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How does Indiana’s ‘one pot’ theory affect property division?

On Behalf of | Nov 22, 2021 | Divorce

When you go through a divorce, you may have a lot of issues to deal with that are new to you. Property division is likely one of them and it can be very complex. To help you get a handle on it, let’s talk about where Indiana law starts, so that it makes more sense how you arrive at the end.

Everything goes into the pot

When we speak of the ‘one pot’ theory of property division, we’re talking about a presumption made at the outset of a divorce. Indiana Code Section 31-15-7-4 states that everything owned by the couple is initially pooled together for purposes of property division. This includes both assets and liabilities and nothing is exempt.

In practice, what this means is that everything you or your spouse own, regardless of when it was acquired, is considered marital property and subject to division. Did you buy a car before the marriage, paying for it with your own money, insuring it yourself, and driving it exclusively? Doesn’t matter – it’s considered marital property. Did you receive an inheritance at some point, intended only for you and your benefit? Still doesn’t matter – it’s marital property.

Equitable distribution

Just because everything is thrown into a single pot does not mean it remains there. The court also begins with the presumption that all marital property should be distributed equally, but that is not the end of the story. In the end, what the court is looking for is that the property is distributed equitably – or fairly. A fair distribution is sometimes also an equal distribution, but not always.

One spouse is well within their rights to argue that a particular asset should remain with them, due to how it was acquired, when it was acquired, what it was intended for or how it was used. So, for something like an inheritance mentioned above, while the law may initially presume it goes into the single pot, it does not have to remain there. One spouse can rebut the presumption and convince the court that they should retain it for themselves.