In Indiana the marital estate encompasses all assets and debts of the parties. Some states, including Indiana, refer to this as the “one pot theory.” The objective in a dissolution is to divide the parties assets and liabilities in a just and reasonable manner and return them to the status of unmarried adults.
If the parties are unable to agree upon the division of assets and debts, then the trial court will make the final decision as to the division and ultimately the percentage of the division. The presumption is to divide the assets and debts equally or 50/50 between the parties, however there are certain assets that are not divisible by the court, and it is not clear if certain assets should even be included in the marital estate because of specific legal provisions (the subject of this blog post based on a recent decision) or their speculative nature (i.e., unvested stock).
Sometimes assets in the form of, or associated with state, federal or union pensions are not divisible due to a federal law or state law which protects these assets from division in a dissolution. These assets include certain Railroad Pensions. Additionally, there are some limitations by state statute on the manner of division of public pensions (PERFs)1.
In a recent opinion the Court of Appeals in Harris v. Harris2 struck a portion of the division of a marital estate that involved payments from the recipient of a Railroad Pension to the former spouse that were based upon the recipient’s Pension payments under Tier I of the Pension. This is due to the fact that the Tier I portion of the Railroad Pension is protected under Federal law and is not a divisible asset in a dissolution of marriage.
The Court went on to indicate that even including the Tier I portion of the Railroad Pension as part of the marital estate, is not allowable. There was a dissent (disagreeing written opinion by one of the reviewing Judges on the Court of Appeals) who opined that the Pension should at least be considered for purposes of the economic condition of the parties, which can be a factor in the division. Therefore, the value of the Pension should be excluded completely from the marital estate, but its value could have some impact upon the division.
This blog post is written by attorneys at Ciyou & Dixon, P.C. and is for general educational purposes only. It is not legal advice, or solicitation for legal services. Ciyou & Dixon, P.C. attorneys handle domestic relations, paternity, guardianship, protective order cases and civil appeals from all Indiana state trial courts.