If you are facing a divorce in Colorado, one of the first questions that probably comes to mind is “Who gets what?” Many people assume marital property is split straight down the middle. While that is true in some states, Colorado follows a different rulebook. Colorado follows equitable distribution, not equal distribution. These words sound similar, but they don’t mean the same thing in practice. With equitable distribution, courts do not aim for a clean 50/50 split. Instead, they focus on what is fair based on the facts of your marriage. This direction can significantly influence your finances long after the divorce is finalized. At Jones Law Firm, P.C., we understand the need for stability after the divorce decree is issued.
What Equitable Distribution Means Under Colorado Law
In simple terms, equitable distribution means fair distribution. However, what may appear fair to you may not be the case under the law. Under Colorado law, judges look at the whole picture of a marriage and divide marital property in a way they believe is just, not necessarily equal.
During the division, courts will consider the circumstances of each spouse and the nature of the assets involved. For example, one spouse may walk away with a larger share of certain assets while the other may receive different property or financial offsets that ultimately balance things out.
The equitable distribution approach recognizes that in marriage, couples contribute in different ways, earn at different levels, and rely on assets differently after divorce. The courts, therefore, account for such realities during property division.
Equitable vs. Equal: Why the Difference Matters
States that divide marital property equally are often called community property states. In these states, courts generally aim to split everything 50/50. While this method appears straightforward, it can create issues during the divorce process.
For instance, if one spouse wants to keep the marital home, an equal division may require them to buy out the other spouse’s half. That alone can force unnecessary sales or financial strain just to satisfy the 50/50 split.
With Colorado’s equitable distribution system, that kind of rigidity is prevented. Instead of asking, “How do we make this equal?” courts typically ask,” How do we make this fair?” This often leads to more practical and sustainable outcomes.
Marital Property vs. Separate Property
Before anything can be divided, the court must determine what counts as marital property and what does not.
Marital property generally comprises assets and debts accumulated by either spouse during the marriage, no matter which spouse is listed as the owner or account holder. Marital property can include real estate, retirement accounts, investment portfolios, vehicles, businesses, and even debt.
Separate property, on the other hand, usually includes assets one spouse owned before the marriage or received individually through a gift or inheritance. Property purchased using separate funds may also remain separate.
Things get complicated when separate and marital property mix, a situation known as comingling. For example, if one spouse uses inheritance money to renovate a marital home, a court may need to determine whether the funds remain traceable as separate property or have become marital property through commingling. Proper documentation is key when questions about commingling arise.
Factors Courts Consider When Dividing Property
Colorado Revised Statute §14-10-113 outlines the factors courts may consider when dividing marital property. These include:
- Each spouse’s financial and non-financial contribution to acquiring marital assets, including caregiving and homemaking
- The value of the property being divided
- Each spouse’s economic circumstances at the time of division
- Custody arrangements involving any children
- Any increase or decrease in the value of separate property during the marriage
How Debt is Divided in a Colorado Divorce
Property division isn’t just about what you own; it is also about what you owe.
Marital debt typically includes financial obligations incurred during the marriage, regardless of whose name appears on the account. This may include credit cards, mortgages, auto loans, and certain student loans.
In Colorado, debt is divided using the same equitable framework as assets. Courts may consider factors such as each spouse’s economic circumstances, who incurred the debt, who benefited from it, and the overall circumstances of the marriage. Debt incurred for one spouse’s sole benefit or after separation may be assigned primarily to that spouse.
It is worth noting that marital tax debt is handled slightly differently. The IRS determines liability based on how tax returns were filed. If spouses filed jointly, both may remain responsible regardless of what a divorce decree says.
Special Considerations That Can Affect Property Division in Colorado
Other special considerations may affect property division, including:
- Business Interests
Dividing a business can be one of the most complex parts of a divorce. If a business was started during a marriage, it’s typically considered marital property. Even a business started before marriage may have a marital component if it grew in value during the marriage.
Courts look at when the business was formed, its current value, outstanding liabilities, and each spouse’s contribution. Since the business can affect asset division, alimony, and child support, professional valuation is essential.
- High-Value and Complex Assets
Divorces involving high-value assets can also be complex. Assets such as real estate, investment and retirement accounts, and valuable property may require expert appraisal. These must be divided with tax consequences and fluctuating markets in mind, adding another layer of complexity.
Can Spouses Agree on Property Division Without Court Intervention?
Yes. Spouses can negotiate a divorce agreement that outlines how property and debt will be divided. That said, it is essential to have an attorney review any agreement to help ensure fairness and long-term viability.
Contact Us for Legal Help
Dividing property is rarely straightforward, and the decision made during the process can affect your financial future for years. While Colorado’s equitable distribution laws are designed to ensure fairness, every case is unique, and outcomes depend on the facts. If you are unsure how your assets or debts may be divided, speaking with an experienced divorce attorney can make all the difference. At Jones Law Firm, P.C., our experienced family law and divorce attorneys help clients navigate Colorado’s divorce process with clarity, strategy, and confidence. Contact us today to discuss your situation and take the first step towards a more secure future.
