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It’s up to you to prove that property is separate and not marital

On Behalf of | Nov 8, 2018 | Firm News

When Colorado couples first enter the divorce process, the (nearly automatic) assumption is that all of the property they own belongs to the marital estate. Under this belief, the parties would then divide all of it in a fair and equitable manner.

If you believe that at least some of your assets are your property alone, then it is up to you to prove it. Even if you negotiate your divorce settlement, your future former spouse will probably want proof as well.

First, what distinguishes a piece of property as separate?

Only certain types of property qualify as separate in family law, including the following:

  • An inheritance
  • A gift
  • Property owned prior to the marriage

You should note that in some cases, any appreciation in the value of property owned prior to the marriage could end up as part of the marital estate unless your spouse had no part in its appreciation such as in passive investments. If you establish an asset as being your separate property, you may keep it, and it is not subject to division with the marital property. For this reason, it is possible for one party to leave the marriage with more than half of the property.

Separate property may not remain that way

Even if you prove that an asset belongs to you alone, what you did with it during the marriage could actually turn it into a marital asset in whole or in part. For instance, if you opened a 401(k) prior to the marriage, any amount in that account as of the date of the marriage remains yours. However, any amounts contributed and accumulated during the marriage may become part of the marital estate, and thus, subject to division.

If you owned a business prior to the marriage and served as its owner and/or employee during the marriage, at least part of the business could end up in the marital estate. In general, if you put an asset into a joint account or use marital funds or assets in order to increase the value of a separate asset, your spouse may make an argument that at least a portion of the asset should be divided as a marital asset.

Protecting your separate property

In the absence of a prenuptial agreement outlining that your separate property remains that way in the event of a divorce, you will need to provide proof of your sole ownership. Evidence that may help to that end includes the fact that you kept it separate from other marital assets and did not use marital assets in order to increase its value. Providing the appropriate proof could take some assistance, and fortunately, legal resources are available to provide it to you.