How Property and Debt are Divided in a Tennessee Divorce

Tennessee law about property and debt division in divorce is complex and based on fairness.

Anyone facing divorce is concerned about how property will be divided and who will be responsible for debts. Tennessee divorce law governing property and debt division is fairly complicated as compared to that of other states.

This complexity underscores the importance of obtaining the guidance of an experienced and knowledgeable Tennessee family lawyer who will stand firm for a fair and equitable resolution to property and debt division on behalf of the client in dissolving a marriage. In addition, legal counsel can fight for full disclosure of assets by the other party and for fair valuation such as by bringing in financial experts and appraisers when needed.

In most divorces, the parties try to negotiate property and debt division, usually through communication between their respective divorce attorneys. When they cannot come to agreement, property and debt will need to be divided by the judge in the divorce proceeding.

Tennessee statute requires an “equitable division” of marital property “in proportions as the court deems just.” Tennessee does not allow “marital fault” to influence property division.

A couple of preliminary issues need resolution. One, if there is a valid prenuptial or postnuptial agreement between the parties in which they previously contracted to divide property in a certain way, that contract will impact what property is available for division.

Second, the judge must determine which property is “marital” and which is “separate.” While Tennessee law about this determination is detailed, in essence, property is separate (with title remaining with the spouse who owns it) if it was brought into the marriage as pre-owned by one of the parties or received by one of them as a gift or inheritance, or consists of a certain type of damage award from a personal injury lawsuit.

Once marital property is determined, the court will look at what kind of division would be equitable and just under the circumstances, which may or may not be fifty-fifty. In so doing, the judge can either give ownership of an item of personal or real property to one of the parties, or order property sold and the cash proceeds divided.

Tennessee statute requires that the judge consider “all relevant factors” to determine what is an equitable, fair, just division. In looking at everything that is relevant, the law directs the judge to include consideration of several specific factors:

Marriage duration
Each party’s age, health, vocational skills, employability and earning capacity, separate property, debt and financial need
Contribution by one spouse to the “education, training or increased earning power” of the other
Ability of each to get future assets and income
Each party’s positive or negative contributions to assets, giving the same weight to contributions as parent or homemaker as to wage earner
Separate property of each
Estate of each coming into marriage
Relative economic circumstances after property division
Taxes, costs of asset sales and expenses associated with particular assets
Social Security benefits
Anything else impacting the “equities between the parties”

Of course, division of marital debt is as important as the division of property. Tennessee courts require consideration of these factors in dividing debt:

The reason for incurring the debt
Who incurred it
Who benefitted from it
Who is better able to pay it

This article briefly introduces Tennessee property and debt division in divorce. Any Tennessean facing these issues should get legal advice about his or her individual circumstances.

From her office in Franklin, family lawyer Judy A. Oxford represents clients in divorce and related matters throughout Nashville and middle Tennessee.

Keywords: Tennessee, property division, debt division, divorce, fairness, equitable, judge, just, marital property, separate property, relevant factor