Colorado is an equitable distribution state: during divorce, marital assets will not be automatically equally divided between you and your soon to be former spouse. Instead, the court will divide the assets based on its determination of what is fair and equitable between the parties. However, for marriages with larger or more complex financial affairs, “fair” doesn’t mean “easy to resolve.”
Some elements that may complicate dissolution of marital assets include:
- Pre or post nuptial agreements
- Co-owned businesses
- Former spouses with maintenance orders
- Child support for children outside the marriage
- Multiple retirement accounts or pensions
- Active or former military service, military pensions
- Determining income when a party is self-employed (a party’s income under Colorado law for purposes of maintenance and/or child support may or may not be the same as determining income under IRS guidelines).
In divorce proceedings, typically, the focus is on getting property from the other spouse. However, in more complex divorces, you may want to get counsel of attorneys and financial advisors to plan for tax issues, debt liabilities, tax consequences of the property allocated to each party, and other related concerns. Current cash on hand may be just one small piece of the puzzle–but there could be issues with carryforwards, net losses, and so forth. Perhaps you were counting on a specific deduction for a business purchase, but only one of you can claim it next year. You may decide that the deduction is worth more to you than the car, and need to negotiate accordingly.
Complex divorces don’t just change the substance of the proceedings: They can also affect the procedures you use. You may consider mediation or other avenues to attend to details that are too involved to work out in an open courtroom.
Even in more straightforward proceedings, courts require pay stubs, bank statements, and similar documentation before dividing assets. However, in more complex, larger estates, forensic accountants may be needed, to make sure that property and business valuations and expenses are legitimate, that there are no unaccounted-for funds, and other ways to hide monies.
If you’re facing a high asset divorce with complicated financial matters in Colorado’s unique environment, consider calling the team at Stahly LLC for a private strategic consultation