Dividing property and debts is often one of the most complicated parts of a Colorado divorce. Couples may have spent years building a life together, accumulating assets like a home, retirement accounts, investments, vehicles, personal property, and businesses. Determining what property should be divided and how it should be divided can be particularly challenging when emotions may already be heightened.
Colorado law follows the principle of equitable distribution, which means that marital property is divided fairly based on the facts of the case. Our skilled Colorado Springs divorce lawyers can help identify marital and separate property, address complex assets, and evaluate debts. When possible, we will negotiate a fair settlement, but will also prepare to litigate if necessary to protect your rights.
At Ascent Legal Group, our Colorado Springs property division lawyers advocate for our clients’ financial interests in a divorce. We use our knowledge of Colorado law to develop a smart strategy for resolving disputes over assets and debts, helping our clients make well-informed decisions in the process. Reach out to our law firm to schedule a free 30-minute consultation with a Colorado family law attorney.
It's Free To Speak With A Colorado Springs Property Division Lawyer
It costs you nothing to sit down with a local property division attorney, discuss your case, and start planning your legal strategy.
How Is Property Divided in a Colorado Divorce?
Colorado follows an equitable distribution approach to the division of marital property. This means that the court does not simply divide everything acquired during the marriage 50-50. Instead, the court will make a division based on what is just after considering all relevant factors.
Only marital property is divided as part of a Colorado divorce. Separate property is not subject to equitable distribution. For this reason, the distinction between marital and separate property is one of the most important issues in a divorce.
Once marital and separate property are identified, it will be valued. This helps to ensure a fair division of property. The parties can then work out an agreement on property division or ask the court to make a division based on Colorado law.
What Is Marital Property in Colorado?
Broadly, property acquired by either spouse after the marriage and before the divorce is finalized is presumed to be marital property. This is true regardless of whose name appears on the title.
Marital property can include both assets and debts, such as:
- A marital residence
- Other real estate
- Bank accounts
- Investment accounts
- Retirement accounts
- Vehicles
- Business interests
- Stock and other investments
- Cryptocurrency
- Increase in value of separate property during the marriage
- Personal property, including furniture and household possessions
- Car loans
- Mortgages
- Student loans
- Medical debt
- Credit card debt
Importantly, an asset isn’t necessarily separate property simply because only one spouse’s name is on the deed, account, or title. The source of the property, when it was acquired, how it was treated during the marriage, and whether its value changed during the marriage may all matter when determining if property is marital or separate property.
When a court divides the marital property equitably, the division will be based on the value of the asset or debt on the day of the dissolution, or the date of the disposition hearing if it comes first (unless the parties agree to another valuation). Our Colorado Springs divorce attorneys can help you accurately identify marital property to protect your financial interests.
What Is Separate Property?
Separate property includes:
- Property brought into the marriage by one spouse
- Property one spouse receives during the marriage by gift or inheritance
While this concept seems relatively straightforward, separate property issues can become complicated, particularly over the course of a long marriage. Under Colorado law, separate property generally keeps its separate status as long as it can be traced. So depositing an inheritance into a joint account does not automatically make it marital property, but commingling separate and marital funds can make it difficult to prove later what portion remains separate. And keep in mind that even when the original asset stays separate, any increase in its value during the marriage is typically treated as marital property.
Retitling separate property into joint names, such as adding a spouse’s name to the deed of a house, is treated differently. This can create a presumption that you intended to gift the property to the marital estate, which may convert it into marital property.
As a result, simply identifying when an asset was originally acquired might not be enough to determine how it will be treated in a divorce. A skilled lawyer can analyze your assets and develop a strategy for ensuring that separate property is treated appropriately during property division.
Valuing Marital Property
After marital property is identified, the next step is determining its value. In some cases, this is relatively straightforward. For example, a joint bank account will have a fairly obvious value. Similarly, it is often a relatively simple matter to determine the value of something like a vehicle through tools like the Kelley Blue Book.
However, if the parties cannot agree on the value of a marital asset, it may be necessary to have it appraised. This is fairly common with certain types of assets, such as real estate, business interests, and valuable art or antiques. Valuing a business can be particularly complex, as there may be both tangible assets (like inventory) as well as intangible assets (such as goodwill, a trade name, or the value of work that is in progress).
