Determining How Marital Property Will Be Divided
Most people know that Colorado is an ‘Equitable Distribution’ state when it comes to dividing marital property. What that means is not nearly as well known.
The most important thing you need to understand is this: equitable does not mean equal. It does not necessarily mean an automatic 50/50 split of the sum total of the marital assets.
What Equitable Distribution in Colorado really means, by law, is that dividing property must be ‘equitable and fair.”
Marital v. Separate Property
The most important question, then, before anyone starts to look at what a fair division of property may be, is: “What assets and debts are included in the marital property?”
Marital property will include all assets – and debts – the spouses accumulate over the course of the marriage.
That means virtually anything of value. Just a few examples:
- Real estate
- Bank accounts
- Investments (stocks, mutual funds, etc)
- Retirement accounts (IRA, 401(k), FERS, PERA, military retirement, etc)
- Vehicles, RVs, etc
- Personal property & household goods
- Business interests
- Stock options, frequent flyer miles, etc
- Intellectual property
Separate property - the assets and debts a spouse brought to the marriage or acquired through gift or inheritance - may be excluded from division. That seems simple but is complicated by this: if the separate property increases in value during the marriage, the increase is considered marital property. Sometimes, as when a home that was owned prior to marriage and was sold during it, the court will need to trace where the proceeds from the sale went. If they were deposited into a jointly titled account or used to acquire a jointly titled asset, they are no longer considered separate property.
This can get very complicated, very quickly.
Even in the most amicable of divorces the process of equitably distributing the property can be complex and, yes, stressful. This can be greatly mitigated if the parties cooperate and negotiate with one another. They can do this with their attorneys, in mediation, and/or with an arbiter - there’s no need to choose beforehand.
The last option is litigation. In that case a judge will look at the assets, consider the spouses’ positions, and make a ruling. Judges in Colorado will most likely consider each of the following factors when determining a fair and equitable distribution of property:
- The financial situation of each spouse;
- Any increase or decrease in the value of property throughout the marriage;
- The desire of the parent who receives primary custody to live in the family home;
- Any use of separate property for the marriage.
It is exceedingly important to remember that marital debts are also equitably distributed. This includes mortgages and car loans (where we take the net value of the asset), loans on retirement accounts, credit card debts, and more.
Halligan LLC’s Role
Halligan LLC is experienced in every aspect in how property is evaluated, calculated, and distributed. We are dedicated to seeing that our clients receive what is fair. We know financial situations can be far more complicated than they appear, and we strive to handle those complexities while explaining them simply and directly to our clients every step of the way.
We will make your voice heard in divorce proceedings, in negotiations or, if necessary, court. We have experience in discovering assets that have been hidden. We are skilled in discovery and negotiation and we will ensure that every asset is counted and divided equitably.