We’ve discussed the essentials of the property division process in Colorado before on our blog. In our discussion, we learned some of the basics of how property is classified, how the process works, and other issues as well. In today’s post, we’re going to slightly alter our style, and go over the top 5 “frequently asked questions” regarding property division here in Colorado. These are among the most commonly asked queries in this process.
Is Colorado a Community Property State?
No, Colorado is not a community property state, but instead is an “equitable distribution” state. In a community property state, the court has a presumption that all marital property should be divided equally. In an equitable distribution state, by contrast, the court has a presumption that marital property should be divided fairly or equitably, which is a different type of analysis that doesn’t always result in a 50/50 division.
What Factors are Involved in the Equitable Distribution Analysis?
In Colorado, a judge will review all the relevant circumstances underlying a given divorce and then divide the marital property according to the equitable distribution standard. Judges will look at the following factors when deciding on a fair solution: the current economic situation of each party, any change in the value of each spouse’s separate property during the marriage, the use of one spouse’s separate property during the marriage by the other spouse, the amount of property awarded to each spouse, the desirability of assigning the family house to one parent (usually the custodial parent), and other factors too.
How is Marital Property Defined?
Marital property is typically defined according to the timing and method of acquisition. In general, whenever something is acquired during the marriage itself, it is considered marital property (and subject to division), unless it was acquired via inter vivos gift or inheritance. If a couple were to purchase a car during the marriage, the car would be considered marital property. However, if one spouse acquires a new boat as an inheritance, then this boat wouldn’t be considered marital property.
Can Premarital or Postmarital Agreements Overcome the Default Rules?
Yes. Colorado has its own “default” rules which it uses whenever a couple dissolves without developing their own property division agreement. But, a couple can effectively overcome these rules if they create either a premarital or postmarital agreement (also called prenuptial or postnuptial agreements). A premarital or postmarital agreement basically allows the parties involved to identify specifically how they prefer the division process to work in a divorce. With these agreements, parties can specify exactly how they want certain property divided, or whether they want certain pieces of property to remain separate, even if that property might otherwise normally be considered marital property.
Are Debts Divided Too?
Yes, marital debt is considered divisible and will be divided up following divorce. Hence, if a couple takes out a credit card and racks up $15,000 in credit card debt, this debt would likely be divided evenly in a divorce, unless there were a compelling reason to divide the debt unevenly.
Contact the Drake Law Firm for More Information
The division of assets and debts can be a tricky endeavor. If you’d like to learn more, contact the Drake Law Firm today by calling 303-261-8111.