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How is Property Divided in a Colorado Divorce?
Posted in Divorce on April 5, 2018
Property division laws vary from state to state. Colorado law requires that division of property in divorce be “equitable and fair,” which means that it doesn’t necessarily have to be a 50/50 split. By contrast, community property states hold that all property accrued during a marriage is subject to a 50/50 distribution.
Couples have the option of deciding what is an equitable and fair division of property. If they cannot decide between themselves, a mediator or arbiter may help with the negotiation process. If these alternative dispute resolution tactics fail, the last option is litigation. A judge may consider the following factors when determining a fair and equitable distribution of property in Colorado:
- The financial situation of each spouse
- Any increase or decrease in shared property throughout the marriage
- The desire the parent who receives custody to live in the family home
- Any dissolution of separate property for the sake of the marriage
Determining Separate and Marital Property
There are two main types of property according to Colorado law: marital and separate. A couple’s marital property will likely include all assets or debts that both parties accrue throughout the course of the marriage. Separate property, on the other hand, pertains to assets and debts a spouse owned before the marriage or acquired through inheritance. If separate property experiences an increase throughout the course of a marriage, this increase is marital property.
There can be exceptions to these marital and separate property rules, assuming that a couple signs a prenuptial or postnuptial agreement. In this case, the couple will divide property in accordance with the terms of the marital agreement.
To make matters even more complicated, sometimes marital property and separate property can become mixed together, which is a concept called “commingling.” For example, a separate bank account may become marital property when the other spouse makes a deposit into it, or a separate inheritance may become marital property when the receiving spouse deposits it into a joint banking account. Assessing marital and separate property can be difficult and often becomes a point of contention in Colorado divorces, necessitating the assistance of a family law attorney.
Process of Dividing Property
In a Colorado divorce proceeding, an attorney or judge will use the following basic formula to divide property between two spouses:
- Assess the value of your property. After determining which assets and debts are marital property, the couple (or a judge, if a divorce results in litigation) will assign a monetary value to each article.
- The division process begins. If spouses choose to divide property among themselves, they can assign items to each party and make equalizing payments if one gets an asset that’s worth substantially more than the other. Additionally, they may mutually agree to liquidate assets and divide the proceeds. Still others choose to amicably continue to co-own property, but this is not always the best option.
- Spouses must split marital debts as well as assets. This includes mortgages, car loans, credit card debts, and more.
Alternative Dispute Resolution Versus Litigation
If a divorcing couple cannot come to an amicable arrangement regarding division of property, they have two other options: alternative dispute resolution tactics such as mediation and litigation. Litigation is a last resort for couples oftentimes, since it involves court costs, additional attorney’s fees, and an outcome that neither spouse will like. Mediation is a preferable alternative to having a judge rule on your property division issue.
Property division in Colorado can become complicated and often requires the guidance of an experienced family law attorney. Talk to a divorce attorney about your legal options if you have further questions.