How Would Assets Be Divided in a Divorce If Parties Have Property in Both Kentucky and Indiana?

It’s an important issue we deal with a lot, and there’s a common misconception that courts will speak only for the property inside state lines. Maybe the couple’s residence is in Indiana, but they own, let’s say, commercial properties or rental properties in Kentucky. Some people mistakenly believe that an Indiana judge will handle the Indiana property and a Kentucky judge will handle the Kentucky property, but that is incorrect. If the divorce is properly in Indiana, then an Indiana judge gets to decide for the entire marital estate, regardless of state or country lines. It’s one divorce case, meaning all the assets must be discussed.

I think the reason for this misconception is that if you pass away in a state, normally the court only probates your real estate in that state. If someone dies in Indiana, you have to set up another estate in, for example, Kentucky if the person owned property there. People think the rules must be the same with divorce, but they are not. One lawsuit, one divorce case in Kentucky, can deal with property all over the world, if the parties own property all over the world.

As discussed before, the first step in Kentucky is to give back to each party what they owned before the marriage, plus anything they’ve been given individually or inherited. From there, it’s normally an equal division of anything that is marital. In Indiana, the normal rule is that everything that is owned prior to the date of filing would be divided 50/50. But there are certain exceptions. We had an Indiana client recently who had a house for many years before the marriage, and the judge did not award half of that house, so it’s a very fact-specific scenario. Indiana is a hybrid between a community property state, where everything is divided 50/50, and a state like Kentucky, where assets are automatically returned. Sometimes, you get mixed results in Indiana on a percentage basis. So instead of getting 0% or 50%, maybe the judge awards 20% of something as a way of acknowledging that the parties have been married for some time but that property was acquired before the marriage. It’s much more individualized in Indiana than in Kentucky.

How Is Alimony Decided and Calculated in Kentucky and Indiana?

There are no official calculators for alimony in either state, though people will try to find them online. Normally, a judge will look at what each person makes, usually their net income. In other words, after taxes, what disposable income do they have? What other expenses are there? What does it cost for them to live reasonably? Then, they’ll look at the other person’s same information.

There is often a disparity because one person is the breadwinner of the family. They make a good amount of money and can easily pay their expenses, but the other spouse is now living on their own, without much income or earning capacity. Their expenses are exceeded by what they earn. If maintenance is awarded, the judge will often make it to where the breadwinner spouse can still survive but has to move money over to help the other person transition out of the marriage and also survive. There is no rule that says the other spouse will get 50% of the breadwinner’s income. There is usually a detailed analysis of how old the people are and how far away from attaining Medicare or Social Security benefits for longer-term marriages or second marriages where people are older. They also look at their monthly budget, expenses and income, their health status, and whether they have any medical bills.

Another issue a lot of people don’t think about is health insurance. When you get divorced, you can’t stay on the same policy. If the wife is having to get on COBRA or is not eligible for the Affordable Care Act, she’s going to be paying $800 a month in health insurance; that’s a brand-new bill that didn’t exist when the parties were married. A judge is usually going to look at that and try to address that with maintenance or alimony.

It’s important to remember that any calculator you find online will not be accurate and shouldn’t be relied on. At our firm, we have a customized calculator that we purchased and use to help people estimate maintenance. It’s the same software that judges sometimes use after they listen to a case and figure out what they are trying to do. In this way, we can give people some inside knowledge with access to those resources that aren’t available online.

Can a Court Handle Alimony If the Other Spouse Has Resided in Another State for Six Months?

Generally, if a state is able to handle a divorce, regardless of where the other person lives, then the issue of maintenance can be brought up, though there are some technical exceptions. Let’s say that both parties have lived in Indiana, but then the mom moves to Kentucky, where she lives for six months and requests a divorce. She also wants maintenance. If the dad has never lived in Kentucky, there may be some restrictions on the court there. The court can divorce them there but may direct the mom to go back to Indiana to ask for maintenance since the dad has never been within the state’s borders. This is what we call subject matter jurisdiction because you have to live in a state for six months before a court has jurisdiction over the subject matter of your divorce. The court would also lack personal jurisdiction over the dad, who’s never been inside of that state’s borders, meaning the court may technically be restricted from making him pay some amount of money.

It’s important, therefore, that if somebody plans to move to a new state and ask for anything other than a divorce or division of property, whether they want child support, maintenance, alimony, or attorney’s fees, they coordinate that with a professional to avoid having to pay double the fees or go to multiple states to be fairly divorced or separated from the spouse.

For more information on Division of Assets in Kentucky and Indiana, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (812) 302-0539 today.