Divorce Property Division: The Basics

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    Your spouse just told you four stinging words: “I want a divorce.” Or maybe, it was you who uttered those four words. Regardless, once those words are said, emotions start flying high and many questions start running through your head, including thoughts about divorce property division.

    Who gets our home? How do we split our couch, our bed, our things? What happens to our savings, investments, and retirement money? Who gets our business? What happens if my family set up a trust for me? Who’s responsible for our debts? Can I afford my normal lifestyle? Am I going to come out on the other side okay?

    Yes, your concerns are real, and they are normal. The good news is Colorado law provides a thorough process to ensure that no spouse is left behind.

    Property Categories

    All property at issue in a divorce case will be categorized as separate property or marital property.

    (1) Separate Property: Separate property is property that an individual spouse keeps as his or her own.

    (2) Marital Property: Marital property is property in which both spouses have an interest. This property will ultimately be divided between spouses.

    Separate Property Explained

    Separate property includes all property you had before your marriage as well as property that you obtained during your marriage by gift, bequest or devise, or descent. For example, separate property can be a gift from your friend, stock that your uncle left to you in his will, or a house you inherited from your mother. Separate property also includes property that you received in exchange for such property. Let’s say a friend gave you a watch as a birthday gift (your separate property), but you later sold the watch and purchased a necklace with the proceeds. That necklace would be your separate property.

    Did you know divorce property division that might normally be considered marital property can be separate property? This happens when you and your spouse have a valid agreement stating that the property is to be separate. (This is where prenuptial agreements may come into play.)

    Marital Property Explained

    Courts presume that property you acquire during your marriage is marital property. In general, marital property includes property acquired during your marriage, except for property acquired by gift, bequest or devise, or descent. Plus it includes property that is outlined as marital property by a valid agreement between you and your spouse.

    The appreciation in the value of the separate property may also be considered marital property. For example, say your spouse inherited a house from his or her mother then valued at $300,000. Now the house is worth $500,000 due to appreciation that accumulated throughout your marriage. You may be entitled to a portion of that $200,000 in appreciation as marital property.

    Even property that may appear to be separate property because it is titled solely in your name or in your spouse’s name may be marital property. It does not matter in whose name the property is titled. For instance, if you opened a bank account during the marriage in your own name and made deposits into that bank account throughout your marriage, the funds in that account may be marital property.

    Who Gets What?

    Let’s say you and your spouse are unable to reach an agreement as to who gets what through mediation or otherwise. The court will step in to determine which property is separate versus marital, and will divide the marital property.

    Colorado is an “equitable distribution” state. This means the goal is to reach a division of marital property that is “equitable,” or fair. “Equitable” does not mean “equal.” For instance, the court does not divide the property 50-50 so that each spouse gets half of everything.

    What the Court Wants to Know

    The court will assess a variety of relevant factors to determine what is “equitable.” These factors include:

    • The contribution of each spouse to the acquisition of the marital property, including the contribution of a spouse as homemaker.
    • The value of the property set apart to each spouse.
    • The economic circumstances of each spouse at the time of the division of property, including the desirability of awarding the family home or the right to live therein for reasonable periods to the spouse with whom any children reside the majority of the time.
    • Any increases or decreases in the value of the separate property of the spouse during the marriage or the depletion of separate property for marital purposes.

    C.R.S. § 14-10-113(1). Note that the court may not consider one spouse’s infidelity or misconduct when making this determination.

    In assessing these “equitable distribution” factors, the court must have an understanding of each spouse’s assets and debts. The court will require you and your spouse to each provide a Sworn Financial Statement, which includes a list of your assets and debts as well as an assignment of values to your assets and debts. In some circumstances, you will need to hire an expert to help value your home, business, or other asset. This information will help the court determine what is fair under the circumstances.

    What is Next?

    “What is next?” is a big question. Sure, some of the basic information seems relatively straight-forward. In reality, the law on divorce property division is complex and has many nuances. You should seek the help of legal counsel if possible.

    Kalamaya | Goscha is here to help you navigate your divorce. To read more about taking the next step, click here. We will help you with property division and other family law issues. Contact us. We’ll move mountains for you. (970) 315-2365.