- January 6, 2023
- Divorce
One of the most important aspects of a divorce case is the division of marital property. Each state has a method for accomplishing this sometimes complex task.
In Colorado, courts divide property equitably, or based on what the judge determines to be fair, given each spouse’s financial situation as well as their history and capacity for earning. But before any division can occur, it’s helpful to ask questions like “What is considered an asset in divorce?” and “Are premarital assets protected in divorce?”
What Is Considered an Asset in Divorce?
By the time a married couple seeks a divorce, the spouses may have accumulated substantial assets. Some of these assets will be marital property, whereas others will be considered separate from the marital pool of assets. This distinction is important because separate property does not get divided during a divorce.
Are Premarital Assets Protected in Divorce?
Separate property refers to non-marital assets that belong to one spouse or the other. In many cases, assets acquired before the marriage are separate property. For example, if one spouse owns a car, house, or any other property before the wedding, that property will likely not be considered marital property.
Additionally, some assets acquired during the marriage may also be considered separate property under certain circumstances. Examples of these circumstances include:
- Assets acquired as gifts
- Assets acquired as an inheritance
- Assets acquired after entering a period of legal separation
- Assets excluded from the marital property in a prenuptial agreement.
Although it may seem straightforward to distinguish separate property from marital property, it’s often a complex legal endeavor. If you’re facing related challenges, consider seeking legal help for custody to ensure you’re well-represented in all facets of your case.
Marital Property
Under Colorado law, marital property is broadly defined as property acquired by either spouse after the marriage. This definition includes anything each spouse buys, earns, or creates, including:
- Income
- Equipment
- Real estate
- Businesses
- Automobiles
- Bank accounts
- Stocks and other equities
- Retirement accounts and pensions.
When it’s time for the court to divide assets or approve an agreement between spouses, the court will refer directly to the Sworn Financial Statement (SFS) that each spouse must fill out. In addition to containing each spouse’s income and assets, the SFS should also show liabilities for both spouses, such as:
- Tax liens
- Mortgages
- Student loans
- Personal loans
- Credit card debt.
As with property, debts can also be considered separate. For example, if your spouse was carrying $50,000 of credit card debt before marrying you, that debt will not be considered marital debt. Also, if your spouse acquires debt in secret, fraudulently, or because of an affair, you will likely not have to take on that debt.
Wondering How to Divide Assets in a Colorado Divorce?
Are you wondering how to divide assets in a Colorado divorce? In Colorado, the courts typically prefer that parties come to an agreement on the division of marital assets on their own. However, any agreement between the parties must be reviewed and approved by the court. A court will not approve an agreement that’s overly unfair or unconscionable. If the parties cannot come to a fair agreement on their own, the court must step in.
When deciding how to divide assets in a Colorado divorce, the court will use principles of equity in deciding how to allocate property. While property is often divided equally, that is not a requirement because it does not take into account the different levels of financial power that are common between spouses.
According to the statute, judges who preside over the division of marital assets must take specific factors into account when making a decision. These factors include:
- The value of each spouse’s apportioned property
- How much each spouse contributed to the acquisition of the property
- The financial situation of each spouse at the time of the division of property
- Increases and decreases in the value of assets that are deemed to be separate.
Regarding the final bullet point, consider an individual who owned a home outright before getting married. By law, that house is considered separate property so long as title has remained separate. However, as the years go on, that house is likely to increase in value if properly maintained. It may also become a source of passive income if the married couple decides to rent it. In both cases, the increases in value and revenue stream are figured into marital property calculations.
Common Issues with Assets and Divorce
In complex dissolutions of marriage especially, there exists an array of issues that typically crop up and make the process challenging.
High-Value Assets
Denver high asset divorce attorney present special problems, especially in the valuation of business assets. Generally speaking, a spouse with a business wants that business to receive as low a valuation as possible. The lower the valuation, the more generous the court is likely to be with other assets. However, the other spouse wants a higher valuation of the same asset so that the judge will be less generous to their spouse when allocating other assets.
Asset Concealment
In some cases, spouses go to great lengths to prevent each other and the court from discovering or dividing their assets. With the right expertise or help, a spouse can effectively disappear an asset from the books or convert it into untraceable cash. This is especially true when the assets are related to business and finance, such as obscure options and interests.
Fortunately, lawyers for divorce and custody are effective at tracking down hidden assets. Many of them regularly work with forensic accountants during divorces, making it difficult for one spouse to conceal assets and cut their ex out of their fair share.
Reach Out to an Experienced Family Law Firm for Answers and Assistance
Determining the difference between separate and marital property may appear straightforward at first glance. However, without an experienced family law attorney, you just might end up on the wrong side of a division agreement.
If you have questions about what is considered an asset in divorce, reach out to a family law attorney at Price Family Law for answers and help. You deserve the peace of mind that comes with being informed. Call (720) 615-1750 today and schedule your free consultation.
