A divorce is usually a stressful experience, both financially and emotionally. In Denver, CO, the situation can get even more complicated if you run into issues with property division. In order to make matters more manageable, it is vital to understand the difference between separate and marital property.
What is separate property?
Some but not all assets or debts in the name of one spouse alone will be classified as separate property. This property can include anything that they acquired prior to the marriage, as well as gifts and inheritances received during the marriage. However, it does not necessarily include any income generated from separate assets. As well, if the separate property has increased in value during the marriage, the increase in value will be marital. For instance, if you have a rental home acquired through inheritance, the value of that property at the time of inheritance will be separate but if it is worth more at the time of divorce than at the time of the original inheritance, that increase in value will be marital. Any assets or debts acquired after the divorce are also defined as separate property.
What is marital property?
Marital property is generally any assets or debts that were acquired during the marriage, regardless of whether the items are held in joint names or only in the name of one of the spouses. This can include any property that they purchased using income earned during the marriage as well as interest, dividends or other income generated from these assets. For instance, if a couple buys a home during the marriage, that home will typically be a marital asset and any mortgage will be a marital debt, regardless of whether the home or the loan are in joint names or not.
How is property divided in a divorce?
Marital property gets divided equitably between the spouses. This doesn’t necessarily mean that each spouse will receive an equal share, but rather that the court will attempt to approach the property division process fairly and equitably. Separate property is not divided during a divorce. However, the steps necessary to prove what portion of a particular account or asset is separate and not marital can be challenging and requires careful analysis. This is an area in which misconceptions are common and parties who succeed in making such claims generally have skilled legal advice.
If you are considering a divorce or are in the middle of one, it’s important to understand that several things can influence how property gets divided. Some of them include, the length of the marriage, and whether or not any of the property is separate or marital. As well, the way property is classified and divided in Colorado differs significantly from the principles and methods used in many other states.