In Colorado, the courts generally accept a fair and reasonable property division the parties agree to, but if the parties cannot agree, the District Court divides the property within the Judgment of Divorce.

Colorado is an equitable distribution state. It uses the dual classification model, and the appreciation of separate property is marital. When the parties are unable to reach a settlement, the Chancery Court classifies and then divides the martial estate equitably. Equitable does not mean equal, or even half, but rather what the Chancery Court considers fair.

Since Colorado is an equitable distribution state, all marital property will be divided fairly unless agreed to otherwise by the divorcing spouses. In dividing the property, the court first categorizes property as marital or separate assets, assigns a monetary value for each piece of property, and then distributes the property between the spouses.

According to the Colorado Revised Statutes; Article 10, Section 14-10-113, the court considers all relevant factors including:

The court divides property without regard to marital misconduct.

As described in Colorado Statutes - Article 10 - Sections: 14-20-113, marital property means all property acquired by either spouse subsequent to the marriage except:

Marital property includes marital assets and marital debts acquired during the marriage. This means houses, businesses, investments, pension plans and 401(k) accounts. Separate property means gifts and inheritances received during the marriage as well as property acquired before the marriage.

Separate property belongs to the individual with title. However, in Colorado any increase to separate property that occurs during the marriage is marital property and is subject to division. For example, interest paid on a bank account bequeathed to a party by a passing relative could be considered marital, but the underlying amount itself would not. Property obtained prior to the marriage is separate, but any increase in value during the marriage is marital property. Some property is always considered “immune,” such as an inheritance. An inheritance is separate property; however, any increase in value of an inheritance during the marriage will be considered marital property.

First, the court classifies assets and liabilities, property and debt, as marital or separate. Then it assigns a monetary value on the marital property and debt. Finally it distributes the marital assets between the two parties in an equitable fashion.

In Colorado, as in many jurisdictions, the equity of the marital home is often one of the biggest marital assets. The equity is the market value of the house, less any liabilities against the property, such as a mortgage, taxes, or home equity loans. Normally, making this calculation requires a paid real estate appraisal or a real estate agent can prepare a market analysis for free.

From there, couples choose one of three options to divide the equity:

In Colorado, the court may include the retirement benefits and plans earned by both spouses as marital assets available for division.

Retirement benefits vary greatly but can generally be divided into two groups:

In Colorado, if spouses share in each other’s retirement or pension plan, a Qualified Domestic Relations Order must be completed. A QDRO is a written set of instructions that explains to a plan administrator that two parties are dividing pension benefits. The instructions set forth the terms and conditions of the distribution - how much of the benefits are to be paid to each party, when such benefits can be paid, how such benefits should be paid, etc. The division of retirement and pension benefits can be complicated and result in a myriad of tax consequences. Consultation with a tax attorney or accountant is recommended when determining whether and how to divide such benefits.