New Changes in Tennessee Divorce LawAs of July 1, 2015, there is a new Tennessee divorce law that now requires Tennessee government pensions to be divided in two. Another new law requires account balances, accrued benefits, pensions, stock options and other fringe benefits and their appreciated value that were acquired prior to marriage be treated as separate property for the purposes of property division.

State of Tennessee Public Chapter 440 went into effect on July 1, 2015. According to this new law, which amends T.C.A. § 26-2-105, local governments that have qualified retirement plans must honor claims under a qualified domestic relations order if the order relates only to the provision of marital property rights for the benefit of the former spouse of the qualified plan’s participant.

So, now local Tennessee government employees (county, city or town) who participate in a retirement or pension plan that is qualified under Section 401 or Section 403 of the IRS Code (26 U.S.C. §401 or §403).

State of Tennessee Public Chapter 202, which also went into effect on July 1, amends TCA Title 36, Chapter 4, which is related to property division in divorce or legal separation.

This new law, or revision to the existing law, clarifies what is to be considered marital property for the purposes of dividing retirement and pension programs in divorce, and it declares that any accrued benefit and value whether vested or unvested that accrues prior to the marriage will be considered “separate property.”

Thus, if a couple marries later in life and one of them has been an employee at the same company for 15 years prior to the marriage, all of the value and accrued benefits that have been accumulating in their retirement program will not be subject to the property division process if and when that couple should divorce.

Both of these new laws serve to refine the existing laws that govern the property division process in Tennessee. Asset division can be complex and involve strong emotions. It is at times like these when it is helpful to have a competent divorce attorney guiding you through the process.

I believe that there are strategies that we can use to ensure a mutually agreeable settlement. I am happy to discuss all of the various options for keeping pensions intact and coming up with solutions that will be fair to both parties. If you live in or around Maryville or Franklin, and you are thinking about divorce but you are worried about losing your retirement savings, please contact me at my law firm –Kevin W. Shepherd, Attorney at Law – and we can discuss your case and explore your options.

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