Dividing property can impact your financial stability after divorce. Indiana law sets a framework for division assuming equal is right. However, equal division is not always right and indeed, may be unreasonable and unjust. The outcome of the division of the marital estate depends on a great deal of facts and evidence that can be presented on the basis of equity.
Indiana Law assumes a fair division is an equal division
Indiana uses an equitable distribution system-therefore, parties may argue that equity necessitates an outcome that is not. Courts begin with a presumption that a 50/50 split of assets and debts is fair. However, this presumption is rebuttable – meaning you can present arguments as to the basis for a different division, something other than 50/50.
Under Indiana Code 31-15-7-4, marital estates are “one-pot.” When you marry, you are legally one person – thus all of your individual assets and debts become marital property and are all in one pot. All assets and debts: even pre-marital, inheritances and gifts, are marital and thus are included in the marital estate, regardless of when or how it was acquired.
This means ownership labels (titles) do not control the outcome and in fact are mostly irrelevant. Indeed, without a pre-marital agreement, no asset or debt can be excluded from the marital pot.
When equal is not fair, just or reasonable
A 50/50 split however is only the starting point. You may present evidence to show that equal division would be unjust. The court evaluates the full marital estate before distributing anything. Several factors (more than can be listed here) are potential considerations for rebutting the equal division presumption. Leading factors include:
- Contribution toward acquisition of assets: Financial, non-financial (homemaking efforts).
- Pre-marital assets or debts: Assets or liabilities that existed at the time of marriage.
- inherited or gift property: Assets acquired by inheritance or gifts before or during the marriage, received individually, by one spouse.
- Economic circumstances: Each spouse’s financial condition at the time of divorce.
- Dissipation of assets: Waste, concealment or improper spending of marital assets or income.
- Earning capacity: Differences in income or future earning ability.
Proper presentation of salient and relevant information related to these leading factors allow the Courts (or in settlement negotiations) to deviate from the presumption that equal is fair, just and reasonable. Oftentimes, each spouse receiving the same amount of assets and debts is completely unjust.
How courts divide assets and debts
Judges have flexibility in how they structure property division. The goal is to reach a fair overall distribution. Common approaches include:
- Awarding property directly: Each spouse receives assets of similar value.
- Ordering a buyout (property equalization payment): One spouse keeps an asset and pays the other their share.
- Requiring a sale: Property is sold and proceeds are divided.
Courts actually may combine these various methods. For example, one spouse may keep the home while the other receives retirement assets.
When it may help to consult an attorney
Property division involves complex financial, practical and legal issues. Using the right attorney with the right experience, knowledge and reliable experts makes all the difference. An attorney like me, can help you understand how Indiana courts may apply the law to your situation and set your short and long-term priorities. Careful guidance and representation from me will assure a fair, just and reasonable division of your marital estate based on your specific and unique circumstances.