We receive questions all the time from clients and prospective clients regarding the division of property in Indiana. Unfortunately, there are no quick and straightforward answers to that question. The reasoning is that 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 real estate investment portfolio in a 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 real estate investment portfolio in a divorce.
In Indiana, upon filing for divorce, the court will 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. Additionally, it 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. This means that if you own a real estate investment portfolio, regardless of if it was acquired before or during the marriage, and regardless of the contributions made by the Parties, it is marital property. Importantly, with it being marital property, it is subject to division by the trial court.
With an understanding of what property is subject to division in a divorce, it is important to note the theory of distribution that Indiana courts follow. In particular, Indiana follows what is known as an equitable distribution of property theory upon divorce. This means that all marital property is divided in a “just and equal” manner, not necessarily a 50/50 division. However, there is a presumption that a “just and equal” division is a 50/50 division. An individual seeking to deviate from the 50/50 division will have the burden of overcoming the presumption that 50/50 is “just and equal.” Therefore, if you own a real estate investment portfolio, generally speaking, you and your soon-to-be-ex-spouse, would be entitled to fifty percent of the value of the real estate investment portfolio. There are many ways in which the court could divide the real estate investment portfolio to accomplish a 50/50 division. For example, the court can award the real estate investment portfolio to one spouse and order that spouse to pay the other spouse half of the value of the investment portfolio. Or the court could award the real estate investment portfolio to one spouse and offset the value of the investment portfolio elsewhere to reach a 50/50 division.
While there is a presumption for equal division of marital property in Indiana, statutory code section 31-15-7-5 lists several factors a court can consider when determining whether a 50/50 division would be “just and reasonable.” There are five different factors listed in said statute that a court can rely on. If an individual is able to show to the court that the factors weigh in favor of an unequal division, then you may be able to persuade the court that you should retain full ownership of your real estate investment portfolio without giving any of the value of said investment portfolio to your spouse.
These types of situations are extremely fact-sensitive, and the above information is general in nature. Divorces are emotional times for all involved. Not only are they emotional, but often time complex, especially when it comes to property division. Obtaining skilled counsel is key to relieving some of the burdens that come with divorce. 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.