Indiana follows the “marital pot” theory to determine what property is “marital property.” The “marital pot” theory means that ALL assets and liabilities, owned byeither Husband or Wife BEFORE and DURING the marriage, no matter how the property is titled, is jointly owned by the husband and wife equally and collectively.
Indiana is unique in that there is no “separate” property, like many states recognize. Other states may consider debts or assets held before the marriage to be “separate” or property acquired during the marriage by inheritance or gift to be “separate.” Separate property is not subject to division, and is set aside for the spouse who holds it outside the marriage. This is not the case in Indiana. While factors like inheritance, gift, or owned before the marriage, are factors that can be a reason to deviate from the presumed 50/50 division of property (example: Wife receives 60% of the total property because she owned a house before the marriage and the house should be given to her).
Because of Indiana’s unique view that, what’s mine or ours, everything, regardless of title, ownership, or “name” on the asset or debt, must be disclosed to your attorney and the court. For example, one spouse is a saver and has a sizeable 401k, while the other is a spender and didn’t contribute. The person who holds the 401k may feel justified that should be theirs when the marriage dissolves, because they contributed to it. In Indiana, the theory is that marital funds were used to build that 401k up, because the spouse that contributed was using income to do so, and that would have been income brought home to the marriage otherwise. Therefore, the 401k is marital property, and divisible equitably upon divorce.
The same rings true for property held by title or deed, such as a car, or land/real estate. Simply because only one spouse’s name appears on the title or deed, does not mean that property is owned only by that spouse. Both spouses have an ownership right, regardless of title. For example, each spouse has a car, and their respective cars are titled to just the spouse that drives it. In a divorce proceeding, the spouses may agree, or a court may logically order that each spouse keep the car he or she is driving, but in reality, both cars are part of the marital pot and divisible equitably. This means, that the value of the cars are added together and divided equally, if one car is worth more than the other ($10,000 vs. $2,000 = $12,000 and each spouse gets $6,000 worth), then the spouse who keeps the more valuable car ($10,000) has to give either money or other marital property to the other spouse to make up the difference (the $2,000 car, plus either $4,000 or something else worth $4,000). So, just because the Wife may hold title to the $10,000 car, and keep it after the divorce, does not mean the Husband is out of luck, as he has an ownership interest in the car as well, even if his name is not on the title.
We hope that you have found this information to be helpful in understanding property division in divorce and why title or deed does not matter when dividing the property. This is not intended to be legal advice. If you have questions or concerns about your specific case, Dixon & Moseley, P.C. can help evaluate your specific case. This blog post was written by Attorney, Lori B. Schmeltzer.
