It is natural for people to worry about their most valuable assets when they prepare for divorce proceedings. Oftentimes, real estate is one of the main assets that spouses need to address in property division negotiations with one another.
Real property holdings can be worth hundreds of thousands of dollars. They can represent stability for any minor children and a source of income. What generally happens to real estate in a Tennessee divorce?
Equitable distribution rules apply to real property
Regardless of the type of real estate that people own, the Tennessee equitable distribution statute governs how they divide their property and debts. Anything that spouses acquired during marriage or purchased with marital income is theoretically subject to division when they divorce. The exact approach that people take depends on the type of real property that they own.
The marital home could easily be a point of contention. If it is a single-family home, spouses may disagree about who gets to live there and how much the house is worth. Factors including pre-existing connections to the property and custody arrangements for the children can influence who stays in the home after the divorce. Multi-family homes can be harder to address because of the upkeep requirements and income generated by the units not occupied by the owner.
In cases where spouses own real property with a large vacant lot attached, it may be possible to divide the property so that one spouse keeps the home and a small lot while the other receives the acreage. If the spouses have a vacation home or a hunting property, those secondary pieces of real estate can also factor into the property division decisions. Each spouse could keep certain real property holdings, or the spouses might liquidate most or all of their real estate holdings to share the proceeds.
If their holdings include investment properties, then the negotiations may be a bit more complex. Couples may need to factor and not just the current value of the property but also the income that it generates. Some spouses can reach contractual agreements where they maintain joint ownership of investment properties. Other times, one spouse may give up their interest in the property and exchange for financial support or other marital assets. In theory, couples can agree to any reasonable terms that they both believe are fair when they must address real property holdings.
Setting aside emotional attachment and looking at long-term financial needs after a divorce may help people employ a pragmatic approach to the property division process. Those who understand what usually happens with real estate during a divorce may know what to expect when they decide to end a marriage.