In Colorado, marital property is divided without regard to misconduct or fault. The Court does not necessarily divide property evenly, or 50/50. Colorado Courts consider "all relevant factors" in making the decision of how to divide marital property. The Courts attempt to make divisions based on what is fair for both parties.
Colorado Courts will first separate all property into one of two categories, separate property or marital property. Once property is deemed marital, the Court assigns a monetary value on the marital property and considers how to divide the marital property. Finally, it distributes the marital assets between the two parties in an equitable fashion. The individuals' separate property remains their own except that the Court will allocate any increases in the value of separate property accrued during marriage.
What is Separate Property and what is Marital Property?
There is certain property that although acquired after the marriage is not considered marital property. Examples include the following:
- Certain gifts, inheritances, or property left by a will or estate is not marital property. A gift from one spouse to another during marriage may be found as either separate or marital.
- Property owned before the marriage is separate, if that property is exchanged for other property during the marriage it is still not considered marital property.
- Property acquired after a decree of legal separation is not marital property.
What is Equitable Distribution?
Colorado Courts consider what is fair for both parties when dividing marital property, this is called equitable distribution.
The Courts consider all relevant factors, including the following:
- The contribution of each spouse to the acquisition of the marital property, including the contribution of a spouse as a homemaker;
- The value of the property given to each spouse in the property award;
- The economic circumstances of each spouse at the time the division of property is to become effective, 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; and
- Any increases or decreases in the value of the separate property of the spouse during the marriage or the depletion of the separate property for marital purposes.
The Marital Home
Like most jurisdictions, in Colorado the equity in the marital home is often the biggest marital asset. The equity is normally the market value less any liabilites (mortgages, taxes, liens etc.). The parties may choose from a few options when dividing the equity in the marital home, including:
- Sell the home and divide the proceeds;
- One of the parties may refinance the home and 'buy out' the other party;
- One spouse (usually the custodial parent) remains in the home with the exclusive use and possession for a certain period of time (for example, until the youngest child graduates from high school), then either buys out the other spouse or sells the home and divides the proceeds.
What else do you need to know?
- Even though the parties have separated, until there is an actual decree of legal separation any property acquired is still considered marital property.
- Even though property might be separate property, any appreciation in its value during the marriage is considered marital property. The Courts must take those values into consideration when dividing the property.
- Retirement benefits and plans earned by both spouses may be included as marital assets.
- The division of marital property can impact the orders for maintenance.
Dividing property equitably can protect your future net worth. This can be a complex task at an emotional time. Seek guidance from an experienced family law attorney when making these decisions.