How to Adjust Colorado Alimony Obligations

If there is one constant in life, it is that life always changes. Layoffs, retirement, career changes, remarriage, changes with an aging parent, or illness – all of these can have an impact on how you live your life and how you manage your financial obligations. For divorced couples and parents, these changes are further complicated because of maintenance or spousal support obligations.

We frequently work with people who need to reduce their maintenance payments. We also work with people who need to seek an increase in the maintenance they receive. The need to change these payments can vary, but Colorado alimony modifications are as much a fact of life as constant change.

Maintenance Defined

In Colorado, alimony or maintenance refers to spousal support  and is usually seen in cases that involve a long-term marriage, or a case where one spouse has been able to make significantly more than the other – as in the case of a stay-at-home parent.

Whether or not one is entitled to maintenance initially is governed under §14-10-114 of the Colorado Revised Statutes. An initial award of maintenance is not always required in a divorce, and a determination of entitlement (amount and duration) is case specific. When maintenance is awarded or agreed upon as part of a divorce, all terms regarding the amount and duration are specified.

There is also the question of taxation regarding paying or receiving alimony. To make it simple: if you are paying alimony, your payments are NOT tax deductible, and if you are receiving alimony, your payments will NOT be taxed as income. Alimony is different than child support: child support IS considered income, which will reduce alimony payments for the receiving spouse.

How to Determine the Amount You Will Receive

Many factors come into play when determining if and how much alimony you may pay or receive. Financial situation and earning capacity, duration of marriage, and physical condition (age, illness, etc.) all influence alimony payments. Not every divorcee qualifies for Colorado alimony, which can be temporary or “permanent” depending on the court’s opinion of both divorcees’ needs. Divorce Matters® offers a free calculator to give you a better idea of potential payment amounts or earnings.

Substantial and Continuing Change

According to §14-10-122 of the Colorado Revised Statutes (C.R.S.), maintenance is modifiable only if there has been a substantial and continuing change. However, you should be aware that if you and your spouse, or former spouse, entered into an agreement regarding the payment of maintenance, whether or maintenance is modifiable will be determined solely on the provisions of that agreement, regardless of whether or not there has been a substantial and continuing change.

So, for example, if your agreement specifically states that “maintenance is contractual and non-modifiable” the Court will not have jurisdiction to modify maintenance even if something has changed in your life. Even if you are not bound by an agreement, the courts may not consider the change in your life to be a “continuing” change and may decline to modify maintenance. From the court’s perspective, some life obstacles are bumps in the road that are only temporary, such as lack of employment, as your finances will (hopefully) revert back to levels similar to when you negotiated your maintenance agreement.

For the court to approve a maintenance modification, you must be able to prove that the change to your financial situation is not only significant but ongoing. While temporary unemployment is not considered ongoing, income loss from a disability often is. If done properly, an out-of-court settlement involving alimony can ensure that the terms of the agreement remain the same, preventing modifications even if circumstances change or either party remarries.

Taking the First Steps

The first step is to determine whether your Colorado alimony or maintenance can be modified. In some divorces, the maintenance obligation cannot be modified. If the maintenance obligation can be changed, you need to determine whether there has been a substantial change that would support a modification.

So, what should you do if your finances have changed substantially and you can no longer meet your maintenance responsibilities?

  • Collect the right information. When you apply for modification, you will need to complete a current Sworn Financial Statement, just as you did during the divorce process. Some information that will be helpful to you while completing this statement include:
    • Tax returns from the past three years
    • W-2 or 1099s from last year
    • Current paystub
  • Refer back to your original divorce agreements. As mentioned earlier, in some divorces, the couple agrees during the divorce process that all maintenance obligations are unchangeable. One of your very first steps should be to understand what you originally agreed to. You should speak to an attorney for legal advice.
  • If you have already missed payments, pay back as much as possible as soon as possible, even if it is not the full amount. Try to demonstrate to the courts that you are making an effort to catch up on your payments, even while seeking a better maintenance agreement. If you make no payments, you may be considered uncooperative, which may reflect poorly on you during the modification process.
  • Seek legal advice. Some maintenance agreements may not be modified, but in many cases – if you can prove that your financial situation has drastically changed – it may be feasible. An attorney will be able to clarify your options. Also, because maintenance is not decided based on a formula, legal representation can help you maneuver the sticky, subjective areas in the law. The most important thing you can do is to act immediately and not wait. Modifications can only be applied back to the date that you file with the court requesting a modification of maintenance.  Courts may also look at the length of time that you waited to address the issue as part of determining whether or not the change is substantial. The longer you wait, the less effective your argument becomes that your life change was substantial.

