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In Colorado, a divorce is the legal process to end a marriage. A petition to “dissolve the marriage” is filed with the court by either one party or jointly.

In all divorces, the court must divide property. That process is explained in detail below. If there are kids involved, the court will have to address the allocation of parental responsibilities and child support. Depending on the financial landscape of the case, maintenance/alimony may be an issue. Finally, a Colorado court does have authority to award attorney’s fees to one party.

Marital vs. Separate Property

Dividing property in a Colorado divorce is often more complex than it may seem. First, it is necessary to account for all property. We have dealt with cases where the other party tried to conceal assets. A Colorado court has up to 5 years to address undisclosed assets, but it is obviously ideal to account all the property in the initial action for divorce.

Second, property must be characterized as either marital or non-marital (“separate property”). Generally, an asset acquired during the marriage is presumptively marital property. In contrast, separate property includes things owned by prior to the date of marriage. This could be a business, retirement funds, or a house. Property acquired during marriage may be separate property if it was a gift or an inheritance. Interests in an irrevocable trust are normally considered separate property. However, there is one big caveat that is a bit unique to Colorado: any increase in the value of separate property is considered marital.

Parsing out marital from separate property is critical because a court may only divide marital property. Separate property can only be allocated to the spouse who owns it. It is important to have a Colorado divorce attorney with the skills to distinguish marital and separate property. During marriage, people frequently take actions that cause non-marital property to be transmuted into marital property. It is not unusual for an attorney to trace transactions that occurred during the marriage that could change the character of property from non-marital to marital or the reverse.

Valuing Property

Once the property is categorized, it must be valued. Many assets are easy to value. For example, bank or IRA accounts, or publicly traded stock (AAPL), are simple to value using only the most recent statements. The value of a home or other real estate is more complicated. We have worked with a number of appraisers who specialize in Aspen or Vail real estate.

Closely-held business interests and private investments are much more difficult to value. Those types of property often need valuation experts to help determine value. Founding partner, Ryan Kalamaya, specializes in divorces involving businesses and private investments. Similarly, if collectibles, art, antiques, vehicles, boats, aircraft or other personal property is owned, experts may need to be used to determine the value.

Dividing Property

It is important to accurately value each asset because assets may be set off against each other to achieve the equitable division. For example, a Colorado court would probably not award one party an actual ownership interest in the other party’s small business; instead, the judge would likely award it to the owning party once it knows the value of the business. As a result, the court would give the other party offsetting assets to equal the value of the business if there was a 50/50 split. Setoffs can include cash, real estate, or any other asset owned by the parties that has been categorized as marital. Contrary to popular belief, a Colorado court is not required to divide marital property 50/50 — the standard is what is “equitable.”

There are a number of factors Colorado courts consider in making a property division. Those factors include the contributions by the parties, including a spouse’s contribution as the homemaker, the value of the property set apart,  and the “economic circumstances” of each spouse, such as the age and health of the parties, the value of the separate property to either party, whether the division is in lieu of maintenance, and the parties’ respective abilities to acquire additional assets after divorce.

The RKV Law Domestic Relations Team

The RKV Law Domestic Relations Team regularly deals with high-asset divorces involving complex property issues. We often work with experts such as CPAs and financial advisors to find, characterize, value and obtain the best property divisions for our clients. The RKV Law Domestic Relations Team handles divorces in Pitkin, Eagle and Garfield County.

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