Colorado is an “equitable division” state when it comes to dividing marital property in a divorce. This means that it’s not up to the court to divide property equally just equitably. Separate property can also be subject to division in certain circumstances. Usually separate property remains with the respected owner, so it’s advisable to be wary when it comes to converting separate into marital.
The difference between marital and separate property is defined as marital property is any property acquired during the marriage. This means pensions, retirement funds, bank accounts, and even small businesses, no matter if only one party is named on the account or not. It also includes any increased value and/or accumulated earnings on separate property, unless it’s been excluded by a prenuptial or post-nuptial agreement. Marital property can also include debts, but since debts are often associated with an asset, the debt usually remains with whomever holds the asset. For instance, a college degree student loan. Whomever received the degree will most likely receive the debt. Credit card debt is also considered marital property.
In a Colorado divorce, separate property is retained by its owner. By definition, separate property is any property that was obtained prior to the marriage, property that was received as a gift or inheritance, property that’s part of a written agreement, and property that acquired after a separation decree. Courts will consider property exchanged for other property that began as separate to remain separate if it can be traced back as separate property to begin with. Current earnings are also considered separate property in a divorce.
When one has separate property and then marries, often times they will add the new spouse’s name to the title, this is presumed to become marital property. It’s assumed that half of the property has been gifted to the other party making it now marital property. It doesn’t matter if they addition of the name was for refinancing purposes or estate planning, the general rule is once the other party is added, it becomes joint, and marital property.
There are some exceptions to the general rule. You may want to talk with an experienced lawyer in these matters, as it pertains to your situation.