If you and your spouse cannot come to a mutual agreement about how to split up your assets and debts, the court will decide. While in some states, property is divided equally among spouses, Colorado is an equitable distribution state. That semantic distinction is important! It means that a court will allocate property to the divorcing parties in a way that is fair and equitable… but not necessarily 50/50.
How Equitable Distribution is Determined
Colorado courts consider a number of factors. Some examples are:
- Each spouse’s contribution to the marriage
- The current economic situation of each party
- Length of the marriage
- Valuation of separate property (i.e. premarital and/or gifted and/or inherited property) received by a spouse during the marriage
- Any liquidation of separate property for the sake of the marriage
- The final valuation of the property assigned to each spouse
Marital Property or Separate Property?
All property involved has to be assessed as marital or separate.
Did one spouse own the property prior to the marriage, or was it acquired after the marriage? Was the property acquired by gift or inheritance? Based on this determination, the judge will divide the marital property—or a valuation of the property—based on what the court considers fair. If necessary, property may sometimes be sold, with the cash proceeds distributed equitably.
One often forgotten but major hurdle during a divorce is assigning and discharging debt. The Courts divide any outstanding debt liabilities between the two parties, based on the same set of inquiries used for asset division. Debt can significantly impede a fresh start following a divorce, so debt obligations must be dealt with properly.
Evidence Needed In These Proceedings
To make these determinations, the courts require the divorcing spouses to disclose financial data to each other. This includes:
- All business and personal financial statements for the last three (3) years;
- All income tax returns filed in the last three (3) years;
- Appraisals and titles for all real estate;
- Current statements for any and all bank, investment, and retirement accounts;
- Current paystubs or other proof of income;
- Proof of childcare expenses for children of the parties;
- Documentation of all personal loans and mortgages;
- Documentation of any and all educational expenses; and
- Documentation of children’s extraordinary expenses.
With the amount of information that is required and the depth of the court’s inquiry, what seemed like a simple undertaking can easily become overwhelming. To get the insight you need to feel in control of this process, please schedule a private consultation with our experienced Boulder property division attorney at Stahly LLC.