Equitable Distribution in Tennessee: What Is It?

Splitting one life into two is a stressful, time-consuming process—especially when it comes to dividing marital property. 

Tennessee couples live in an equitable distribution state. This means that when you get divorced, your judge will be more focused on finding the outcome that is fairest to both sides, not what’s equal. 

In other words: your property division probably won’t be fifty-fifty. 

To find out why, keep on scrolling… 

In this article, we’ll talk about how the rules of equitable distribution break down in Tennessee, and why the Byrd Law team is the best choice to help you with yours.  

What Is Equitable Distribution?

In the family law arena, equitable distribution is one of two schools of thought for dividing marital property (with the other being community property).  

Under the rules of equitable distribution, anything either you or your spouse acquires while married—regardless of whose name is on the paycheck, loan, or deed—belongs to both of you, equally. Upon divorce, this property will be divided between you, equitably.

Keep in mind, “equitable” does not mean fifty-fifty. In fact, it doesn’t even mean you’ll get part of every asset. Instead, the primary focus of equitable distribution is what’s fair. This ensures that neither spouse either benefits—or is unfairly punished—as a result of being married.

How is Equitable Distribution Different from Community Property?

The simple answer is: community property focuses on what’s equal, while equitable distribution emphasizes what’s fair. 

In the realm of marital property, this is a subtle, but important difference.

Community property primarily focuses on what’s in front of them right now. Here, only things like real property, retirement accounts, debt, and digital currency are considered. In other words: the assets that have a clear-cut, defined value. Intangible factors are not as important in a community property split. 

In contrast, equitable distribution courts are allowed to consider intangible assets (more on that, below). While these subjective influencers are more difficult to value, the end division is ultimately fairer, for having taken them into account.

How Do Equitable Distribution Courts Divide Property? 

When it comes to property, dividing marital assets is about much more than who gets the pens in the junk drawer, and how you split the house. Along with physical assets and real property, judges must divide everything from retirement accounts, to investments, all the way down to the debt you’ve accumulated as a married couple.

In tackling this mountain of jointly accumulated assets, the court will follow these four steps: 

1. Identify all property. 
2. Classify property as either marital or separate. 
3. Value all property. 
4. Divide property in an equitable split. 

Here’s a closer look at each of these. 

1. Identify 

The division process begins by identifying what assets you have to be divided. 

Here, both parties will be required to disclose all assets, including real property, debt, retirement accounts, jewelry, art, stocks, patents, intellectual property, and, yes, even that lottery ticket you just won. 

And, just in case you were thinking about trying to hide assets from the court, don’t. Your chances of success are close to zero, and will likely only result in you owning your ex more money. 

2. Classify Property 

After all of your assets have been identified, they must be labeled as either separate property, or marital. 

As we stated earlier, marital property includes anything you acquired while married—be it debt, real property, investments, or anything else. These are the things that will be subject to division, upon divorce.

On the other hand, is separate property. These are assets you brought into the marriage, and which will (theoretically) leave with you, upon divorce. Separate property can also include: 

• Gifts, regardless of the giver, or when they were given (including wedding rings, by the way).
• Inheritances. 
• Any awards from personal injury lawsuits.

So long as you have the paper trail to prove that these things are separate property (and that they haven’t been commingled past the point of no return), they will leave with you upon divorce.

3. Value Property 

Once things are classified, it’s time to give everything a value. 

This is a fairly straightforward process for things like real property, marital debt, and numbers in a bank account. However, retirement accounts and digital currency can be a little more complex. 

In Tennessee, retirement accounts are valued on the day of divorce—not based on what you put into them, originally. And, digital currency—which has no centralized server—can sometimes take a little longer to value. 

If you are worried your spouse might try to hide assets using digital currency, talk to your family law attorney, who can help ensure that everything is fairly accounted for.

4. Divide Property 

With accurate values in hand, the court is finally able to move on to the last step: property division.

Tennessee does not have a set formula for dividing property. Instead, decisions are made by weighing the factors of your individual situation. And—in an equitable distribution jurisdiction—that includes intangible assets.

An intangible asset is something that doesn’t exist in a physical form, has no set worth, but that, nonetheless, still carries a great deal of value. This could include things like education, intellectual property, or even business goodwill. While these things don’t have a dollar amount, their value definitely impacts the quality of a person’s life, post-divorce. 

Hence, courts are allowed to consider these intangible factors, and adjust marital property amounts, accordingly. 

In the end, spouses are left with a share that—while not necessarily equal—is the fairest to both sides, giving each spouse an equal chance of success, post-divorce. 

Equitable Distribution and Alimony

Alimony (often referred to as “spousal support,” or “spousal maintenance”) are payments one spouse is ordered to make to the other, in order to help support them, post-divorce. (Often these payments are made to a spouse who has sacrificed education and career opportunities, in order to support the family in non-monetary ways.) 

Because equitable distribution is allowed to consider intangible factors, alimony is often not as high in Tennessee, as it might be in a community property state. Which makes sense, since it’s not as if the value is being ignored completely, it’s just being accounted for in other areas.

That being said, Tennessee does not ignore alimony, altogether. Instead, these payments will be assigned according to need, according to your judge’s discretion. 

Equitable Distribution Attorney in Tennessee

While equitable distribution rules are more complex than community property, the bright side is that your end share of marital property will likely be much fairer. 

If you have more questions about equitable distribution in Tennessee, and how these rules might affect your divorce, we want to hear from you. Call the Byrd Law team at (423) 304-6827, or contact us online, and together, we can ensure that your interests are fully protected.