For many spouses in Colorado, one of the most daunting aspects of divorce is property division. There are all kinds of myths and rumors surrounding this topic, and it is important to approach property division with a clear understanding of the real laws. Contrary to popular opinion, you do not necessarily need to hand over half of your wealth when you get divorced. The process is far more nuanced thanks to a process called “equitable distribution.” With the right approach, you and your spouse can walk away from the marriage in a fair way. How does property division work in Colorado? What are some tips for achieving a fair settlement? Here's what you need to know:

The Difference Between Separate and Marital Property in Colorado

The first thing to understand is the distinction between separate and marital property. Separate property is not eligible for equitable distribution – meaning you can keep this property without dividing it with your ex. A primary step should be to clearly identify your separate property and set it aside. 

Separate property can take various forms. Perhaps the most obvious type is property you owned prior to signing the marriage contract. Anything you owned before your marriage is yours – and yours alone. For example, you might have been a landlord with several investment properties before your marriage. Your ex should not have any access to these properties, assuming you purchased them before signing your marriage contract. 

Separate property also includes things you acquired after your official “date of separation.” In most cases, this is when one spouse moves out of the family home. For example, you might move out of the family home and use your next paycheck to purchase a motorcycle. As long as you can prove that you purchased the asset with your own funds, you shouldn't have to divide it with your ex. 

Finally, separate property includes gifts and inheritance. The most important thing to remember about gifts and inheritance is that they are separate regardless of when you acquired them. Whether you receive inheritance before, during, or after your marriage, you shouldn't have to divide it with your ex. 

The same logic applies to gifts – but only if they come from third parties. For example, your parents might have gifted you a new car after a promotion during your marriage. Your ex should not have any claim to this asset during divorce – assuming your parents made it clear the car was a gift to you and you alone. If your ex gave you a pearl necklace, this is not a “third-party gift” – and as a result, it remains marital property. 

On the other hand, marital property includes everything you acquired during the marriage (excluding gifts and inheritance). For example, you might have purchased a house after getting married. Perhaps you purchased stocks in a company – or maybe you started your own company. Vehicles, jewelry, fine art, collectibles… the list goes on. Anything you acquired during the marriage is marital property – even if you purchased it with only your income. 

Tip One: Consider Alternative Dispute Resolution

Many spouses stay out of the courtroom when resolving property division disputes. It is possible to negotiate a divorce settlement without ever going through a trial, and this is a popular choice for many reasons. First, it is a quicker and less stressful process compared to litigation. In addition, it is inherently private since negotiations occur behind closed doors. If you want to keep the details of your wealth (or lack thereof) out of the public record, alternative dispute resolution is a positive choice. 

Finally, spouses have more control over their assets during private negotiations. While a judge might arbitrarily order spouses to sell their family home, mediation can facilitate more favorable outcomes. Spouses can make deals with each other during this collaborative process – perhaps trading assets instead of selling them. Buyouts are also common, and this could lead to less lingering bitterness after divorce in Colorado. 

Tip Two: Carefully Document Your Date of Separation

Your date of separation could prove crucial as you approach property division in Colorado. If this date is disputed, you could potentially lose some of your separate property – and this property could be worth a considerable sum if your divorce drags on for many months. For example, you might move out and invest $5,000 from your next paycheck in the stock market. If this investment skyrockets in value over the next few months, your ex might pursue it during divorce. 

In this situation, you may need to prove that your separation occurred on a specific date. As a result, it could be worth documenting your official “move-out day” with photographs and records. You might also show documents such as utility bills and rental/lease agreements for your new residence. 

Tip Three: Review the Factors Colorado Courts Consider During Equitable Distribution

Equitable distribution is a complex process that revolves around various factors. Courts must consider these factors when determining an equitable division of marital property – and it may be worth reviewing them in more detail alongside a lawyer. For example, the length of your marriage could become a factor. 

Courts might also consider the non-financial contributions of your ex. For example, they might have contributed by staying at home, raising the children, and maintaining the residence. These non-financial contributions can be complex, and they can drastically alter the course of your divorce. 

Can a Colorado Divorce Lawyer Help With Property Division?

A divorce lawyer in Colorado can certainly help with property division. One of the key roles of a divorce lawyer is to guide spouses toward fair settlements and economic security. With help from Casey James Alexander, LLC, you can pursue financial well-being with confidence. During a consultation, you will have the opportunity to discuss the unique factors surrounding your family's wealth. From there, we can create an action plan that serves everyone's best interests. Remember, online research is only the first step – so book your consultation at our Loveland office today to get started.