Property division is the most difficult part of many Tennessee divorces. This is especially true in a high-asset divorce where there is property of significant value. The law is clear as to how marital property and separate property are defined. However, people might not be sure how the rise in value of certain properties will be calculated and divided.
For example, if one spouse purchased a home before the marriage, it will generally be separate property. If it was maintained during the marriage and it rose in value, then the increase and how that is spilt could be in dispute. Understanding what the law says and how the courts navigate these situations is key.
How increased value of property will be divided based on state law
If there was income from separate property or the separate property became more valuable while the couple was married, that increase will be marital property if both sides are found to have contributed to preserving it and to its appreciation.
In the above example of a home, the person who did not own it at the outset might have taken part in maintaining it, repairing it, paying the mortgage and through other means that made it more valuable. This income would then be construed as marital property.
If a person had a pension through their employment during the marriage, its value would also be categorized as marital property. The same is true for retirement accounts, stock options and fringe benefits from employment that one of the spouses held while they were married. When the benefits were started before the marriage and it has appreciated in value, it will be separate property.
For complex property division and value increases, having help is important
With complex, high-asset divorce, the property that was held before the marriage and acquired after the marriage is generally perceived as clear as to who has the right to retain it as part of the divorce. Still, with property that grew more valuable during the marriage and the non-owning spouse claims to have taken part in its rise in value, there can be a contentious disagreement as to how to find a workable solution.
In some cases, it might be possible to negotiate. Perhaps trading one item for another or offering a cash settlement would be effective. From the outset, it is wise to be aware of how what the law says about these properties, whether it was separate or marital, if it grew in value and by how much. Calling for professional assistance with these difficult cases is beneficial for reaching an acceptable result.