Is a Family Business Considered Marital Property in Indiana?

Navigating the complex waters of family law is challenging. Throw a family business into the mix, and the stakes rise even higher. For business owners in Indiana facing the prospect of divorce, understanding how the law treats family businesses is paramount. Andrews & Crell is here to help you understand the nuances of family law and protect your assets during this difficult time. 

The Definition of Marital Property in Indiana

In Indiana, marital property is any property acquired by either spouse during the marriage. This includes real estate, personal property, and financial assets such as retirement accounts and investments. Marital property also consists of any debts incurred during the marriage.

Is a Family Business Marital Property?

In short, yes. In Indiana, a family business formed or acquired during the marriage is considered marital property and subject to division during a divorce. This means that both spouses have a right to a portion of the business’s value, regardless of whether one or both spouses were actively involved in running the business.

However, this does not necessarily mean the business will be split evenly between the spouses. Many factors help determine how the business will be divided, including: 

Involvement and Efforts in the Business: The degree to which each spouse was involved in running the business can be a pivotal factor. If both spouses had a hand in the business’s day-to-day operations or decision-making processes, the argument for the business being marital property becomes stronger.

Source of Funding and Investment: Examining how the business was funded and whether marital assets contributed over time can sway the classification. Indiana law recognizes the value of each spouse’s monetary and time contribution to shared endeavors.

Growth and Appreciation: The passive growth of a business during the marriage, even if it was owned or started by only one spouse, is generally considered marital property. However, the appreciation of active contributions during the marriage may also factor in.

Debt and Liabilities: Family businesses are subject to more than just asset division. Debts and liabilities incurred during the marriage can be part of the equation, impacting the business’s net value and, consequentially, its division.

The Benefits of Legal Counsel

If you own a family business and are facing divorce, seeking legal guidance from experienced family law attorneys is crucial. At Andrews & Crell, we understand that your business is not just a financial asset but also a personal and emotional investment. We will work rigorously to protect your interests and fight for a division of assets that is fair and equitable.

Our team has extensive experience handling complex property division cases involving family businesses. We will meticulously review your case and explore all options for protecting your business, including negotiating a buyout or reaching a settlement agreement.

Protect Your Interests Now

Understanding the classification of a family business in an Indiana divorce is complex but crucial for safeguarding your stake in your life’s work. If you’re in this difficult situation, consider a family law attorney as an investment in your future equilibrium. 

At Andrews & Crell, our commitment to our clients’ peace of mind is unrivaled. Our skilled team is equipped to provide bespoke legal solutions tailored to your divorce and family business needs. Don’t let uncertainty shroud the future of your legacy. Contact us today to begin safeguarding your business interests.