Divorce: What is Marital Property in Colorado?


In my experience as a divorce attorney, most people don’t really understand that everything accumulated during the marriage is marital property.

This includes real estate, cars, retirement funds, investments, valuables like art and jewelry… Unless you and your spouse had the foresight to sign a prenuptial agreement, it is very likely that nearly everything you own will be considered martial property, especially if you have been married for a considerable length of time.

Is My Separate Bank Account Considered Marital Property?

Even if you and your spouse maintained separate bank accounts throughout your marriage, yes, everything you earned during the marriage is legally considered marital property.

Think of your paycheck as being made out to you and your spouse. In the eyes of the law, it is, which means that when it’s time to get divorced, the Court will want to split your earnings and valuables as fairly as possible, and it won’t take “future expenses” into account when calculating what is fair.

Is My House Considered Marital Property?

If you owned your house before entering into the marriage, then the value of the house at the time of the marriage is not considered marital property. However, if the house has appreciated over the course of the marriage, the value of the appreciation is considered marital property.

For instance, say you bought a house in 2005 for $200,000 and you got married in 2006. If you live in Boulder, that house may be worth $700,000 today — a huge increase in value. The appreciation from the time you got married to the time of your divorce is fair game in calculating an equitable division of assets.

I once worked with a client who was in a very similar situation as the example I just described: the husband owned the house, and it had appreciated by about $500,000 during the course of the marriage. My client, the wife, wanted her fair share of the appreciation; after all, she had spent countless hours maintaining the house and caring for it as if it were her own.

When it came time to present our arguments to the judge, the husband said, “Judge, at some point in the future, I’m going to want to sell this house. It’s not really worth as much as you think because you have to subtract the future closing costs, real estate commissions and capital gains tax if I decide to sell it.” The judge was not sympathetic to this argument. Saying that he “might” sell the house “someday” is not going to fly with a judge.

The law says that when you look at financials in a divorce case, the Court will only address expenses that are actually going to be incurred. It won’t consider closing costs, real estate commissions and capital gains tax unless a sale is IMMINENT. Not hypothetical, future expenses that may or may not come to pass. Similarly, the Court doesn’t like to predict what is going to happen in the future (for instance, stock prices, art valuation, changes in the capital gains tax, etc.)

Sell the House Before the Divorce

Whenever I’m involved in a case where the other side says, “I want the house, but I’m not going to tell the Judge that I’m going to sell it in the near future,” I always advise my client to insist that the house is sold before the divorce or he/she announces his/her intent to sell. This way, we don’t get into a situation where, the other side says I don’t think he’ll sell, so don’t deduct those expenses. Plus, if the expenses are deducted by the Court and the party changes his/her mind and doesn’t sell, the other party will try to re-open the case, claiming the house was undervalued because the person keeping the house didn’t incur real estate commissions, closing costs or capital gains tax.

If the house is sold before the divorce, everyone has a crystal clear understanding of how much money was made from the sale and how to divide it equally between the parties.

Talk to an Attorney to Determine Martial Property

Unless you signed a pre-nuptial agreement, most of what you own will be considered marital property by the Court in Colorado. That said, it’s important to speak with an attorney to get a clear understanding of what’s yours, what’s theirs, and what needs to be negotiated.

Call our office today at 303-449-1873 for a complimentary consultation.

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