When a married couple divorces in Colorado, state laws mandate equitable division of property acquired by either party during the marriage. Unlike in community property states, where the court equally divides marital assets, equitable property division must be fair but is not necessarily equal.
Prepare for divorce by understanding how taking this step may affect your assets.
What is the difference between separate and marital property?
In Colorado, assets owned by each spouse prior to the marriage remain separate. Separate property includes:
- Assets one spouse inherited or received as a gift during the marriage
- Property one spouse owned prior to the marriage
- Assets exchanged for or purchased with separate property
- Assets specifically kept separate by a premarital or postnuptial agreement
Marital property, on the other hand, is subject to equitable division. In general, both debts and assets either party acquired during the marriage constitute marital property. While this may seem easy, dividing assets during divorce can get complicated.
If separate property increases in value during the marriage, that increase falls into the category of marital property. In addition, if either spouse contributes to the other’s separate property, it becomes marital property. This concept, called commingling, can occur when one spouse makes deposits to the other’s separate investment account or pays the mortgage on separately owned real estate.
Factors a judge considers during property division
If the couple cannot agree on how to divide their property, the judge will “help” make that decision for you. The court considers many factors, including:
- The value of each person’s separate property
- Whether use of a spouse’s separate property for marital purposes depleted its value
- Whether either person’s separate property increased in value during the marriage
- Whether the couple owns a home together
- The custody arrangement for minor children, if applicable
- Each person’s current and future earning capacity and financial circumstances
Anyone with significant assets should seek professional assistance with the divorce process, asset valuation and property division. This can help ensure that you are able to keep all to which you are entitled.