Settling property matters between divorcing spouses can be difficult, particularly in high-asset divorce cases. In a July 11, 2017 case from the Court of Appeals of Tennessee, part of the spouses’ dispute centered around an art collection and two rings gifted from the husband to the wife during their marriage. After a trial, the lower court ruled division of property and that the art collection would be divided equitably, and each spouse would receive one ring. The parties filed a subsequent appeal.
Tennessee is a dual property state, meaning that there is a distinction between marital property and separate property. Generally, assets acquired by either spouse during the marriage are presumed to be marital property, and assets acquired by either spouse before the marriage are presumed to be separate property. In addition, assets acquired by one spouse by gift, bequest, devise, or descent are also considered separate property. Significantly, separate property is not part of the marital estate and is therefore not subject to division. If the spouses cannot agree on how to divide property in the event of divorce, the trial court will classify the spouses’ property as marital or separate and assign a value to each piece of property subject to division. The court will then divide the property in an essentially equitable manner, without regard to the marital fault.
At the time of the divorce, the spouses in the case owned a collection of artwork consisting of three reproductions of paintings that the wife testified were purchased with marital funds and one original painting that the husband gifted to the wife as a Christmas gift. The appeals court found that the only evidence on the matter of the reproductions was the wife’s testimony and the affidavits of both spouses, which listed the art as marital property. Accordingly, the appeals court affirmed the trial court’s award of the original painting to the wife as her separate property, but it concluded that the reproductions should be classified as marital property on remand.
The wife also contested the trial court’s order awarding each spouse one of the two rings given to the wife by the husband during their marriage. The husband argued that the rings were made from rings belonging to his mother and grandmother, and the wife said she didn’t want them after discovering his infidelity. On appeal, the court ruled in favor of the wife, noting that the only evidence elicited at trial demonstrated that the two rings were a gift to the wife from the husband, that the wife placed the rings in a safe when the parties separated, and that the husband removed the rings from the safe to re-propose to the wife. Although she rejected that proposal, the court found that she never expressed an intent to relinquish her property interest in the rings. As a result, the court held that the two rings should be classified as the wife’s separate property.
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