An important aspect of a divorce or legal separation is the division of property and debt. The Court first determines what property is separate property and what property is marital property. The Court sets aside the separate property and then equitably divides the marital property. Jeremy will assist you in analyzing whether property is separate or marital and what division of the marital property is in your best interests.
Separate property is property that a spouse brings into the marriage or receives during the marriage by gift, inheritance or distribution from a trust. The separate property of one spouse cannot be awarded to the other spouse. However, all appreciation or increase in the value of separate property is marital property under Colorado law which can be equitably divided by the Court. In cases involving separate property which has appreciated or has increased in value during the marriage, the separate property must be valued as of the date of the marriage or the date that the separate property was received by gift, inheritance of distribution through the date of the final orders hearing or the entry of the Decree of Dissolution of Marriage or Legal Separation. The appreciation on separate property is marital property which the Court can equitably divide.
All property acquired during the marriage is presumed to be marital property regardless of how it is titled. All income, including interest and dividends earned or received during the marriage, is also marital property. Therefore, if income earned during the marriage is used to pay off the separate debt on one of the spouse’s separate property, this may create a marital component in that separate property that may be equitably divided by the Court. Colorado is an equitable division state which means that the Court will divide the marital property in a fair and equitable manner. The Court can award more marital property to one spouse in order to avoid having to award maintenance.
Valuation of Assets:
In order to divide marital assets, the value of the assets must be determined. The value of publicly traded stocks and bonds can be determined from public sources such as the New York Stock Exchange. The value of real estate can be determined by an appraisal. The value of interests in closely held businesses and professional practices, such as law practices and medical practices, can be determined by a forensic valuation expert.
If a spouse is the beneficiary of a trust, under certain circumstances the appreciation or increase in value in the corpus or principal of the trust may be marital property that can be equitably divided by the Court. The value of the corpus or principal of the trust must be determined as of the date of the parties’ marriage or when the trust is established and then compared to the value of the corpus or principal of the trust as of the date of the final orders hearing or the entry of the Decree of Dissolution of Marriage in order to determine if there has been any appreciation. If there has been appreciation of the corpus or principal of the trust, then the Court may equitably divide that appreciation.
Jeremy will guide you through the complexities of what property is separate or marital and how the marital property may be equitably divided in settlement by the Court.
As with the division of assets, the Court must first determine whether debt is separate debt or marital debt. Separate debt is debt that a party has before the marriage or debt that is related to a party’s separate property. The Court will allocate separate debt to the party who brought the debt into the marriage and to the party whose separate property is associated with the separate debt.
Marital debt is debt which is created during the marriage for marital purposes such as mortgages for a jointly titled marital residence and credit card debt. The Court will equitably allocate marital debt and may assign marital debt to the party who receives the asset. For example, if the marital residence is awarded to one party, the mortgage on the marital residence is generally allocated or assigned to the party who receives the marital residence.