Ensuring fair property division in a divorce can be a complex and emotionally charged process. Start by understanding the laws. Colorado, like most states, is an equitable distribution state. This means marital assets are split fairly, but this does not mean equally. Courts consider many factors when deciding how to divide up property under equitable distribution rules, such as the contributions each spouse made to the marriage, the income, and earning potential of each spouse, as well as the living standard enjoyed during the marriage.

The only time when state laws do not need to be followed is if there is a prenuptial agreement in place. A prenuptial agreement is a legal document signed before marriage that outlines how assets are to be split in a divorce. As long as both parties willingly agreed to it and were not coerced into signing the prenuptial agreement, it will likely be enforceable in court. 

What You Need to Know About Property Division

What is Separate Property?

Separate property refers to assets only you own, acquired before getting married, as well as gifts and inheritances you received during the marriage. Your spouse has no claim to separate property.

What is Marital Property?

Marital property refers to property acquired during the marriage, no matter who “owns” it. This may include bank accounts, vehicles, houses, and furniture. If you have investments such as stocks or retirement funds, those are marital assets as well. 

Marital property may also include debt accumulated while married.  If you have joint credit cards or loans, these have to be split as well in a divorce.

How to Ensure Equity

Now that you know state laws and what is classified as separate and marital property, here are some ways to make asset division fair in a divorce:

• Provide full disclosure. Both spouses must provide full and accurate financial disclosures. This includes disclosing all assets, income, debts, and liabilities. Hiding assets or providing inaccurate information can undermine the fairness of the property division process. It’s also a crime. You could face perjury charges as well as jail time for lying.  If a party hides assets, the Court can come back later and divide that property.  
• Identify what is marital property and what is non-marital property. As mentioned above, marital property typically includes assets acquired during the marriage, while non-marital property typically includes assets acquired before the marriage, as well as inheritances and gifts. In some cases, non-marital property can turn into marital property through commingling. An example of this would be using your inheritance to pay the mortgage or placing an inheritance in a joint account.  
• Obtain fair valuation. Obtain accurate valuations for all assets and liabilities. This may require appraisals for real estate, businesses, and other valuable assets. Having accurate valuations ensures that the property division is fair and equitable.
• Negotiate in good faith. Try to negotiate a fair property settlement agreement with your spouse. Consider factors such as each spouse’s financial needs, earning capacity, contributions to the marriage, and future financial prospects.
• Consider tax implications. Be mindful of the tax implications of different asset divisions. Certain assets may have tax consequences when transferred or sold, which can impact their value to each spouse.
• Document everything. Keep thorough records of all financial transactions, communications, and agreements related to the property division process. Documentation can help protect your interests and provide evidence in case of disputes.
• Focus on long-term financial stability. When negotiating property division, do not just be thinking about what you want right now. Consider the long-term financial implications for both spouses. Aim for a settlement that provides each spouse with a fair and sustainable financial foundation for the future.
• Seek professional assistance. Consider working with divorce attorneys, mediators, financial planners, or other professionals who can guide you through the property division process. These professionals can help you understand your rights, explore options, and negotiate fair settlements.

All’s fair in love and war, which means things should be fair in divorce. With the right legal team on your side, you can ensure things will go your way. The attorneys at Tanis McGonegal will work to ensure your divorce is as fair as possible. Contact us today for a consultation. 

https://smartasset.com/estate-planning/how-does-separate-property-become-marital-property

https://www.forbes.com/advisor/legal/divorce/equitable-distribution/