Category: Division of Assets

Car accidents are a fact of life, and depending on the severity of the car accident, the victims can seek damages for property damage, pain and suffering and lost future gains due to personal injury. What happens, then, if someone who receives a substantial recovery after a car accident decides to get a divorce? Is the recovery received from a personal injury considered marital property subject to equitable division?

Asset Division in Colorado

Equitable distribution does not require equality in Colorado and the parties need not be accorded equal shares of the marital estate.  In other words, the trial court is granted broad discretion in dividing marital property in an equitable or fair fashion.  Each property division action depends on the particular facts of each case.  However, there are certain marital assets that are considered separate property and those are (1) property owned prior to the marriage; (2) property acquired during the marriage by gift or inheritance and not co-mingled; and (3) property acquired during the marriage in exchange for gifted, inherited or premarital property.  A personal injury settlement for pain and suffering is marital property if the accident giving rise to the injury occurred during the marriage.  Since it is property acquired during the marriage, it is presumably marital and none of the above-listed exceptions is applicable.  Furthermore, an unliquidated personal injury claim is also considered to be marital property, but the court should consider the effect that the personal injury had on the marital estate in determining an overall equitable distribution.

Contact a Denver Asset Division Lawyer Today

Asset division is always complicated and can be contentious for a divorcing couple. Speak to a divorce lawyer to help you work your way through your marital property issues.

After you’ve gone through the divorce process, it can be hard to pay the bills on your single paycheck. This is doubly true when you are carrying around debts from the marriage, including credit card debt ”“ even for things you did not buy yourself.

Getting Back to a Manageable Level of Credit Card Debt

• If you received the marital home as part of your divorce settlement, you might consider taking out a home-equity loan to help manage your credit card bills. The positive side of this is that the interest on home-equity loans is often less than the interest on a credit card; on the other hand, if you find yourself in trouble and can’t make the loan payments, there is a risk of losing your home.
• If you have less than $10,000 in unsecured debt, using a consumer credit counseling service can be beneficial. These people are experts at fixing credit card debt situations and are often more reasonable than the card companies themselves. The downside is that this can take a little longer to clear up your debts and you may find that your credit score lowers. Still, the credit score impact is much less serious than late or delinquent payment credit hits.
• If you have over $10,000 in unsecured debt, you could try your luck with a debt settlement company. What these companies do is try to negotiate with creditors to lower the amount of debt owed. These plans usually help clear your debt in two to four years, but you will also be charged a percentage of the debt as payment for the service and you will need to pay taxes on the difference between the original debt and the settlement.

Get in Touch with a Divorce Attorney in Denver

As you can see, there are plenty of options for this complicated situation. If you have any questions, speak to a divorce attorney.

When you get divorced, you may wonder if you are entitled to part of your spouse’s inheritance, acquired either before or during the marriage.

In most cases, inheritance is going to be treated as separate property, which is not divided equitably in Colorado divorces. Inheritance will generally be immune from division unless it is “comingled.”

What Are Comingled Assets?

Commingling occurs when inheritance assets are mixed together with joint marital expenses. If, for example, the inheritor puts the assets into a joint banking account which is then used to pay for a house for the couple, those assets are comingled and thus can actually be considered marital property for the purposes of division. This is true even if the inheritance was acquired before marriage.

If you are concerned about a future inheritance, the easiest way to prevent division is to lay out your terms in a prenuptial agreement. Prenups can be a contentious decision for a couple that plans to wed, but it is an important one that you should absolutely consider if you are concerned about your inheritance.

Speak with a Colorado Asset Division Attorney

If you have already comingled your inheritance into joint marital assets, there is still a way out of losing part of your inheritance to your spouse. You must prove in court that the funds were never intended to be shared. However, this is fairly difficult to prove. In this case, and in all matters of property division dealing with inheritance, you should speak with an asset division attorney.

If you are getting divorced and own a business worth over $5 million, you might find that when it comes to marital assets, you have trouble satisfying the equitable distribution demands of your spouse. Especially with a booming business, it can be hard to come up with the liquid assets specified by your divorce.

