When spouses get a divorce, deciding how to divide assets such as real estate, bank accounts, vehicles, investments, businesses, and other items of value can result in bitter disputes.
Though Colorado has laws that can guide couples about how marital property, separate property, and debt are to be divided on an equitable basis, the term “equitable” can be interpreted in multiple ways.
A lawyer can help with property division by providing legal guidance in this area while protecting the client’s best interests by advocating for their rights.
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Variables that Affect Property Division in Colorado
How property is divided in divorce depends on several factors, including:
- The type of property
- Whether the property was acquired before or during the marriage
- Whether the value of the property has increased during the marriage
- Individual spousal contributions and sacrifices
Understanding the Different Types of Property in Colorado
How property gets divided in a divorce ultimately is decided by classifying the property as either marital or separate property.
Anything acquired while married is considered marital property, even if the property is only listed in one spouse’s name. Marital property includes real estate, vehicles, bank accounts and investment accounts, businesses, pensions, and retirement accounts. This categorization also includes marital debts and personal property.
Notably, if an asset increases in value during the marriage even though it was acquired before the marriage, the respective increase in value becomes marital property.
As an equitable distribution state, courts seek to divide property fairly, not necessarily an equal 50/50 split. A lawyer will advocate for their client to receive as much property as possible, using the following arguments as support:
- Spousal contributions to marital property (including being a homemaker)
- Property values
- The spouse’s economic situation
- Whether the spouse depleted separate property to acquire or maintain marital property
Often, spouses acquire assets before they get married. In this case, those assets are considered separate property, and the spouse may take that property with them when the marriage is dissolved.
Some property is still considered separate even if it was acquired while you were married. This separate property could come in the form of gifts, inheritances, and irrevocable trusts.
There are several ways in which separate property can become marital property, including:
- The property increases in value while you are married (the increase becomes marital property)
- You place the gift or inheritance into an investment account
- Your spouse helps pay the mortgage or otherwise contributes to separate property
- You add your spouse to the title of separate property
How Colorado Courts View Debt in Property Division Cases
Debt in Colorado is fairly straightforward. If one spouse acquires debt, it becomes marital property. As such, it is subject to division under the same principles. This includes any financial obligations such as student loans and medical bills (or any other debt not secured).
It is important to understand that even if one party has acquired more debt or takes responsibility for a larger portion of the combined debt than their partner, the court does not automatically think this should be reflected in an unequal division of assets.
When it comes to dividing your property during a divorce or alimony settlement, having a lawyer can be invaluable. A property division lawyer can provide advice and counsel on legal rights, assist in determining the most equitable division of marital or community property, protect your financial interests through negotiations, represent you in litigation and help enforce the terms of settlement.
Moreover, the expertise that a lawyer brings can often be crucial when dealing with complex family matters such as contested divisions of property, assets, and estate planning.
Legal involvement may also lead to quicker transference of properties during a divorce or separation and simplify an otherwise cumbersome process.
Therefore, having a knowledgeable property division lawyer involved in the division of property during such proceedings can be a great way to ensure that your interests are safeguarded.