Greenwood Village Family Law Blog

Dividing the vacation home in a Colorado divorce

When it comes to the process of divorce, states can differ considerably regarding the timeline and the way that assets are divided. When considering filing for a divorce, make sure to research how the law works in the state in which you will be filing for divorce.

In the state of Colorado, no fault divorce law is followed. This essentially means that a spouse cannot be blamed, from a legal perspective, for the breakdown of the marriage -- for example, because of adultery or hostile behavior. Instead, there is only one way of having grounds for a divorce: by claiming that the marriage in question is broken irretrievably.

Avoiding court when divorce negotiations stall

Settling disputes in court can be costly in Colorado and around the country, and this can be especially true when the individuals involved are divorcing spouses who harbor deep resentment toward one another. Family law attorneys may seek to avoid court battles by resolving delicate and potentially contentious matters like child custody, spousal support and property division at the negotiating table, but this can be difficult when the spouses involved become entrenched in their positions and unreceptive to new ideas.

In these situations, divorce attorneys may suggest exploring alternative approaches like mediation or collaborative divorce. During mediation, spouses work with a neutral party to find a common ground that can provide a foundation for future discussions. While there is no guarantee that mediation will work and recommendations made by mediators are not binding, it could avoid costly and protracted litigation and family law judges may order it before allowing cases to move forward.

Divorce considerations for older couples

Statistics show that more Americans are getting divorced nearer to retirement age. It's important to note that these "gray divorces" can present unique considerations for the spouses involved. Instead of child custody, this age group may be concerned about losing half of the assets they have spent a lifetime building. Annuities can be particularly complicated to divide, and some couples in Colorado may opt to trade them for other assets since they could lose value when split.

For a 401(k) or pension plan, a document called a qualified domestic relations order is necessary. Pension plans also have additional rules associated with them. IRAs do not require QDROs, but they do have certain rules that need to be followed. Rolling 401(k)s and IRAs into a new IRA can prevent taxes and penalties. When assessing the value of these accounts, soon-to-be exes should also account for taxes on distribution or other fees.

Understanding common law marriages in Colorado

While only five states in the United States recognize common law marriages, Colorado is one of them. If you are a resident of Colorado and currently navigating the law around marriage, divorce and annulment, it is important that you take the time to understand how common law marriage comes about, and how it works.

Common law marriage is quite an old-fashioned law that was put into place in 1877 to address the legal status of couples who are living together yet not married. While it was designed for a different time, it can still be considered relevant today in the state of Colorado, because it means that non-married couples who meet the common law marriage criteria can still benefit from some of the legal implications of being married. However, not just any couple can benefit from common law marriage implications. They must satisfy certain conditions first.

Bankruptcy won't relieve child support debt

Debt following a divorce can mount up fast. People may find supporting a household on one income is tough when they're used to a spouse sharing this responsibility. Add in child support and alimony, and some Colorado parents may find themselves facing a heavy financial burden. When this happens, it's easy to get behind on child support and alimony. Non-custodial parents who get behind in these last two items could end up back in court or, even worse, be sentenced to jail, further exacerbating their financial issues.

Some people who are in this position may see bankruptcy as the answer to their problems. While it may relieve the burden of other debt, child support and alimony cannot be discharged in a bankruptcy. These are legal obligations ordered by the courts.

How the tax code influences divorce planning

Colorado residents who make alimony payments get to take a tax deduction for the amount paid. For divorces that are finalized starting in 2019, however, alimony will be treated like child support. The person who makes the payment won't receive a tax deduction while the receiver won't count it as income. There will also be changes for parents who get divorced in the near future.

From 2018 to 2025, the child dependent deduction has been suspended. However, custodial parents can take advantage of the expanded Child Tax Credit (CTC) that is classified as a refundable tax credit. This means that it's given out even if a recipient's tax liability dips into negative territory. The Tax Cuts and Jobs Act (TCJA) also provides incentives for parents to use 529 educational savings plans. Prior to the TCJA, money in such accounts could only be used for approved college expenses.

Consider these business strategies if you’re headed for divorce

Divorce is never an easy road to go down. Even if your assets only consist of a couple of cars and a house in Greenwood Village, you could still be facing weeks if not months of negotiations before you reach a divorce settlement. However, if you also own a business, planning for your divorce becomes even more important to your future financial stability.

If you are planning to end your marriage and you own a business, you probably don't want to see years of your hard work end up in the pocket of your soon-to-be ex-husband. The following strategies can help you divorce-proof your business.

Income and the child support guidelines

In divorces here in Colorado, among the things that can have big impacts on parents and families are the state’s child support guidelines. These guidelines are what courts in the state use to calculate payment amounts when child support decisions come before them.

Now, child support is among the issues divorcing parents can decide to settle through an agreement rather than having a court decide on the matter. However, the child support guidelines are still impactful in this situation. This is because child support agreements reached by parents are subject to court approval. If an agreement deviates a great deal from the guidelines, it could have high likelihood of not getting approved.

Dealing with inherited IRAs during divorce

When people in Colorado make the decision to divorce, sorting out financial matters can be one of the most complex parts of the process. Retirement funds are often the largest assets held by a couple. These types of investment funds can be a major vehicle for future savings and pose some tricky questions when it comes time for property division in a divorce.

In 2019, new rules will be put in place for all divorces that change the way spousal support is treated for taxation. The prior tax status of alimony payments allowed payers to receive significant tax benefits and recipients to often receive a boosted income as a result. With the change, however, those tax benefits will no longer accrue to the payer of alimony. This is likely to have the greatest effect on couples with high-asset divorces in higher tax brackets. Because of these changes, individual retirement accounts or IRAs may be used more frequently as a means to transfer tax-free wealth in a divorce settlement.

Who can receive spousal maintenance in a Colorado divorce?

Ending a marriage is not easy, even (or especially) if the decision was not yours. You might be feeling angry at your spouse and scared about what your future will look like. You can also feel overwhelmed by the prospect of supporting yourself, particularly if your spouse was the primary earner in your family.

If you are in this situation, one important thing to know is that you may be in a position to collect financial support in the form of spousal maintenance. Below, we explain who is eligible for maintenance and what you can do if you are interested in pursuing it.

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