When getting divorced in Colorado, there are two categories of property: (1) marital; and (2) separate. The court can only divide marital property during divorce proceedings. Separate property is automatically retained by the spouse who owns it.
Marital property is anything that was owned and acquired during the marriage, unless it was a gift, inheritance, or bought with separate property. For example, all income from your job is marital property starting on the day that you get married.
Separate property is anything that was owned by one spouse before the marriage. For example, if you purchase a house in 2019, and get married in 2023, that house is your separate property. However, if that house increases in value during the marriage, the increase in the equity is marital property.
This can all get quite complicated, so let’s use an example to illustrate:
“Ben and Jocelyn got married on April 1, 2010. On their wedding day, they each had the following assets:
Ben:
• Toyota Camry
• Savings account with a value of $5,000Jocelyn:
• Honda Civic
• Savings account with a value of $6,000In 2010, Ben’s parents gifted him 100 shares of Apple stock, worth $1,000.
On January 10, 2017, Ben filed for divorce. His Apple stock is now worth $10,000 and his savings account has increased to $9,000. Jocelyn’s savings account has increased to $12,000. They both still own their cars. They are trying to determine what amounts are marital property and can be divided by the court. ”
There are two types of property in the context of divorce: marital property and separate property. The court can only divide marital property. Separate property is automatically retained by the spouse who owns it.
CARS
Because they were owned before the marriage, each car is considered the separate property of the owner.
SAVINGS ACCOUNTS
Any increase in value to separate property that occurs during the marriage is marital property. The initial $5,000 of Ben’s savings account remains his separate property, while the $4,000 increase is marital property. In Jocelyn’s savings account, $6,000 is her separate property, and $6,000 is marital property.
APPLE STOCK
Gifts received during the marriage are separate property. However, because the Apple stock increased in value, $9,000 of its value is marital property. The original value of $1,000 is Ben’s separate property.
As you can see, the rules governing marital and separate property can be complicated and confusing. The analysis gets even trickier if the parties have spent money from their savings accounts or have a pre-nuptial agreement. Call Katelyn to discuss how your property will be classified.
