Decisions about property division in a divorce can often be one the biggest issues in dispute as each side works to get what they believe is a fair share. Couples able to reach an agreement on this issue will typically find courts willing to accept their terms, unless they seem particularly unequal or unfair. If couples are unable to resolve property division on their own, they may then turn to mediation to negotiate a settlement, and can appeal to a judge to make a determination if there is still a dispute.

While division of most property (houses, bank accounts, stocks) can appear to be somewhat straightforward, what about property that has not fully vested, like benefits in a life insurance policy or pension? Anyone involved in a divorce should think about any property that lists a spouse as the beneficiary because that is treated differently and will typically require action outside of a divorce proceeding to change who is entitled to the money. A discussion of general property division provisions in Indiana will appear below, followed by a consideration of what happens if you do not change the beneficiary from your ex-spouse before death.

Property Division

Property division in Indiana is determined by what is most equitable, and there is a presumption that a 50/50 division should be the starting point in all divorce cases. Because property division is based on equity, the division may not be entirely equal, but it will be the one that is most fair in the court’s view. Courts combine together all property owned by both spouses when deciding how to divide it. This means property brought into the marriage is treated the same as property acquired while the couple was married, which is based on the thought that it is often difficult to figure out who owns what. Courts do not, however, completely disregard the distinction between property acquired separately and that acquired while married. If one spouse challenges the equal distribution of property as unfair, the fact that some property was purchased separately may be used as an argument against completely equal division.     

There are several factors courts consider if one spouse contests a 50/50 division. These are:

• How much each spouse contributed to acquiring property;
• How much property was acquired separately, either before marriage or through inheritance;
• The economic circumstances of each spouse;
• The earning abilities of both spouses; and
• Whether conduct by either spouse during the marriage led to a reduction in the value of their property.

Property division can occur by assigning a spouse certain assets, selling property and splitting the proceeds, or continuing to jointly own the property. All debts and liabilities must also be divided between both spouses.

Property Interests as a Beneficiary

Most people would assume that once a couple gets divorced, all the rights in property they would inherit upon death would be extinguished. This is true for property passed through a will, or probate proceeding if there is no will. Indiana law automatically revokes any provision in a will that gives property to the ex-spouse, and for estates without wills, the ex-spouse would no longer be considered as part of the line of possible inheritors. A divorce decree has no effect on property benefits that pass through contract, such as life insurance proceeds, pensions, and IRAs. This means that unless the spouse that holds the policy or account changes the named beneficiary prior to death, the money would still pass to the ex-spouse, regardless of the deceased’s wishes. Therefore, it is crucial that any couple going through a divorce look at all of their assets, not just the ones they can access today, to make sure the person who ultimately receive the proceeds is the person truly intended.

Find an Attorney

Property division and valuation of assets during divorce is not something you should attempt alone if have the slightest reservation about how to fairly distribute your property holdings. Consulting with a divorce attorney prior to entering an agreement on property distribution is a good way to ensure you receive what is fair. Christopher L. Arrington, Attorney at Law, P.C., offers divorce representation to those living in the Indianapolis area and is available to assist you in all aspects of a divorce case. Contact him today to schedule a consultation.