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Colorado Divorce, Property Division, and Contribution to the Marital Estate

property-market-1223813By:  Stephen J. Plog

As indicated in various, previous posts over the years, one of the primary issues which can arise in any divorce case is the division of marital property. While reading the news the other morning, I came across a story regarding the case of an English couple battling over their divorce and division of property.  The gist of the article tied into an appellate ruling related to division of the marital estate and whether that division would deviate from the norm based on the husband’s contributions.  Specifically, the parties were arguing over how to divide their $225 million marital estate, with the husband arguing he should receive a greater share than normal due to his special contribution to the marital estate.   The special contribution the husband claimed was the fact that his superior intelligence or “genius” lead to the creation of the vast amount of wealth to be divided.    The English appellate court ultimately ruled against him.

While analyzing this and other cases, the author pointed out that under English law, the norm is to divide a marital estate equally.   This is also the norm in most Colorado divorce cases, whether that norm is arrived at through settlement or a hearing with the court.  Given that many of our notions of legal fairness stem from English law, I was not shocked to learn this.   Of course the bigger aspect of the article was the issue of how British courts might treat contribution of one spouse towards the marital estate as a basis for deviating from the norm of equal and awarding the greater contributor a greater piece of the proverbial pie.   Given my years of experience and familiarity with Colorado family law, I immediately started pondering the issue of contribution and how often it’s really a factor in a Colorado divorce case.

C.R.S. 14-10-113, the section of the Colorado code dealing with division of property in a divorce, specifically lists the contributions of each spouse to the marriage as one of the enumerated factors for a court to look at when dividing marital property.  Specifically, Section 113 states the court should look at, “The contribution of each spouse to the acquisition of the marital property, including the contribution of a spouse as homemaker.”    Firstly, it is highly uncommon for a “contribution” argument to even arise in a divorce case.  In many families, both parties work and contribute their income or earnings to the marriage, household, expenses, etc.   Additionally, one or both parties may also have accrued retirement, savings, or perhaps additional investment property.  For cases in which one party works and the other is a homemaker, whether with or without children, statute clearly indicates that being a homemaker, or perhaps stay at home parent, is still contributing or a contribution to the marriage.

In practicality, judges will often view the roles parties take on in a marriage as an agreement or understanding between them as to how they are going to structure their life and home.   Judges are generally hesitant to second guess the parties’ collective decision over the course of the marriage regarding who did what or who contributed what in an actual monetary sense tied into wealth accumulation.   Why should one party be penalized for assuming their agreed upon role?  The reality is they will normally not be.  Furthermore, there is a gravitational pull within the family law court system towards simplicity and resolution through settlement.   If contribution were truly a significant factor looked at by each court in a divorce case, the reality is there would be more litigation and fighting.  In turn, dockets would become more backlogged as more time would be needed to battle over who contributed what.  Equal division is the norm, in part, because it is viewed as fair and simplistic, period.   The enumeration of “contribution” in Section 113 appears to be designed not to create another avenue for argument and fighting, but rather a safeguard for those exceptional cases.  That being said, what are the common exceptional cases in which contribution might be raised as an issue?

Unlike the travails of the English couple, most families do not have $225 million, or even a fraction of that.  Rather, there may be the typical home, cars, retirement account(s), maybe some savings, and maybe some furnishings.   Regardless of the norms, cases can arise in which contribution is relevant and legitimately argued over.   Perhaps there is a case in which one party has worked while the other has refused to.  Perhaps there are no children in that case, and despite begging and pleading for the other spouse to work, they just refused.  Perhaps the working spouse was truly in love, blinded by that love to the point of failing to recognize that he or she was being taken advantage of.   Adding to this hypothetical scenario, perhaps the spouse who refused to work did nothing.  Didn’t cook or clean.  Didn’t buy groceries.   Did absolutely nothing to enhance the home or make the working spouse’s life easier or more enjoyable.  Perhaps that spouse only enjoyed the fruits of the other’s efforts and contributed almost, or truly nothing.  In those types of cases, presuming the utter lack of contribution to the marriage can be proven, a court might, and I do mean “might,” entertain a contribution argument.

Another scenario might be one in which parties got married, separated, and essentially lost contact for a decade, or more, with no financial entanglements.   We have seen these types of cases.   During that decade, or more, one spouse might have amassed significant wealth due to his or her employment and efforts, while the other spouse essentially did nothing.  In this type of scenario a court might be willing to more thoroughly look at the contributions of each tied into the accumulation of that wealth.   With the parties being married in name only, but ceasing to function as a married couple for years, a contribution argument would certainly be appropriate and more likely well received.

Finally, we do see cases in which one party might inherit a decent amount of money during the marriage.   Normally, increase in value to that property would be considered martial in nature and subject to division.  However, depending on the circumstances, a court might be willing to entertain a contribution argument, knowing that allocating some of the increase to the inherited wealth might essentially be rewarding the other spouse for the first spouse’s fortune, or misfortune, however one looks at it.  A more extreme example might be a case in which the inherited asset is received shortly before the divorce is filed, with a rapid increase in value between receipt and dissolution.   Again, would it really be equitable or fair to divide that asset when dealing with such a short time frame, particularly while a divorce is on the horizon or pending?

Under Colorado law, though equal division is the norm, divorce courts are required to divided marital property as they deem “equitable” or fair.  As such, judges are vested with a wide array of discretion when it comes to dividing the marital estate.   Notions of what is fair are subjective and each judge is different.   As such, while one court might entertain a contribution argument when presented with a certain fact pattern, another may not.

If you are faced with, or entertaining, a contribution argument in your divorce, it would certainly be wise to consult with a Colorado family law attorney to assess your case and the strengths and weaknesses of that contribution argument.  Just as in England, contribution arguments are rare in Colorado.   As such, options should be thoroughly weighed before choosing a course of action.

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