How Does The Divorce Court Value And Divide Our Marital Estate If We Have Been Physically Separated For A While?

There are many times couples physically separate but continue to stay married. There are a variety of reasons this occurs. For instance, maybe one spouse has a chronic medical condition and would lose health care coverage he or she has under the other spouse’s group medical plan upon divorce. However, in most cases, there comes a time when a party who has been separated for a time from their spouse wants a divorce to move on (perhaps with a new romantic interest). This raises a profound question. What is in the marital pot for the court to divide? Is it the assets and liabilities as they existed at the time of the physical separation? Or is it the assets and liabilities at the time the divorce is filed? What if one party has accumulated significant wealth since physical separation? In this blog, we try to answer these questions and provide insight to potential options for individuals in similar situations.

As a threshold matter, Indiana, is a one-pot theory state. This means the divorce court will divide the property of the parties, whether it was owned by either spouse before the marriage, acquired by either spouse in his or her own right after the marriage and before the final separation by the parties, or acquired by the parties by their joint efforts up to the date of filing.¹ While this one-pot speaks in terms of assets, it also includes liabilities. With all assets and liabilities accounted for, the court presumes that an equal division of the marital property between the parties is just and reasonable. In simple terms and by way of example, if all of the marital assets are liquid (cash sitting in a bank account), the court would take all of the cash, minus the debts, and divide and distribute the net of debts equally to the parties.

This noted, by definition, a “final separation” for purposes of a divorce filing means the date of filing of the petition for dissolution of marriage.² This is obviously different from the date of physical separation where the parties physically separated much in advance of the filing for divorce, which, again, may be years before. This noted, the divorce court must value the assets to be divided in the marital pot between the date of the filing of the dissolution petition and the date of the final hearing.³ At this point, good lawyering may provide a solution where a situation exits where equal division in this situation would be unjust because of, and based upon, the years of physical separation of the litigants.

Specifically, the presumption for an equal division may be rebutted by a party who presents any relevant evidence that this would not be a just and reasonable division of the marital property. The statute allowing for a deviation and an unequal division even sets forth some reasons the divorce may consider in making said unequal division:

• The contribution of each spouse to the acquisition of the property, regardless of whether the contribution was income producing.
• The extent to which the property was acquired by each spouse before the marriage or through inheritance or gift.
• 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.
• The conduct of the parties during the marriage as related to the disposition or dissipation of their property.
• The earnings or earning ability of the parties as related to a final division of property and a final determination of the property rights of the parties.⁴

However, any relevant argument may be made if you can show in the evidence that an equal division would be unjust. For example, assume one parent leaves the family, moves away, and leaves the care-giving of the children to the other parent, but in relocating the parent is able to get a great job and amasses a large retirement account while the other parent struggles as a sole caregiver to the children, forgoing his or her career. In such cases, if properly presented in the evidence, would not allow the court to pick a valuation date outside the filing of divorce and the final hearing, but deviate in favor the caretaker of the children because he or she could not get a good job and advance through the ranks and simultaneously take care of the children. Literally, and reason showing, an equal division is unjust can justify a deviation, including the date of physical separation and financial implications for each parent (or party, if there are no children involved). But this must be developed in the evidence and carefully presented in court to have chance of success. Mere testimony that a party wants an unequal division is insufficient.

Ciyou & Dixon, P.C. advocates handle a wide array of domestic cases throughout the state, including those with complex assets and/or liabilities. Every case is unique and there are numerous tools available to a skilled family law attorney to advocate an unequal division of the property that meets your needs as long as there is a nexus between your position and the division you seek. This blog is written for general educational purposes only. It is not intended as legal advice or a solicitation of services. It is an advertisement.

1. Indiana Code section 31-15-7-4.
2. Indiana Code 31-9-2-46.
3. Trackwell v. Trackwell, 740 N.E.2d 582 (2000).
4. Indiana Code section 31-15-7-5.