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Indiana Property Division
Property Distribution Laws in Indiana

In Indiana, the courts generally accept a fair and reasonable property division the parties agree to, but if the parties cannot agree, is divided by the Domestic Relations Court within the Judgment of Divorce.

An equitable distribution state, Indiana follows the "all property" model, and appreciation of separate property is marital. Equitable does not mean equal, or even half, but rather what the Domestic Relations Court considers fair.

In Indiana there is a rebuttable presumption for equal division of property. A spouse may rebut the presumption of an equal distribution if he or she presents relevant evidence that an equal division would not be just and reasonable.

Indiana is a no-fault divorce state. However, if the Court finds one party dissipated marital assets, (i.e., gambling, poor business investments) then it may consider this conduct in determining that an equal division of property would be inappropriate.

According to statute, the length of marriage does not have an effect on property distribution. However, in a relatively short-term marriage, the Court would probably deviate from the 50/50 presumption to allow parties to keep what each brought into the marriage.

Factors in Equitable Distribution

According to Indiana Code - Title 31 - Article 15 - Chapters: 7, the court may consider these factors in determining whether or not an equal distribution is appropriate:

  • the contribution of each spouse to the acquisition of property, regardless of whether the contribution was income producing;
  • the extent to which the property was acquired by each spouse before marriage or through inheritance or gift;
  • the economic circumstances of each spouse at the time of the disposition of the property, including the desirability of awarding the family residence or the right to dwell in the family residence for such periods as the Court considers just to a spouse having custody of any children;
  • the conduct of the parties during the marriage as related to disposition or dissipation of their property; and
  • the earnings or earning ability of the parties related to a final division of property and final determination of property rights of the parties.

Marital Property vs. Separate Property

Being an all property state, marital property is property owned or acquired by either spouse before or during the marriage or assets acquired by their joint efforts. The spouses must have executed a valid pre-nuptial agreement prior to their marriage in order to keep property separate. More often than not, a Court deviates from the 50/50 presumption in order to give a spouse his or her separate property.

Valuing and Dividing Property

The Domestic Relations Court goes through a discovery process to classify property and debt as marital or separate. The court assigns a monetary value on the marital property and debt, and then distributes the marital assets between the two parties in an equitable fashion. Equitable does not mean equal, but rather what is deemed by the Domestic Relations Court to be fair.

The Marital Home

In Indiana, as in many jurisdictions, the equity in the marital home is often one of the biggest assets the spouses divide. The equity is the market value of the house, less any debts or liens against it. Equity is established by determining what the current market value of the home is at the time of separation. Once the spouses agree to a current market value, any debts associated with the property (mortgage, taxes, home equity loans, etc.) from are deducted the market value to arrive at the equity to be divided. Normally, making this calculation requires a paid real estate appraisal or a real estate agent can prepare a market analysis for free.

From there, couples choose one of three options to divide the equity:

  • The spouses sell the home and divide the proceeds.
  • One of the parties may refinance the home and buy out the other party.
  • One spouse (usually the custodial parent) remains in the home with the exclusive use and possession for a certain period of time (for example, until the youngest child graduates from high school), then either buys out the other spouse or sells the home and divides the proceeds.

Pensions and Retirement Accounts

In Indiana, vested retirement accounts are subject to division by the court. The court sets aside to either spouse a percentage of those payments, either by assignment or in-kind at the time of receipt.

When retirement benefits are contingent, for instance, upon the worker spouse remaining at such place of employment a certain number of years and those number of years have not been achieved at the time the divorce was filed, those retirement benefits are not subject to division.

In Indiana, vested pensions are marital property. A pension vests when all the requirements to receive the pension have been met. Unvested pensions are also marital property. Until the pension has vested, the person under whom the pension is maintained has only an expectancy of interest in the pension.

Several different methods of valuation are used in determining how much a marital asset is worth, depending upon the asset to be valued and the level of agreement between the parties. Courts generally accept the value when the spouses mutually agree on a value of a particular asset. Experts may be retained by the parties or by the courts to determine the value of marital assets if the parties cannot agree. Such experts may include accountants, real estate or business appraisers, or pension valuators. The use of experts adds to the cost of the divorce.

In Indiana, if spouses share in each others retirement or pension plan, a Qualified Domestic Relations Order must be completed. A QDRO is a written set of instructions that explains to a plan administrator that two parties are dividing pension benefits. The instructions set forth the terms and conditions of the distribution - how much of the benefits are to be paid to each party, when such benefits can be paid, how such benefits should be paid, etc.

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