Options if You Don’t Have Cash on Hand

1. Borrow money from the bank
2. Establish a long-term payment plan
3. Form an Employee Stock Ownership Plan, or ESOP.

An ESOP is a specialized employment benefit allowing an employer to contribute cash or stock to a trust for employees. This money is then allocated to employees in proportion to the employee’s compensation.

A simple explanation is that you are selling an interest in your company to your employees. This allows you to raise the cash you need to pay off your spouse without allowing your spouse to own part of your company. An additional benefit is that when you create an ESOP, the funds put into it are no longer owned by you; the ESOP itself is the owner. This means that creditors cannot go after it, and neither can your spouse.

Meet with a Denver Divorce Lawyer to Discuss Your Options

ESOPs are not the be-all-end-all of marital asset divisions for successful businesses. Only consider an ESOP if you expect your business to continue experiencing healthy growth and increased profits. As with any complicated issue involving divorce and division of marital assets, you should always speak with a Denver divorce attorney to explore all of your options.

If you have gotten divorced and ended up keeping your marital home, you will likely want to get your ex’s name off of your mortgage. This can be for a variety of reasons ”“ your ex may not want to be held financially responsible for your mortgage, or you might wish to retain the proceeds from an eventual sale, for example. Working with a Highlands Ranch Divorce Attorney can help you in the process.

Refinancing Your Colorado Home After Divorce

There is really only one way to get this done. You will need to apply for a refinance to your mortgage using only your name. Just because you and your ex have agreed that you are keeping the house does not mean your lender has to honor your decision. Your lender is bound to your original contract, which has both names on it. This process will mean that you need to prove your eligibility for a new loan, and depending on how you have divided your property you may find that as a person living on a single income, you are no longer eligible for your refinancing. If so, you will have to seek other options, like finding a cosigner.

If your refinancing is approved, you can begin the process of removing your ex’s name. This is usually done by a quitclaim deed. A quitclaim deed allows your ex to forfeit his or her rights to the property. In order for a quitclaim deed to be filed, your ex will be required to go to your lender and sign the documents in front of a loan officer.

Contact a Highlands Ranch Divorce Attorney Today

The process is straightforward, but complications can arise at any step of the way. The simplest way to make sure your spouse’s name comes off your mortgage is to discuss your case with a divorce attorney.

When deciding on how to divide marital property, you are required to make an honest disclosure of your interests and assets. The keyword is honest ”“ and not every spouse is going to be honest. Especially in situations where one spouse is less involved in the couple’s finances, there is a risk that one spouse will try to hide assets in order to prevent them from being divided under Colorado law.

How to Ensure Everything is Divided Fairly

The best approach to ensure you receive your fair share of marital property is a preventative strategy. You should obtain as many documents related to your spouse’s assets as you can and make copies. Keep them somewhere safe, and do this before you even initiate a divorce. Tax returns are useful in this respect, as they could provide an impartial view of a person’s assets.

Even if you believe your spouse is being honest, your attorney will submit interrogatories ”“ written questions ”“ to your spouse that require answers under oath. The threat of punishment for lying under oath could deter your spouse from hiding assets. Then again, it may not, in which case you can also have your spouse give an oral deposition, testifying on record, under oath about his or her assets. This gives your attorney a chance to ask follow-up questions if something seems off.

You can also draft a Separation Agreement with your spouse stating that all assets have been honestly disclosed, and that if later it becomes apparent that assets were hidden, your case can be reopened and marital assets redistributed.

Trust Divorce Matters with Your Denver Family Law Needs

If you enlist the services of a divorce attorney, he or she can help you in a variety of ways, like subpoenaing your spouse’s employment records, asset records and bank accounts. Based on these considerations, it is always wise to discuss your marital property division with an attorney.

When determining the division of marital assets during a divorce, you are going to need to think about the tax implications of the divided assets. Houses, businesses, investment accounts, maintenance ”“ there is a lot to think about and without assistance, the task can be highly stressful.

