How Is the Division of Assets and Debts and Spousal Support Determined in Kentucky and Indiana?

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There may be people reading this blog who perhaps don’t even have kids. They might think, “I don’t have kids, so this isn’t an issue.” It actually is an issue for people who just have assets. To give an example, I worked with a couple who was living in Kentucky, and one of the parties had received a significant inheritance, which was the bulk of what they owned and were planning on retiring on. One of them wanted out of the marriage, so they consulted with us. One of the big differences between Kentucky and Indiana is that Kentucky is a separate property state, as are a good number of states in the United States. That generally means that anything you inherit, anything you’re given during the marriage, or anything you had before the marriage, you get back as part of the divorce. The other person can’t even ask for a portion of that, and the court only splits up what is marital, meaning it was acquired by the parties during the marriage.

Contrast that with a community property state, where normally everything is divided 50/50. Indiana is a hybrid of those two. It’s what’s called a marital pot state. So, in Indiana, everything you own goes into a pot, and the question that’s asked is, “Why shouldn’t we divide all of this 50/50?” In that specific case, the person who wanted out of the marriage did not want to leave without half of those assets, and so we’ve sometimes advised people to establish a new residence for purposes of divorce in order to avail themselves of more advantageous laws and protect their assets.

In a situation where somebody has inherited a lot of money and wants to protect it, Kentucky has a much more favorable law to get that back than Indiana does. Indiana would put the money in a pot and say, “Why shouldn’t each party share half?” It’s important, therefore, for each person to know their state’s unique laws about property and debt division.

For people with children, there are, obviously, some interstate issues that come up, as well as questions regarding how maintenance and alimony will be calculated. Kentucky is a fairly generous alimony state. We got an alimony award for one client who was only married for a year and a half, whereas that is very rare in Indiana, where alimony doesn’t really exist. There are very limited ways to get maintenance in Indiana. If I have a client who is disabled and has been in a 30-year marriage, it is advantageous for her to have residence in Kentucky and let that issue be decided there instead of in Indiana, where there’s not much law to support that type of claim.

When it comes to the issues of dividing property and debt and figuring out alimony and maintenance, there’s also the issue of attorney’s fees. If you have one partner making significantly more than the other, states have different rules about who pays for the divorce. So, even if you don’t have children, if you are living right next to another state or you are potentially going to be living somewhere else, you need to think about how that will look.

There’s another story that comes to mind. A couple here did not have any children, and the husband really wanted to be out in California to live the rest of his life. He met with an attorney who wasn’t well-versed in interstate matters and who told him they’d file here. His divorce ended up taking two years, time during which he was not living in the place he wanted to be. Many of his issues could have been avoided if he’d gone ahead and moved and filed there.

We also see a lot of cases where, sadly, one spouse does not wish to file. Either they don’t want to get divorced or they have religious beliefs that prevent them from doing so. Whether they want the divorce or not, they should still plan for their future because the divorce will affect their belongings, their assets, and their very livelihood going forward. If a potential relocation may change how things get divided, the spouse needs to get on top of that and not wait until it’s too late. Once the case gets filed, it’s very hard to get it moved, as a general rule.

For more information on Division of Assets & Debts And Alimony, an initial consultation is your next best step. Goldberg Simpson is proud to have a robust family law practice with clients licensed in both Indiana and Kentucky.

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