One potentially thorny and important issue in any Colorado divorce is the division of property. What you receive will be all or part of your financial foundation for post-divorce life, so it’s crucial that you know as much as possible about how Colorado courts handle property division in a divorce.
Equitable Division
In Colorado, the relevant laws call for a division of property that is fair or equitable. This does not mean the property will be split equally, however. If you’re able to decide property division on your own, either during mediation sessions and/or with the help of your attorney, it will become part of your proceedings once the judge approves your proposed settlement.
If you are not able to resolve disputes about property outside of the court, you will have to go to court and request a decision from a judge. Many factors will be considered by the judge for the property division, including:
- The economic state of each spouse.
- The preference of awarding the family home to the parent with whom children of the marriage will live, if any.
- Any increase or decrease in the value of a spouse’s separate property over the marriage.
- Any depletion of separate property belonging to a spouse for a marital reasons.
- The value of property to each spouse.
Marital and Separate Property
There are two types of property in a general sense in divorce: marital and separate. In most cases, marital property will include the debts and assets acquired by the couple during the marriage. Separate property refers to items owned by one spouse before marriage or an inheritance or gift a spouse received during the marriage. Anything exchanged for or purchased with separate property also becomes separate property.
If the value of separate property increases during the marriage, that increase is considered marital property, but the original item – or its value – remains separate as long as the spouse who is claiming it can back that assertion up using financial records or other documents.
Separate property can be converted into marital property over the course of the marriage and vice versa. If a marital agreement signed during or before the marriage specifies which property is marital and which property is separate, for example, that agreement would be honored in the divorce as long as it was properly executed and legal under Colorado laws. Should a spouse convert ownership of separate property to joint with his or her spouse during the marriage, that property would become marital as well, as the court views it as a gift to the marriage.
Finally, separate and marital property can be mixed together, which is known as “commingling.” Sometimes, couples intentionally combine separate assets. Other times, it is done accidentally. For example, a bank account one spouse opened before getting married becomes martial property if the other spouse makes deposits to it, and a home owned by one spouse becomes marital property if both spouses are paying the mortgage or other related expenses. If the couple can’t make decisions on commingled property, the judge will have to decide whether the property is part of the marriage or the original owner needs to be reimbursed for its value in whole or in part. Naturally, commingled property can complicate property division in a divorce, so the assistance of an attorney is recommended when a divorce includes mixed property types.
Valuing the Property
Once the property is separated into marital and separate categories, the court or the couple will assign values to each item. If there are high-level assets involved or the couple is struggling with valuations, a professional appraiser can be brought in. Some types of financial accounts, such as retirement vehicles, can be hard to evaluate and may call for the services of a certified public accountant or an actuary.
Property Division
A couple can divide assets by assigning items to each spouse. There may be equalizing payments made from one spouse to the other if one of the spouses is receiving substantially more property. Property can also be sold, with the proceeds divided however, the court or the couple decides. A couple can also agree to keep some property together as co-owners if they believe they can work together. This option is not always appealing because it requires a divorced couple to communicate, but some situations may call for it, such as keeping the family home when there are children involved. Investment properties are another asset former couples may wish to hold onto as they hope the value will increase over time.
Debts and liabilities are also assigned to each spouse during a divorce, and this can become complex. Property division in divorce will have a significant impact on your financial future, so speak to an experienced Colorado family law attorney at Burnham Law about your case so you know all of your rights and options.