What happens to the family home when divorcing? One of the most pressing concerns for many when facing divorce is understanding how the court will divide their property. Like most states, Colorado has specific laws distinguishing between marital and separate property.
What is considered marital property in Colorado? Today, we will attempt to answer that question and address how these laws may impact you.
What Is Considered Marital Property in Colorado?
In Colorado, marital property includes any assets or debts acquired by either spouse during the marriage, with a few exceptions. Colorado Revised Statutes § 14-10-113 (Colorado marital property law) covers everything from homes and vehicles to retirement accounts, stocks, and household items. The law assumes that most property obtained during the marriage belongs to both parties equally, regardless of who purchased it or whose name is on the title.
Exceptions to Marital Property
Not everything acquired during marriage is subject to division. Some exceptions include:
- Gifts or inheritances given explicitly to one spouse,
- Property owned before marriage that was never commingled with marital assets, and
- Settlements from personal injury lawsuits, unless compensation is for loss of income.
How you manage your assets during the marriage can impact their classification under the state’s marital property laws. For example, depositing an inheritance from your uncle into a joint bank account could be considered a commingling of assets. Such commingling usually turns otherwise separate property into marital property under certain circumstances. Your lawyer can analyze your situation and advise you on how the court will likely view exceptions.
Marital Property vs. Separate Property: What Is the Difference?
One of the most important aspects of property division is distinguishing between marital property vs. separate property. Separate property includes assets that are not subject to division, such as:
- Property acquired before the marriage that is not commingled, i.e., it is kept separate;
- Gifts or inheritances explicitly designated for one spouse; and
- Items protected by a prenuptial or postnuptial agreement.
So, what exactly falls under marital property? It includes all the assets and debts you’ve accumulated throughout your marriage, regardless of which spouse earned or purchased them. The tricky part comes when separate and marital property become intertwined. Imagine owning a house before the marriage but using marital funds to pay the mortgage or renovate it. The increased value may be considered marital property.
What Is the Impact of Property Commingling on Division?
Commingling occurs when separate property is mixed with marital property, making it difficult to distinguish between the two. Commingling often complicates divorce proceedings because the court must determine what commingled property remains separate. Tracing the original source of the funds or assets can help clarify which portion of the property should be classified as separate.
How Is Property Divided in a Divorce in Colorado?
Colorado follows an equitable distribution model when dividing marital property, meaning property is divided fairly, though not necessarily equally. How is property divided in a divorce in Colorado? Judges look at several factors when dividing assets, including:
- The financial circumstances of each spouse at the time of the divorce;
- Contributions to the marriage, including non-financial ones like child-rearing or homemaking;
- The economic value of property brought into the marriage by either spouse; and
- Any increase or decrease in the value of separate property during the marriage.
Rather than splitting everything 50/50, the court looks at what is fair based on each couple’s circumstances. A judge aims to ensure neither party is disadvantaged after the divorce.
How Do Prenuptial and Postnuptial Agreements Affect Marital Property?
Prenups and postnups give you and your spouse a chance to agree on how your property will be divided if you ever go through a divorce. Such agreements can significantly impact how the court classifies property and divides it during a Colorado divorce. For example, a prenuptial agreement can specify that certain assets, like a family business or inheritance, will remain separate property, even if commingled during the marriage.
Colorado law honors prenuptial and postnuptial agreements (also called separation agreements) as long as the spouses enter into them voluntarily, with full disclosure of assets, and without coercion. If your agreement meets these criteria, it can override standard marital property laws, giving you more control over your assets during a divorce.
Does the Court Consider Debts to Be Marital Property Under Colorado Marital Property Law?
Just as the court can classify assets as marital property, it can also categorize debts in the same way under marital property laws. Any debts incurred during the marriage, such as credit card balances, car loans, or mortgages, are typically considered marital debts, even if only one spouse’s name is on the account. The court divides debts along with the assets, following the same equitable distribution principles.
However, debts incurred before the marriage or after legal separation are usually classified as separate debts for which the individual spouse is solely responsible.
What Role Do Retirement Accounts Play in the Property Division?
Retirement accounts, including 401(k)s, IRAs, and pensions, are often some of a couple’s most significant assets. Any contributions made to these accounts during the marriage are generally considered marital property, regardless of which spouse’s name is on the account.
Colorado law permits the division of retirement accounts through a qualified domestic relations order (QDRO). This order allows one spouse to receive a portion of the other spouse’s retirement benefits without incurring penalties or tax consequences. However, any portion of the retirement account earned before the marriage is typically considered separate property and remains with the original owner.
How Can You Protect Your Separate Property?
To protect your separate property, consider taking the following steps:
- Keep assets separate—avoid commingling your separate property with marital assets;
- Document everything—maintain detailed records of your separate property, including bank statements, deeds, and other important documents; and
- Consider a prenuptial agreement—if you’re entering into a marriage with significant assets, a prenuptial agreement can help protect them during a divorce.
If you’re already married, a postnuptial agreement can still outline how your assets should be divided if your marriage ends.
Experience the Plog & Stein, P.C. Difference
Facing a divorce in Colorado? You deserve experienced legal guidance to protect your rights and assets. At Plog & Stein, P.C., our dedicated family law attorneys have years of experience handling high-stakes divorce cases throughout Colorado. We are recognized for our results, commitment to client satisfaction, and deep understanding of Colorado’s marital property laws.
Whether you need help distinguishing between marital and separate property, negotiating a fair division, or ensuring your financial future, our team is here to support you every step of the way. Contact us today to schedule a consultation and learn how we can help you during this challenging time.
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