Property Division During a Divorce for Same-Sex Couples

A Brief History on Same-Sex Couples’ Fundamental Right to Marry

In the last decade we have seen the United States government recognize the rights of same-sex couples and give them equal treatment under the law as opposite-sex couples.

In 2015, the Supreme Court of the United States handed down a landmark civil rights cases where the Court ruled that the fundamental right to marry is guaranteed to same-sex couples in Obergefell v. Hodges. 576 U.S. 644 (2015). The protection of the fundamental right to marry applies to same-sex couples in the same manner as it does to opposite-sex couples. This case legalized same-sex marriage in all fifty states, because a denial of the right for same-sex couples to marry would be a denial of same-sex couples’ equal protection under the law. Same-sex couples that were married in states that recognized same-sex marriages prior to the Obergefell ruling now had their marriage recognized in all states.

Part of Obergefell v. Hodges actually originated from Tennessee in the form of Tanco v. Haslam, 7 F. Supp 3d 759 (M.D. Tenn. 2014). On October, 21, 2013, the National Center for Lesbian Rights filed a lawsuit on behalf of multiple same-sex couples in Tennessee seeking to have the state recognize their marriages that were established in states that recognized same-sex marriages. The federal court granted a preliminary injunction requiring the State of Tennessee to recognize the marriages of the same-sex couples. The ruling was appealed to the Sixth Circuit Court of Appeals, where the bans on same-sex marriage were ultimately upheld. Tanco v. Haslam was incorporated into Obergefell v. Hodges, along with other Sixth Circuit cases related to the legality of state bans on same-sex marriages.

Before Obergefell v. Hodges was decided on June 26, 2015, Tennessee did not recognize same-sex marriages that were validly established in states that did recognize same-sex marriage. A same-sex couple was not only unable to get married in Tennessee, or have their marriage recognized in Tennessee, but also could not get a divorce in Tennessee. After Obergefell established that the fundamental right to marry is also guaranteed to same-sex couples, the Court of Appeals of Tennessee finally recognized the ability for same-sex couples to file for divorce in Tennessee. Borman v. Pyles-Borman, 2015 WL 9946270 (Tenn. Ct. App. 2015). Quoting Obergefell, the Court of Appeals of Tennessee stated that “there is no lawful basis for a State to refuse to recognize a lawful same-sex marriage performed in another State on the ground of its same-sex character.” 576 U.S. at 681, Borman at *2. Now that same-sex marriages and divorces are recognized as a valid in Tennessee, same-sex couples are now subject to the property division laws of Tennessee.

Property Division in the State of Tennessee

Property division in divorces in Tennessee is governed by Tennessee Code Annotated § 36-4-121. There are two types of property in a marriage: separate property and marital property. Marital property is defined as “all real and personal property, both tangible and intangible, acquired by either or both spouses during the course of the marriage up to the date of the final divorce hearing. . .” T.C.A. §36-4-121(b)(1)(A). Separate property is defined as “[a]ll real and personal property owned by a spouse before marriage. . .” T.C.A. §36-4-121(b)(2)(A). Only marital property is divided upon divorce in Tennessee. T.C.A. §36-4-121(b)(1)(E).

The courts of Tennessee and same-sex couples seeking divorce may face unique challenges in deciphering what is separate property and what is marital property. These challenges may be more prevalent if a same-sex couple were married in a state that recognized same-sex marriages pre-Obergefell, and moved to a state that did not recognize such a union. For example, a same-sex couple is married in Iowa in 2010, where same-sex marriage is legal and recognized. The couple then moves to Tennessee in January of 2011, where same-sex marriage is not recognized. The couple buys a home, but it is only titled in one of the spouses’ name, and not jointly titled because of Tennessee’s stance on same-sex marriage. In 2022, after years of marriage, the parties then seek a divorce after Tennessee recognizes same-sex marriages as valid. Is the home considered marital property and subject to equitable division? Or is it the separate property of the purchasing spouse?

There may be two answers for this issue based on two views of the applicability of Obergefell. One answer is based on the notion that the Obergefell decision retroactively recognized same-sex marriages in states that held same-sax marriages invalid. Under this theory, the same-sex couple’s marriage in Iowa would have been retroactively recognized as a valid marriage when they moved to Tennessee in 2011. Therefore, the home is marital property, because it is property “acquired by either or both spouses during the course of the marriage. . .” under T.C.A. §36-4-121(b)(1)(A).

Under the opposite theory, that Obergefell made all same-sex marriages valid in states that did not recognize same-sex marriage at the time of the decision, the marital home in question may have been initially considered as separate property. However, the couple would then have had a valid marriage recognized in Tennessee after the Obergefell decision, and the marital home can now become marital property.

The Supreme Court of Tennessee lays out one way for the home titled in the name of one spouse to become marital property. In Langschmidt v. Langschmidt, the Court states that appreciation in value of the marital residence (titled separately in the name of one spouse prior to and during the marriage) is marital property once it is shown that the other spouse substantially contributed to the home's preservation and appreciation as a result of efforts made as a homemaker. ... or other such contributions.” 81 S.W.3d 741, 746 (Tenn. 2002). Some examples of “substantially contributing to the home’s preservation and appreciation” include payment of the mortgage from a joint marital checking account, or from both parties’ salaries. See Gragg v. Gragg, 937 S.W.2d 823, 833 (Tenn. 1996). A spouse’s direct financial contribution to family expenses and indirect contributions as a homemaker constitute contributions to the appreciation or preservation of the other spouse’s separate property. Brown v. Brown, 913 S.W.2d 163, 167 (t. App. Tenn. 1994).

So, the house titled separately in the name of the purchasing spouse in our example can become marital property if the other spouse substantially contributes to the home’s preservation and appreciation. The best way to do this if the contributing spouse helps make regular financial contributions to the house from his or her salary, or from a joint checking account where both spouses’ salaries and assets deposited. If the Court finds that the contributing spouse made substantial improvements to the value of the home, then the home can be considered marital property, and is therefore subject to equitable division upon divorce.

Tennessee now recognizes same-sex marriages as a valid marriage in the state after the Obergefell decision. Property acquired during the marriage by either or both spouses is considered marital property. Property that comes into the marriage as separate property can become marital property through several scenarios. It can be difficult to analyze what property is marital and separate on your own. Same-sex couples that were married in a state that recognized same-sex marriage but then moved to a state where same-sex marriage is not recognized face unique challenges when it comes to the division of property. These are complicated issues, and if you are considering divorce, you should consult with an attorney to assist in navigating these issues.