Indiana is considered an equitable distribution state. Other states operate on a process of equal distribution. In these states, the marital estate is divided 50/50 regardless of any other considerations. In Indiana, we operate on a process known as equitable distribution. In equitable distribution states, the marital estate may not necessarily be divided in half. Instead, one spouse may acquire more of the marital estate than the other. 

But what exactly is getting divided? This, too, depends on what state you live in. In Indiana, the process of determining what belongs to the marital estate is considerably different than in most other states. Indiana does not recognize separate property during a marriage. Indiana is thus considered a “whole pot” state. All property owned by both spouses at the start of the marriage becomes marital property (Indiana Code Section 31-15-7-4).

Nine states in the country are considered community property states. These states presume that all property acquired during the marriage belongs to both spouses. That property is what is divided in a divorce. During a divorce or legal separation, a family court judge can divide marital assets according to what seems fair rather than equally. Indiana is unusual. Instead of recognizing separate property, all property that either spouse brings into the marriage is considered marital property. 

Indiana Code §31-15-7-4

Under Ind. Code § 31-15-7-4, no asset is outside of the court’s reach to divide or assign to either party. If you owned a house prior to your marriage, once you are married, that house becomes marital property. When a house is purchased, and only one party’s name is on the title, the house is still considered marital property. Assets do not follow the title when dividing the marital estate. The courts will divide such assets in accord with what is equitable.

Another important factor to bear in mind is that the length of the marriage does not determine when an asset becomes marital property. Instead, the asset is considered marital property as soon as the two spouses marry. It is thus subject to equitable distribution if the couple separates or divorces. 

Preventing an asset from becoming marital property

As stated prior, all assets brought into the marriage by either spouse are considered marital property. All assets purchased during the marriage are also considered marital property. In these cases, there is only one way to prevent an asset from becoming marital property. This is through the use of a prenuptial agreement. If one spouse wants to protect a business that they brought into the marriage, they can do so with a prenuptial agreement. The prenuptial agreement would specify that the asset is not considered part of the marital estate, and thus, it would not be subject to equitable distribution.

Talk to a Danville, IN, Family Law Attorney Today

Chris Arrington represents the interests of couples who are pursuing a divorce in Danville, IN. We also represent the interests of couples who are engaged to be married and want to draft a prenuptial agreement. Call our office today to schedule an appointment and learn more about how we can help.