Getting divorced in Colorado can be a new start to life, but it can also have a profound impact on your financial circumstances. Unless you have a thorough prenuptial agreement, you will either have to agree to terms regarding how to divide your property or allow the courts to handle asset division for you.
One of the most confusing aspects of the asset division process is the system by which the Colorado family courts classify property. Any asset or debt you currently own must either be separate property or marital property. The courts will do their best to divide your assets in a fair and equitable manner.
Assets that are marital property will be subject to division in your divorce, while separate property usually remains exempt from division. Determining which assets and debts are marital and which are separate can sometimes confuse people.
Items you owned before marriage are separate property
In most situations, assets and possessions acquired prior to marriage are your separate property. That means that you retain ownership of them when you divorce. However, there are some exceptions to this rule.
If you have commingled your assets with marital assets, by depositing them into a shared account, for example, that may influence the courts to consider them shared or marital property. Likewise, if your spouse contributed to an asset owned prior to marriage, that may have an impact on how the courts view the asset as well.
Real estate is a good example. Although you may have owned the house that you lived in prior to marriage, your spouse likely had some share in maintaining, upgrading and otherwise covering the costs of the home while you were together. They may have some interest in that property when you divorce.
Gifts and inheritance assets typically remain separate property
When someone gives you a gift, it is yours, not your spouse’s. Similarly, if a loved one or family member leaves you a significant asset as part of an inheritance, that is your separate property, not marital property equally owned by your spouse.
However, you need to protect those gifts and inherited assets. Commingling can also affect inheritance and gift assets. If you deposit these assets into a shared account, the courts may view them as marital or shared property.
There are many assets that don’t fall neatly into the categories of the separate or marital assets. Maybe you have a retirement account that you opened prior to marriage. You will continue to make deposits in that account while you were married. Some of the money in the account is liable to division, and other deposits likely are not.
Working with an attorney who understands Colorado divorces is a good decision when you have significant assets that you hope to exempt from division in a divorce.