When dealing with the division of property in a Colorado divorce case, the first step is identifying what property is marital and what is not. There are many misconceptions among people in a divorce case as to what is to be divided, how it is generally divided, and what is fair or not fair.
The division of property in a Colorado divorce case is governed by C.R.S. 14-10-113, which deals specifically with property. Pursuant to statute, Colorado is an “equitable division” state. What this means is that unlike some states, where there is an automatic 50/50 division of property, our divorce judges have discretion in terms of how to allocate property. That being said, the general rule of thumb we attorneys go by is that most divorce courts will divided property more or less equally.
Perhaps the largest area of confusion is “what is marital property?” Marital property in its purest form is property acquired during the course of the marriage. As such, whatever you brought into the marriage is yours and vice versa. However, statute also makes provisions for increases in value to separate property. Let’s say for argument sake that a woman comes into a marriage with a 401K worth $100K and that during the course of the marriage it increases in value to $200K. The $100K increase in value to the 401K during the course of the marriage would be deemed marital and subject to division. Thus, each party would, in theory, be awarded $50K of the increase at the time of divorce.
Another common issue that comes up is separate property and the titling thereof. Again, pursuant to statute, when separate property is “co-mingled,” it takes on the nature of “marital property” and could be subject to division. A common example in which co-mingling occurs is with bank accounts. Let’s say a man enters a marriage with nothing but receives a $100K inheritance 5 years into his 10 year marriage. Let’s say he puts that money in a separate account titled solely in his name. Let’s also say, going back to the previous paragraph, that the money does not increase in value. The $100K would remain his separate property at the time of the divorce. However, let’s say he takes that $100K and puts it into a joint bank account with his wife, where it sits for the next 5 years. By titling that money jointly he has made the property, in theory, “marital property” subject to division. Though the court can look at all facts and circumstances, there is a good likelihood that the court will call the $100K marital property and divide it.
When going into your divorce, you should know these basics of property for purposes of arriving at settlement or assessing what is worth fighting for in court and what is not. Though everyone hopes and believes their marriage will last, the general saying is that only 50% do. As such, people should plan ahead of time in terms of what they do with their separate property, how they title it, etc. Headaches down the road can be avoided, and your divorce can be much simpler and less costly. Just some food for thought.