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How Property is Typically Divided During a Divorce

How Property is Typically Divided During a Divorce


In Indiana, as well as many states, how property is divided will ultimately be up to the courts. While the system is designed to be as fair and equitable as possible, property divisions are complex.

Individuals can come into a marriage with property, can have “separate” property (such as family inheritances), and can co-mingle funds to the extent that it can be hard to extricate.

Consequently, a court will need to go over each unique situation to determine what is actually fair.

How is Property Typically Divided?

Usually, a property is divided equally between husband and wife—or if one spouse has significantly greater assets than the other spouse, as close as possible to an equal division. This approach, however, may result in unfair results when substantial marital assets go to the wealthier spouse. Because the process is so complicated, the court can reallocate property to achieve a fairer result.

In other words, there are guidelines for property division, but nothing is set in stone. The court has to determine how the property will be divided… and this may be appealed if one or both parties find it unfair (as can be the case if sentimental items are split up).

A court is required to make an “equitable” division of marital property but under no set formula. This means that if one party has far greater assets than the other party, it does not necessarily mean that the wealthier spouse will end up with most or all of the marital assets. Similarly, if one party has less wealth than the other, it does not automatically mean that he/she will receive a greater share of the marital assets.

What Factors are Considered in this Process? 

Commonly, how property is allocated depends on factors such as who needs the assets to maintain their standard of living following divorce; what was each spouse’s role in accumulating those assets; and whether one spouse has greater access to the funds. As an example, they might consider the fact that the custodial parent will need to have a place to raise their family.

Most states require a court to consider all of the circumstances surrounding each party’s contributions to the marriage, both financial and non-financial, when distributing property. Some states list factors that a court must consider when dividing marital property, and some states allow courts to consider any factor that the court determines is just and equitable.

So, for instance, consider a family home that a wife recently inherited from her parents, that neither party has ever lived in. It’s not likely to be split in a divorce because that is a property that the wife has an extreme amount of claim to. On the other hand, consider a scenario in which both wife and husband have lived in that home for 40 years. Now, it’s more likely the husband will have some stake in that home.

Does Indiana Designate Marital Property and Separate Property? 

Indiana does designate between marital property and separate property. But a judge still has the final say in how the property is divided. So, let’s say that a husband has stayed at home with the children for 10 years and the wife has a business that she owns all to herself. A court might reason that the wife would not have been able to maintain that business if her husband had not stayed home with the children.

Marital property is usually any wealth that’s gained after marriage, as funds are usually significantly co-mingled, as are household expenses, assets, and debts. But separate property can be gained during the marriage. Usually, this refers to an inheritance. But it can also refer to the proceeds of anything that was separate.

If someone goes into a marriage with $1 million that they had separately gained and uses that $1 million to invest and make $10 million, that could actually be separate rather than marital property. But the veil is pierced if that money is ever used to contribute to the household or if the household’s money is ever invested alongside it.

Contact Trapp Law LLC for Help 

As you can see, while there are general guidelines regarding marital property and separate property, it has to be decided by a court. This is why it’s so critical for individuals who are going through a divorce to consult with an attorney. Contact Trapp Law LLC today for more information.