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Separate and Marital Property in Your Divorce

When dividing property during a divorce, Colorado Courts must first determine whether property falls under the category of marital property or separate property, before they equitably divide marital property between ex-spouses.

Defining marital and separate property

Put in the simplest terms, property acquired during the marriage is considered marital property, and any property acquired prior to the marriage is considered separate property. Property is presumed to be marital, and the party that states a claim to separate property has the burden of demonstrating or proving the separate interest.

Even if you have a separate property interest (for example a retirement account that has some value going into the marriage), that does not mean that the entirety of the asset remains separately yours. The increase in value of separate property is considered marital property. For example, if you had $100,000 in your retirement account on the date of marriage, and it increased in value to $300,000 throughout the marriage, $200,000 of that retirement account is considered marital property, meaning that the court may divide it at the time of divorce.

When separate property becomes marital property

Generally speaking, separate property that is either used to purchase a marital asset or that becomes comingled with otherwise marital property is considered a gift to the marriage. For example, if you use the proceeds from the sale of a home that you owned prior to the marriage to put a down payment on a jointly titled home during your marriage, those funds are presumed to be marital, and your contribution of separate property is presumed to be a gift to the marriage. While the court ultimately applies an equitability (aka “fairness”) standard when dividing marital property, the court would not likely recognize any separate property under these types of circumstances.

Where otherwise separate property was used during the marriage to contribute to the purchase of or increase in value of a marital asset assets, you may engage a forensic accountant to conduct a more detailed tracing of separate funds to support either a separate or equitability claim.

Preserving separate property interests during your marriage

It is important to be mindful of what you have going into your marriage and that you consult with an attorney regarding your options to protect those interests in the event of a future divorce. Oftentimes, people expand the definition of separate property in prenuptial or marital agreements, so that parties can rest assured that they will, at a minimum, retain what they brought into the marriage should the marriage dissolve.

While it may seem straight forward, separate properties can be both tricky and emotional. Our seasoned attorneys at GEM Family Law can assist you in determining whether you have a separate property claim, how best to frame a request for consideration of your separate contributions, and to discuss your options regarding preserving separate interests going into your marriage.

Authored by: Chelsea Augelli, Associate Attorney