What Is It? What Is Included? How Is It Divided Up?
In Indiana, what property, assets, and liabilities the trial court is to divide is commonly referred to as the “marital pot”. In essence, everything the divorcing parties have is poured into a “pot” and the court divides this in a just and equitable manner.
Specifically, a central determination to be made during settlement of a case, or by a trial court after trial of the matter, is how the marital estate or marital property is to be divided. An important concept to understand is that the marital pot includes assets and liabilities. So if there is $75,000.00 total in the marital pot worth of assets and $25,000.00 in debts, the net marital pot to divide is $50,000.00.
Under Indiana law, the legal presumption set out in a statute is that property will be divided equally (50/50). Unless a party rebuts that presumption (shows why it should not be 50/50), generally, Indiana trial courts will follow equal division or something very close to an equal division.1
With Indiana statues and cases, all marital property goes into the pot to be equally divided. This includes the property of either spouse acquired before the marriage, acquired by either spouse in his or her own right after the marriage and before final separation, and acquired by the joint effort of both spouses.2 Thus, marital property is a broad term.
This noted, the onus or burden of proof is on either spouse to show why this should not be the case. A lot of facts, or any fact, that demonstrate this would be unfair may be a basis the trial court can utilize to deviate from the equal division. Under the example above, if the trial court ordered an equal division, each party would get $25,000.00, assuming the marital estate was all liquidated to cash (unfortunately, that is not the case in most divorce matters).
A recent case was decided by the Indiana Court of Appeals regarding a divorcing couple and how to treat Husband’s IRA that illustrates some of these points.3 In this case, Husband had a retirement account established and well funded before marriage and rolled it into an IRA–again, before the couple was married. Twenty-one (21) years later, the account was worth approximately fourteen (14) times the original value.
The trial court found that the IRA was part of the marital estate and divided that property equally. Husband appealed. On appeal, Husband conceded that the IRA was part of the marital estate- it was marital property in the marital pot- but argued it should not have been equally divided.
In deciding this case, the Court of Appeals found that the Husband properly presented evidence that the IRA was never co-mingled with any marital property; and even the annual $10 fee was not paid with marital funds. However, as compelling as this seemed, the Court of Appeals found the controlling issue to be that most of the appreciation of the IRA occurred during the marriage. In doing so, it affirmed the trial court’s discretionary ruling that the IRA to be equally divided.
In this case, Husband was not able to rebut the presumption that the marital pot was to be divided equally. Even thought this retirement account was never commingled, which can be a basis for division, the prevailing legal theory is because the bulk of the value of the IRA was accrued during the marriage, the IRA was fairly divided under the 50/50 statutory presumption under Indiana law.
By way of summary, a key point to glean from this blog is that martial property is very expansive. Moreover, even where property is brought into the marriage and maintained completely separately from the rest of the marital property, it is very likely, under presumption, that marital property (which is broadly defined) will be split equally and not rebutted by the mere fact it was not commingled.
It is the understanding of the definition of martial property, and presumptive equal division of marital property which provides a rough tool to determine how a trial court might divide the property, at least in the absence of a compelling reason for an unequal division. We hope this educational material about the “marital pot” and presumptive division of the pot’s contents helps you better understand Indiana divorce law.
Dixon & Moseley, P.C. practices law throughout the state of Indiana.