Legal Memorandum: Division of Marital Property in TN

Issue: How is marital property divided in a marital dissolution action under Tennessee law?

           Like other fact-based decisions, the trial court’s authority to divide marital property is broad and its decision is entitled to great weight by the appellate court.  Watters v. Watters, 959 S.W.2d 583, 590 (Tenn. Ct. App. 1997).  The first inquiry is whether the property is marital property—which is property acquired during the marriage by either or both spouses—or separate property.  Brown v. Brown, 913 S.W.2d 163, 166-67 (Tenn. Ct. App. 1994); see Tenn. Code § 36-4-121 (Supp. 2000).  A business started or acquired during the marriage is considered marital property, id. § 36-4-121(b)(1)(A), as is any increase in the value of the business during the marriage, id. § 36-4-121(b)(1)(B).  Accord Hazard, 833 S.W.2d at 916.  In dividing interest in a company, the court is expressly authorized to consider whether one spouse made indirect contributions to the business, such as working in jobs outside the company and working as a homemaker.  Brown, 913 S.W.2d at 167-68 (holding that the wife was entitled to a share of the husband’s business because she made substantial indirect contributions primarily as a homemaker toward the business’ preservation and value appreciation).

Relevant factors in making a division of marital property include:  the length of the marriage; each party’s age, health, skills, earning capacity, employability, financial needs and liabilities, and estate; each party’s contribution to the other’s education or earning power; each party’s ability for acquisitions of capital assets and income in the future; each party’s contribution to the status of the marital […]