The division of marital property in a divorce can greatly impact a couple’s children together as well as children either spouse might have from previous marriages. Many of the assets that one of the spouses intended to preserve and pass down to children could be sold, divided, or awarded to the other spouse. Divorcing parties are sometimes on the same page as far as preserving assets to be passed down to their joint children. However, there is often far less common ground when the issue is what either spouse might want to preserve for the offspring from a prior relationship.
A court in a divorce has no power to award any of the parties’ assets to their children. The divorce court also has no power to require either divorcing spouse to make any particular estate provisions for their children. It will be up to the divorcing parties to make their own decisions whether they wish to make such transfers.
Keeping your children’s inheritance intact requires an understanding of Colorado’s marital property laws and usually requires advance planning sometimes starting before a marriage ever occurs. The following outlines property division in a Colorado divorce and offers suggestions on protecting your children’s inheritance in the event of a divorce.
For specific information and advice, contact an experienced Denver divorce attorney.
Marital and Separate Property in Colorado
In the absence of a prenuptial or postnuptial agreement that provides otherwise, Colorado considers nearly all property acquired by either spouse after marriage to be marital property regardless of how it is titled.
Separate property in Colorado includes property received by a spouse as a result of an inheritance or gift, and property owned by one spouse prior to marriage; However, most people don’t realize that if the separate property goes up in value during the marriage, that increase in value is marital. Income generated by separate property is also marital.
Sometimes a divorce brings the realization that the nest egg the parties accumulated together will not go nearly as far once it is divided and the parties have to live separately. In that case the immediate financial interests of one or both of the parties will be at odds with the hopes of their children for a future inheritance.
Protecting Your Children’s Inheritance Through a Prenuptial or Postnuptial Agreement
Working with a Denver prenuptial agreement attorney to form a valid prenuptial or postnuptial agreement can specify the property rights of both spouses in the event of a divorce or death, and act as one safeguard for children’s inheritance. A prenuptial agreement is signed before marriage, and a postnuptial agreement is signed after a couple is already married.
Updating Your Estate Plan While Your Divorce is Pending
In Colorado, a divorce decree will automatically revoke an ex-spouse as a beneficiary or fiduciary in a will or a trust. However, a spouse can’t effectively prevent assets from being passed to the surviving spouse if he or she dies while the divorce is pending. It is important to note that neither spouse may transfer, encumber, conceal, or dispose of marital property during a divorce without the other spouse’s consent or a court order.
Important Notes on Custodial Accounts and Children
The rights of children as minor beneficiaries under a custodial accounts, 529 accounts and similar kinds of accounts for the benefit of a child need to be reviewed in connection with a divorce. Some such accounts are actually the asset of the account holder parent and not actually owned by the child.
Protect Your Children’s Inheritance: Contact an Experienced Denver Divorce Attorney Today
If you are worried about how marriage or divorce will affect your children’s inheritance, contact the experienced Denver family law attorneys at Hogan Omidi, PC. We have represented a variety of high-asset clients throughout Colorado with the same concerns.
The sooner you meet with one of our skilled attorneys, the faster we can tailor a solution to fit your needs. You can trust Hogan Omidi, PC, for competent, reliable family law advice.
We wrote the book on it.