Determining Current Financial Resources in a Divorce

Colorado law allows a trial court to order one party to a divorce to pay for the other party’s attorney’s fees. C.R.S. 14-10-119. The court must take both parties’ financial resources into account, including both the amount available to one party and the amount needed by the other, in determining the amount of the order. The statute is silent, however, on the time period, or point in time, that the court should consider in determining an amount. The Colorado Court of Appeals recently considered this issue in a case where the trial court held separate hearings on permanent orders and attorney’s fees about six months apart. In re the Marriage of de Koning, No. 12CA2334, slip op. (Col. App., Jan. 2, 2014). The parties disagreed on which hearing date the court should use in considering the amount of financial resources.

The wife incurred about $90,000 in attorney’s fees during the divorce proceedings. The husband paid about $20,000 of that amount before the entry of permanent orders, and the wife requested that the court order him to pay the remaining amount at the permanent orders hearing. The court entered a decree dissolving the marriage, as well as permanent orders regarding the division of the marital estate, maintenance, and parental responsibilities and child support. It deferred a ruling on attorney’s fees, however, and set a hearing for six months later.

The wife served the husband with discovery requests seeking information about his personal and business financial accounts. He obtained a protective order for this information from the court, which agreed with his claim that any eventual attorney’s fee award would be based on his financial resources on the date of the permanent orders. At the fee hearing, he claimed that he should not be ordered to pay the remainder of the wife’s attorney’s fees because they each had the same amount of assets “on paper.” De Koning at 3.

At the fee hearing, the wife referenced evidence that certain assets awarded to the husband had appreciated by about $100 million in value since the permanent order hearing. The trial court agreed with the husband, and while it expressed sympathy with the wife’s financial situation, it ordered that the husband pay no additional attorney’s fees to her.

The Court of Appeals disagreed with both the trial court’s ruling and the parties’ description of the permanent order and fee hearings as two separate hearings. It noted that the purpose of a fee award under C.R.S. 14-10-119 is to equitably apportion the costs of divorce “based on the current financial resources of the parties.” Id. at 6, quoting In re Marriage of Lewis, 66 P.3d 204, 207 (Col. App. 2003). It further held that a decision on fees is “part and parcel of dissolving the marriage.” De Koning at 7, quoting In re Marriage of Hill, 166 P.3d 269, 272 (Col. App. 2007).

Until the trial court ruled on fees, the permanent orders were not complete, so the date to use to review “current financial resources” was the date of the fee hearing. The court vacated the protective order, reversed the attorney’s fee judgment, and remanded the case.

If you are currently involved in or are considering filing for, a divorce, a knowledgeable and experienced family lawyer in Denver can help you understand your rights and responsibilities and can prepare the best possible case for you. To schedule an initial consultation with a dedicated family law attorney, please contact us today through our website or at (303) 781-0322.