Make Sure Your Bases are Covered

The first step you are going to take is making a list of your marital assets. When doing this, you will want to pay extra attention to a few of them. Investments, for example, may have to be revalued ”“ sometimes many times ”“ during your divorce. You’ll want to consider built-in gains on these investments and how capital gains taxes might affect them. For your businesses, you will want to look not only at how much it is currently worth but also projected earnings.

Young children will also affect your taxes. You will have to decide who gets to claim the child as a dependent ”“ it cannot be both, at least not in the same year. Many couples will alternate years on claiming the dependent children, which comes with tax exemptions. Depending on who provides money for childcare, you might also qualify for dependent care tax credits.

Speak with a Family Law Attorney in Highlands Ranch Today

These are just a couple examples of the many considerations you will need to make when thinking about taxes. Speak with a divorce attorney to receive assistance in handling the complex issue of taxes after divorce. In cases with complicated tax issues, it may be necessary to speak with an attorney who specializes in taxes as well.

Divorce Matters ”“ Denver Family Law Attorneys  

When you and your spouse are working out the division of marital assets, you may come across the question of whether family trusts are subject to equitable division under Colorado law. The short answer? Like all things involving divorce and money, it’s complicated. Here is a basic overview of the situation.

Revocable vs. Irrevocable Trusts in Divorce

Irrevocable trusts are trusts that have terms that cannot be changed. Irrevocable means no take-backs ”“ even in a divorce, the original terms of the trust still stand. This can give a beneficiary of an irrevocable trust an enforceable right to the assets contained within the trust. If one divorcing party has an interest in an irrevocable trust, that interest could be considered marital property.

If the trust is revocable, this means that the “settlor” ”“ the person who created the trust ”“ can revoke the trust or beneficiary’s interest at any time. If a spouse is a beneficiary to a revocable trust, it is possible for the settlor to revoke that trust and thus cause the spouse to lose his or her interest. Therefore, an interest in a revocable trust may or may not be considered property subject to division in divorce.

As you can see, none of this is black and white! Furthermore, many trust interests are granted from parents to children. If the parent of a married spouse grants a future interest to only one spouse, it is entirely possible that the interest in the trust could be considered separate property and thus immune from equitable division. This can happen when a trust is created before marriage, or even if the trust was a gift to one of the spouses during marriage.

If you are unsure of how to go about protecting your assets or trusts in a Colorado divorce, speak to a family law attorney in Colorado. The legal team at Divorce Matters has the skills and resources to answer your questions and get you the help you need.

Determining what is considered marital property that is divisible in divorce can be confusing without the help of an attorney. One asset that is frequently overlooked by people considering divorce are employee stock options. Some companies will give employees stock options as part of a benefits package.

Most employee stock options are non-transferable, but they are still considered marital assets subject to equitable division in a divorce.

When is Stock Subject to Division After You Divorce?

According to In re: the Marriage of Balanson, 25 P.3d 28 (Colo. 2001), employee stock options are considered marital property only when the employee has an enforceable right to the options. This means that the options must be formally vested before the divorce is finalized.

For example, consider when unvested stock options are granted as part of a signing bonus, but the options are conditioned upon the passage of time or when future performance goals are met. Until the time period passes or employment condition is met, the unvested options are not an enforceable right, and they would likely not be divisible upon divorce. This is because the employee has no enforceable right to unvested stock options: if the employee quit before the time period was complete or did not meet the employment condition, the employee would lose the right to the unvested stock options.

Once the time period or employment condition has been met, the stock options would be considered vested and an enforceable interest. Then the options could be considered marital property, subject to division in divorce.

If one spouse has unvested stock options during divorce, and later they vest, they would be considered property for post-decree child support issues. If the employee exercises the stock options after divorce, income from the exercise of the options could affect post-decree child support.

Contact a Lakewood Family Law Attorney Today

As you can see, figuring out whether stock options are an enforceable right and whether they are marital property subject to division in divorce can be complicated. If you have questions about stock options as marital property, contact a Denver divorce attorney.