Tennessee operates as an equitable distribution state when the property is divided during divorce proceedings. This means that the property won’t technically be split 50-50 between the two spouses. Instead, the court will determine the equitable and fair distribution of the property after hearing both sides of the case.
When going through a Maryville contested divorce (meaning the spouses do not agree on child custody, alimony, and/or asset division), the family courts will look at the following in determining how property will be divided:
- The number of years the marriage lasted
- The ages and physical and mental health of both spouses
- The skills and capacity to earn a living for both spouses
- The ability of each spouse to acquire income and assets in the future
- The financial liabilities and needs of both spouses
- The contributions made by both spouses as homemakers and acquiring income and assets during the marriage
Before the court can review the above considerations, the property involved in the divorce much be assessed values. This includes the home, vehicles, collections, boats, artwork, furniture, financial accounts, businesses, vacation homes, and just about any other asset owned by the couple.
Debt is also divided equitably in Tennessee. The judge will take the above considerations and make a decision based on the situation of both spouses. For example, the judge might award one spouse with a low-paying job more assets, and less debt than the other spouse. At the same time, the judge could award all of the debt to one spouse if he or she wasted assets by gambling, spending recklessly during the marriage, or taking part in any other irresponsible financial activity.
How will my Maryville home be assessed during divorce proceedings?
Most likely the largest asset in the divorce will be your home. The judge presiding over your divorce case will rely on expert witnesses (real estate appraisers, real estate agents, antique dealers, etc.) to determine the value of your home and other assets. When the time comes to assess the value of a home in a divorce, a Comparative Market Analysis (CMA) must be performed.
A CMA takes into account the most recent homes that have sold in your neighborhood as well as the asking prices for homes currently listed for sale. Any special features of your home will also be taken into account when conducting a CMA, such as an updated chef’s kitchen, climate-controlled vehicle storage, an in-ground pool, a wine cellar, and any other special features surrounding homes might not have.
When the real estate appraiser conducts the CMA, they will also look at any appreciation or depreciation in value. For example, if only one spouse owned the home prior to getting married, the appraiser will need to determine the change in the value of the house, which is then divided between the spouses and not the overall value of the house.
The appraiser will also take into account any improvements made to the home during the course of the marriage, including the following:
- A new roof
- Installation of central air conditioning
- A new water heater
- Conversion from oil heat to gas heat
- A pool
- New windows and doors
- An addition
- Changing septic to sewer service
All of these improvements would add value to the home and that value can be divided between the spouses if the money spent on them was marital money or a loan obtained in both of the spouses’ names.
Once the home is assigned a value, the spouses have three options: remain as co-owners even in divorce, sell the home and split the profit, or one spouse can buy out the other spouse based on the assessed value. Buying out your spouse to become the sole owner of the home will require you to refinance the mortgage on the home. Depending on the real estate market, it’s almost always more beneficial to sell the house and split the profit so that both spouses have a financial cushion with which to begin their new lives.
How will my Maryville business be valued during divorce proceedings?
Divorce becomes complicated when there are children or a business involved. When either of these two is present, the process can take upwards of one year to finalize. Placing a value on a business during a divorce is challenging, especially if one or both spouses own all or part of a business. If this is the case, the value of the portion they own can be included in the assets that are divided by the court.
The expert brought in for the valuing of a business is a certified forensic accountant. In order to value a business, the certified forensic accountant will examine the following:
- Business profits
- Assets and debts – inventory, equipment, customer relationships, and patents
- Increased value – the accountant will attempt to determine if the business has increased or decreased in value since the marriage began
- Valuation date – the court sets the valuation date, which is often the date when the divorce paperwork is filed
How will my personal property be assessed during divorce proceedings?
There are three main ways experts will assess the value of personal property in a divorce:
- Market Comparison – Experts will review the sale price of similar items from within the past 30 days. This approach is often best for collections of art, sports memorabilia, and wine.
- Cost – Experts assign value to items based on what it would cost today to replace them.
- Revenue – Experts assign value to items or property that were purchased as an investment (artwork, sports memorabilia, vacation homes). The future value of the item is more important than its current value.
Your property and assets need to be assessed accurately to ensure that you get your fair share. The experienced Maryville divorce attorneys at Shepherd & Long can examine your situation and help you come to an agreement with your spouse on the most important aspects of divorce. Call our office at 865-982-8060, or complete our contact form to schedule a consultation. We serve clients throughout Blount County and East Tennessee from our Maryville office.