Splitting Property in Divorce: Considerations for 10 Types of Assets

When you get a divorce, unless you have a prenuptial or postnuptial agreement that addresses property distribution, you and your spouse will need to divide your assets in a manner that is consistent with Indiana law. Indiana’s property distribution law is unique in that it establishes a presumption that an equal split of all assets is the most “just and reasonable” solution, regardless of whether these assets were acquired prior to or during the marriage. This presumption can be overcome under limited circumstances; but, in any case, divorcing spouses will need to be prepared to both (i) accurately calculate their fair share of the “marital pot,” and (ii) negotiate to protect the assets that matter most after their marriage is over.

While divorcing spouses could theoretically prepare an inventory of their assets and then go down the list until they are satisfied that they have achieved a 50/50 split, in most cases, certain assets will require specific attention and a more in-depth approach to achieving an amicable resolution. Here are 10 examples of assets that will typically merit special consideration in a divorce:

1. The Family Home

The family home is usually among couples’ most high-value assets, and it will often carry significant emotional value as well. While one option is to sell the home and split the proceeds, the more-common solution is for one spouse to keep the home in exchange for giving up his or her interest in other assets in the marital pot. Home equity, mortgage debt, potential tax liability, custody rights and various other practical considerations are all likely to come into play, and both spouses should carefully weigh all of the relevant factors before agreeing to give up or take sole ownership of their marital residence.

2. Bank and Investment Accounts

Regardless of whether a bank or investment account is in one or both spouses’ names, it will be subject to division during their divorce. Typically, one spouse will retain the couple’s existing savings and checking accounts (formally removing the other spouse from the account and updating any online login information), and the other spouse will deposit his or her share of any cash assets into newly-formed accounts. While it is also possible to split an investment portfolio, brokerage accounts can present some unique issues; and, if there are sufficient assets available, it may make sense for one spouse to keep the entire portfolio while giving up his or her rights to other property.

3. Retirement Savings

Dividing retirement accounts and pensions involves a number of special considerations as well; and, once again, there are a few different options available. A qualified domestic relations order (QDRO) can be used to divide one spouse’s retirement assets without triggering taxes and penalties, but spouses may also choose to keep their respective retirement plans or exchange one spouse’s interest in a retirement plan for other marital property. For more information, you can read: What Happens to Retirement Accounts and Pensions in an Indiana Divorce?

4. Vehicles

If a couple has two or more vehicles of relatively equal value, it may be simple enough for the spouses to agree that each will keep one vehicle in their divorce. However, if a vehicle is part of a collection or has sentimental value, this may come into play in deciding how to divide the couple’s overall marital estate. In any case, it is important to note that title ownership is irrelevant in a divorce – even if a vehicle is solely in your (or your spouse’s) name, it is still subject to the equitable distribution process.

5. Collections

For legal purposes, the individual items in a collection are generally treated the same as any other pieces of personal property. Practically speaking, however, one spouse is likely to have a personal attachment to his or her collection, and it may be that the value of a collection is greater than the sum of its parts. These are relevant considerations that should not be overlooked; and, if divorcing spouses agree that one will keep an entire collection, the collection must be valued appropriately.

6. Pets

Pets are property under Indiana law, and they are considered part of the marital pot just like real estate, financial accounts and physical assets. When deciding who will keep a family pet, if desired, divorcing spouses can make provisions for financial support and “visitation” rights as well.

7. Businesses

Businesses formed prior to and during the marriage are subject to division in a divorce, and this applies regardless of whether one or both spouses are named as owners or involved in the day-to-day operations of the company. As you might expect, there are several complex considerations involved in addressing ownership and control of a privately-held business in a divorce. For a brief introduction, you can read: Divorce Considerations for Indiana Business Owners.

8. Health Insurance

Health insurance is a subject of critical importance for many individuals; and, with a potential repeal of the Affordable Care Act (or Obamacare) being the subject of ongoing political debate, it is especially important for divorcing spouses to ensure that they will have access to continuing coverage after their COBRA eligibility expires (if applicable). There are a number of potential solutions available, and divorcing spouses who do not have coverage through an employer will need to carefully weigh their options during the divorce process.

9. Education

Although education is not an asset that can be divided in a divorce, it is still relevant to our discussion. If one spouse gave up education or employment opportunities in order to undertake childcare or household duties during the marriage, this is an issue that can be addressed through spousal maintenance (or “alimony”).

10. Gifts and Inheritances

In many states, gifts and inheritances are considered “separate” property that are not subject to equitable distribution. But, this is not the case in Indiana. Gifts and inheritances received prior to and during the marriage are subject to division as part of the marital pot under Indiana law. Once again, a prenuptial or postnuptial agreement can override this default rule, and divorcing spouses may agree that each will keep their respective gifts and inheritances or negotiate an alternative amicable resolution.

Speak with a Carmel Divorce Attorney for Free

If you are contemplating a divorce and would like more information about Indiana’s equitable property distribution rules, we encourage you to contact us for a complimentary initial consultation. To speak with Carmel divorce attorney Joshua R. Hains in confidence, please call (317) 588-2883 or request an appointment online today.


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