Rental Property Owned Before Marriage Became Marital Asset
Tennessee case summary on property classification and transmutation in divorce.
Michael Lee Givens v. Tristine Ann Givens
The husband and wife in this Hamilton County, Tennessee, case were married in 2002 and had no children. The husband filed for divorce in 2012, and the trial was held in 2015, at which time the husband was 55 and the wife was 61.
One of the issues in the case was the status of rental property which the husband had acquired in 1998, prior to the marriage. The wife’s name had never been on the deed, and the husband and wife never lived at that property.
The property, a duplex, was purchased for $78,000, and the husband financed all of the purchase price. At the time of the marriage, he still owed about $70,000. During the marriage, the husband refinanced and borrowed $72,000, at which time the wife signed a deed of trust relinquishing any marital interest. This loan was paid off during the marriage, and the property had a value of about $83,000. This mortgage had been paid both from the rent collected, and from the sale of another property. Also, he had spent money from his income to remodel the property and to pay taxes and insurance.
The trial court made various rulings, including holding that the rental property was the husband’s individual property. The wife appealed this and other holdings to the Tennessee Court of Appeals.
The appeals court began by noting the general rule that property brought to the marriage by one spouse is separate property, unless the evidence shows that it was converted to marital through transmutation. The trial court had agreed with the husband that there had been no transmutation because the property paid for itself with hardly any contribution by the wife.
But the appeals court pointed out that marital funds had been used to remodel the house and to pay off the mortgage. The appeals court called these significant expenditures of marital property. For that reason, it held that the presumption of separate property had been rebutted. Therefore, the Court of Appeals modified this portion of the lower court’s ruling.
No. E2016-00865-COA-R3-CV (Tenn. Ct. App. Sep. 29, 2017).
See original opinion for exact language. Legal citations omitted.
To learn more, see Transmutation in Tennessee Property Division Divorce Law.
