During your marriage, you and your spouse likely acquired significant assets, including your home, cars, retirement savings and investments. You may also have some outstanding student loans, credit card bills or medical expenses. Either way, you must address your assets and liabilities during your divorce.
In Indiana, divorcing spouses do not necessarily receive exactly 50% of the marital estate. Instead, judges use an equitable distribution approach when deciding what happens to assets and debts. If you are planning to end your marriage, you should understand what this legal standard means for your financial future.
Simply put, the equitable distribution standard means you receive a fair share of marital property. When deciding what is fair, the judge considers a number of factors. Among others, these include the following:
- Each spouse’s economic situation and income potential
- Each spouse’s contribution to the marital estate
- The children’s custody arrangement
- Tax implications
While judges in Indiana must follow an equitable distribution approach, you and your soon-to-be ex-spouse have wide latitude to negotiate an acceptable settlement. If you do, a judge is likely to respect your bargain.
Separate and marital property
While understanding how judges tend to divide marital assets and debts is essential in planning for your divorce, you must also understand the difference between separate and marital property. Generally, separate property is whatever you acquired before your marriage. If something is separate property, you likely do not have to divide it during your divorce proceedings. That is, you can probably keep whatever you own that is independent from the marital estate.
If you have decided to end your marriage, you have probably thought through many of the advantages and disadvantages of doing so. Still, you should not forget about your financial future. By understanding how Indiana law treats the division of assets and liabilities, you can better prepare for your upcoming divorce.