Generally speaking, the Indiana courts will divide the marital estate evenly between the former partners. However, they don’t have to. Indiana operates on a system of equitable distribution, meaning that the marital estate is divided “fairly”—not necessarily evenly. In some cases, the courts can see fit to favor one party when dividing the marital estate. That’s precisely what happened in the Indiana family law case of Roetter v. Roetter, 174 N.E.3d 1 (Ind. 2022), Supreme Court of Indiana, decided March 10, 2022 (No. 21S-DC-568).
Background of the case
Husband and Wife were married in 2017, and their marriage lasted less than two years. Both spouses brought separate assets into the marriage. Wife had a more stable income and a stronger earning capacity. Husband’s income was modest by comparison. During the dissolution, the trial court identified and valued all of the couple’s marital assets. After considering the statutory factors, the court awarded 55% of the marital estate to Wife and only 45% to Husband. While Indiana law presumes that 50/50 is the best way to divide the marital estate, the courts can find reasons to divide the marital estate unevenly. In this case, the trial court entered a decree that divided the marital estate 55/45 in favor of Wife. The rationale behind this deviation was warranted by the short duration of the marriage, premarital contributions, and the parties’ income disparity.
Husband appealed the matter, and the court of appeals reversed the trial court’s decision, finding that the trial court improperly “set aside” premarital property instead of including it in the marital estate. The case made it all the way to the Indiana Supreme Court.
Outcome and reasoning
The questions before the court were:
- Did the trial court err by awarding Wife 55% of the marital estate?
- Must all assets be included in the marital estate even if acquired before the marriage?
- What findings are necessary to justify a deviation from the 50/50 split?
Ultimately, the Indiana Supreme Court affirmed the trial court’s decision to divide the marital estate unevenly in favor of Wife. The Supreme Court clarified that while all property (premarital and marital) must be considered in the marital estate, the presumption of equal division can be rebutted with the appropriate findings.
Under Indiana Code § 31-15-7-5, there must be an equal distribution of marital property unless the court makes certain findings based on specific factors. These factors include:
- Each spouse’s contribution to property acquisition
- Property acquired before the marriage or through gift/inheritance
- Economic circumstances of each spouse
- Conduct of the parties regarding property dissipation
- Earning ability of both parties
In this case, a shorter marriage supported weighing premarital property more heavily toward the original owner. Wife had a significantly higher earning capacity, which also favored an uneven distribution. The trial court did not exclude premarital assets from the estate. Instead, it properly considered them, then explained why an uneven division was equitable.
Ultimately, a trial court must consider all property in the marital pot and explain why a 50/50 division is not equitable. The trial court did, in this case, according to the Indiana Supreme Court, so the verdict stood.
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