Colorado is not a community property state, but is what’s called an equitable division state.
That means that in Colorado, there is no assumption that all property is marital property and assets are not divided equally upon the dissolution of a marriage. Instead, property is divided equitably once the couple decides to get a divorce.
An equitable distribution means that the couple’s assets and debts would be divided fairly, but not necessarily equitably. The court considers a number of factors before determining what is equitable. Generally, most types of property that are acquired during the marriage are considered as marital property.
What is Considered Marital Property in Colorado?
As mentioned above, most property acquired after the marriage is classified as marital property, no matter how it’s titled or even if only one spouse acquired it. There are some exceptions, and these are deemed separate property.
Some examples of assets that are considered marital property in Colorado are the following:
- Real estate equity
- Vehicles, including RVs and boats
- Bank accounts
- Investments, such as mutual funds, stocks, etc.
- Business interests
- Increase in value of separate property during the marriage
- Retirement accounts such as 401(k), IRA, PERA, FERS, or military retirement
- Household goods and other personal property
The court will divide the property depending on their value at the time of dissolution, and not at the couple’s separation. Marital debts will also be allocated equitably, no matter which spouse acquired the debt.
An equitable allocation, however, may mean that the spouse who assumes a greater responsibility is the one who earns more or the one who incurred the debt.
Is Colorado a Community Property State for Tax Purposes?
Most property settlements during a divorce proceeding will be affected by each spouse’s tax liabilities. Colorado is an equitable distribution state, and this is the case even for tax liabilities. The court will consider both deferred and current tax liabilities in the division of any piece of property. The tax burden will then be shared by the spouses equitably.
Who Gets House in a Colorado Divorce?
The marital home is generally considered marital property. If it was purchased by one spouse before the marriage, it may be deemed separate property by the court. However, there is no straightforward rule on who gets the marital home after a divorce. The judge decides on this issue on a case-to-case basis.
When deciding who gets the marital home, the court will consider several factors such as:
- The contribution of each spouse to acquisition of the home, including contributions made by the homemaker
- Each spouse’s economic circumstances, earning capacity, and employability
- Each spouse’s physical and mental health
- Which spouse is tasked with primarily caring for the children
- The lifestyle that the children have been accustomed to
- Value of the property
- Marital transgressions of either spouse
The court may also decide that selling the marital home is more appropriate. In this case, the proceeds from the court-ordered sale will be divided.
Is Inheritance Considered Marital Property in Colorado?
Inheritance, generally, is considered separate property and may not be divided in a Colorado divorce. However, it may be classified as marital property under certain circumstances. For instance, if there’s a commingling of assets—where inheritance assets combine with marital assets—then the inheritance may lose its exemption from property division.
To prevent this from happening, some couples outline their separate property and terms within a prenuptial agreement. Another way is to keep it a completely separate bank account.
Contact a Colorado Divorce Lawyer Today
If you have questions about which of your assets would be subject to property division during your divorce proceedings, contact a divorce lawyer right away.
Our divorce attorneys have years of experience helping clients navigate the Colorado legal system, and will help you build a strong case to ensure you receive your fair share in a divorce. Call (303) 656-9529 to schedule a case evaluation.