Colorado is not a community-property state, and its divorce law does not require a strict 50/50 division of marital property. Instead, Colorado’s divorce court requires a fair and equitable division of marital assets, giving spouses greater discretion in negotiating a divorce settlement, often with the help of a professional mediator.
For example, under the equitable division law, if one spouse wishes to keep the marital home and the other wants to keep the vacation home, they could agree to retain their preferred properties even if their values are not exactly equal.
The first crucial step is to determine the value of all significant marital assets, so the spouses or the court can make a fair distribution.
First, What Is Marital Property In Colorado?
The first step in property division in a Colorado divorce is to determine which assets are separate and which are marital. Each spouse may retain their separate property without having to divide it with the other. Separate property is any property owned by one spouse before the marriage, property inherited by one spouse during the marriage, or property gifted to one spouse during the marriage.
Contrarily, marital property refers to all assets and real estate property acquired during the marriage, regardless of which spouse’s name is on the account, title, or deed. Marital property is subject to division and redistribution in a way that the court considers fair and equitable. Spouses may reach these decisions together with the help of professional mediation and their divorce attorneys, or they may take their disputes to court.
Before spouses can reach a settlement agreement or the court can make a court order, it’s necessary to have an accurate assessment of property values.
How Does Property Valuation Work?
Once both spouses and their attorneys determine which properties are marital property and subject to division, the Colorado courts prefer that the spouses reach an agreement through direct negotiations rather than going to court. This process begins by obtaining valuations of all significant property, including real estate, businesses, vehicles, artwork, antiques, jewelry, and other items of significant value.
Determining the fair market value of some items is as simple as looking up the Blue Book value of a vehicle or hiring a property appraiser for real estate holdings. However, complex holdings such as businesses and diverse financial portfolios require professional valuation services.
Often, spouses hire a single valuation expert to appraise their property, and then work together with their Denver family attorneys to fairly divide their marital property. When spouses require a complex business valuation or during contentious divorce cases, each spouse may hire their own valuation specialists. This sometimes results in different values assigned to the same property. When this occurs, it often triggers disputes that require the court to resolve.
Uncontested vs Contested Divorce After Property Valuation
When spouses obtain accurate valuations of all their marital assets, they can begin negotiations and mediation to reach a settlement agreement that meets the court’s standards for a fair and equitable division. This allows them to obtain an uncontested divorce. If disputes remain unresolved, both parties must present their arguments in court for a judge to decide in a contested divorce proceeding.
Contested divorces require more time and additional attorney fees and lead to a more contentious process. Accurate property valuations during divorce are an important step toward avoiding a contested divorce in Colorado.