Division of Property & Debt
In every Colorado divorce, legal separation or annulment case, the family law court will divide marital property and allocate responsibility for payment of debts incurred during the marriage.
Property acquired during marriage is generally marital property, regardless of how it is titled (with limited exceptions, as noted below).
Marital property includes any equity in a marital residence, stocks/mutual funds, retirement plans (including military retirement), bank accounts, the increase in value of one spouse's separate property, and tangible property such as vehicles and household goods. A Colorado divorce court will divide the marital property equitably (almost always means equally), based upon the value on the day of dissolution unless the parties agree otherwise.
A spouse's separate property includes:
- Property brought into the marriage by that spouse, and
- Property one spouse receives during the marriage by gift or inheritance.
If the original property inherited has been invested or exchanged, the property thereby acquired remains separate property providing it can be traced, through a series of exchanges, to the original separate property. This can be extremely difficult if, e.g., one has an active stock portfolio which included constant reinvestments, splits, etc.
Titling separate property in joint names creates a presumption that the spouse who had the separate property intended to make a gift of it to the marital estate. This is one of the only instances where how property was titled matters for a divorce.
Finally, any increase in value of separate property is marital. As an example:
Pat owns a house at marriage worth $200,000, with a mortgage of $150,000. His separate property interest is the net equity, or $50,000.
Upon divorce, the house has appreciated to $300,000, and the mortgage has decreased to $100,000. The net equity is now $200,000.
The marital share is the increase in net equity ($50,000 to $200,000), or a total of $150,000.
Dissipation of Marital Assets
Neither spouse may dissipate marital property once a party has filed for dissolution. Furthermore, if during the marriage one spouse improperly used marital property for non-marital purposes, a Colorado divorce court may "recapture" the value of that property into the marital estate. This means if $100,000 was improperly spent or wasted, the other spouse receives $100,000 from the marital estate, before the remainder is divided.
It is rare to see dissipation cases, since the purchases made during the marriage, even if they only benefited one spouse, are presumptively marital. So generally, one spouse's trips to Vegas will still be considered marital. But if a spouse bought expensive presents for a mistress, those would obviously not be marital, and subject to recapture.
If property may have been dissipated, or is just being hidden, your Colorado divorce attorney can help by tendering financial releases, Requests for Production of Documents, and Interrogatories. It should be possible to uncover improper transactions, at least in the previous few years.
If the parties cannot agree on the value of a marital asset, they may get it appraised. This is done most often with real estate (either a comparative market analysis from a real estate agent, or a full-blown appraisal), antiques, and business interests. Sometimes even household goods have to be appraised! Your Colorado divorce lawyer should have the names of appraisers, if needed (and, under new court rules, hopefully the two attorneys can agree on one appraiser).
The value of a business includes not only the "tangible" assets such as furniture and fixtures, but intangible assets such as accounts receivable, the value of work in progress, and "goodwill." Believe it or not, even a business with no assets has a value, as long as it generates a good revenue stream for its owner.
Marital debts are those debts either spouse incurs during marriage, again without regard to whose name the debt is in. Debts are also allocated equitably in Colorado, which may result in an allocation which is equal, one where the higher income earner assumes a greater responsibility, or one where the party who incurred the debt incurs a greater responsibility.
Kelley Blue Book. Indispensable tool for calculating vehicle values.
Yahoo Finance. Find current and historical stock values.