Marital Property Distribution Methods
In a divorce, states will use one of two methods when dividing property: the community property method or the equitable distribution method. The community property method is simple and straightforward, in that all marital property is split evenly, 50/50. States that use this method just assume your marital property was earned equally, so they divide it equally.
However, Colorado is not a community property state; instead, Colorado follows the equitable distribution method. This means that a Court will determine what is “fair and equitable,” and the division of your marital property may not be an equal 50/50 split.
When making an equitable distribution pursuant to C.R.S. §14-10-113(1), the Court will consider factors such as:
- 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 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.
If you feel you’ve contributed more financially to the marriage, it is important you hire an experienced attorney for your Colorado divorce to help ensure you receive a fair and equitable portion of your marital property.
What exactly is property?
Colorado Courts recognize “property” to include “everything that has an exchangeable value or which goes to make up wealth or estate.” This includes income, bonuses, commissions, investment and retirement accounts, real property, vehicles, personal items, etc.
What is Marital Property and how is it different from Separate Property?
Any and all property acquired by either spouse after the marriage and before a decree of dissolution or legal separation, is presumed to be marital property, regardless of whether that property is titled in only one spouses name, or is subject to a form of co-ownership with a third party. This presumption can be over-come by showing that particular property was:
- acquired by gift, bequest, devise, or descent;
- acquired in exchange for property acquired prior to the marriage or in exchange for property acquired by gift, bequest, devise, or descent;
- acquired by a spouse after a decree of legal separation;
- or excluded by valid agreement of the parties.
On the other hand, non-marital property, or “separate property,” is property acquired before the date of the marriage, after the decree for dissolution or legal separation has been entered, or is property subject to one of the exceptions above.
It is important to note that any appreciation in the value of separate property during the marriage is considered marital property. For example, if your $300,000 home that you brought into the marriage is worth $400,000 at the time of divorce, that $100,000 of appreciation is subject to equitable distribution because it is a marital asset.
Further, spouses need to be aware that separate property can become marital property if that non-marital asset is comingled with a marital asset to the extent that it can no longer be distinguished as separate property. For example, if you deposit pre-marital money into a marital bank account, over time that non-marital money may no longer be identified as non-marital, in which case, the funds have been comingled.
How to Prepare for Property Division
The process of identifying, valuing, and dividing property can a hassle, especially over the course of a long marriage. It’s best advised that spouses begin the process of identifying this property early on in the dissolution process to avoid delays and expenses. If parties cannot agree on the value of certain items, such as a home or vehicle, an appraisal will be necessary.
It’s also important to not overlook personal items such as jewelry, tools, yard equipment, and other personal items of high value. For example, your spouse might have a valuable collection of purses or shoes, the value of which is going to be subject to division if those items are marital property.
Lastly, spouses should know that marital property also includes debt. If either spouse acquired debt during the marriage, the Court will be dividing that debt equitably between them.
The family law attorneys at Hulse Law Firm have years of experience assisting Colorado families navigate the divorce process and can provide you with a free consultation regarding your divorce. Call (720) 773-2900 to schedule your free consultation!