In a Colorado divorce, property division laws state that all marital property must be divided in an equitable fashion. A court considers numerous factors when determining what is equitable, such as the economic standing of each spouse, who has custody of the children, and the value of both separate and marital property. Most forms of property obtained during the marriage are classified as marital property, even if only one spouse acquired the property. There are a few exceptions though, as gifts and property acquired by either inheritance are deemed separate property.
Separate property such as an inheritance is not divisible in a Colorado divorce. Your control over your inheritance, however, ultimately depends on what you choose to do with it. Depending on how your inheritance is handled, it is indeed possible for it to be classified as marital property.
One way for your spouse to lay claim to a portion of your inheritance is through commingling assets. Simply put, this means combining your inheritance assets with your joint marital assets. If your inheritance money is deposited in a joint bank account and is used for the benefit of both spouses during the marriage, then the inheritance is considered commingled—thus losing its exemption from division. Commingling can also occur when money from your inheritance is used to purchase a marital home or any other joint purchase.
One way to prevent division of inheritance is by outlining your terms in a prenuptial agreement. Though this may be a contentious decision, it is one you should consider if you are truly concerned about your inheritance. Obtaining a postnuptial agreement is another way to protect your inheritance, stating which part of the inheritance is deemed marital and which is deemed separate. Of course, the simplest way to protect your inheritance is by keeping it in an entirely separate bank account.
If you have already commingled your inheritance with your joint marital assets, it is still possible to get out of losing a portion of your inheritance to your spouse. You must show the court that you never meant to share such assets with your spouse. It may be hard to prove this argument though, as you may need to provide solid evidence to establish that it was never your intention to share your inheritance.
It is important to know that if you decide to share a fraction of your inheritance with your spouse and keep the rest of it in a separate account, the portion you kept separate may still be classified as marital property. This is because the act of sharing a part of your inheritance creates the assumption that you intend to share your entire inheritance with your spouse.
If you are considering getting a divorce and are worried about high-value assets such as your inheritance, it is crucial that you seek sound legal advice. Working with a qualified divorce attorney can be extremely beneficial, particularly when it comes to property division. A legal professional can explain the laws applicable to your situation and to see to it that both your rights and your assets are protected.