Marital vs. Separate Property: What Counts in Asset Division?
Dividing assets during a divorce can be an emotional and complicated process. One of the most challenging aspects of this process is determining what constitutes marital property versus separate property. Marital property refers to assets acquired during the marriage, while separate property includes assets owned before the marriage or received as gifts or inheritance.
Determining what falls into each category can affect everything from your financial division to the future stability of both parties. At Brazil Clark, PLLC, we understand how stressful this process can be, and we're here to help guide you through the details of asset division with clarity and compassion.
If you’re facing divorce in Nashville or Rutherford County, Tennessee, you need an asset division attorney who can provide personalized guidance to protect your rights. We’re here to help you achieve a fair and equitable distribution of your property, so you can move forward with confidence.
What Is Marital Property?
Marital property is any asset or debt acquired during the course of the marriage. In Tennessee, marital property is generally subject to "equitable distribution," meaning it is divided fairly, though not necessarily equally, between both spouses. This includes both physical property, such as homes and vehicles, and financial assets, such as bank accounts, retirement funds, and investments. Marital property includes:
Homes and real estate purchased during the marriage
Joint bank accounts and savings
Income earned during the marriage
Pensions, retirement accounts, and 401(k)s accrued during the marriage
Vehicles, furniture, and other personal property bought during the marriage
Business interests or investments made during the marriage
The court will evaluate each item of marital property and decide how best to divide it between the spouses, aiming for a fair division for both parties. Though Tennessee is an "equitable distribution" state, this doesn’t mean a 50/50 split. The court considers several factors when dividing marital property, including the length of the marriage, each spouse’s financial situation, contributions to the marriage, and more. This process assures that the distribution of property is fair, even if it’s not necessarily equal. Our trusted family law attorneys can help prepare you for this process.
What Is Separate Property?
Separate property refers to assets one spouse owned before marriage, as well as gifts or inheritances received during the marriage. These assets are considered personal property and are typically not subject to division during a divorce. Also, it can include items specifically designated as separate, such as an inheritance one spouse has kept in their name only. Separate property includes:
Assets owned by either spouse before the marriage.
Inheritances received by either spouse.
Gifts given exclusively to one spouse.
Certain damages awarded from personal injury claims.
Separate property remains with the spouse who owns it, but if it’s commingled or used in the marital home, the court may rule that it has become marital property. For example, if one spouse used separate funds to help pay down a mortgage or make improvements to a home, the court may consider those funds marital property and subject them to division.
If you’ve used separate funds to contribute to the value of a marital home, or if you’ve placed marital funds into an individual account, that can complicate the matter and make it difficult to determine whether the property is still separate.
What Happens When Marital and Separate Property Mix?
In many cases, separate property becomes intertwined with marital property, a process known as "commingling." Commingling occurs when separate funds or assets are mixed with marital funds. For example, if one spouse has a bank account from before the marriage, but after the marriage, both spouses deposit money into it, the account might be considered marital property.
In these situations, it can be challenging to separate what was originally separate property from what has been added during the marriage. The court may need to trace the funds and determine how much of the asset is still separate and how much is marital. Examples of commingling include:
Depositing both spouses' salaries into a separate account.
Using marital funds to pay for improvements or upkeep on a property that was originally separate.
Placing separate funds into a joint investment account.
It’s essential to understand the potential implications of commingling property and how it might affect your divorce settlement. If you're unsure about whether an asset has been commingled, consulting with a knowledgeable divorce attorney is a smart move to protect your interests.
Debts in Divorce
Much like assets, debts incurred during the marriage are typically considered marital debts and are subject to division during divorce. However, debts that were incurred before the marriage or by one spouse individually (such as student loans or credit card debts) may be considered separate.
Marital debts include:
Credit card debt accumulated during the marriage.
Mortgage or loan obligations incurred during the marriage.
Personal loans used for marital purposes.
Separate debts include:
Student loans taken out before the marriage.
Credit card debt incurred by one spouse before marriage.
Any other debt that is tied specifically to one spouse’s name.
In Tennessee, marital debts will be divided in a way that reflects the equitable distribution of property, meaning the division is based on what is fair, not necessarily what is equal. The court will consider each spouse's financial needs and contributions when determining who will be responsible for specific debts.
How to Protect Your Assets During Divorce
If you’re worried about protecting your separate property during a divorce, there are steps you can take. The best way to protect your assets is through a prenuptial agreement, which allows you to outline which assets will remain separate in the event of a divorce.
If a prenuptial agreement isn’t in place, keeping detailed records of your separate property, such as bank statements and receipts, is crucial. This documentation will help clarify which assets are separate and which are marital. Additionally, if you're dealing with commingled property, it can be helpful to consult with an asset division attorney to trace the origins of funds and determine what belongs to whom.
Contact a Skilled Asset Division Attorney Today
If you’re going through a divorce in Nashville or Rutherford County, Tennessee, don’t hesitate to reach out to an experienced asset division attorney who can guide you through the process. Dividing property during a divorce can be a complicated process, especially when determining what is marital versus separate property. At Brazil Clark, PLLC, we understand how overwhelming this process can be, and we’re here to help.
Contact us today at Brazil Clark, PLLC, to schedule a consultation. We’ll help you protect your assets and fight to help you get a fair division. Reach out to us today.