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Protecting Assets in Divorce – Is it Yours or Mine?

On Behalf of | Sep 8, 2014 | Divorce |

There are two types of property in Colorado: 1) Separate Property and 2) Marital Property.

  • Marital property is all property you and your spouse have acquired during the marriage which does not fit into the definition of separate property.
  • Separate property is any property that you had before the marriage, or which you acquired during the marriage by gift or inheritance, or which you acquired during the marriage by converting separate property into another separate property asset.

Here is an excerpt from the statute (Colorado Revised Statutes § 14-10-113. Disposition of property) with exact definitions of separate and marital property:

(2) For purposes of this article only, and subject to the provisions of subsection (7) of this section, “marital property” means all property acquired by either spouse subsequent to the marriage except:

(a) Property acquired by gift, bequest, devise, or descent;

(b) Property acquired in exchange for property acquired prior to the marriage or in exchange for property acquired by gift, bequest, devise, or descent;

(c) Property acquired by a spouse after a decree of legal separation; and

(d) Property excluded by valid agreement of the parties.

Appreciated property: The appreciation in separate property may be divided by the court as marital property. For example, if your spouse owned a house at the time of the marriage which was worth $400,000 but it is worth $500,000 at the time of the divorce, there is $100,000 worth of appreciation. This $100,000 in appreciation may be equitably divided by the court. Be sure to carefully review all separate assets for appreciation. If your spouse had a stock brokerage account during the marriage, this poses a very unique and possibly complicated situation. If some stocks went up in value during the marriage and some went down, it is still possible that the court may divide some of the appreciation in the stocks. If you are in this situation, you should talk to one of our attorneys about hiring an expert to review the historical stock transfer ledgers for possible division of appreciation.

The court may also divide losses in separate property. In the case of In re Talarico’s Marriage, App.1975, 540 P.2d 1147, 36 Colo.App. 389. Divorce ​ 681, the court looked at the issue of a decrease in value of separate property and determined that the trial court, in dissolution proceeding, did not abuse its discretion in its division of marital property by apportioning a loss in value of separate property between the parties. Therefore, if your separate property has lost value, you should confer with one of the attorneys at the Pearman Law Firm as to whether the court may take this into account in your property division.

Do not co-mingle Separate property with marital property. If you co-mingle separate property, it probably has become marital property. For example, if you quit claim your house that you had before the marriage to your spouse, there is a presumption that this was a gift to the marital estate. The court will then divide the house at the time of a divorce. This was addressed in the case of In re the Marriage Of Janice Pearl Moncrief, Petitioner-Appellee, Cross-Appellant, V. Gerald Owen Moncrief, Respondent-Appellant, Cross-Appellee. 36 Colo.App. 140, Colorado Court of Appeals, Div. I.. in which the court found that when one spouse causes the title to the family residence to be placed jointly with other spouse, gift is presumed and the burden to show otherwise is upon donor. Therefore, if you keep your separate property separate, and never co-mingle it by adding your spouse’s name to the account, it is likely that only the appreciation in value will be divided at the time of a divorce.

Using separate property for marital purposes. If you have used or depleted separate property for martial purposes, the court may take this into account when it divides property equitably. You should ask for a disproportionate division of marital property in such instance.



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