In Colorado, property division matters associated with a divorce are governed by the doctrine of equitable distribution, which states that property and assets must be split in a fair, but not necessarily equal, manner. Arriving at an equitable way to divide assets can be a complicated process, and it can potentially result in hotly contested disagreements between spouses, in part because there are a lot of emotions tied up with marital possessions.
At Split Simple, we can guide you through the difficult process of resolving property division issues. We do this through a calm, professional mediation process that is designed to achieve the goals of both spouses. Our attorney-mediators understand Colorado's equitable distribution laws, and we can help you negotiate a split of marital assets that is fair for everyone involved.
If you live in Denver, Boulder or any other Colorado community and you want to learn more about how we can help you resolve your divorce through mediation, please call Split Simple today at (855) 665-9920.
- Marital Property vs. Separate Property
- Equitable Distribution does not Mean Equal Distribution
- Division of Retirement Accounts during a Divorce
- High Value Estates
Marital Property vs. Separate Property
Contrary to some popular perceptions, property division during a divorce does not entail dividing up the value of every single asset both spouses own. Colorado, like most states, recognizes a distinction between marital property and separate property.
"Separate property" can be roughly defined in two ways:
- Any property or assets acquired before the marriage (even if was acquired during the relationship that produced the eventual marriage) is separate property, and the possessing spouse is entitled to maintain ownership of the piece in question
- An item acquired during marriage as a result of a gift or inheritance is, in most cases, separate property
By contrast, marital property includes any property, assets or debts acquired after the marriage, even if the property in question is used solely by one spouse.
According to Colorado's equitable distribution laws, separate property is exempt from the asset division process and will remain with the property's original owner. On the other hand, all marital property and assets will be split between both parties, even if one spouse is the sole title holder to the property.
As you can imagine, these determinations can quickly get complicated, especially for couples who comingled many of their assets (think a joint bank account). This is one of the reasons why do-it-yourself divorce is such a bad idea for so many couples.
Our attorney-mediators have seen all sorts of convoluted comingled financial arrangements. We know how to untangle the threads of a marriage's finances and make a determination as to what qualifies as separate vs. marital property. This will ensure your property division agreement earns a judge's approval and treats both parties fairly.
Equitable Distribution does not Mean Equal Distribution
As we mentioned earlier, it's important to remember that equitable distribution doesn't mean equal distribution. In some circumstances, asset division will be determined based on the contributions of each spouse. This is especially true when one spouse owns a business.
In situations where one spouse started a business during the marriage, the value of the business won't necessarily be split equally, even though it is considered to be marital property. Instead, the court typically evaluates the other spouse's contributions to the marriage (such as being a parent and homemaker) when deciding what percentage of the business should be awarded to the non-owning spouse. Often, it will be less than 50% of the value of the business.
However, there are certain marital assets which are typically divided equally between each spouse. These include:
- Cars, motorcycles, boats, RVs, or other vehicles
- Bank accounts
- 401ks, IRAs, and other retirement accounts
- Other types of savings and investments
At Split Simple, our attorney-mediators know how the court rules in these cases, and we can guide you towards an agreement that will be fair for both parties based on state property division laws.
Division of Retirement Accounts during a Divorce
Many people are surprised to learn that retirement accounts are serious issues in divorces. You might not be aware that a 401(k) is even something that can be divided as part of a divorce proceeding.
Split Simple's attorney-mediators have handled enough cases that we've seen just about every form of retirement account. We know this money is important to you and your future, and we use the divorce mediation process to ensure that it is handled in a fair and equitable fashion.
A retirement account is almost always held in the name of one spouse; joint retirement accounts are fairly rare. However, retirement accounts still typically qualify as marital property, which means they can be divided between both spouses.
This can be a seriously contentious issue, especially in a longer marriage, since a retirement nest egg can be the most significant asset either party holds. Imagine how much both parties might have deposited during a 20-year marriage that coincided with their prime earning years.
One of the popular misconceptions about divorce is that retirement accounts will have to be liquidated during a divorce. This isn't true. While liquidation is an option, it's not the only one.
The right option will be based in large part on the specific nature of your retirement plan. For example, a defined benefit plan has different disposal rules than a defined contribution plan.
Split Simple's attorney-mediators will guide you through the appropriate terms to divide a retirement account, and these terms will be utilized in a subsequent qualified domestic relations order (QDRO), which governs the dispersal of funds in a retirement account.
The terms for division of a retirement account can be relatively simple (for example, "Spouse A shall be paid 50 percent of the retirement plan"), or decidedly more complex. Either way, careful attention to the detailed drafting of retirement account division and the subsequent QDRO terms is absolutely crucial. One oversight or poorly written section regarding division of the retirement account can result in some very unfortunate unintended consequences.
This is one of the reasons it's important to place your divorce in the hands of expert attorney-mediators who know the state laws which apply to your case. At Split Simple, we'll make sure your retirement account is divided in a manner that adheres to all applicable laws, is fair for both parties, and will be approved by a judge.
High Value Estates
The value of your marital property reflects the hard work and dedication you and your spouse put into your professional lives during your marriage. At Split Simple, we know that you don't want your decades of labor to be squandered during a divorce.
Our divorce mediation process is uniquely capable of helping divorcing couples who have significant financial assets in their marital property. High-value estates can be tricky for divorce lawyers, but our skilled attorney-mediators have the legal and financial know-how to ensure that the final settlement is fair for both parties.
It's difficult to define “high-value estate” with a specific number. A certain level of personal wealth might easily qualify as high value in Kansas City, for example, while being solidly middle class in San Francisco. And marital property includes such long-term assets as investments and retirement programs, which require some projection to determine their true worth.
Our attorney-mediators will discuss the basic details of your estate when you first contact us for a free divorce mediation consultation. Based on those conversations and our experience with financial matters, we'll be able to determine if you have a high-value estate and recommend the appropriate mediation plan to address your unique financial needs.
For high-value estates, we usually recommend a more significant mediation plan which calls for three two-hour mediation sessions. Often, we need every minute of this time to work through the complicated financial issues involved. You can see our pricing page for more information.
Divorces involving high-value estates have unique financial concerns that need to be addressed. These include:
- The division of exceptionally valuable marital property
- Retirement accounts
- Stocks, bonds and other investment assets
Our attorney-mediators will work through these issues using both our ample experience and sophisticated financial planning software. This ensures both parties receive the best possible outcome when resolving property division issues.
Please contact Split Simple using the form on this page or call (855) 665-9920 today to schedule your free divorce mediation consultation. We serve clients in Denver, Boulder, Aurora and throughout the Front Range of Colorado.