One of the biggest concerns in a divorce is property. How many of our valuables are on the line? Which person owns what property? Who will get the house? How is this all decided?
There are always exceptions within exceptions, going state by state, but generally, anything purchased during a marriage is considered to be a marital asset. Jim hates video games, but Jane loves her Nintendo Switch. If Jane bought it while they were married, it’s now a marital asset. Even if Jim’s new car is in Jim’s name only, most states are going to see that as a marital asset. Debt accumulated during the marriage is also viewed as jointly owned.
“Separate assets” tend to include things like gifts from someone outside the marriage; inheritance; or property owned before the marriage (or property gained by exchanging separate assets).
So, once we decide who owns what in a marriage, now it’s time to figure out who receives what in a divorce. There are three general types of property division in a divorce. One is decided by the two parties; the other two are decided by the courts.
Types of Property Division in a Divorce
Do It Yourself
The simplest way to divide up the property among divorcees is for them to do it themselves. If both parties are agreeable, they can simply decide who gets what. Maybe Jim gets to keep his jewelry without a fight, and maybe Jane walks away with her old comic book collection. They can decide on who gets the home. They can decide to sell the home and split the earnings however they see fit. Debt, the dog, the picture frames, whatever it is – property is distributed however the two parties desire as long as they agree and put it in writing. Unfortunately, life isn’t always that easy, and the courts may need to make these decisions if the couple cannot do so amicably on their own.
Community Property Division
Simply put, in a Community Property Division, the court looks at the joint, marital assets and splits them evenly among partners, 50/50. As is the case with all divorce laws, standards vary from state to state. Other factors like the “at-fault” partner, number of children, etc., will affect the outcome of community property division. But one can generally assume a 50/50 split if they are in a community property state. There aren’t many states that use this model, including Colorado.
Equitable Division
In an Equitable Division of marital assets, many factors are taken into account when dividing property. Did one partner quit their job to stay home with the kids? Is there one partner with a greater “potential income” than another? How much property did Jane bring into the marriage vs. Jim? The courts are going to look for outcomes that represent what each person deserves given the circumstance.
“Equity” is about trying to find the fairest solution, not necessarily an equal solution. It’s important to remember that “equity” and “equality” aren’t the same thing. “Equality” means that everyone is given the same thing, regardless of outside circumstances. In a community property division, the 50/50 split is an example of “equality.” Each person is given 50%, regardless of whether or not that amount is a huge benefit or a huge blow to the individual.
Equitable Division in Colorado
Colorado is an equitable division state. Its courts will determine what is fair for each spouse.
The first step in property division is to value all property in question. This will likely involve appraisers for homes, cars, or even expensive collectables. The value is set on the “date of decree.” This is the date that the couple files for separation or divorce, or another date determined by the court. If property that was brought into the marriage – separate property – has risen in value, it could be deemed martial property by the court. After all property is valued, it’s time for the courts to decide how to distribute it among the two former partners.
Each piece of divisible property is considered individually, on a case-by-case basis. Colorado won’t make a sweeping ruling that involves all the assets.
The court can take into consideration how much a spouse contributed to the property. If Jim was the one who kept Jane’s fancy sports car clean and operable – if he’s the one who put all the work into the car – he may have some claim to it in the divorce. Perhaps a partner didn’t make any financial contributions to a home or business. However, they did help contribute to the business’s success, or they were the one who kept the home. Even if the home or business was originally brought in as “separate property,” this partner may have some claim to it. A custodial parent may have more claim to the home since they will be caring for the children. The court will consider the economic standing of each spouse at the time of the hearing. There are many factors a judge could use to decide how to equitably divide property.
Unfortunately, there is no “one size fits all” system or calculator to determine what a spouse will receive in Colorado. The courts are trusted to make a just decision designed to “[mitigate] harm to spouses and children.” Colorado’s definitions clearly state the following:
- “There is no mathematical formula for establishing a just and equitable property settlement.”
- “. . . trial court has wide discretion in dividing marital property to accomplish a just result . . .”
When former partners cannot agree on how to divide their property, it is imperative that they seek a lawyer.
We are here to help you protect your assets during a divorce. Call today at (303) 647-4245 or contact us online.