When two people divorce, it becomes necessary to split the marital assets. Accounts, property, and investments will be divided so that both spouses leave with a fair and equitable share. Ideally, this will leave both people able to start a financially independent life. Colorado is an equitable division state, meaning that the separation of assets in a divorce will not necessarily be a flat 50/50 split. Instead, each spouse will leave with their own premarital and personal assets, as well as an equitable share of the marital property

But first, it is important to identify what your marital property is. We’re here to help you get a clear view of marital property, premarital property, and personal property as you plan for your divorce.

What is Marital Property in a Colorado Divorce?

Marital property is defined as property, financial assets, and investments that were acquired during the marriage. It includes not just joint assets like a jointly owned house or shared bank accounts. Everything acquired during the marriage is marital property, with a few special exceptions.

Assets Acquired During the Marriage

Bank accounts and retirement accounts
Homes and other real estate
Cars
Personal items
Furniture and Equipment
Investments

Marital property includes financial accounts, physical items, real estate property, and investments attained during the marriage. This includes the income from both spouses, including personal accounts and even your private retirement accounts. It includes any cars, even if only one spouse drives each car, and even expensive wardrobes and personal items, even though they are used by one spouse.

Land, homes, and businesses bought or built during the marriage are marital property. Stocks, bonds, and other investments acquired during the marriage are marital property – even if they are part of a spouse’s career track.

All furniture and equipment in the house – whether or not you own the actual house you live in – are marital property.

Assets That Have Become Common Marital Property

Premarital property is typically excluded. However, there are cases where premarital property may be considered to have become marital property. For example, if one spouse restores a piece of furniture initially owned by the other spouse, and that piece is a commonly used family item.

Example of Marital Property Division: A Hypothetical Case in Colorado

Consider a hypothetical situation in Colorado where a couple, John and Jane, decide to divorce after 10 years of marriage. During their marriage, they had accumulated assets including two cars purchased after their wedding, a house, a retirement account under John’s name, a joint bank account, and some antique furniture restored by Jane.

Under Colorado’s marital property laws, all these assets are considered marital property and would be subject to equitable distribution upon divorce. This means the court would endeavor to divide assets fairly, though not necessarily equally, based on various factors including each spouse’s economic circumstances and contribution to the acquisition of marital property.

Even though the retirement account is under John’s name, the funds accumulated during their marriage would be considered marital property. Similarly, the antique furniture restored by Jane will also be treated as marital property since it was used as a common family item, despite it being initially owned by John.

Exceptions to Marital Property in Colorado

Premarital property are items that each spouse owned before the marriage. This allows spouses to leave the marriage with personal items that can be proven that the other spouse did not contribute to the purchase or creation of. In addition to premarital property, Colorado marital property also excludes personal inheritance and some personal gifts.

Premarital Property

Protected premarital property includes all childhood keepsakes, family heirlooms, college furniture, real estate, and even bonds and investment assets that have not been changed since the marriage are protected. Spouses should be able to secure all items and assets they owned before getting married.

In a hypothetical case, Susan and Mark got married in 1990 in Colorado. They both brought valuable assets into the marriage: Susan’s painting and Mark’s real estate property. Over the 30 years of their marriage, both assets increased in value. When they decided to divorce in 2020, the assets were considered premarital property under Colorado law, and were not subject to equitable distribution. This example illustrates the exceptions for premarital property, but it’s important to consult a legal professional for specific circumstances.

Inheritance

If one spouse receives an inheritance before or during the marriage, that wealth is protected. As long as the assets were kept separate so they are easy to differentiate from marital accounts, each spouse will be able to leave the marriage with their respective family inheritance and the other will have no claim over any property or isolated money inherited by just one spouse.

Consider the hypothetical case of Sarah and John, also in Colorado. Before their marriage, John was gifted a classic car by his grandfather. This car, being a vintage model, appreciated substantially in value during their 20-year marriage. However, despite the increase in value, the car remained John’s separate property throughout their marriage because it was a premarital gift exclusively given to him. When Sarah and John decided to divorce, this asset was not subject to equitable distribution as per Colorado’s marital property laws. This reflects the application of gift exceptions in matrimonial asset division. As always, it is important to consult with a legal professional to understand the nuances in individual cases.

Personal Gifts

Lastly, personal gifts can be argued to be protected from the marital property split. Spouses often receive gifts as a couple, and gifts from one spouse to the other are typically considered marital property. However, let’s say that one spouse receives their grandmother’s heirloom jewelry, or a valuable birthday present from their best friend that is clearly not for the family, these assets might be protected.

However, gifts tend to be judged on a case-by-case basis.

Other Types of Separate Property

In addition to inherited assets and personal gifts, there are other types of separate property that are not subject to division in the event of a divorce. These may include:

Property acquired before the marriage, such as a home or car
Income from separate property, such as interest earned on investments or rental income from a separate property
Property specifically designated by a prenuptial or postnuptial agreement as separate property
Property acquired after separation, which may be considered separate property if the couple is legally separated or has filed for divorce
Compensation from Personal Injury Claims

Compensation or settlements received from personal injury claims typically fall under separate property. These funds are generally considered the sole property of the spouse who suffered the injury. This is because they are intended to compensate that individual for their personal suffering, pain, and loss. Even if the injury occurred during the course of the marriage, the awarded settlement is usually not subject to division during a divorce. However, there may be exceptions, depending on the specifics of the settlement and state laws. Therefore, it is always advisable to consult with a legal professional for guidance.

Marital Property with Prenuptial and Postnuptial Agreements

Lastly, prenuptial and postnuptial agreements may affect what is considered marital property. For example, a prenuptial agreement may require that one spouse leave with a minimum amount of money, or that a specific type of asset is always granted to one spouse. If one spouse independently starts a company, they might request a postnuptial agreement that designates the company and all its assets as non-marital assets.

These agreements can influence your marital asset division. However, the court may also rule that an agreement is not appropriately equitable and can throw out the document in a contested divorce.

Divorce with a Fair and Practical Asset Division

If you are planning a divorce, you deserve a fair division of assets, and will benefit from practical advice on how to best split assets so both spouses can achieve independence after the divorce. Petrelli Previtera, LLC Family Law is here to be your advocate and help you achieve the best possible divorce outcomes.

Why Choose Petrelli Previtera, LLC

Petrelli Previtera, LLC stands out amongst its peers, having built a reputation as one of the premier divorce firms. Our dedication to our clients is evidenced by the impeccable rating of 10/10 conferred upon our managing partner, Thomas Petrelli Jr. by Avvo. Our commitment to excellence has also earned us recognition by Inc. 5000, ranking us at #2703 on their 2019 list. These accolades attest to our unwavering dedication to championing our clients’ rights and facilitating their journey towards a better life post-divorce.

When seeking the finest property division attorneys in Denver, you can trust our experienced, proficient team. We are steadfast in our mission to safeguard your interests, provide comprehensive support, and bring clarity to your situation, regardless of its complexity. Our end-goal is to successfully navigate you through the chaos and secure a positive outcome tailored to your specific needs.

Ready to Help

Remember, we don’t leave you hanging when things get tough. We’re committed to addressing every facet of your property division case, answering any and all questions, and providing thorough support throughout the process. Reach us at (303) 416-7086 or schedule an online consultation with one of our live agents to book your appointment. Let us answer your questions and determine if we are the right fit for you. Your journey towards a fair asset division and independence post-divorce starts with Petrelli Previtera, LLC.

What is Marital Property in Colorado?