Conclusion

Changes are going to happen in life, and when those changes affect whether or not you can continue to make your maintenance support payments, it is vital to understand what your rights and responsibilities are and to clarify all options. You will only have an opportunity at successfully modifying maintenance if you can prove that your situation has changed drastically and that the change is ongoing – such as being laid off because of an injury or illness or retirement. You must know exactly where you stand.

Colorado alimony, or spousal maintenance, is designed to provide financial support after a divorce, but it is not necessarily set in stone. Modifications are possible under the right circumstances, but they require strong legal backing and solid proof of substantial and continuing financial changes that could negatively affect you – especially if you are the one paying. If you are experiencing financial hardship, facing unexpected life changes, or simply need clarity on your maintenance obligations, taking proactive steps is crucial.

Understanding your legal options and obligations can make all the difference when it comes to modifying alimony. Whether you are seeking to reduce your payments due to job loss or requesting an increase because of unforeseen financial burdens, it is essential to act promptly and with the right representation. Delaying action may weaken your case, as courts consider both the nature of the change and how long you have waited to address it.

At Divorce Matters®, we specialize in helping individuals navigate the complexities of Colorado alimony modifications. Our experienced attorneys are ready to evaluate your situation, guide you through the legal process, and advocate for a fair outcome. We treat every client with compassion and aim to get you the best results possible. Don’t let financial uncertainty overwhelm you – contact Divorce Matters® today to discuss your case and find out how we can help you move forward with confidence. Your financial stability and future are too important to leave to chance.

How to Deal with Exes and Parenting Issues Post-Divorce

Our Twitter feed has been full of great tips for dealing with ex-spouses this week! Whether emotionally or legally, dealing with your ex after your divorce can be a bumpy””but often necessary””ride. The most common reason an ex stays in your life after the relationship ends is shared custody of the kids. If you have children together, your life will likely never be completely free of a former spouse””even after the kids enter adulthood.

Maintaining a civil relationship with an ex””in most cases, except instances of abuse or violence””can benefit everyone involved, particularly children. It may not always be easy, but here are a few tips for dealing with an ex in ways that everyone can live with:

  • Do not badmouth your ex in front of your kids: Face it””everyone is human. And all of us are tempted at times to express anger, frustration, annoyance, or sadness when the kids are going to visit the ex. For your children’s sake””and for your own mental health””please refrain. Seriously. It will not help you, and it certainly is not good for the children to feel stuck in the middle. In fact, try and go the opposite direction. Be generous. Let your children know your ex””their mother or father””loves them as much as you do, even if””inside your head””you have negative thoughts. Try to remember that the most important people in this relationship are your children. They will watch your actions as well as listen to your words. And it is not just the kids who will benefit. Avoiding arguments, harsh words, and negative emotions will reduce your own stress. Find someone to confide in””a good friend, family member, or therapist””and save your negative thoughts for a better setting and recipient.
  • Adjust to changes and be understanding: Your ex is dealing with his or her life too. There may be times when he or she is late for the children’s drop-off and pick-up. Or maybe there is a work conflict or an after-school activity to navigate around. Try to be flexible and understanding. Life happens, so be open to changes and adjust as best you can. If unplanned changes to parenting schedules and visits seem to be happening often, it might be time to review arrangements. If your ex is late to a few drop-offs, the world will not end; however, if it is a precursor to more serious behaviors or habits, consider whether there will be long-term effects. Again, the most important person here is your child. Will this behavior eventually impact your child negatively? If not, do your best to be flexible, even when it is hard.
  • Find neutral help: If you are finding it beyond difficult to maintain civility””and believe us, it happens””find someone who can act as a go-between or mediator for you. This can be a friend or family member, but it should be someone who both of you like and respect””and importantly, someone who can be neutral. This neutral party could then attend drop-offs and pick-ups or any additional meetings between the two of you regarding your child’s upbringing. Often, involving someone who is not directly affected can defuse a tense situation and keep everyone calm.
  • Keep the lines of communication open: Whether your child is having a hard time adjusting to the divorce, is involved in sports that bring frequent schedule changes, or even is having problems in school””you and your ex will need to be able to communicate. The first step is to find the communication style that works for both of you. It could be that email is easiest because face-to-face dredges up too many emotions. It could be that you need a neutral third party we discussed above. Either is fine. Just pick what works for you and the kids and make sure to keep talking. If you see a potential problem at your home with your child, make sure you let the other parent know. If your child is interested in joining a sport, and the games will require out-of-state travel, talk to each other. Communication in any fashion that reduces stress, prevents misunderstanding and ensures both parents know all they need to know to effectively address a child’s needs is the ultimate goal.

