What constitutes marital property? The answer to this question will largely depend on where you live. In Indiana, all assets owned by either party at the time you file for divorce are considered marital property. It makes no difference how the property is titled.
If the property is owned by either party it will be included in the marital pot. This is also true for any liabilities either party may have at the time the divorce is filed.
Keep in mind that property will include not only real estate, vehicles, bank and investment accounts but also retirement benefits. Even if you cannot access these funds if they are vested the value of your 401(k), pension, IRA etc. is a marital assets. The value of all assets minus the liabilities equals the marital estate.
How is the marital estate divided? There is a presumption in Indiana that the marital estate be divided 50/50. Indiana is no fault divorce state so who caused the marriage to end is irrelevant in the division of assets and liabilities. Keep in mind that dividing the estate 50/50 is merely a starting place. The court has wide discretion in dividing the estate in any manner justified under the law.
What factors will the court consider when deviating for the 50/50 presumption? One factor may be the value of assets or liabilities owned prior to marriage by either party. For instance if vested value of your 401(k) at the time you were married was $50,000 and at the time you divorce it equals $100,000, the court may distribute an extra $50,000 worth of assets to you. The result of which would be an unequal distribution of the marital estate. The value of pre marital assets generally becomes less relevant the longer you are married. In other words, the value pre marital assets in a 5 year marriage will have much greater impact that the pre marital assets in a 25 year marriage. It is assumed the longer you are married the more you have commingled your assets.
Some other factors that may be considered are the contributions of the parties, economic circumstances of the parties, earning abilities of the parties. Economic circumstances and earning ability is big factor when a spouse did not work outside the home. The court may reason that the stay at home spouse will need additional time to reach the same career level as the spouse that worked. This may also be true if one spouse has more education or training than the other.
Finally, another factor that may be considered are gifts or inheritance received during the marriage. The court may set aside to gift or inheritance received to the party receiving it. This will largely depend on how the money that was gifted or received through inheritance was use. The more the gift is kept separate from the other marital assets the more likely it is to be set aside. To protect gifts and inheritance try to not commingle them with other assets and track how and when the assets are used. The length of your marriage and when the gift or inheritance was received during the course of your marriage may also factor into how it is treated when dividing your marital estate.
The most important thing to remember about property division is that the court makes the final decision and has wide discretion to do so. It is important to listen to your attorney when trying to negotiate property settlement. Listen to what your attorney has to say not only about the law in your state but how the Judge hearing your case is likely to apply these laws.
Erik H. Carter is a Senior Attorney of the Cordell & Cordell, P.C. office in Indianapolis, Indiana. Mr. Carter has practiced since 1993 as an attorney. He is licensed in Illinois, Indiana, Pennsylvania as well as the Northern District of Indiana and the Southern District of Indiana.