Case Study: Divorce & Inheritance Accounts
Updated: Mar 18, 2019
When a married couple decides to file for the dissolution of their marriage, the assets and property must be divided between the two. In Indiana, the law governs that the trial court will divide the property of the couple in a just and reasonable matter, or follow the premarital agreement if there is one.
This property includes assets 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, or acquired by their joint efforts. This “one pot” theory of marital property ensures that all marital assets are subject to the trial court’s power to divide and award. However, the presumption of equal division may be rebutted by a party who presents evidence than an equal division would not be just and reasonable because of the contribution each spouse made to the acquisition of property.
A recent Court case affirmed that a spouse must overcome the presumption of equal division in order to have different distribution. In the case, the husband and wife married in 1978. During the marriage, the wife inherited property and funds after the deaths of her mother and uncle. She deposited the funds from the estates into multiple bank accounts in her name only. The husband had various sources of income, including worker’s compensation funds.
In 2013, the husband filed a petition for dissolution of marriage and requested the trial court apply the presumption of equal division of the marital estate. However, the wife requested that the trial court award a 65/35 percent distribution in her favor due to the income disparity. The trial court decided that a 65/35 percent distribution was not warranted and instead awarded an equal distribution. The issue went on to the Court of Appeals, who reversed and remanded.
The Court noted that the wife had presented several specific facts related to the inheritance accounts that supported her claim. A person’s inheritance alone does not necessarily dictate how property should be divided, but the inherited property should be considered with relevant evidence and contextual facts.
In this case, the wife kept the inheritance accounts solely in her name and for her use. Her husband was unaware of the specifics of the accounts and did not have access to or use the accounts. Since the wife met her burden of overcoming the presumption of an equal division, the case was remanded to determine the proper division of the marital estate.