Divorce marks the end of a couple’s romantic journey and shared financial path. It is the legal acknowledgment that the intertwined lives are now moving in different directions. The property division aspect of the divorce process helps divorcing parties work through the financial separation, helping to better ensure a fair distribution of assets.
The process varies in each state. Three things to know when working through the process in Indiana include the following.
#1: Equitable distribution
Indiana follows the principle of equitable distribution, which means the court aims for a fair, though not necessarily equal, distribution of property. The court considers various factors to determine what is fair, including:
- Contribution to marital property: The court examines each spouse’s contribution to acquiring and maintaining marital assets, including non-financial contributions like taking care of the home and child-rearing.
- Economic circumstances: The court assesses each spouse’s financial situation, including income, earning potential, and future financial needs.
- Duration of the marriage: The length of the marriage can impact the division of assets. Shorter marriages might lead to a division based on individual contributions.
- Custodial arrangements: If children are involved, the court considers who will have primary custody and how this affects financial needs.
Understanding these factors can help you anticipate how the court might approach your divorce settlement.
#2: Marital v. separate property
In many states, it is important to distinguish between marital property and separate property. Marital property includes assets and debts attained during the marriage, while separate property generally includes assets owned prior to the marriage or acquired by gift or inheritance during the marriage. This is not the case in Indiana. Indiana law generally does not recognize separate property. All property owned by each spouse becomes marital property unless specifically addressed within a prenuptial agreement.
#3: Valuation and division process
The process involves valuing all marital assets and debts, which can include business interests, real estate, personal property, retirement accounts, and more. Both parties may need to provide documentation and appraisals to establish the value of these assets. The court will then divide the property in a manner it deems equitable, which may involve selling assets or awarding certain items to one spouse while compensating the other with different assets or payments.
Divorce can be a challenging process, both emotionally and financially. In Indiana, it is important to understand how equitable distribution law affects divorce settlements when working through a divorce to mitigate the risk of any surprises after you finalize the divorce.