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How to Approach an Increase in Value of Separate Property During Marriage

Increase in Value of Separate Property During MarriageIf you are facing the dissolution of your marriage, we imagine you have several questions about what to expect. In addition to your queries about how your family dynamic will change and how long the process will take, you probably want to know how the court will divide your assets. Each spouse in a divorce keeps their separate property, and the court divides the marital property equitably. As simple as this process sounds, it can quickly become a complex issue that leads to contention between divorcing parties, especially if there is an increase in the value of separate property

At Plog & Stein P.C., our skilled attorneys focus exclusively on family law. Over the decades, we have represented clients in a myriad of divorce matters, so we can prepare you for what to expect, and we can help you protect your family and your assets. 

Dividing Assets in Divorce Court

When they are ready to dissolve a marriage, many couples assume that the court will divide all property and finances in half and send each divorced party on their way. An automatic 50/50 split is not the law in Colorado. In Colorado, the court must determine what property is marital property and then divide the marital property equitably (i.e., fairly) while allowing each spouse to keep all of their separate property

What Is Considered Separate Property in a Marriage?

So, what is separate property? Colorado’s divorce law defines separate property as the following:

  • Property a spouse acquires before getting married;
  • Property a spouse obtains by gift, will, or inheritance; 
  • Property a spouse receives in exchange for other separate property; 
  • Property a spouse obtains after there is a decree of legal separation; and 
  • Property excluded by a valid agreement between the divorcing spouses.  

As you can see, there are many circumstances in which a divorce court should not be dividing your assets. But separate property under many of these categories can become marital property, depending on how it increased in value over time and how you and your spouse handle the property.  

What Happens If My Separate Property Increases in Value? 

Assets you obtain before and after your wedding rarely maintain the same value over the life of a marriage. And the change in an asset’s value can transform your separate property into marital property. If you owned property before marriage, received a gift or inheritance, or made an exchange of one separate property for another that increased value during the marriage, that appreciation in value generally becomes marital property subject to equitable division upon divorce

Because the value of assets can fluctuate up and down multiple times each year, calculating the difference in the value of a property can be difficult. Our attorneys understand the appropriate methods to use to determine whether your separate property truly increased in value during your marriage, and we can help safeguard your finances during divorce proceedings. 

How Does the Court Divide Marital Property? 

Colorado divorce courts divide marital property according to what is equitable. Equitable division in a divorce means that the courts seek to divide marital assets fairly instead of equally. When determining what is fair, the courts consider the following: 

  • The contributions each spouse made to acquire the marital property (including homemaking);
  • The value of each spouse’s separate property; 
  • The ways in which the value of each spouse’s separate property has changed; and
  • The economic circumstances of each spouse (including housing needs for the parent who will take care of the children a majority of the time).

The courts do not divide assets according to fault. The court allocates assets only according to each spouse’s needs and circumstances. 

How Can I Safeguard My Separate Property in a Divorce? 

The end of a marriage can be a painful, tumultuous, and precarious time. If you can take steps to make the divorce process more predictable and easier to manage, you should. Taking the following actions when you are contemplating divorce can help you immensely.

Enter into a Separation Agreement

If you and your spouse do not want to leave the fate of your finances up to chance with the divorce court, you can enter a separation agreement. Your separation agreement can address the division of property, maintenance, support, and parental responsibilities

The court can make its own decisions about your parental rights, but if financial provisions in your separation agreement are conscionable (meaning fair), the court will generally adopt those terms in its divorce decree. You want to make sure that your separation agreement is detailed and addresses all financial matters. The more detailed and exhaustive your agreement is, the less room a family law judge has to make unfavorable, independent decisions about allocating your assets. 

Hire an Attorney

The best step you can take to safeguard your family unit, your peace of mind, and your assets during a marriage dissolution is to hire a skilled attorney. Plog & Stein’s experienced family law attorneys can navigate the intricacies of Colorado divorce laws for you and help ensure that you are treated fairly in dissolution proceedings. We can also negotiate separation agreements and divorce settlements that are comprehensive and just. 

Speak to Plog & Stein’s Experienced Denver Divorce Attorneys

Plog & Stein has been providing the Denver metro area with exceptional family law advice and advocacy since 1999. Divorce is a very personal process, and our experienced family law attorneys tailor their legal strategies to each client’s unique family law needs. We treat each case with the sensitivity and respect it deserves, and our attorneys keep the lines of communication open with our clients to ensure collaboration and effectiveness.

Whatever type of family law dispute you have in Colorado, we can handle it. And our rates and retainers are reasonable. If you are facing a family law issue, come to us with your concerns and questions. You can call us at (303) 781-0322 or send us a message online to schedule a consultation. We are ready to help. 

Author Photo

Stephen Plog, co-founder of Plog & Stein, P.C. in 1999, is a dedicated family law attorney with almost two decades of expertise in Denver. Focused exclusively on family law since 2001, he excels in both intricate legal writing and courtroom litigation, having navigated cases in all Denver metropolitan area District Courts. Steve’s comprehensive background, including a Bachelor’s Degree in Psychology and a law degree from Quinnipiac University School of Law, underscores his commitment to providing insightful and personalized representation in family law matters.