Facts: Husband and Wife were married for 26 years.

Before the marriage, Husband lived in a mobile home on a property. Husband and his father eventually acquired the property and had it jointly titled in both of their names.

After the marriage, Wife lived on the property with Husband. They later decided to build a home on the property. Together, they selected the site for the home, the design of the floor plan, flooring, appliances, cabinets, bathroom tile, exterior lights, etc. They insulated the home themselves. They used their credit cards to help pay the construction costs. Also, Wife’s income went into a joint account with Husband’s income, from which all their bills were paid.

Husband claimed that his father paid to build the home and acted as the general contractor. Husband could not find any receipts or other corroboration related to the cabin construction.

The trial court found the property had transmuted from Husband’s separate property into marital property. Wife was awarded a one-half interest in its value.

Husband appealed.

On Appeal: The Court of Appeals affirmed the trial court.

Transmutation occurs when separate property is used in such a way as to give evidence that it became marital property. A presumption that one spouse has given a gift to the marital estate can be rebutted by evidence clearly indicating an intent that the property remain separate.

Four of the most common factors used to determine whether real estate has been transmuted from separate to marital property are:

• using the property as a marital residence;
• the ongoing maintenance and management of the property by both parties;
• jointly titling the property; and
• using the credit of the nonowner spouse to improve the property.

The use of marital funds to pay off or improve the property is also relevant.

Applying this analysis, the Court found no error in the trial court’s decision to classify the property as marital property:

The property was used as a family residence for approximately 20 years, until the couple separated in 2019.

The trial court found that Wife made significant contributions to the preservation and appreciation of the property. The term “substantial contribution” is defined to include, but is not limited to, “the direct or indirect contribution of a spouse as homemaker, wage earner, parent, or family financial manager, together with such other factors as the court having jurisdiction thereof may determine.”

The property is titled to Husband and [his father]. However, title alone is not dispositive of the intent of the parties in the use of the property; whether a particular asset is marital or separate depends on the conduct of the parties, not the record title of the asset. An asset separately owned by one spouse will be classified as marital property if the parties themselves treated it as marital property. Transmutation often occurs when a spouse purchases real property prior to the marriage and the parties then use the property as the marital residence and undertake significant improvements to the property during the marriage.

The trial court determined that the parties used their joint credit cards along with periodic accumulation of savings to fund their joint efforts to construct the home on the property at issue.

In the present case, the record supports the trial court’s determination that Wife made significant contributions to the maintenance and improvements to the property. She provided physical labor, including decorating, painting, and insulating the house they constructed. Wife maintained employment throughout the majority of the marriage, and all of her income was deposited into the parties’ joint account, from which the taxes, insurance, and normal household expenses were paid. Additionally, Wife contributed to the payment of the credit card debt that arose out of the construction of the marital home in which she lived for over 20 years. Furthermore, Wife contributed as a homemaker. The state’s policy is to recognize the equal dignity and importance of the contributions to the family of the homemaker and the breadwinner.

The Court affirmed the trial court’s judgment that the property Husband owned before the marriage had become marital property by the time of divorce.

Source: Snapp v. Snapp (Tennessee Court of Appeals, Eastern Section, June 28, 2024).

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