Property Division

Property Division

Divorce is the legal mechanism of dividing all assets and debts that were accumulated during the marriage.  The first step in determining what the court needs to divide is to classify each asset and debt.  The court only has jurisdiction to divide property acquired during the marriage, this is commonly referred to as the “marital estate.”  An asset can by classified as: separate, marital, separate property with a marital interest, or a non-property interest.

What Is the Classification of Property?

• Separate Property – is property owned by a party prior to the marriage or a debt owed prior to the marriage.  An example would be a car owned prior to marriage or student loan debt incurred prior to the marriage.

• Marital Property – is property or debt gained by either party during the marriage.  The title to the party does not matter. The exception is anything specified in a valid prenuptial or postnuptial agreement, inheritance, or gifts that has not been mixed or comingled with marital assets or debt.

• Separate Property with a marital interest – is property that is owned by one party prior to the marriage but has appreciated in value during the marriage. An example may be a 410k plan that was established prior to the marriage.  The amount of the fund prior to the marriage is separate property, but the increase in value from the date of the marriage to the date of divorce would be marital.

• Non-Property Interest – is property that is not divisible by a court in a divorce because the interest is too speculative to be divided.

Marital property may consist of:

• Financial obligations, such as loans and credit card debt

• Personal property

• Real estate holdings

• Retirement funds

• Business interests

• Student loans, incurred during the marriage

• Restricted Stock Units

• Employee Appreciation Units

In a divorce in Colorado, the division of property should be equitable given the circumstances of the marriage.  Equitable does not necessarily mean 50/50 or equal. Some circumstances that would justify a deviation from an equal division of assets and debts include if one party used funds for non-marital purposes, if one party committed economic waste during the proceedings, or the contribution of each spouse to the acquisition or preservation of the asset.