Normally when you own a house or other major asset prior to a marriage, that property will remain your separate property. However, there are some exceptions. If you’re not careful (and sometimes even if you are careful) what was “yours” might become “ours”. As and example, we will look at the recent case Lewis v. Lewis.
1995 Husband and Wife started dating. In 2005 Wife bought a house with her own money and the deed was in her name. There’s no dispute that at this time the house was completely hers.
In 2006, the parties were living together and they signed a written agreement in which they agreed that each would pay half of the monthly payments on the property and equally divide the other financial obligations on the property. The deed remained in Wife’s name.
In 2007, the parties got married and they (along with the children they each had from previous marriages) lived in the home. Husband quit his job and attempted to start a business out of the detached garage. Throughout the marriage, he did not pay for half of the mortgage or other bills. He did contribute some funds, and he performed some maintenance and upkeep.
In 2017, both parties filed for divorce. Things must have been really bad at home.
THE TRIAL COURT DECIDES WHETHER THE HOUSE IS MARITAL PROPERTY
At trial, the Court heard the testimony from both parties and reviewed the documents they submitted as evidence. At the conclusion of the trial, the Court said that the house was the Wife’s separate property because she purchased the property prior to the marriage, she managed the majority of the maintenance and upkeep on it, Husband did not pay his share of the payments, and the agreement the parties signed was not meant to give Husband a share of ownership in the house.
Husband found that result to be unsatisfying, so he appealed.
COURT OF APPEALS: DID THIS HOUSE BECOME CONVERTED INTO MARITAL PROPERTY?
“Transmutation” is the word you’re looking for. It’s also a word you’ll probably rarely run into in any other context. It’s not even a good scrabble word.
The Court of Appeals noted that the Trial Court correctly used four factors that have previously been used to determine whether transmutation has occurred. Those factors are:
- Use of the property as the marital residence,
- The ongoing maintenance of the property by both parties,
- Placing the title to the property in joint ownership, and
- Using the credit of the non-owner spouse to improve the property.
The parties agreed that Husband’s name was never added to the deed to the property, that Husband’s credit was not used to purchase or improve the property, and they agreed that the house was used as the marital home. However, the Court says, the above four factors are not exclusive and the Trial Court should also consider the remainder of the evidence presented.
The Appellate Court suggests that there are other facts in this case that are also important, such as:
- Income is a marital asset, and while Wife made the majority of the payments on the property, the payments were made with her income during the marriage.
- While Wife was responsible for most of the maintenance, Husband contributed to the maintenance and upkeep of the property.
- The parties made some smaller improvements together, such as replacing a kitchen counter and adding drywall to a shed.
When all these facts are considered together, the Court said the property did convert from separate property to marital property. The Court then sent the case back to the Trial Court for consideration on how the property should be divided.
DID THE HUSBAND WIN?
Maybe. The Appellate Court did not give the lower court any explicit instructions on how to divide the property, but did note that while Tenn. Code Ann. § 36-4-121 provides a number of factors a judge should consider when dividing marital property, this Trial Court should pay particular attention to this one: “[t]he contribution of each party to the acquisition, preservation, appreciation, depreciation or dissipation of the marital or separate property, including the contribution of a party to the marriage as homemaker, wage earner or parent[.]”
I’m going to guess that the Trial Court is likely to find that the property was marital (as instructed by the Court of Appeals), but then award either all or most of the house to Wife, since she had the greater contribution to it. Will the Husband come out any better than he was before? We will see.
CALL ME FOR HELP
If you are going to be getting divorced, or you have any other family law related matter, give me a call at (615) 244-1018 x 102 to find out how I can help you.