Factors Considered When Making an Equitable Distribution of Property
Colorado courts do not necessarily split property in half during a divorce. Instead, after identifying and valuing marital and separate property, a judge will consider relevant circumstances when deciding how marital property should be divided. This may include:
- Each spouse’s contributions to the acquisition of the property, including contributions as a homemaker
- The value of property set aside for each spouse
- The economic circumstances of each spouse at the time of the division, including the desirability of awarding the family home to the spouse caring for the parties’ children
- Increases or decreases in the value of separate property during the marriage, or depletion of separate property for marital purposes
Under Colorado law, marital misconduct is not a factor in property division. This means that issues such as infidelity in the marriage won’t influence how property is divided. However, if one spouse dissipates marital property (i.e., improperly spent or wasted the money), this may impact property division.
Debts are also allocated equitably in Colorado. All debts incurred by either spouse during the marriage may be subject to division, even if the debt is in one spouse’s name. A court will consider all of the circumstances surrounding the debt (such as which spouse incurred the debt) before deciding how to divide it between spouses.
What Happens to the Marital Home in a Colorado Divorce?
For many couples, the family home is their most valuable asset. It is also one of the more emotionally difficult assets to divide. There are several possibilities when it comes to dividing the family home:
One Spouse Keeps the Home
One spouse may retain the home while giving the other spouse an offsetting share of marital equity through other property or financial assets. For example, one spouse might keep the house while the other receives a larger share of retirement accounts or investments.
The Spouses Continue to Own the Home Temporarily
In some circumstances, spouses may agree to postpone the sale of the marital home. This can arise when the couple shares kids or when selling immediately wouldn’t make financial sense. However, continued joint ownership can create additional financial and legal issues, so any agreement should clearly address mortgage payments, taxes, insurance, maintenance, repairs, and the eventual sale or transfer of the property.
The Home Is Sold
Selling the home and dividing the net proceeds may be appropriate when neither spouse can reasonably afford to maintain it or when both parties want a clean financial separation. The parties will need to account for the home’s mortgage, selling expenses, liens, or other costs when determining the amount of equity available for division.
Because a house usually cannot be divided down the middle, it is important to carefully consider what should happen with your marital home during a divorce. Our Colorado Springs property division lawyers can help you evaluate your options and craft a solution that meets your needs.
How Are Retirement Accounts Handled in a Colorado Divorce?
Retirement accounts can represent a substantial portion of a couple’s marital estate. A couple may have 401(k) plans, IRAs, pension benefits, military retirement benefits, or other retirement accounts. There are special rules that may apply to the division of retirement accounts based on the type of account.
For retirement accounts that are subject to the Employee Retirement Income Security Act (ERISA), the court will have to issue a Qualified Domestic Relations Order (QDRO) to divide these assets. This allows the plan administrator to split the retirement plan while preventing tax penalties that would otherwise be associated with an early withdrawal from the account.
Military retirement accounts are also subject to special rules. The Uniformed Services Former Spouses’ Protection Act (USFSPA) allows state courts to divide military retirement pay in a divorce, subject to specific rules on how it is divided and paid to the non-military spouse. This process can be complex, so it is a good idea to consult with a Colorado military divorce attorney if either spouse is a current or former servicemember.
A retirement account that existed before marriage may contain both separate and marital property. Contributions and appreciation during the marriage may be considered marital property that is subject to division. In some cases, it is necessary to work with forensic accountants or other financial experts to determine what portion of a retirement account is separate property.
What Happens to Business Interests?
Business ownership can make property division substantially more complicated. A business may have been started before marriage or during marriage. It may have been acquired using a combination of separate and marital resources. Even when one spouse is the sole owner of the business, it may still be considered marital property.
When dividing business interests in a divorce, a court may ask:
- When was the business established?
- How was it funded?
- Did the non-owner spouse contribute to the business?
- How much did the business increase in value during the marriage?
- What portion of the business is marital?
- What is the business worth?
- How should the non-owner spouse receive their share in a divorce?
Depending on the circumstances, business valuation professionals or other financial experts may be necessary to fairly divide business interests in a divorce. Our Colorado Springs property division lawyers work with experts to help our clients reach a fair resolution when dividing business interests during a divorce.
Can My Spouse and I Come to an Agreement on Property Division?
Spouses do not have to ask a court to decide how to divide their marital property. In many situations, working out an agreement can lead to a far more favorable and predictable outcome. If you and your spouse are able to reach an agreement, your lawyers can document the agreement appropriately as part of the divorce process.