Conclusion

Your marriage may have ended, but you will always have your kids in common””and that means a little extra challenge when you are adjusting to life as ex-partners. Whether it is scheduling joint attendance at events, juggling the challenges of daily scheduling or child-rearing challenges, you and your ex will want to develop new””and perhaps unexpected””coping and communication skills to make sure children grow up with as much involvement and interaction from both parents as possible, despite the divorce.

Why You Should Consider a Prenup

Prenuptial agreements are, quite possibly, the most misunderstood of family law issues. Some think of them as something only for the rich and famous with famously large assets to protect. Others believe a prenuptial agreement highlights trust issues and signals the demise of a relationship before it is even been legally cemented.

In reality, prenuptial agreements are often drafted between the non-famous and not famously rich. In fact, they are typically a sound idea for anyone with even small but independently obtained assets to consider. And with divorce rates approaching 50% in our country, prenuptial agreements may be something you and your spouse-to-be might seriously consider.

Potential inheritance, joint debt, retirement funds, all of these are taken into account when you develop a prenuptial agreement. It is not just a list of this is mine and that is yours but rather a cohesive plan of how you will handle a divorce, should it happen.

Here is a quick list of questions you might ask yourself to see whether or not you might need a prenuptial agreement:

  • Are you an owner or partial owner of a business?
  • Do you have separate assets?
  • Do you have separate debt?
  • Do you have kids, either together or from a previous relationship?
  • Are you in line to receive an inheritance?
  • Do you have assets you would want to protect, such as family heirlooms?
  • Do you anticipate needing to financially support elderly relatives in the future?
  • Does one or the other of you own a house or property?
  • Do you have separate retirement funds?
  • Are you a same-sex couple in a state that does not recognize gay marriage?
  • Are you concerned about your different money-spending or money-saving habits?

Drafting a prenuptial agreement does not mean you are planning for a divorce, as the stigma indicates. Instead, it is a method of protecting yourself just in case the unthinkable happens. With our clients, we liken it to wearing a helmet when you ride your bike. You are not planning to get into an accident, but sometimes life happens, and you want to be protected.

So what are you being protected from?

In Colorado, a divorcing couple’s assets and debts may be considered joint property. The courts will decide an equitable division of both. With a prenuptial agreement, you can decide ahead of time which pre-marriage assets and debts will be considered as individual rather than joint. It may prevent you from having to pay your spouse’s student loans for the next 20 years. Or it may protect your business assets from being divided between the two of you.

Conclusion

Prenuptial agreements are not for everyone. But if you or your partner believe one is in your best interests, based on individually held assets or other factors, speaking with a lawyer about the pros and cons of such a legal document is highly beneficial.

Prenuptial agreements are not an indication that you do not trust someone, and they are not an admission of defeat before the marriage has even begun. Instead, they are an open acknowledgment that life happens, and sometimes things do not go as planned.

Divorce, no matter the circumstances leading up to it, is an emotionally stressful time. A thoughtful, well-crafted prenuptial agreement has the power to protect both of you during what can be a potentially contentious situation.

Divorce Matters Overturns Wrongful Adoption, Reunites Father with Son

Recently, we handled a case that really reminded us of why our work is so important.

In this case, the mother and step-father filed for a step-parent adoption without the biological father’s consent. Along with their petition for step-parent adoption the mother and step-father filed an affidavit alleging the biological father had abandoned his son and failed to pay reasonable child support for more than a year.

A hearing was held to determine whether the father had abandoned his son and failed to pay reasonable child support and whether to grant the step-parent adoption. The father did not attend the hearing. At the hearing, the mother and step-father failed to inform the court that the father had recently filed and won, two months earlier, a hearing to enforce his parenting time and that he was exercising his parenting time with his son at the time of the hearing. They also failed to inform the court the father had repeatedly fought to enforce his parenting time for years. The court relied on the fraudulent affidavit, terminated the father’s parental rights, and granted the step-parent adoption. Thereafter, the father was not allowed to see his son.

Father, without an attorney, filed a motion to set aside the adoption based on fraud. The trial court refused to hold a hearing regarding father’s allegations that the step-parent adoption was obtained through fraud.

