Call us today for Free ConsultationWhen couples decide to part ways in Colorado, dividing their property can sometimes lead to complex issues. Co-mingled assets and retirement benefits are issues that often arise during divorce proceedings.
If you are considering divorce, it is important to understand the laws governing property division and what happens if you can not agree to arrive at less stressful resolutions.
Marital vs. separate property
One significant aspect of property division in Colorado divorce cases is distinguishing between marital and separate property. Marital property includes assets acquired during the marriage, while separate property typically includes assets owned before the marriage or acquired through inheritance or gift.
However, what happens when separate property becomes co-mingled with marital assets? This can occur when couples use separate funds to purchase marital property or when separate property increases in value due to contributions made during the marriage.
Tracing and equitable distribution
Tracing is a method used to identify and separate co-mingled assets back into their original categories. Courts use the principle of equitable distribution, meaning asset divisions are fair but not necessarily equal. With co-mingled property, tracing becomes essential to ensure each spouse receives a fair share.
For example, if one spouse uses inheritance money (separate property) to renovate the marital home, you may need to trace the increase in the home’s value back to the separate funds to determine how to divide it.
Retirement accounts and pensions
Another property division issue that often arises is the division of retirement accounts and pensions. These assets are subject to division, and spouses may qualify to receive a portion of the other’s retirement benefits earned during the marriage.
This can be a complex process, requiring the valuation of retirement accounts and the preparation of Qualified Domestic Relations Orders to facilitate the division of pension benefits.
When couples can not agree
If divorcing couples are unable to agree on who gets what, the court steps in to decide for them. The judge looks at things like each spouse’s financial situation, how much they contributed to the marriage and what they need. The goal is to divide things fairly, which might not mean splitting everything exactly in half.
This process can take a long time, cost a lot of money and might not make either person completely happy.
Work it out
While you may think a division is fair, the court may not agree. It is usually better for both spouses to try to work out a deal they both like before going to court.
