Marital Property and Allocation in Divorce Proceedings
One of the difficult aspects of divorce is determining how to divide up the marital property. Marital property is property that the parties acquired while married. This typically excludes property that one particular party obtained during the marriage, property acquired after a decree of separation, and property that is divided by a valid agreement between the two parties. Section 14-10-113, Colorado Revised Statutes, is the statute that governs how marital property is allocated after a divorce.
Typically, all the property acquired during the marriage is considered marital property no matter if the title is held individually or jointly. As previously mentioned, a party can show that the property is not marital property if he/she can show that the property was a gift by bequest, devise, or descent.
When determining how to allocate the property, the court will first determine what property is marital property and what is not. Next, the court will determine the value of the property in question. It will look at the value of the property at the time of the hearing or at the time of the divorce decree.
There are two types of property allocation systems that a state may adopt: common law and community property. Under the common law system, the party only has rights to the property they bring into the marriage. Thus, if the husband has an income and the wife is a stay-at-home mother, then the husband will get all of the income he earned. Under the community property system, all property acquired during the marriage is considered shared property. Thus, in this hypothetical situation the husband would have rights to half the income, as would the wife. Colorado has been moving slowly towards adopting the community property system.
The community property system places an emphasis on that which was acquired during the marriage. Therefore, the property and assets a party has prior to marriage is often ruled to remain with that party and will not be treated as marital or community property. Similarly, property that is acquired after divorce is not considered marital property and is to remain with the party who obtained it. The parties must provide evidence that the property was obtained prior to the marriage or after the divorce decree in order for it to be considered individual property. This can be shown through receipts or title records.
It can often be assumed that the court will consider income, houses, and vehicles acquired during the marriage to be community property. One may not expect that retirement benefits, club memberships, stock options, and student loans incurred during the marriage are considered community property. The following have been ruled as individual property: educational degrees, income from a discretionary trust, and severance pay.
Once the court determines what property is to be allocated and the value of that the property, the property is divided amongst the parties. The division takes into account what contributions the parties made during the marriage, the financial statuses of the parties, and testimonies. The court has a responsibility to ensure each party receives his/her fair share of the community property in a reasonable amount of time. If the court rules that some property cannot be physically divided, it may order that the property be sold and the proceeds divided between the parties. The court must also divided debts between the two parties.