Dividing assets during divorce can quickly become contentious, even when the process starts amicably. Usually, each spouse not only wants a fair monetary share but also desires to hold onto items for sentimental reasons.
One such piece of property for well-to-do families may be the vacation home. Understanding how Tennessee courts could handle this asset can help a person determine how to negotiate during divorce proceedings.
Tennessee’s approach to property division
Tennessee courts rely on the principle of equitable distribution to divide property between spouses. Consequently, assets do not necessarily get a 50/50 split. Rather, the court focuses on what is fair and considers multiple angles.
The first step involves determining whether the vacation home is marital or separate property. Tennessee Code Title 36 details the differences between these two types of assets.
Marital property typically includes anything the couple acquired during the marriage. Separate property most often pertains to items that a spouse owned individually before the union. Therefore, the classification of a vacation home largely hinges on who purchased the property and when.
Other factors that influence property division
The court usually starts by weighing the financial contributions each party made toward the home’s acquisition, maintenance and improvements. Furthermore, nonfinancial contributions, such as time on upkeep or improvements, are also a determinant.
Additionally, the court reviews each spouse’s contributions to the marriage as a whole and their respective economic circumstances. Future earning capacity, child custody decisions and the overall well-being of each spouse are elements to consider.
How the court divides the property
Of course, real estate is harder to split than liquid capital, such as cash or investments. After determining an equitable division, the court can award one party the vacation home and give a fair amount of the remaining assets to the other spouse.
If this arrangement is not possible, the following outcomes are available:
- The court orders the sale of the house and splits the proceeds
- One party buys the other out
- The ex-spouses jointly own the home
Each case is unique, and the law makes clear that courts do not have hard and fast rules for what to do.
However, judges often prefer to allow whatever arrangement the spouses agree to, as long as the outcome is fair. Awareness of the deciding factors and the ability to prove one’s contribution to the marriage can allow a person to achieve a more favorable outcome regarding the vacation home.