A separation agreement can address every aspect of property division, including how to split real estate, vehicles, bank accounts, investments, retirement accounts, personal property, business interests, and debts. It can also address related financial issues such as taxes and spousal support. Importantly, full financial disclosure (as required by Colorado law) is necessary to ensure that the parties can meaningfully negotiate an agreement.
If you reach an agreement with your soon-to-be ex, the court will review it to ensure that it complies with Colorado law and is generally fair to both parties. The judge will then finalize the divorce, incorporating the agreement into your final decree.
Reaching an agreement about property division can reduce the uncertainty, expense, and stress of litigation. However, it isn’t always possible to agree with your spouse on how to divide your assets in debts. In this situation, you may try alternative dispute resolution like mediation. Otherwise, the disputed issue may need to be resolved through the court process.
Your Colorado Springs divorce lawyer can help you:
- Gather financial documentation.
- Identify and categorize assets and debts as marital or separate property.
- Obtain appraisals or valuations when necessary.
- Address disputed financial information.
- Negotiate with your spouse and/or their attorney.
- Participate in mediation or other dispute resolution processes.
- Prepare for trial and represent your interests in court if necessary.
Litigation may not be your preferred outcome, but it may be necessary in some cases. This is particularly true for high-net-worth divorces and where there are serious disagreements about how property is owned or valued.
The decisions that you make during this part of your divorce can affect your financial stability for years to come. An experienced attorney can help you consider the broader financial picture. For example, a home with a lot of equity may look attractive on paper, but keeping it may also mean taking on the mortgage, taxes, insurance, maintenance, and other expenses.
At the same time, your lawyer can help you decide what is worth fighting for in your divorce and when it may be best to negotiate. Many divorcing couples are understandably in an emotionally charged state. A Colorado Springs property division lawyer can help you develop a strategy that takes your financial circumstances, legal rights, and long-term needs into account. This can allow you to make smarter decisions throughout the process.
Contact Ascent Legal Group for a Free 30-Minute Consultation
Property division is often one of the most consequential parts of a Colorado divorce. Whether your case involves a house and retirement accounts or a more complex marital estate, you can benefit from experienced legal representation. A lawyer can help you analyze your options and make decisions that are best for you and your family.
Ascent Legal Group represents clients in Colorado Springs and beyond in divorce and other family law matters. Our attorneys can help you identify marital and separate property, evaluate financial issues, negotiate a settlement, and pursue litigation when necessary. If you are considering divorce or are already involved in a Colorado divorce, call us at 719-625-8951 or fill out our online contact form to set up a free 30-minute consultation with a Colorado Springs property division lawyer.
Frequently Asked Questions about Colorado Property Division
Can My Spouse Get Part of My Property That Was in My Name Before Marriage?
Possibly. Property owned before marriage may qualify as separate property, but an increase in its value during the marriage may be considered marital property. In addition, commingling or using marital funds to improve or pay for the property may also impact how it is treated during a divorce.
Does Moving Out of the Marital Home Affect My Ownership Rights?
Moving out of the marital home does not determine how the house will be divided in the divorce. However, leaving the home can raise practical issues related to things like mortgage payments and parenting arrangements. Because leaving the marital home can affect aspects of your divorce beyond property division, you should discuss your plans with your attorney before making any decision that could affect your divorce.
Can I Keep My Property Division Agreement Private?
Divorce filings and agreements may become part of the court record, which may be publicly available. However, sensitive financial information may receive different court rules and can be shielded from the public in some circumstances. Your attorney can explain what information must be included as part of your divorce filings and whether any privacy protections may apply in your case.
What Happens If an Asset Changes in Value During a Divorce?
Valuation of assets can be a contentious issue in any divorce, including when the value of an asset changes between separation, filing, and the entry of the final decree. In Colorado, property division is based on the value of an asset on the date of the decree of dissolution, or the date of the disposition hearing if it comes first. If an asset increases or decreases in value over the course of a divorce, that will be taken into account when the property is divided.
Resources:
- Colorado Revised Statutes § 14-10-113. Findlaw. https://codes.findlaw.com/co/title-14-domestic-matters/co-rev-st-sect-14-10-113/
- Kelley Blue Book. https://www.kbb.com/
- Qualified Domestic Relations Orders (QDROs). Internal Revenue Service. https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-qdro-qualified-domestic-relations-order