Understanding How Colorado’s Marital Property Laws Affect Your Divorce
A divorce is a split - a split between your and your spouse’s lives, your living situation, your money, your possessions, your friendships, and your children, if you have them. It’s not only a life split, but also a legal one, and because it primarily has to do with the division of property (custody more so involves working out the division of parenting), it’s extremely important for you to have a solid grasp of Colorado’s marital property laws before you head into divorce! The more you know about the laws and what your legal options are, the more empowered you will be to make good decisions during the divorce process that lay a strong foundation for your future.
Here are a few things that you need to know about Colorado’s marital property laws and how they may affect your divorce!
First - what is marital property?
Marital property is things that were bought, received as gifts, or otherwise acquired by a marriage couple (as a couple) during the marriage. For example, a joint bank account that both spouses set up together and contributed to is marital property. Anything purchased with money from that joint bank account is marital property. Wedding presents are marital property.
Separate property is anything that was owned individually or brought into the marriage. For example, if one spouse owned a car before getting married, that would be considered their separate property in the event of a divorce, even if the other spouse frequently drove it during the course of the marriage. If one spouse’s grandmother died, and left an inheritance to them, that would be their own separate property. Debts are other examples that can also be classified as separate property or marital property, depending on the circumstances.
It seems fairly cut and dry, but “commingling” can occur if separate property becomes marital property during the course of the marriage. For example, if one spouse owns a house, but then gets married and the other spouse contributes to mortgage payments on that house, the house has become marital property.
The first step in the divorce process in Colorado when it comes to dividing assets is determining what assets are marital property and what assets are separate property. This can get complicated, and often requires the assistance of attorneys or financial professionals to sort out.
Colorado is an equitable distribution state, not a community property state - what does that mean?
When assets have been classified as marital or separate property, the next step is to divide the assets that are marital property between the spouses (separate property will go with the spouse who it belongs to). How the marital property will be divided is the biggest issue in divorce, and that’s where knowing Colorado laws comes in.
There are two primary ways that most states divide up marital property.
One follows a community property rule, which means that all marital property is divided equally between the two spouses - 50/50, even stevens. Only about 9 states currently abide by this guideline.
The other way is equitable distribution, which means that all marital property is divided equitably (fairly), but not necessarily equally or exactly evenly, between the two spouses. Colorado uses this system for divorcing couples.
What factors come into play to determine what’s “equitable”?
A Colorado judge or court will consider a variety of factors to determine what an equitable distribution of marital assets looks like. Some of these factors may include:
- What each spouse has in terms of separate property
- Each spouse’s age, physical health, and ability to provide for themselves apart from the other spouse
- The couple’s standard of living during the marriage
- Any education or time one spouse would need to reach a similar living standard on their own
- The length of the marriage
- Whether either spouse put aside career goals to support the other spouse or children
- Whether either spouse contributed to the education or earning power of the other
- Each spouse’s contributions to caring for and improving marital property
- Whether either spouse wasted marital property
- Whether or not children are involved, and the cost of caring for those children
- Each spouse’s debts
- Whether a prenup existed that would affect how marital property is divided
- And more.
All of these factors may prove important and can influence who gets what. For example, if you were a stay at home parent and didn’t earn money during the marriage, you may end up with more of the marital property than your spouse because you sacrificed your earning potential to take care of the children and contribute to a smooth running of the household and save money on childcare/housework. In a community property state, you’d get 50%, but in Colorado, you may get 70% because that’s what is the most fair.
Seeking the help of legal divorce professionals is highly recommended!
Fairness may look different to your spouse or to a judge than to you, which is where legal representation comes in. Regardless of your financial position during a divorce, having an experienced Colorado divorce lawyer on your side who is familiar with equitable distribution and who can make a strong case for you to receive what is truly fair is the best way to make sure you don’t get taken advantage of or don’t get the short end of the stick in your divorce!
At New Leaf Family, we’re committed to guiding clients through every aspect of divorce, including the division of marital property. We have a unique perspective on divorce as a transition rather than an ending! Our firm prioritizes collaboration whenever possible; we focus on clarifying and achieving your goals and helping you grow as a person along the way; we charge predictable monthly fees instead of huge hourly billing rates so that representation is more cost-effective.
If you’re contemplating getting divorced or are already in the beginning stages of the process, call New Leaf Family today to schedule a free consultation and learn more about your options.