One of the natural questions that you may have about divorce is how you and your spouse will divide the assets, or split the property, that you accumulated during the time that you were married. While this can be a complex issue with its own nuances, the court will seek to make a fair and equitable property division. One of our jobs as a Fort Collins divorce attorney is to analyze your financial circumstances and those of your spouse to ensure all the assets are properly and fairly divided. The division of assets ultimately depends on the particular facts of the parties involved and the type of property that is in question.
The equitable distribution of property requires a four-step process:
- Determining whether an interest constitutes property
- Classifying property as marital or separate
- Valuing the property
- Equitably distributing the property
The equitable division of property is primarily determined by:
- The contribution of each spouse to the acquisition of the marital property
- The value of the property set apart to each spouse
- The economic circumstances of the parties at the time the division is to be effective
- Which parent has which parental responsibilities related to any minor children
- Any increases or decreases in the value of separate property during the marriage
Marital versus Separate Property
Marital property is any property that is obtained while you and your spouse are married, and may include real estate, businesses, vehicles, retirement accounts, pensions, personal savings accounts, and even debt such as mortgages, credit cards, or medical bills.
Exceptions to the marital property rule include:
- Property acquired by gift, bequest, devise, or descent
- Property acquired through exchange of personal property
- Property acquired by one spouse after the decree of separation
- Property excluded by a valid agreement of the parties
Separate property includes any property that was owned by a spouse before the marriage. Separate property may become marital property, however, if it is co-mingled with marital property or used as part of the marriage. Separate property is generally not divided between the parties by the court.
Dividing Property in a Separation Agreement
While the court may make its own determination based on the circumstances of each party and the value of the property, you and your spouse may agree before the trial begins to establish your own property division arrangement in a separation agreement. Under such an agreement, you may divide the property in any way you want, as long as you both agree to the division of property and the division is fair.
One of the primary benefits that come from creating a separation agreement is that you and your spouse can negotiate with each other to obtain desired marital property. For example, if the two main properties in the marriage are the marital home and a business owned by one or both of you, you and your spouse would be able to decide who gets what based on your needs and desires. This can be more beneficial than leaving the decision to a judge who might not be as familiar with any particular attachments each of you may or may not have to the property.
Appraisers can be helpful in providing a value to any property that may be in dispute during the Fort Collins divorce property division process. They can be appointed by the courts, agreed upon by you and your spouse, or privately retained. We have a network of appraisers we work with that focus on different areas of valuations to help you understand the full picture of your assets and their value.
Real estate appraisals are the most common, but anything that has a value can be appraised – antiques, businesses, etc. We work with appraisers of all types and will work with you to obtain the information needed to provide an accurate analysis and fair division of assets – whether it’s from you, your spouse, or your spouse’s attorney.
A business valuation expert can provide a valuable analysis of any businesses owned by one or both of the parties to a divorce case. This can help the court make a fair distribution of available property. The involved parties can also benefit from a business valuation expert, since the expert would allow the parties to make informed decisions should they choose to make a separation agreement.
The three basic approaches to valuing a business are:
- Cost: the market value of underlying assets or the adjusted book value
- Market: the business compared to other similar businesses
- Income: the estimation of value obtained by considering the income of cash flow to the prospective owner/buyer
To book a confidential consultation and discuss your property division concerns with an experienced family lawyer, contact The Cossitt Law Firm to speak about your case with one of our Fort Collins divorce attorneys.