Colorado family courts require divorcing spouses to divide their marital assets in a “fair and equitable” way, if not precisely 50/50. This allows both spouses to move forward with fair provisions for the future rather than one spouse experiencing a sudden decline in their accustomed style of living or facing unfair financial hardship.
The court also allows divorcing spouses to retain their separate assets—or the property, financial holdings, and valuables that belonged solely to them before the marriage. Many divorcing spouses want to know, “Where do inherited assets belong in the categories of separate and marital assets?”
Some partners create a prenuptial agreement before their marriage to define and protect their separate assets from becoming subject to division during a future divorce. Contact our divorce lawyers in Denver for legal assistance on your unique case today.
Without a valid, enforceable prenuptial agreement, the court requires divorcing spouses to divide their marital assets fairly through a settlement agreement or by presenting arguments over disputes for a judge to decide in court while each spouse retains their separate assets. Under C.R.S. 14-10-113, the court defines separate assets as the following:
Under this rule, a spouse may keep any assets they inherit during the marriage as their separate property.
Although Colorado’s division of property laws define an inheritance as a separate asset, there are times when one spouse may claim a portion of the other’s inheritance. This is due to the intentional or unintentional commingling of assets that commonly occurs between spouses during a marriage.
For example, if one spouse inherits a house or real estate rental property while they are married, it’s their separate asset; however, if the other spouse invests money, time, or talent into improving the property, they have a valid claim to half of the asset’s improved value.
To claim a portion of a spouse’s inherited property, the claimant must show that the property’s value increased during the marriage due to their contributions to improve it. They use a valuation process to determine the property’s current worth compared to its value before the improvement. Typically, they are entitled to half of the difference in the property’s increased value.
In some cases, a spouse may have a valid claim to a portion of the other’s inheritance even if they didn’t directly invest time or money into the property. For instance, if the spouse who inherited the property or asset had time and opportunity to increase the value of the inherited asset because the other spouse raised the children and took care of the household.
A spouse can make a strong case that their contribution to the household allowed the other spouse to improve the value of their inherited property, entitling them to a share of the increased value.
Prenuptial and postnuptial agreements protect separate assets—such as inheritance—from commingling by delineating the separate asset as belonging solely to the inheriting spouse, regardless of increased value.
If you have questions about protecting an inherited property or making a claim against a portion of a spouse’s inherited property during a divorce, call the experienced attorneys at Ciancio Ciancio Brown, P.C. for legal guidance to protect your best interests.
