Because Colorado is an equitable distribution state when it comes to divorce, marital property is divided equitably ”“ not necessarily equally, but equitably ”“ in divorce. However, marital property does not cover all assets owned by a couple during divorce. Property that is separate is generally awarded to the party that owns it. However, in order to prove that property ”“ whether it’s a vehicle, a business or just personal money ”“ is separate, you will need documentation. This is where asset tracing comes into play.
Under Colorado’s Uniform Dissolution of Marriage Act, all property acquired by either spouse during a marriage is divisible. Asset tracing is a way that you can prove that property obtained after marriage is not actually marital property, but your own separate property.
How Asset Tracing Works
The first step of asset tracing is for the party claiming that certain property is separate property to demonstrate evidence of the claim. Let’s use gifts or inheritance as an example. By gathering together documents like gift tax returns, inheritance or estate tax returns or other documents that show ownership prior to a marriage, the party can usually easily prove that the property is separate.
Once it has been demonstrated that the property was obtained prior to marriage, it is then necessary for the party to prove that the assets were not transmuted during the marriage. Transmutation is a word describing assets that have changed from separate to marital. Assets that are commingled, such as an inheritance used to fund the marital home, can be considered transmuted.
Contact an Experienced Colorado Divorce Attorney
Asset tracing is a complicated and convoluted process that is made more difficult the longer a marriage lasts and the higher the total assets held by the couple. For more information on asset tracing contact our team and we can help today.
Our Denver divorce attorneys can connect you to the resources you need to ensure that your property is divided equitably.