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How do Tennessee divorce courts split your assets?

On Behalf of | Jun 15, 2022 | Property Division

Anyone planning to get a divorce may have questions about how the court distributes property and assets. In Tennessee, asset distribution hinges on whether the property is marital or separate.

Although separate property usually reverts to its pre-marital owners, anything the spouses acquire during marriage is subject to equitable distribution.

What is equitable vs. equal distribution?

A Tennessee judge will divide a divorcing couple’s assets equitably, though not necessarily equally when the spouses cannot reach an agreement. Judges must consider each individual’s earning capacity, financial liability, health status, education and other factors that impact the marital finances.

What qualifies for equitable division?

Tangible and intangible assets are subject to equitable division. For example, a judge may award a couple’s two homes to one spouse when the other spouse receives the business they both own together.

The court also considers child-rearing and custody when finalizing asset distribution during a divorce. For example, parents who stay home to care for their children may not fulfill their career aspirations, leaving them with fewer income options.  Likewise, a spouse who works to pay for the other’s education will not benefit from the higher salary that comes with it when the couple divorces and may receive the assets in a joint savings account as compensation.

A spouse who starts a business before marriage may keep it, even if it is the primary source of income for the other during the marriage. An equitable arrangement may grant the other person financial compensation for contributing to its growth, funds in a joint savings account, a family car or an art collection.

During a divorce, carefully negotiating with your spouse is less risky than relying on the court’s equitable distribution of your assets that could potentially compromise your financial future.