Property division laws in Indiana start with a presumption that all marital assets (and debts) will be split evenly. While there are sometimes factors influencing the court to award more to one party or the other, the court always starts at the even split.
Protecting your assets, or ensuring you are awarded what is rightfully yours, can be a complicated process, starting with how those assets are defined. Without guidance, property division can become a source of unnecessary drama and animosity, making an already difficult situation more painful.
The “One Pot” Property Theory
In Indiana the court will consider all assets regardless of when they are gained as marital assets, with a few exceptions. This will include assets gained before and during the marriage, unless a pre or post nuptial agreement says otherwise. The One Pot theory also considers all debts of the parties in deciding how to divide the marital property. This would include credit card and student loan debts of the parties.
The presumption in Indiana is for an equal split of all of the assets and debts of the marriage. However, there are some factors that the court will look at that can change the amounts awarded to each side. These factors include amongst others, the earning capacity of the parties, the education level of the parties, the duration of the marriage, property owned before the marriage, each parties contribution to the families wealth, and child custody. The division of property is at the court’s discretion, but any deviation from the 50/50 split requires the court to explain the reasoning behind the decision.
Considerations Regarding the Marital Home
Usually, the most difficult decision to make regarding assets is how to divide the marital home. This decision is rarely straightforward, as it requires both spouses to carefully consider things like (but not limited to) the following:
- Will one of you stay in the home, or will it be sold?
- If one of you stays in the home, who will be responsible for the mortgage?
- Can the person staying in the home afford the mortgage, taxes, and maintenance expenses?
- How will the agreement affect the wellbeing of any children involved?
Further, if you have moved out of the home, your right to move back in may change. Even though your name might be on the deed, you cannot simply move back in because you’ve changed your mind.
Before you make any decisions about your house, it’s wise to consult an attorney to ensure your rights are protected and that you are not impinging on the rights of your spouse.
Dividing Marital Debt
What many people don’t realize is that marital debt is also divided between spouses. As is the case with assets, debts are divided equally between the two of you, which is an important consideration when analyzing your finances. A few (but not all) of the considerations you need to make:
- Can you afford to take on half of the debt you and your spouse have incurred over the course of the marriage?
- If you do take on half or part of the marital debt, what impact will it have on your credit score?
Financial Awareness
Our Divorce Budget Worksheet is a helpful starting point for looking at your finances so you have a clear idea of what you can afford after your divorce.
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Alimony/Maintenance
Alimony is called Maintenance in Indiana and is very rare because we have the “one pot” system. The thinking is that because you are getting half of everything, assets and debts, that there should not be any additional need for the payment of maintenance. This isn’t always the case though. In some circumstances the court may award maintenance, but it is very rare and difficult to obtain in Indiana.
The three situations where maintenance can typically be awarded are when one spouse suffers from a physical or mental disability, where one spouse has insufficient assets to support themselves and they have custody of a disabled child, or they need to pursue new skills to become employed. The last situation is called Rehabilitative Maintenance, and is limited to a maximum of three years.
Know Your Financial Standing
Before you file for divorce, it’s important to understand what you can expect after the process is finished, and what your life and resources will look like. Consulting a qualified attorney can help you understand how the financial aspects of an Indiana divorce looks like and to ensure that your best interests are being protected.
If you are seeking legal advice about property division in divorce, please call us at 317-708-9410 to schedule a confidential consultation, or email us at info@watanabelawin.com