How to Distinguish Separate and Marital Property in a Divorce

Property distribution is one of the most difficult aspects of a typical divorce case. Both spouses may wish to keep shared assets such as real estate or vehicles, leading to a contested divorce. In Colorado, the courts allow divorcing couples to determine property division before forcing a judge to intervene. If the couple cannot make a shared decision, the courts will divide property according to related state laws. One of these laws distinguishes separate property from marital property.

What Is Considered Separate Property and Marital Property in Colorado?

Colorado is a separate property state, not a community property state. In a community property state, the courts divide all marital property in half (50/50) between both spouses in a divorce, regardless of fault or circumstances. In Colorado, equitable distribution laws control the division of property. Colorado Revised Statute 14-10-113 states that the courts will set apart each spouse’s separate property and divide the marital property as a judge sees fit. A judge in Colorado will consider many relevant factors when dividing marital property, including each spouse’s contribution to the acquisition of the property and the economic circumstances each spouse will have post-divorce.

It is important to distinguish separate property from marital property to understand which assets you could be at risk of losing or dividing in a divorce case. Separate property generally refers to all properties and assets you brought into the marriage or owned before the marriage. It can include anything you or your spouse acquired before matrimony. Marital property means all assets you and your spouse acquired together during the marriage. A few exceptions exist to the rule. Gifts given to a specific spouse and one spouse’s inheritance, for example, will remain separate property.

Examples of Separate and Marital Property

It is not always easy to distinguish separate property from marital property. Many assets will be difficult to classify, such as money commingled in a joint bank account or a shared business. It can help to learn common examples of each type of property to recognize which assets of yours might be safe or not during a divorce.

• Separate property. Income already earned by one spouse before the marriage, debts acquired before marriage, homes or vehicles brought into the marriage, one spouse’s inheritance, and any property kept separate during the marriage.
• Marital property. Any shared or jointly owned properties acquired by the couple after marriage, including debts and income (with commingled bank accounts), retirement accounts, homes, and cars. Also, any separate property one spouse gifted to the other spouse or legally made community property.

It is important to correctly classify all your assets if you wish to achieve a fair divorce settlement. Hire professional appraisers and a Denver divorce attorney to help you distinguish your property types and accurately assess their values.

What Is Commingling?

Commingling assets will turn separate property into marital property in the eyes of the law. One spouse can make his or her separate property marital property by commingling it with his or her spouse’s assets. Commingling will lawfully make the property lose its separate status. The courts may then divide the asset or give it to your spouse during a divorce. Commingling or mixing property can happen in a few different ways.

• Combining two accounts into one shared or joint account
• Using marital funds to pay for or make improvements to a separate asset
• Adding your spouse’s name to a separate property title or deed

It may be possible to claim some commingled assets as separate property by tracing the asset back to your sole ownership for the courts. If you wish to prevent separate property from ever becoming marital property, consider a pre- or post-nuptial agreement to protect their separate status. Keep your bank accounts separate after marriage and do not use marital money to fund any of your separate assets. Work with an attorney for the best odds of protecting your property during a divorce case in Colorado.