How Is Personal Property Divided In A Divorce?
When Colorado couples are divorcing, they face an array of financial issues they may need to deal with, one of which is the division of marital property. Property comes in many forms and the allocation of marital property is governed by C.R.S. 14-10-113, which requires courts to divided property as it deems “equitable.” Equitable means “fair” and fair generally translates to an equal division of the property in the vast majority of divorce cases.
With property coming in many forms, there are various ways in which the different types of property are divided. Houses are generally either sold, or one party keeps the property while paying the other his or her share of the equity, usually derived from a home appraisal or a comparable market analysis. Things like bank accounts or defined contribution retirement accounts, such as 401K’s, are relatively simple to divided in that the values are known or readily ascertainable. Of course there are more difficult items of marital property which can be at issue, such as dividing a business in a divorce. In those cases, there may be need for an expert valuator who will asses not only assets and liabilities, but also income and revenue streams. With all of the various, more significant assets that come to play, it’s not uncommon for little time to be devoted to the division of personal property, such as furniture, artwork, jewelry, vehicles, and other tangible items.
Dividing vehicles can be relatively simple. Firstly, if someone came into the marriage with a vehicle, which is generally going to be a depreciating asset, the vehicle will remain theirs at the time of the divorce, unless it was somehow jointly titled during the marriage. If there are jointly titled vehicles, the normal conclusion is that the party who traditionally used the vehicle will keep it as his or her sole property. If financed jointly, agreements or orders will generally contain provisions about attempting to remove the other party from the loan, making payments on time, and consequences if it goes into default, such as a forced sale. Titles and other necessary documents effectuating any agreement or court order can be signed off on when needed or required.
When it comes time to deal with the household goods and lesser property items, it’s important to remember that the same property division principles tied into dividing meatier assets also apply. Property owned prior to marriage or received by gift or inheritance is going to be separate and not part of the marital estate.
Unfortunately, the reality most Denver divorce attorneys know is that most metro area judges do not want to spend time and resources dealing with dividing furniture, televisions, appliances, camping equipment, electronics, or other tangible things. Many judges take the position that if people are not able to agree on how to divided the household goods then they must sell them and split the proceeds. This could be accomplished via a garage sale or a jointly managed craigslist account. The rationale also applied by most courts, which is legally correct, is that the value of these household items is not the purchase price, but rather what the fair market would pay in a current sense. Thus, that $4000 couch might fetch $1000, if you’re lucky, at that garage sale. The problem with the common position taken by most courts is that these personal, marital property items can actually mean a lot to the parties. With a home splitting up and a whole new set of living expenses arising, coupled with a sometimes unknown financial future, every dollar counts and people want to be able to maintain as much as they can, including as relates to furniture.
Knowing that courts are likely to order a sale, the realistic and practical approach to dividing personal property as part of your divorce is going to be to come to agreements. The first step should be to inventory everything, preferably together, and see what you can agreement upon, earmarking items for each spouse as agreed. Whatever is not agreed upon can also be dealt with via cooperation. Perhaps the parties could take turns picking the items which are not agreed upon until there are none left to fight over. Maybe a monetary figure can be agreed upon for one to pay the other for certain items. If truly unable to agree and still concerned about what a court might do, the parties could also agree to binding arbitration, at which a private judge (arbitrator) divides the property, within specific rules laid out by the parties.
Finally, it should be noted that when dealing with the division of tangible, marital property, parties should always strive to look at things from a cost-benefit analysis standpoint before delving into a personal property battle that could cost them more in attorney fees than the value of what they are fighting over.
