Planning for a divorce requires some degree of understanding about the process. There is so much misinformation floating around about property division in particular that you may have inaccurate or unrealistic expectations.
Unless you have a marital agreement with your spouse or can set your own terms before you file for divorce, it will be the judge overseeing your divorce that decides who gets what. They will apply Colorado state law, which requires that they divide your property in a just manner but without consideration of marital misconduct.
What does that mean for the most important assets that you share with your spouse?
Your house may be the biggest piece of property that you own jointly. Despite people talking about how they lost the house in divorce, what they usually mean is that they lost possession of the house.
The courts will typically give each spouse a portion of the house’s value or use their share of the house’s accrued equity to offset other property that they receive.
If one spouse keeps the house, they will usually have to refinance to pay their ex, their ex will receive other significant property or they will have to assume substantial debt from the marriage as well.
Your retirement fund or pension
Retirement accounts are often a combination of separate and marital property. Any amount that a spouse accrued in the account prior to getting married is their separate property, but the amounts accrued during the marriage are marital property. The courts will have to determine how much of the account is subject to equitable distribution.
They may then order the person whose name is on the account to split the account with their spouse. They may also use the value of one spouse’s share of the retirement fund to offset other property distributed to that individual. In some cases, the courts may also order spousal maintenance for pensions or plans that they cannot immediately divide.
Businesses can be a major complicating factor for a divorce. They come with both extensive liabilities and the potential for future revenue. You are going to have to look closely at the business’s assets and obligations to place a reasonable price on it if it is marital property.
The courts might have one former spouse buy the other out of a business. They might consider its value when making other decisions or they might split ownership between the spouses.
Other major assets, like investment portfolios and substantial collections of personal property, can also become a focal point in your divorce if you have a personal attachment to or future plans for property acquired during the marriage. The more concerned you are with the high-value property settlement in your divorce, the more important it becomes to plan for your optimal outcome early in the process.