How Is Marital Property Divided In Colorado?
When it comes to marital property division, it doesn’t matter if your ex was the best spouse or the worst spouse. The court will divide marital property without considering marital conduct or marital misconduct.
Marriages are treated as business partnerships, and the starting point is to divide assets acquired during marriage as 50-50. In Colorado, the rule is equitable distribution that is not the same as equal distribution. There are circumstances where the court will give more assets to the partner who doesn’t make as much money, or the partner who has the responsibility for the children the majority of the time. The court can also consider the contributions of the parties to the marriage when dividing the marital property equitably.
Separate Property Vs. Marital Property
If one side brings property into the marriage or inherits property during the marriage and doesn’t put the other spouse’s name on it, that property may be set aside as separate property. However, any increase in value to the separate property during the marriage becomes marital property and must be considered in the division of property.
How Will Divorce Affect Your Retirement Accounts?
Retirement plans, 401(k) and SEP accounts are usually before-tax dollars. Since a portion of these assets must be paid in taxes at the time of distribution, these pretax assets should not be valued the same as after-tax assets. The courts may take into consideration the future tax liabilities of assets such as retirement plans and investments with large gains when dividing the property equitably.
It is also important to know the tax consequences associated with each property. Some properties will have a low basis and, upon sale or distribution, the holder will have income taxes to pay on the transfer price less the basis.
Will I Pay Or Receive Spousal Maintenance Or Alimony?
If your combined gross income does not exceed $240,000 and the marriage is at least 3 years in duration, then the Colorado court will use a formula to determine temporary alimony (called maintenance in Colorado) while your divorce is in process. The court has discretion to award permanent alimony (maintenance) based on the needs of the lower-income party, the other side’s ability to pay, the division of assets and debts, and the amount of money paid in child support.
Are Common Law Marriages Recognized In Colorado?
Yes, Colorado law recognizes common law marriages, and allows common law spouses to inherit assets from their deceased spouses. If you establish a common law marriage and wish to terminate the relationship, then a dissolution of the common law marriage is recommended.
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