Blog

Divorce and Real Estate in Indiana: Dividing the Family Home

Index

Introduction to Property Division in Indiana
Equitable Distribution and the Marital Estate
Is the Family Home a Marital Asset?
Determining the Value of the Family Home
Options for Dividing the Home in Divorce
Buyouts, Refinancing, and Selling the Home
What Happens If Children Are Involved?
Separate Property and Prenuptial Agreements
Common Disputes in Real Estate Division
How a Divorce Attorney in Indianapolis Can Help
Conclusion
Frequently Asked Questions

Introduction to Property Division in Indiana: A Deeper Look

Divorce in Indiana involves the careful and often emotional process of dividing real estate, especially the family home. Indiana's law is rooted in the principle of equitable distribution, meaning property division is guided by fairness rather than strict equality. This presumption of fairness has evolved from historic English common law, moving toward a more inclusive approach where both titled and untitled property is considered.

Despite who holds title or when property was acquired, Indiana courts will generally include all assets in the marital estate, known as the “marital pot.” Even inherited, gifted, or premarital property can be subject to division if used for marriage or commingled with marital funds—unless covered by a valid prenuptial agreement or well-documented as separate property.

Equitable Distribution and the Marital Estate

What Is Equitable Distribution?

Indiana employs a unique version of equitable distribution. Courts start with a presumption of a 50/50 division but can adjust for fairness based on evidence from either party. This “equitable” approach is not always “equal,” with judges considering factors such as:

The contribution of each spouse (including non-financial contributions)
Economic circumstances at divorce
Earning abilities and future needs
How and when property was acquired (before/during marriage, by gift/inheritance)
Misuse or dissipation of marital assets

Indiana includes almost all property present at the time of divorce filing in the marital estate—including property acquired before marriage, during, and through inheritance—with limited exceptions.

Real-World Example

Suppose one spouse paid a mortgage on a home owned before marriage with marital earnings. That home, including its equity growth, is likely to be included in the “marital pot” unless a prenuptial agreement or clear records prove otherwise.

Is the Family Home a Marital Asset?

In nearly all Indiana divorces, the family home is considered a marital asset, especially when:

Purchased during the marriage
Both spouses’ names appear on the deed or mortgage
Marital funds paid for maintenance, upgrades, or mortgage

Homes owned before marriage may still become marital property if used by the family or improved/maintained using joint funds. Factors such as where children were raised or investments made using shared money often tip the scales.

Checklist: Is Your Home a Marital Asset?

Was the home purchased during the marriage?

Was it used as the primary family residence?

Did both spouses contribute to payments or improvements?

Was marital money used for the mortgage or renovations?

Is there a prenuptial agreement explicitly covering the home?

If you answer “yes” to most, your home is almost certainly part of the marital estate.

Determining the Value of the Family Home

Valuing the family home is a technical but crucial step. Courts and parties usually aim for the fair market value at the time of the divorce.

How Is Value Determined?

Professional Appraisal: Independent, licensed appraisers assess the market value based on condition, location, and comparable sales.
Comparative Market Analysis (CMA): Real estate agents use local sales data to estimate value—often used in negotiation, but courts generally favor appraisals.
Agreement Between Parties: Spouses may agree on a value, especially if sales data is clear.

If Spouses Disagree: Each can hire their own appraiser, and common resolutions include averaging the results, entering mediation, or letting a judge pick the most credible number. Courts may even order a third, neutral appraisal.

Proof matters: Photos, receipts for repairs, and evidence of recent upgrades can increase the value attributed to your share.

Options for Dividing the Home in Divorce

There are several well-established methods for handling the marital home in an Indiana divorce:

Selling and Splitting Proceeds

The home is listed for sale, mortgage and costs are paid off, and net proceeds divided.
Preferred for a “clean break” but may be ill-timed if the market is down or children need stability.

Buyout by One Spouse

One spouse keeps the home, buying out the other’s equity share (after subtracting mortgage and liens).
Requires the staying spouse to refinance in their name and compensate the other, often using cash or by offsetting other marital assets.

Co-Ownership (Rare and Temporary)

Both parties temporarily remain on the title and mortgage, often until children finish school or the market improves.
Requires careful legal agreements detailing payment, repairs, and an exit plan.

Buyouts, Refinancing, and Selling the Home: A Practical Guide

Buyouts

Determine home value (via appraisal) and subtract mortgage or lien balances.
Calculate each spouse’s equity share.
The staying spouse refinances, pays the other their share, and assumes sole responsibility for mortgage and property.

Tip: Inability to refinance often makes selling the necessary option.

Refinancing Issues

Lenders require proof of income and acceptable debt-to-income ratios. Support payments may count toward income if they are court-ordered and paid regularly.
Both a refinance and a quitclaim deed (removing the former spouse from title) are essential.
Complete the refinance before the divorce is finalized to avoid post-divorce credit risks.

