In a divorce, one of the most important issues to settle is the division of joint property and marital assets. Your family home is a major property in your shared equity and can be a point of contention in any divorce proceedings. If it has much sentimental and functional value, it may be a pain point in negotiations.
It is common for divorces to revolve around discussions on who keeps the home. If you want to get a share of a home in Colorado, you have many options to achieve this. You must familiarize yourself with the state’s property distribution laws. Each option has tradeoffs to consider.
What is “equitable distribution”?
Property division in Colorado follows the equitable distribution model. This means that you and your spouse should divide all shared property in the state (including your family home) fairly. But fair distribution does not always mean equal distribution.
Instead, the court considers multiple factors to determine fairness, which may include the following:
- Each spouse’s earning capacity
- Your contribution to the joint estate, including your contributions as a homemaker
- The duration of your marriage
- Your economic circumstances, especially which parent has primary custody of any children
A Colorado court may also base your share of the marital assets on how you used and possessed the property. You might need to build your case for further negotiations.
Marital property vs. separate ownership
Is your home a marital asset or a separately owned one? The state generally considers property purchased during the marriage from shared finances as marital property. But if your spouse inherited or owned the family home before the marriage, it might not be a part of the marital estate.
Separately owned property is not subject to Colorado’s property division laws for spouses. However, under Colorado law, any increase in the home’s value or equity during the marriage is considered marital property and is subject to division.
Dividing a home according to law
If you have extensive equity in your Colorado home, you may want to consider different options in order to get your fair share. Here are a few options that work in Colorado divorces.
- Buying out your spouse’s share: One way to keep any marital property is to buy out your spouse’s share of equity. Keep in mind that courts almost always require you to refinance to remove your spouse’s liability within a set timeframe. The court may consider whether you qualify to keep the home and shoulder the expense and taxation requirements.
- Selling your home and splitting the profit: If buyouts are neither feasible nor desirable to you, then selling is a straightforward way to split the equity. By selling, you can liquidate and receive profits that are easier to split.
- Offset with other assets: If you are willing to part with other assets, you may choose to negotiate. When the court awards you other assets in the estate, you can trade your share. Shares in property such as joint bank accounts, other property and more can offset the value.
At the end of the day, negotiations are the primary factor in marital property divisions. If you desire to keep major assets such as family homes, consider hiring an experienced legal representative. They can increase your chances of securing a good outcome in your proceedings.