The most valuable and emotionally significant asset in many marriages is the family home, and its future becomes a major concern when a Franklin divorce begins. Couples often worry about stability, financial security, and what life will look like after the property is divided. These fears are common, and understanding how Tennessee handles the home can ease some of the stress.
Tennessee follows equitable distribution, which focuses on dividing property fairly based on each spouse’s circumstances rather than splitting everything equally. Under Tenn. Code Ann. § 36-4-121(a)(1)(A), courts look at contributions, needs, and financial realities before deciding who keeps the home or how it should be handled. This approach ensures decisions are based on fairness rather than rigid formulas.
In this blog, you will learn how the home is classified, what options spouses have for keeping or selling it, and who may remain in the property during the divorce. You will also understand how equity and mortgage decisions are made and how prenuptial agreements may influence ownership. These insights show why early guidance from a Franklin divorce lawyer can help you navigate the process with confidence.
How Tennessee Law Classifies the Family Home
Tennessee courts classify the family home before dividing it, and this step shapes every financial decision that follows. Clear classification helps the court determine ownership, equity, and each spouse’s rights during the divorce process.
Marital vs. Separate Property Basics
Marital property includes assets gained during the marriage, and the home may fall into this category depending on how it was acquired. Separate property includes premarital ownership, gifts, and inheritances, and these assets usually stay with the original owner. Mixed property appears when both marital and separate contributions exist, and the court must review how each spouse added value.
When the Family Home Becomes Mixed Property
A home owned before marriage can become partly marital when both spouses contribute financially after the wedding. Appreciation gained during the marriage may be shared if both spouses helped increase its value. Courts review payments, labor, and improvements carefully to determine how much of the property should be considered marital.
Practical Options for What Happens to the Home
Selling the Home and Splitting Equity
Many couples choose to sell the marital home and divide the equity as part of property division.
- Spouses may agree to list the home and split the net proceeds.
- Courts can order a sale when it is the only fair way to distribute assets.
- Sale terms may include temporary occupancy, listing deadlines, and cost-sharing.
- Equity = fair market value minus the mortgage balance and selling expenses.
- An appraisal may be required to confirm an accurate value.
- One spouse may stay in the home temporarily until the sale is completed.
One Spouse Keeps the Home (Buyout or Asset Trade)
A spouse may keep the home if they compensate the other for their share of equity.
- A buyout usually requires refinancing to remove the other spouse from the mortgage.
- Courts evaluate whether the retaining spouse can afford long-term housing costs.
- Buyout amounts are based on current equity, not on what the home originally cost.
- Retirement funds or cash assets can be used to offset equity owed.
- Affordability includes taxes, insurance, utilities, and maintenance over time.
Who Stays in the Home During and After Divorce?
Tennessee courts determine temporary and long-term occupancy by focusing on stability, safety, and the needs of each spouse. These decisions can influence daily living arrangements throughout the divorce process.
Priority When Children Are InvolvedÂ
Under Tenn. Code Ann. § 36-4-121(d), courts may grant temporary occupancy to the parent with primary physical custody, especially when continuity supports the child’s well-being. Judges consider school routines, home stability, and each child’s emotional needs when making this decision. Minimizing disruption remains the central goal when children are part of the case.
Temporary Occupancy vs. Final Distribution
Temporary possession decides who lives in the home during the case and focuses on immediate needs. Final distribution determines long-term ownership or whether the property will be sold once the court reviews the full circumstances. Staying in the home temporarily does not create a property right or guarantee future ownership.
Mortgages, Equity, and Debt Responsibilities
How Courts Handle Mortgages in Divorce
Courts review income, living arrangements, and each spouse’s financial stability when assigning mortgage responsibility during and after divorce.
- Courts determine who must pay the mortgage while the case is pending and after the property is divided.
- Payment responsibility may shift depending on occupancy, income, and ability to pay.
- Mortgage obligations are treated as part of the overall property division.
- A spouse keeping the home must usually refinance into their own name.
- Missed mortgage payments harm both spouses’ credit until refinancing is complete.
- Judges may require proof of affordability before assigning the home to one spouse.
Calculating and Dividing Equity
Courts evaluate equity using current property value and the remaining mortgage balance.
- Equity is calculated based on present market value minus the outstanding loan.
- Courts ensure that marital debts are addressed before dividing any remaining equity.
- Equity is not always split 50/50—fairness factors determine the distribution.
- Recent appraisals or market analyses may be needed to confirm value.
- Home improvements paid with marital income can increase marital equity.
- Courts may treat post-separation mortgage payments differently when assigning shares.
How Prenuptial or Postnuptial Agreements Affect the Home
Prenuptial and postnuptial agreements can strongly influence how the family home is classified during a Franklin divorce. Clear written terms help the court understand each spouse’s intentions and reduce disputes over ownership and value.
Enforceable Prenups That Control the HomeÂ
Under Tenn. Code Ann. § 36-3-501, a prenuptial agreement is enforceable when both spouses sign it knowingly, voluntarily, and in good faith. A valid prenup can decide whether the home is treated as separate property throughout the marriage. Courts still consider marital contributions when the agreement does not clearly address specific financial or property issues.
Settlement Agreements Between Spouses
Spouses may create a settlement agreement that explains whether the home will be sold, kept, or divided through a buyout. Courts generally approve these agreements when they are voluntary and fair to both spouses. Clear terms help prevent future disputes and allow the court to enter the agreement into the final divorce decree.
Conclusion
Understanding what happens to the family home in a Franklin divorce requires reviewing classification rules. Tennessee courts weigh fairness factors, financial circumstances, and each child’s stability needs carefully. Prenuptial agreements and settlement terms also guide how long-term ownership is assigned.
Options include selling the home, one spouse keeping it, or temporary occupancy during divorce. Courts review financial ability, housing needs, and the overall stability of each family. These choices help shape future living arrangements and support a fair transition afterward.
At Durak Law, we understand how overwhelming property decisions can feel during a Franklin divorce. Our knowledge of Tennessee divorce laws allows us to protect your rights and guide you through every step. Contact us today at (629) 210-0866 to speak with a local Franklin divorce attorney. Take action now and let our team help you secure a fair outcome for your family and your future.
