Tennessee Couple Divorced After Five Years Has No Marital 401(k)
Tennessee law case summary on property division in divorce and family law from the Court of Appeals.
Herbert L. Hall v. Chona S. Hall – Tennessee divorce law
This case involves a second marriage for both parties, which lasted four years. At issue is the division of the husband’s 401k plan.
The husband, Herbert L. Hall, and the wife, Chona S. Hall, were married for four years when the husband filed for a divorce in 2010. The husband was 60 and both he and the wife were on their second marriage. The husband filed for divorce because the wife refused to sleep with him in the bed he had owned with his first wife. He also claimed she was argumentative and difficult.
The husband earned $26 per hour, owned the home he had purchased in 1986 (during his 25 year marriage to his first wife) and was in Chapter 13 bankruptcy. He also owned ten vacant lots which he was unable to sell, and an old truck. He purchased a rental property during the marriage which he lost to foreclosure, and he still owed $24,000 on the property. He had boat worth $8,000 which he had purchased by selling his previous boat that he owned prior to marrying the wife. The husband had a 401k that had decreased in value over the course of the marriage, and he was also paying back a loan he had taken on the 401k. During the marriage, the husband paid the mortgage and all expenses on the house, which had not increased in value during the five years of the marriage.
The wife never worked and received social security disability in the amount of $973 each month during the course of the marriage. She used these payments for her own interests. She also owned a car (purchased prior to the marriage) and the husband was paying off her loan of $2,000 on the car. She owned a house in the Philippines which cost her $14,000 and her son lived there rent-free. The wife also had some $16,000 in debt which she brought with her, had no pension or retirement plan, and had nowhere else to live.
No Increase in Value of Property
In the divorce decree, the trial court denied the wife her request for alimony. While the court recognized her difficult situation and need, it also recognized that husband’s limited ability to pay, given his bankruptcy status and debt on his 401k.
The court also granted each party the property they had owned prior to the marriage. The wife appealed this decision. She argued on appeal that the 401k would have increased in value had the husband not taken out $55,000 from the account as a loan. According to Tennessee law, any appreciation in the value of property (even if purchased prior to the marriage) during the marriage is considered marital property. The appeals court ruled that there had actually been a decrease in the value of the 401k and therefore no part of it was marital property.
No. E2012-00394-COA-R3-CV (Tenn. Ct. App. Dec. 21, 2012).
See original opinion for exact language. Legal citations omitted.
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