Is Colorado a Community Property State?
No, Colorado is not a Community Property State. Colorado is an equitable property state. This means that the court must divide the marital estate fairly, although not necessarily equally to the penny.
Is Colorado a No Fault State?
Yes. In Colorado the court must divide the marital property without regard to marital misconduct, in such proportions as the court deems just, taking into account all relevant facts as well as the specified statutory factors.
The court must first set aside to each spouse his/her separate property.
What Is Marital Property Compared to Separate Property?
Marital property is all property acquired during the marriage, regardless of how titled.
Separate property is property that was acquired:
As a gift or inheritance;
Property that was acquired in exchange for property acquired prior to the marriage or in exchange for property acquired by gift, bequest, devise, or descent;
Property acquired after a divorce or legal separation, and
Property excluded by valid agreement of the property.
Do Increases in Value of Separate Property Remain Separate?
No, unless there is a valid agreement of the parties to do so.
How Does Separate Property Become Marital?
Property that is acquired by gift or inheritance, or that was owned prior to the marriage, or is otherwise “Separate property” can become marital if it is co-mingled. This most commonly happens by placing funds received from an inheritance in a joint checking account, or adding the other spouse to real estate owned prior to the marriage. If separate property is comingled with marital property it loses its separate nature. This does not, however, prohibit a party from arguing for a larger share of the marital portion based on a theory that he/she contributed more to acquisition of that asset.
What Is Contribution?
In Colorado, the court is required to consider the contribution of each spouse to the acquisition of the marital property.
As a practical matter, in this day and age, the courts generally seek to effectuate a 50/50 division of the marital estate, this is not always the case and not legally required. An extreme example of this involved a case with an elderly homeowner Spouse who owned a home for many years and a much younger Wife. The Husband had added the Wife to the title and thus transformed this asset from Separate to marital property. The court was upheld by the Court of Appeals in awarding 90% of the value of the home to the husband based on his greater contribution to acquisition of the asset. So while an asset may become marital, it doesn’t mean that it will necessarily be divided 50/50. In re marriage of Stumpf, 832 P.2d 845 (Colo. App. 1996).
Can My Spouse Get Any of My Retirement in A Divorce?
Very likely, but the amount to be divided will depend on the length of marriage and the length of employment with the entity providing the benefits. For example, if parties were married for ten years, and the Wife had 15 years employment with a company providing retirement benefits, the court would divide the marital portion of the retirement which would be 10 (number of years of marriage/15 (number of years in service) = 2/3 or 66.66%. This is the marital portion of the retirement.
How Can a Court Divide a Pension that Is Not in Pay Status Yet?
In dividing defined benefit retirement plans, (old fashioned pensions that pay a certain amount per month for the rest of your life) either a 401k or a military or government pension, a Qualified Domestic Relations Order is prepared. This is governed by Federal ERISA statutes rather than State divorce statutes. In the case of a conflict between a state divorce statute and Federal ERISA statute, the Federal interpretation controls.
Is a 401K Treated Differently than An Ira for Purposes of Division?
Both are defined contribution plans and have a value that can be easily ascertained as of any given day. This is different than a defined benefit, old fashioned pension, which can’t easily be valued in today's dollars without consideration of the time value of money, interest/discount rates, and assumptions about continued employment and contributions. In dividing a 401k, a QDRO is required. In dividing an IRA, a rollover is utilized and no QDRO (Qualified Domestic Relations Order) is needed.