Selling the Home

Select a neutral real estate agent, prepare property for sale, agree on a list price and sales timeline, and split proceeds after costs.
If spouses can’t agree, a court may order a sale.

Step-by-Step Guide for Selling or Refinancing

Obtain a professional appraisal.
Gather mortgage payoff info and calculate equity.
Negotiate buyout or sales terms.
Execute refinance and quit claim deed (for buyouts), or market the home (for sales).
Ensure final court orders align with the property division.

What Happens If Children Are Involved?

Indiana courts prioritize the stability and best interests of minor children in property division. This may mean:

Awarding the family home (or temporary use) to the custodial parent to minimize disruption to children’s schooling and community.
Reviewing the parent’s ability to maintain the home, provide a supportive environment, and ensure proximity to schools and extended family.

Sample Parenting Plan:

Home remains with the custodial parent until children complete the school year, after which it may be transferred or sold.

The Role of Prenuptial Agreements

A carefully drafted prenuptial or postnuptial agreement, in full compliance with Indiana law, is the clearest way to safeguard real estate. Key elements:

Written, signed, and voluntary.
Full disclosure of all assets and debts.
Clauses for asset division, debt responsibility, business interests, and estate planning.

Tip: Courts can override provisions related to child support or custody as they are determined by the child’s best interests. Prenups signed under duress or without proper disclosure may be invalid.

Common Disputes in Real Estate Division

Emotional Attachment vs. Financial Practicality

Sentimentality may prompt a spouse to fight for the home, but courts focus on financial fairness and stability—sometimes awarding other assets to balance the division.

Mortgage Responsibility and Credit Risks

Both spouses remain on the mortgage until it is refinanced. Protect your credit by ensuring the other party refinances or the home is sold.

Disagreements Over Repairs and Improvements

Upgrades made with joint funds or labor during marriage usually increase both parties’ equity.
Provide documentation to claim credit for improvements.

Case Study: Courts may award extra value to a spouse who can show documented investments in fixing up the home.

How a Divorce Attorney in Indianapolis Can Help

A local, experienced attorney provides:

Legal strategy, ensuring that your interest in the home and other marital assets is protected
Guidance in gathering valuations, tax documents, mortgage records, and evidence of contributions
Coordination with real estate agents, financial experts, and mediators
Preparation of buyout or sale agreements with enforceable timelines and contingencies
Court advocacy, should a fair agreement prove impossible

Conclusion

Dividing the family home in an Indiana divorce blends legal, financial, and emotional considerations. Because Indiana’s “all property” rule often pulls even pre-marital or separately titled homes into the marital estate, documentation and legal counsel are absolutely vital. Common solutions include sale and division, buyout with refinance, or—rarely—co-ownership. Judges may tip the balance to maintain stability for children.

If you're in the Indianapolis area—or anywhere across Indiana—and facing divorce involving real estate, gather all property documents, get an appraisal, and speak with an experienced attorney as early as possible.

Frequently Asked Questions

Can my spouse force me to sell the house in a divorce?

No. If you can’t agree, a judge may order the home sold as part of dividing marital property fairly. Courts usually prefer settlements but will intervene as needed.

What if only one spouse is on the mortgage or deed?

In Indiana, the house typically belongs to the marital estate whether or not both spouses are on the title or loan.

How is the house divided if we both want to keep it?

The judge considers factors like the needs of minor children, finances, and contributions. One spouse may be awarded the home or a sale may be ordered and proceeds divided.

Will I have to move out if the divorce isn’t final yet?

Not unless a court orders exclusive possession. Both have a right to reside in the marital home unless the judge decides otherwise.

What happens to the equity in the house?

Equity is most often divided by agreement or court order—either paid out following a sale or used in a buyout by one spouse.

What if the house is under negative equity?

Options may include a short sale or agreement on which spouse will assume risk and potential reward for future appreciation.

Can I recover investments I made in a spouse’s premarital property?

Potentially, with good documentation. Indiana courts may credit substantial marital improvements to pre-marital homes.

How are investment properties handled?

Jointly owned investment properties are part of the marital estate and divided according to the same factors as the family home.

Do Indiana courts consider tax implications?

Yes, especially if you present evidence—such as costs of sale, refinancing, or tax-related penalties connected to division.

Take the Next Step Toward Protecting Your Future

If you are navigating a divorce involving division of real estate, early engagement with skilled legal counsel—and clarity about your financial position—are essential. The attorneys at Ciyou & Associates, P.C. have decades of experience protecting clients’ interests and helping them achieve fair outcomes.

Contact our Indianapolis legal team at (317) 210-2000 to schedule a confidential consultation.

Disclaimer

This blog post is for informational and educational purposes only. It does not constitute legal advice or create an attorney-client relationship. For individualized legal advice, always consult with a qualified Indiana attorney.

Citations

Division of Assets, Divorce

Quick Contact

Need to talk now? Fill out the quick form below and we will contact you directly.

Blog Categories

Contact Us

Name(Required)

Email(Required)

Phone(Required)

Message(Required)