Marital property is property accrued during the course of a marriage over which a court in a divorce (dissolution of marriage) case has jurisdiction and authority for purposes of division between the spouses. The specific definition of marital property, and exceptions as to what is not considered marital property, are set forth in Colorado Revised Statutes, 14-10-113.
Statute specifically charges courts with the authority to divide marital property in a divorce in an equitable, not equal fashion. As such, courts maintain discretion as to the division of marital estates in the event that the divorce litigants are unable to agree upon a division on their own.
Specifically, marital property means any property, include potentially rights or interests to such, obtained during the court of a marriage, unless obtain through certain means. Property or assets held by either husband or wife prior to a marriage are not considered marital in terms of the basis or value in that asset at the time the marriage occurred. However, C.R.S. 14-10-113(4) specifically indicates that increases in value to that property during the term of the marriage are considered marital property and do fall under the court’s jurisdiction for division purposes.
Property contained in a marital estate includes assets of all types, both tangible and intangible. Specifically, the list would include:
- Furnishings and household items
- Real estate
- Retirement accounts (both defined contribution and defined benefit plans)
- Investment and other financial accounts (including bank accounts)
- Businesses and interests in businesses
- Royalties, mineral rights, and other, similar assets
- Motor vehicles
- Stocks and stock options (in some cases)
There are varying methods for both valuation and division of these types of assets and, in some instances, it becomes necessary to distinguish between what portion of an asset is marital and what is not. Likewise, it may be necessary to determine the equity in an asset, as opposed to just the present value. Some assets must be divided through additional legal process, such as a retirement account, which may need to be divided through a Qualified Domestic Relations Order so as to avoid any tax code or penalty consequences. In some cases, dividing a complex marital estate may entail the use of multiple experts for purposes of valuation and classification of the property.
Section 113 also specifically sets forth what is not going to be considered marital property. The list includes:
- Property obtained by gift or inheritance
- Property acquired in exchange for non-marital property, whether pre-marital or gift/bequests in nature
- Property acquired by one spouse after a decree of legal separation enters
- Property not subject to division based on a valid legal agreement, such as a pre-marital agreement
- Certain interests in a trust
- Social Security benefits
Property does not need to be titled jointly to considered marital in nature. Additionally, property which was once separate property can be converted to marital property by virtue of conduct of the parties. For instance, taking premarital property, such a home, and titling it jointly, is an overt act that may make the once separate property marital. Commingling of separate property with marital property can also render the property part of the marital estate. For example, taking a proceeds from the sale of a separate, premarital home and applying those proceeds towards the down payment on a jointly titled new home will likely render those once separate funds marital.
Gifts between spouses are also specifically deemed to presumptively be marital unless it can be shown that the transfer of the property was intended to be a gift.
Statute specifically allows people to enter into either a premarital agreement, or intra-marital agreement, in which they define what property is to be considered separate, including any increase in value to such during the marriage. Presuming statutory requirements are met and the agreement is done procedurally correctly, Colorado case law supports the notion that these types of agreements shall be upheld, unless determined to have been entered into voluntarily.
In any Colorado divorce case, the marital estate will be divided either an agreement (Separation Agreement) or the court will ultimately determine how assets are divided.
If you find yourself in need of legal representation regarding division of your marital assets, contact the Denver divorce and custody attorneys at Plog & Stein. With over 60 years of combined legal experience, we understand the detail needed to make sure your marital estate is divided fairly.