Separate versus Marital Property in Colorado
The distinction between separate and marital property in Colorado is important to understand if you’re considering a marriage, divorce or estate planning. This classification of your property as being separate or marital determines how those assets would be divided in a divorce. This article from Denver Law Firm FlinLaw explains how property is classified as separate or marital and how that classification affects your rights.
How Property is Divided in a Colorado Divorce
During dissolution of marriage proceedings, a Colorado court is empowered to divide a couple’s marital property in a manner that is “equitable,” however, the courts cannot touch any property that is deemed the separate property of one spouse or the other. The courts have broad discretion in determining what is an “equitable” division of marital assets in any given divorce case, but should generally follow a few specific factors that are laid out in Colorado statutes (§14-10-113). These factors include:
- Each spouse’s contribution to the acquisition of marital property, including the contribution of a homemaker spouse;
- The value of each spouse’s separate property;
- The earning capacity and economic circumstances of each spouse, including the desirability of awarding the family home to the spouse who will primarily care for any children; and
- Increases and decreases in value of the assets of each spouse, including the use of separate property for marital benefit.
These factors are not all encompassing, and courts still may consider many other circumstances related to the division of marital property.
What is the Difference between Marital Property and Separate Property?
So why can the courts divide certain assets between spouses and not others? It has to do with the distinction between marital property and separate property. Basically, separate property are certain items that the law believes are the property of the person who owns or receives them regardless of marital status. This includes:
- Property owned by each spouse prior to the marriage;
- Property received in exchange for other separate property;
- Gifts & Inheritances (even if they are received during the marriage);
- Property acquired by a spouse after a decree of legal separation; and
- Property that is agreed to be separate by a valid marital agreement.
On the other hand, marital property represents assets that the law deems are owned by a married couple for the benefit of their marriage, regardless of who purchased the assets and whether title is held in one person’s name. Generally, marital property is everything not included in the definition of separate property. Specifically, marital property includes assets obtained during the marriage, and any appreciation on separate property assets that happens during the marriage.
Using Estate Planning and Marital Agreements For Better Results
Our Denver Divorce, Family Law and Estate Planning Attorneys can help you avoid the out comes described above if you find them undesirable. A well-drafted pre-marital agreement (prenups) or post-marital agreement can help you re-define what is separate property and what is marital property. Likewise, a joint trust can help to keep assets separate during the marriage to avoid issues that could turn your separate property into marital property, like marital contributions to protect separate property assets. Finally, our divorce attorneys can make sure you’re protected during divorce proceedings by ensuring that the court properly characterizes your property.
Contact us today for your free consultation to learn more about this topic!