What is Considered Marital Property in Colorado?
If you are getting a divorce in the Colorado Springs area, you may already be aware that, like most states, Colorado is an “equitable distribution” state. But as your family law attorney will explain, equitable doesn’t always mean equal; it is about what is fair. As a result, it makes sense to enlist the help of a Colorado Springs property division lawyer who can help you reach a fair settlement on issues concerning property and debt.
You would think that it would be easy to immediately know how the biggest marital assets like houses, cars and pensions will be divided by the court. And in many cases it is.
Marital property in Colorado is considered to be anything that is acquired during the marriage by either spouse. Any property given as a gift during the marriage, received through inheritance or part of a binding pre or post-nuptial agreement is generally considered separate property and won’t be divided (but of course there are exceptions).
Other than that, just about everything else may fall into the big catch-all category of marital property. So if you obtained or earned any of these common marital assets during the marriage, both you and your spouse may have an interest subject to “equitable” division:
- Primary residence, vacation home, timeshares, and other real property of any kind;
- Cars, trucks, recreational vehicles;
- Bank accounts;
- Bonds, stocks, stock options, mutual funds, other investment vehicles;
- Retirement plans like IRAs, 401(k), hybrid plans and pensions;
- Household goods such as furniture, televisions, stereo equipment, landscaping equipment;
- Business interests undertaken with marital assets or effort;
- Pay bonuses to be received for work done during the marriage.
The courts don’t usually require the parties to actually divide each asset, unless it’s easily divisible like a bank account or shares of stock. The value of each asset is added to the total assets, and then allocated between the spouses after debts and other considerations are factored in.
Not every property division settlement ends up in court. Often, divorcing couples find they can divide up marital assets amicably. When there are areas of disagreement, however, a property division lawyer will recommend mediation. Mediation is where you and your spouse sit down and try to work thing out with the help of a neutral third party who is familiar with Colorado property division law. In cases where disputes are not resolved through mediation, it may be necessary for the court to divide the marital property.
What If I Devoted a Lot of Time and Effort to My Spouse’s Separate Property?
If it were always easy to distinguish marital property from separate property, we probably wouldn’t need a family court system. But life is never that simple, particularly when two people who have interwoven their financial lives are trying to now disentangle them.
One of the biggest exceptions that can blur the lines between marital and separate property is when one spouse brings property into the marriage, like a rental home. During the course of a ten-year marriage, marital funds may be used to pay the mortgage or property taxes on the rental property. Like most other properties, the rental home may increase in value.
Or maybe the rental home started off titled to the spouse who owned it before the marriage, but it was repeatedly refinanced during the marriage so that now both spouses’ names are on title. Or maybe both spouses performed exhaustive remodeling or critical maintenance work on the property like installing a new kitchen, or improving a previously “unimproved” basement.
In all of these situations, the value of the appreciation of the property during marriage may also be considered marital property and subject to division.
But don’t take any chances. Consulting with a knowledgeable Colorado Springs family law attorney can help determine in fact whether separate property has “morphed” in marital property, or if it retains its “separate” property status.
Once Our Property Has Been Labeled Marital or Separate, How is it Divided?
In Colorado, marital assets and liabilities are supposed to be divided “equitably” between the parties. No, that does not mean equally, although in many instances the final division does appear to fall into or close to the 50/50 dividing line.
And the courts are only asked to divide marital assets and liabilities in the event the parties cannot work out a reasonable agreement themselves. In most cases, the parties come to an agreement before the court has to step in and make these hard decisions.
Ultimately, it is important to remember that key issues of property valuation, and marital and separate property can turn on when, why and how and asset was purchased. These small technical distinctions may seem insignificant at first, but are the kinds of nagging questions that a seasoned Colorado Springs family law attorney can answer.
These answers can make the difference between concluding a marriage with some financial cushion to help you get a fresh start, and exiting a relationship with few monetary safeguards in place to protect you.
A property division attorney can ensure your rights are protected, and that your contribution to the marital property is accurately calculated. This will require consideration of all relevant factors, including the contribution of a spouse as homemaker, the economic circumstances of each spouse at the time of separation, and any increases or decreases in the value of the property during the marriage. A judge will also consider which spouse should maintain residence in the marital home, especially if there are minor children involved.