A divorce is typically comprised of numerous steps—one of which is the division of property. In a Colorado divorce, properties are typically divided into two: separate property and marital property.
Marital property in Colorado can be defined as property owned by both parties, and which is subject to division. Separate property is defined as property owned only by one of the parties in the divorce, and is therefore not subject to division.
Separate property refers to any property that was obtained or acquired before the marriage. Separate property also includes property that is part of a written agreement, property that is received as a gift or inheritance, and property that is acquired after a separation decree. In a divorce, current earnings are also classified as separate property.
Marital property, on the other hand, refers to any property that is acquired during the course of the marriage. This includes bank accounts, retirement funds, and pensions. Frequent flyer miles, club memberships, vehicles, and even small businesses count as marital property.
Marital property also includes any accumulated earnings or increased value on separate property—unless it is specifically excluded in a pre- or post-nuptial agreement. A common example to such a scenario would be a home. If one of the parties purchased a home and then married later, the increased value of the home becomes marital property.
Another type of marital property subject to division is debt that may have arisen while the couple was married. However, since debts are generally associated with a specific asset, then the debt typically remains with the spouse that holds the asset. A debt due to a student loan, for instance, will likely be assigned to the spouse that received the degree. Credit card debt is also classified as marital property.
If an individual has separate property and then marries, then the spouse’s name is often added to the title. This property then becomes marital property. It can be assumed that half of the property has been gifted to the spouse, regardless of whether the addition of the name was simply for estate planning or refinancing purposes.
When it comes to dividing property in a divorce, Colorado is classified as an equitable division state. This means that in terms of marital property, the court does not divide property equally—but instead divides any property equitably. Properties are divided equitably to give each party what rightfully belongs him or her.