By: Jessica A. Saldin
In most divorce cases, the parties are either still living together when the case begins or have recently separated. However, it is also not uncommon for parties to have separated several months, or even years, before the divorce case is filed. In my experience that can be for a variety of reasons. In some cases the parties wanted to take time to attempt reconciliation. In others, the parties simply never got around to filing. Furthermore, in some cases one party left and the other party did not want to file because they did not want the divorce to happen. In sum, there may be a variety of other reasons why spouses wait lengthy times to file for divorce. Regardless of the reasons, if the parties do get to the point of filing a divorce case, a common and reasonable question many parties ask is: what, if any, effect could this long period of separation have on the division of marital property and debts? When reading this article, keep in mind that the court has the power to divide all marital property accrued up to the date of the decree.
The only time that marital property and/or debt acquired during a period of separation will be automatically set aside as one party’s separate property or debt is if it was a period of legal separation. Legal separation is a formal legal process, similar to a divorce, and whether it may be the best fit for your situation will be discussed in a future blog post. If you have received a decree of legal separation, property obtained after that point will be considered your separate property. If you are not legally separated, though, and have only physically separated, the answer to the effect such separation has on the property and debt division is not as clear cut.
It is important to be aware of the fact that property acquired during the marriage, even during long periods of physical separation, is considered marital property. Same with debt accrued during that time. Therefore, if you are considering a divorce, it is best to start the process sooner rather than later to get resolution and to avoid property you acquire being considered marital property (to which your spouse could be entitled) and debt your spouse acquires being considered marital (part of which you could get stuck paying).
Simply because an item is marital, though, does not mean it is automatically divided in half. Colorado is an equitable division state. What that means is that, when deciding how to divide marital property, the court needs to divide it in the manner most equitable to the parties, considering a variety of factors set out in C.R.S. 14-10-113. Prior blog posts have discussed equitable division and the factors the court may consider when deciding how to divide marital property and what is equitable. The focus of this post is how those factors, and the equitability consideration, is affected by a period of long-term physical separation.
One of the factors the court can consider in deciding how to divide marital property is the contribution of each spouse to the acquisition of marital property. If two people have been physically separated for a lengthy period of time, each acquiring their own property, paying their own bills, debts, etc., the argument can be made that this factor supports setting aside each party’s property and debts to them as of the date of separation and dividing the values from the date of marriage until the date of separation only. However, there are several other factors that go into the consideration of what is an equitable division of property and debt. These include: the value of the property received by each party and the economic circumstances of each party. Therefore, while the argument can be made that, due to the contribution, each party should receive his/her property and debt as of the date of the separation, there is no guarantee the court will see that as equitable. Furthermore, if the spouses continued to share joint property after the separation, assist each other with bills (such as continuing to contribute to the mortgage, insurance, etc.) that could be enough of an argument for the court to determine the physical separation should not have an effect on how property and debt is allocated. In other words, it will be a case by case analysis by the court and will really be determined on the specific facts of the case.
One other issue to consider is the effect of the physical separation on maintenance (alimony/spousal support requests). Before awarding maintenance to a spouse, the court must first find that the requesting spouse lacks sufficient property to provide for his or her reasonable needs and is unable to support him/herself through appropriate employment. If the spouses have been separated for a lengthy period of time and the spouse now requesting spousal support has been paying all of their own bills and supporting themselves without any assistance from the other spouse, that can be an argument as to why maintenance is not needed. Much like the property and debt division, there is no bright line rule on this issue, or guarantee that the court will agree with the argument, but it is a reasonable argument to make in that situation.
In conclusion, if divorce is coming, why wait? The longer you let things linger, the greater financial risks you may have.