How Does Property Division Work in Divorce?
When you get divorced, one of the primary things that you have to deal with is dividing up the property that you have. There are basically two steps to that. The first step is to determine what is marital property and what is separate property.
In the state of Colorado, marital property is defined as any property that you obtained during the marriage other than property that was obtained through gift or inheritance. Separate property, on the other hand, is anything that either party owned prior to the marriage or anything that you acquired during the marriage through gift of inheritance.
The first thing that the court does is it sets aside to each party his or her separate property. Anything you had prior to the marriage you retain. Generally, anything that you obtained during the marriage through gift or inheritance, you retain. However, one catch to that is any increase in value in separate property during the marriage is marital property.
If you own a house at the time that you get married, the increase in value during the marriage will be marital property. For example, the equity in the house at the time of the marriage is $200,000. Then at the time that you get divorced, the equity in the house is $300,000, because the value has increased due to the mortgage being paid down, etcetera. The $200,000 in value that you had at the time that you got married, that belongs solely to you. However, the $100,000 increase in value is marital property and is subject to being divided.
After setting aside to each party his or her separate property, the court divides the marital property. There is a common misconception that Colorado law says that marital property will get divided equally. However, that is not actually what the law says in Colorado. What the law says is that marital property will be divided equitably. What that means in basic terms is fairly.
The statute basically says that the court is to look at all the circumstances and then divide the property fairly between the parties. In reality most of the time in the state of Colorado, marital property is going to get divided equally or close to it. That is how property division works in the state of Colorado.
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