A community property state is one in which the assets of a married couple are considered to be owned jointly, even if only one spouse holds a title to a particular asset or piece of property. Colorado is not a community property state, as courts do not assume that the property obtained during the course of a marriage is all marital property. As a result, assets within a marriage will be divided equitably among the spouses under Colorado law. If you are considering a divorce and have questions regarding how your property will be divided between you and your spouse, make sure your financial rights remain protected by contacting an experienced family law attorney at Johnson Law Group at (720) 744-3513 or through Text-to-Chat at (720) 744-3513 today.
Community Property vs. Equitable Distribution
There are significant legal and financial ramifications to how property is categorized for the purposes of a divorce.
Community Property
Colorado is not a community property state. In fact, there are only 9 states that have adopted community property laws (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin). Additionally, there are three states (Alaska, Tennessee, and South Dakota) that allow spouses to treat their property as community property if they agree in writing to do so jointly.
Equitable Division of Property
Colorado is a state where the assets of a marriage are divided equitably among the spouses. Under Colorado Revised Statute Section 14-10-113, the state of Colorado will first determine the value of all the property owned by both spouses and then makes a determination to divide all assets, debts, and marital property equitably between the spouses.
Definition of Marital Property in the State of Colorado
The state of Colorado distinguishes between property and assets owned by the marital estate (both spouses) and separate property (owned by one spouse). Generally speaking, if an asset or debt is acquired after the marriage, it is typically considered part of the marital estate under Colorado Revised Statute Section 14-10-113(2).
Separate Property
If the court determines that the property is a separate property from the marital estate and owned only by one spouse, then it will not be used as part of the valuation for the division of marital assets in a divorce. Examples of separate property may include assets given to one spouse before marriage, or inheritances given specifically to one spouse during the course of a marriage.
Marital Property
Marital property is the property that the court determines is part of the marital estate and jointly owned by both spouses. The courts will then look to determine the actual contribution of each spouse to the acquisition of each piece of marital property. Even if a spouse does not earn an income, they will have contributed to the marital property by taking care of the home or raising the children. The court will also examine whether there have been any changes in the valuation of the separate property during the course of the marriage, which may become then part of the marital estate.
Types of Property Divided in a Divorce in Colorado
Many people only think about their home and their bank accounts when it comes to the division of property in a divorce. However, there are many different types of assets to consider including the following:
- All real estate including the family home, rental properties, vacation properties, and timeshares
- Businesses including family businesses, or one spouse’s business ownership interests
- Checking and savings accounts
- Investment accounts including stock options, stock market investments, bonds, mutual funds, retirement plans, pension plans, individual retirement accounts, and 401(k) plan assets
- Collections of value including art, antiques, heirlooms of value, wine, coins, and stamps
- Collected credit card points or unused airline miles
- Vehicles including personal cars, recreational vehicles, ATVs, boats, or campers
- Household goods and furnishings of value
- Debts including credit cards, mortgages, and loans
Legal Basis for Equitable Distribution of Property
Because Colorado is not a community property state, the court will attempt to equitably divide the property, assets, and debts between the spouses. It is important to understand that equitable division does not me exactly equal division, but rather that each spouse gets the amount of assets and debts that are considered fair under the law. Some of the factors that will impact the equitable distribution of property in a divorce in Colorado include:
- The amount of contribution each spouse made towards the property (including homemaker contributions)
- The economic situation of each spouse at the time of the divorce (some spouses can afford a mortgage payment, in which case they may be awarded the asset of the house along with the debt of the mortgage)
- Determination of the total value of assets through independent valuations and appraisals
Neither spouse has the legal right to dissipate (squander) marital property once there is a filing for divorce in the state of Colorado. If one spouse attempts to frivolously spend marital assets after a divorce has been filed, it may work against them when it comes time to equitably distribute the property. Additionally, there are serious Internal Revenue Service (IRS) tax implications regarding property division and the amount of property awarded to each spouse. If you are curious about how your assets and debts will be divided in your divorce, contacting an experienced family law attorney at Johnson Law Group can help you better understand your legal rights.
Learn How an Experienced Family Law Attorney Can Protect Your Financial Future
If you want to ensure that your financial rights are protected throughout the entire divorce process, contact an experienced family law attorney at Johnson Law Group at (720) 744-3513 or through Text-to-Chat at (720) 744-3513 today. Because Colorado is not a community property state, it is important to categorize your assets and debts correctly for your financial security following your divorce. We would welcome the opportunity to visit with you to protect all of your rights during the divorce process.
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