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It is not easy to go through the process of deconstructing a life piece by piece, but tens of thousands of people go through this painstaking process every year in Colorado. If you are considering or going through a divorce in the state, you are likely wondering how your property will be divided, and whether you will lose ownership of any of your treasured items. While your focus is likely on larger things, like the house, you may have precious heirlooms or sentimental or expensive jewelry that you really don’t want to lose.
Our Colorado property division attorneys at Halligan LLC will discuss how jewelry is treated during a divorce below.
How is Property Divided in a Colorado Divorce?
While many of us have the idea that divorce is always 50-50, that is not necessarily the case in Colorado. Colorado is an equitable distribution state, which means that marital property must be allocated equitably, or fairly, as opposed to a presumption of an equal division. An equitable distribution of property involves weighing a number of factors to consider the contributions and sacrifices made by each spouse during the marriage. This number will generally not stray too far away from 50-50, however, it certainly can depending on the circumstances of the case. One crucial point to take away is that in a Colorado divorce, only marital property is allocated, as opposed to separate property. We’ll expand on that distinction below.
Separate vs. Marital Property
When it is time to equitably distribute property, the first step is identifying all assets and debts of a couple and then categorizing them as either marital property or separate property. Separate property is generally any property owned by either spouse independently before entering into the marriage (or acquired via gift or inheritance during the marriage), while marital property includes assets acquired by either or both spouses during the marriage.
However, there are some exceptions. For instance, if the inheritance was received by one spouse during the marriage, but was deposited into a joint checking account or used for things related to the marriage then commingling is said to have occurred, then it’s possible the inheritance may be treated as marital property. It’s also important to note that even if an asset is deemed separate property, if that asset has increased in value during the marriage, the appreciated amount will be considered marital property.
How is Jewelry Classified During a Divorce?
Jewelry may be classified as either separate or marital property depending on the specific circumstances, so here we will provide an overview of some common situations that we see pertaining to jewelry.
- Jewelry bought before the marriage. Jewelry that was purchased, received, or inherited prior to entering a marriage will be treated as separate property, and will not be subject to equitable distribution by the court; however, to the extent the item(s) have appreciated in value during the marriage, that increase in value may be considered marital property subject to allocation in a divorce.
- Engagement rings. Engagement rings are given and accepted as a promise of marriage. When the party that accepted the ring follows through with entering the marriage, they have completed their end of the bargain. This means that they are entitled to keep the ring if they subsequently divorce, and therefore engagement rings are typically treated as the separate property of the spouse receiving the ring.
- Gifts exchanged between spouses. Gifts exchanged between spouses, such as a birthday or Christmas gift, may be considered separate property depending on the specific facts and circumstances surrounding the gift; however, these types of gifts are often considered marital property.
- Gifts made to spouses by third parties. Unlike gifts made between spouses, gifts received by either spouse from a third party, such as a friend or relative, are considered separate property; however, to the extent the gift has appreciated in value during the marriage, that increase in value may be considered marital property subject to allocation in a divorce.
- Inherited jewelry. If you inherited jewelry it will likely be treated as separate property. This is true even if you received the inheritance while you were legally married. While inheritance of money can become commingled if you use it for household reasons or deposit it into a shared checking account, it is unlikely that a piece of tangible property can be commingled. For this reason, gifts or inheritances of tangible property are almost always considered separate property and are not subject to equitable distribution; however, to the extent the inherited jewelry has appreciated in value during the marriage, that increase in value may be considered marital property subject to allocation in a divorce.
- Jewelry acquired via a trade. If you traded a piece of tangible property for a piece of jewelry, it may be considered either marital or separate property depending on the classification of the item that you traded for it. For example, if you traded an item that you owned prior to entering the marriage (an item that would therefore be classified as separate property) then it’s possible that the jewelry you received for it may also be classified as separate property. However, if you traded a piece of marital property (such as an item that you purchased during the course of the marriage) then the jewelry would likely be classified as marital property.
- Do you have a prenuptial or postnuptial agreement? If you have a prenuptial or postnuptial agreement that includes terms on the treatment of tangible property such as jewelry acquired throughout the marriage, the terms of this document will govern.
How is Jewelry Divided During a Divorce?
The parties to a divorce always have the opportunity to divide property according to their own terms. If the parties cannot come to an agreement on how their assets and debts should be distributed, the judge will decide how the property will be equitably distributed based on a variety of factors.
Schedule a Consultation with Halligan LLC in Denver, Colorado
If you are going through a divorce in Denver, Colorado, it’s important to protect your assets and make sure that your interests are represented. The experienced Denver family law attorneys at Halligan LLC are ready to help. Contact us today to schedule your personalized and confidential consultation.