Premarital Savings Account Became Marital Property Due to Commingling
Tennessee case summary on property division and classification in divorce.
The husband and wife in this Bradley County, Tennessee, case had been married for about five years by the time of their 2017 divorce. It was the second marriage for the wife, who had received a piece of real property in her first divorce, and the proceeds were in a savings account in her name.
A trial was held, and their property was divided. The husband was awarded his retirement account as his separate property, but with a marital portion to be awarded partly to the wife.
There was a disagreement as to the status of the wife’s savings account, which had a balance of about $30,000 at the time of the marriage. During the marriage, she had deposited marital funds prior to buying a car, and the balance was about $20,000 at the time of the divorce.
The trial court held that this account remained the wife’s separate property. The husband then appealed this issue to the Tennessee Court of Appeals. He argued that the account had become marital property due to commingling. The appeals court noted that property can become marital if the other spouse makes a substantial contribution to the preservation and appreciation of that asset. That issue is a question of fact, and the trial court’s findings are normally not disturbed.
The wife testified that when she took money out of the account, such as to buy the car, she would put money back in to make up for it. The husband argued that many of the deposits were from the wife’s employment, which was a marital asset.
The Court of Appeals agreed with the husband that the account had become “inextricably mingled” with the marital property. This, it held, amounted to a gift to the marital estate, and the wife did not overcome the presumption of such a gift having been made.
After deciding this issue, the Court of Appeals went on to examine the remainder of the division of the marital property. It found that the lower court’s distribution put the parties into a position similar to had existed prior to their short marriage. Therefore, it held that the distribution was equitable and affirmed, subject to the modification for the savings account.
No. E2018-02007-COA-R3-CV (Tenn. Ct. App. Aug. 12, 2019).
See original opinion for exact language. Legal citations omitted.
To learn more, see Commingling Money & Assets with Marital Property in Tennessee Divorce.
