Separate property is generally property that a spouse acquired before marriage—or acquired by gift or inheritance during marriage—and is not subject to division upon divorce. In contrast, marital property is generally property that is acquired during marriage, is jointly owned by the spouses, and is subject to division upon divorce—whether the spouses reside in (1) an equitable distribution or common law property state or (2) in a community property state.

Community property states generally include Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. In these states, divorce courts generally start with the presumption that the marital property is owned equally by the spouses and will be divided equally upon divorce.

In other states—so-called equitable distribution or common law property states—the divorce court attempts to divide the spouses’ assets equitably (fairly) and may consider a spouse’s separate property in deciding to make an unequal division of the spouses’ marital property. In practice, the difference between the division of assets in community property states and in equitable distribution states is sometimes not as great as it may seem, as the court in a community property state may have the discretion to divide the spouses’ community property on a 60-40, 70-30, or other unequal basis.

In Indiana, which is an equitable distribution state, the court divides marital property in a manner that is fair and equitable, but not necessarily equal, during a divorce. Separate property, which includes assets acquired before the marriage or received as a gift or inheritance during the marriage, is typically not subject to division. Marital property, on the other hand, includes assets acquired during the marriage and is subject to division upon divorce. The court considers various factors to determine an equitable distribution of marital property, which may result in an unequal division. This approach differs from community property states, where there is a presumption of equal ownership of marital property by the spouses. However, even in community property states, courts may divide property unequally based on specific circumstances. Indiana does not follow the community property model and instead focuses on what is fair for both parties, taking into account the contributions of each spouse to the marriage, the economic circumstances of the parties, and other relevant factors.