In Colorado, when a parent or third-party buys a house or pays down a mortgage on a home, and the home is titled in both the husband and wife’s names, the law presumes the money is a gift to the marriage and subject to equitable distribution in the event the couple divorces.
An unresolved issue, however, was whether this legal presumption had to be overcome by clear and convincing evidence or could be overcome under a lesser standard of preponderance of the evidence.
Recently, in the case of In re the Marriage of Krejci, 2013 COA 6. No. 11CA2345, the Colorado Court of Appeals was faced with this very question. In Krejci, during the marriage, the wife’s mother paid off the mortgage on the marital home that was jointly owned by the parties. During the divorce the wife argued that when her mother paid off the mortgage, she was giving her a gift, and therefore that portion of the equity in the home was not part of the marital estate that had to be divided with her soon to be ex-husband. The Court of Appeals determined that when the mother paid down the mortgage on her daughter’s marital home, it was presumed that the payment was a gift to the marriage and held that the presumption could only be overcome by clear and convincing evidence.
If you have questions regarding the Division of Marital Property, contact an experienced Denver family law attorney at Divorce Matters.