We receive questions all the time from clients and prospective clients regarding how the court will divide their inheritance in a divorce. Unfortunately, there is no quick and straightforward answer to that question. The division of property in Indiana depends greatly on the facts and circumstances of each case. However, there are some uniform concepts and rules that will help give you an idea of how the trial court will treat your inheritance during divorce. In this blog, we provide a brief overview of how property is divided in Indiana, and how you may be able to keep your inheritance in a divorce.
At the outset, it is important to outline the process for division of property in Indiana. To begin, upon divorce, Indiana courts divide what is known as “marital property” between the parties. Marital property is property owned by either spouse, regardless of if the property was acquired before the marriage or during the marriage. Nor does it matter if the property is titled in only one of the spouse’s names, or if it is jointly titled. All property is presumptively marital property. Thus, if you received an inheritance before or during the marriage, that inheritance is going to be considered marital property subject to division. All of this property is in the marital “one-pot” to divide.
Next, Indiana follows what is known as an equitable distribution of property theory in divorce actions. This means that property is divided in a “just and reasonable” manner, not necessarily a 50/50 division. However, the presumption in Indiana is that a 50/50 division of property is “just and reasonable.” Thus, an individual who wants an unequal division must overcome this presumption. As such, if you do not want your inheritance to be divided between yourself and your soon to be ex-spouse, you must overcome the presumption that a 50/50 division is just and reasonable by putting on in the evidence why the inheritance should be factored into an unequal division.
Indiana Code section 31-15-7-5 provides a list of factors that a court can consider in determining whether a 50/50 division would be “just and reasonable.” Those factors include: (1) The contribution of each spouse to the acquisition of the property, regardless of whether the contribution was income producing. (2) The extent to which the property was acquired by each spouse: (A) before the marriage; or (B) through inheritance or gift. (3) The economic circumstances of each spouse at the time the disposition of the property is to become effective, 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 the spouse having custody of any children. (4) The conduct of the parties during the marriage as related to the disposition or dissipation of their property. (5) The earnings or earning ability of the parties as related to: (A) a final division of property; and (B) a final determination of the property rights of the parties.
If a litigant can, with the assistance of skilled counsel, present competent evidence relating to these factors, and the factors weigh in favor of an unequal division relative to the inheritance, the presumption may be overcome. So a 60/40 division may account for the inheritance by an unequal division. These types of situations are extremely fact sensitive. Divorces are emotional times for all involved. Not only are they emotional, but often legally complex to formulate for trial and develop the necessary evidence, especially when it comes to property division. Obtaining skilled counsel is key to developing the evidence to rebut the 50/50 division at trial. Basically any just and reasonable rationale can allow the court to divide the marital estate unequally. This blog was written by attorneys at Dixon & Moseley, P.C. who handle divorces of all types throughout the state. It is written and posted for general educational purposes and is not to be construed as legal advice or solicitation for services. It is an advertisement.