Sunday, 23 December 2018

Colorado is a Marital Property State: Do you know what that means?

Colorado is a marital property state and that means that during divorce, the property of the couple is not divided arbitrarily as in a community property state, where the property is divided in half regardless of how it was acquired. There are lots of misconceptions among couples in Colorado about what should be divided and who should get what during divorce.

Property division following a divorce in Colorado is governed by C.R.S. 14-10-113. Under C.R.S. 14-10-113(1), the judge will consider a number of factors before deciding what a fair division should look like.

While the court will conduct its own investigations and come up with a decision on how the division should be done, it would be wise to have a Fort Collins family lawyer by your side for counsel.

Considerations when calculating a fair division

The court considers the following factors before determining a division:

● The contribution of each spouse towards acquisition of the property
● What each spouse brought into the marriage (separate property)
● Change (both increase and decrease) in value of separate property during the marriage
● Each spouse’s economic circumstances at the time of the divorce, including consideration to let the spouse who will remain with the couples’ children keep the family home

Note that responsibility of debt payment will be divided ‘fairly’ and not necessarily allocated to the party who took the loan or accrued the debt. 

What is marital property?

Perhaps the most confusing phrase in Colorado divorce cases is “marital property”.
Marital property can be defined as the property acquired while the couple was still in marriage. Whatever was acquired before the day you got married belongs to whoever acquired it. Statute, however, takes into account changes in value that a property may have seen during the course of the marriage. 

That means that if you came into the marriage with a property worth $200,000 and the property increases in value by $100,000 such that by the time of the divorce it is worth $300,000, the $100,000 will be considered marital property and will be divided by two. Of the increase, you will only get $50,000 during divorce.

How is titling handled?
“Co-mingling” of separate property makes the property marital in theory, meaning it could be subject to division. A good example where property is co-mingled is with bank accounts. If, for instance, you got into marriage without any money in the bank but then received an inheritance of $200,000 six months in and decided to put it in an account titled in your name, the money will remain separate property. Any increase in value may however be deemed marital property and divided fairly.

Now, let’s say you put the money in a joint bank account with your wife.

In this case, the money will be considered marital property and may be subject to division, albeit the court could still consider other facts to make a decision favoring the person who acquired the money.

When going into a divorce, it is wise to have an acquaintance with these basics to ensure you walk out with what is rightfully yours, and nothing less.

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