One of the most significant issues in a divorce case is the division of marital property. The division of marital property is controlled by C.R.S. 14-10-113.
Marital or Separate Property?
The first step in dividing marital property is to identify which assets are marital which assets are separate. Generally, assets which are acquired prior to the marriage are separate and those which are acquired during the marriage are marital. However, the gain in value of a separate asset during the marriage is marital property. A common example of this is where one party purchases a house prior to the marriage and then, during the course of the marriage, the house gains significant value. While the equity the individual had in the house prior the marriage stays separate, the gain in value is marital. This house now introduces some complexity to the property division. It’s important to remember that debts acquired during the marriage are considered property for the purposes of the division.
There is a lot of law regarding whether an asset is marital or separate and it’s a good idea to consult with an experienced divorce lawyer before agreeing to a separation agreement.
After identifying the marital property, the next step is to assign a value to everything. Sometimes this is easy. For instance, a checking account’s value is readily determinable. Some assets are more difficult to value such as businesses and pension plans. When the parties cannot agree on the value of an asset they have the option to hire an expert witness to investigate and render an opinion as to the value of the item in question.
Expert witnesses are frequently retained when there is disagreement as to the value of a martial home. Getting an appraisal on the home costs $500-800. This is sometimes an intelligent expense because it can increase the likelihood of settlement, which reduces overall costs of litigation.
After determining which property is marital and assigning a value, the next step is to divide the property equitably. An equitable division does not necessarily mean an equal division. However, with smaller marital estates and shorter marriages, something close to a 50/50 division of assets and debts is a common outcome.
If the parties are unable to come to an agreement regarding the property division the judge will decide. Pursuant to C.R.S. 14-10-113, the court considers the following factors:
(a) The contribution of each spouse to the acquisition of the marital property, including the contribution of a spouse as homemaker;(b) The value of the property set apart to each spouse;(c) The economic circumstances of each spouse at the time the division of property is to become effective, including the desirability of awarding the family home or the right to live therein for reasonable periods to the spouse with whom any children reside the majority of the time; and(d) Any increases or decreases in the value of the separate property of the spouse during the marriage or the depletion of the separate property for marital purposes.
Once the judge makes his property division or the parties agree to a property division as part of a settlement agreement, it is very difficult, and sometimes impossible, to make changes after the fact. That’s why it is extremely important to get it right the first time.
This page is only a brief overview of this issue and should not be treated as an authoritative guide. There is no substitute for advice from an experienced lawyer. If you have any questions about this, or any other issue, please do not hesitate to call our office at (720) 295-4196 or email Cody@CKMLawyer.com.