Divorce Matters began representing Father to reinstate his parental rights and to vacate the step-parent adoption.

First, Divorce Matters appealed to the Colorado Court of Appeals the Judge’s decision in which he refused to hold a hearing regarding father’s allegations of fraud. Divorce Matters got the Court of Appeals to reverse the Judge’s decision and the Court of Appeals sent the case back to the trial court to determine whether the adoption was obtained through fraud.

Second, Divorce Matters went to hearing and argued the step-parent adoption was obtained through fraud. The trial court agreed. The trial court found the father had not abandoned his son and that the mother and step-father fraudulently misrepresented to the court that the father had abandoned his son. The court vacated the step-parent adoption and reinstated the father’s parenting time effective immediately. After not seeing his son for almost two years, the father gets to see his son again.

This is the type of case””and outcome””we always hope to secure for our clients and remind us why we work so hard on our clients’ behalf every day.

Dealing with the Family Business During Divorce

Recently, I spent some time talking to a couple currently in the process of having their family business valued. This couple, together for 15 years, is divorcing””having worked together at the business for much of their time together. Both spouses want their fair share of the business’ value.

Now they face having to appraise the business and figure out what’s next””from keeping the business with a sole owner to selling it and allocating sale profits among involved parties. What’s more, both have a vested interest in keeping the business running and maintaining profitability during the divorce process, until sound decisions about the future are secured.

This story is not uncommon. Divorce can be damaging to small business owners, particularly if both parties involved in the divorce were also highly ranked in their business. How do you decide what’s fair, when both of you have been heavily involved in this family venture?

Here are some tips on how to keep your business going, even after you’ve divorced:

Make decisions

Consider every level of potential effect from the divorce””from potential lost revenue to communicating with employees. Some potential questions to ask in regards to how you will handle the business include:

  • Are you planning to sell or keep the business?
  • Will you both continue to work there, or will one of you buy out the other?
  • Can you afford to buy out your spouse, if that is your interest?
  • How will you manage and run the business during the divorce process?

Make these decisions early in the divorce proceedings. In addition to getting the buy-out-or-sell decision out of the way, it may also provide you some piece of mind and security during your divorce.

Get a business valuation

Regardless of which above decision you make, you will need to know your business’ overall value. Hire a neutral third party””an accountant, business appraiser, or financial analyst who specializes in business valuation””to walk you through the steps. A business valuation takes into account all assets of the business, including the “intangibles.” Often, both spouses in this situation will hire their own valuation expert for comparison purposes.

In today’s economically challenged world, property values and future earning potential may both be considerably lower than years past, which is one reason why it is particularly important to have an accurate business valuation completed. The business valuation will take into account all aspects of the company””assets, liabilities, earning potential””to anticipate how lucrative the business’ future looks. To help the process along, have available tax returns or loan applications that you have filed as a business.

Conclusion

In the state of Colorado, a jointly owned business is considered marital property and will be split “equitably.” If the business is owned by one or the other it may not be considered joint or marital property, but it still may be affected if both of you played a major role in running the company.

The court will take into account the valuation of the business and the roles that each of you played in running and maintaining the business to make its decision on who will get what in the divorce. The court may order a buy-out from one of you to the other. If the two of you can’t come to an agreement, the court may decide to order that the business be sold. The court may also be open to the two of you continuing to work together if your divorce is amicable.

Divorcing in the Golden Years

Improved medical availability and technology has led to an increased life expectancy in the United States. Americans are living longer, healthier lives than they ever have in any time in our history. And with those longer lifetimes come higher aspirations for life in the Golden Years.

Many Baby Boomers want more from life than just the status quo””and it may be leading more couples to divorce court than ever before. Among the over-60 set, the incidence of divorce has increased sharply””by 50% in just the past 10 years.

Because these couples have had decades to build financial and emotional lives together””children, grandchildren, retirement funds, real estate assets, and shared debt””divorce in the golden years can be far more complicated.

The key factors of concern for divorcing couples over age 60 include:

  • Dependent Incomes: Many couples divorcing after 60 face shared expenses that depend primarily on one or the other’s current or past income. It can be particularly challenging to divide up assets equitably or calculate maintenance when one of you was a stay-at-home parent for decades””supporting the asset accumulation of the bread-winning spouse””while one of you earned the bulk of the income. It can also be more expensive to live as a single person, so you may be facing lifestyle changes with divorce.
  • Healthcare: Along with the dependent income, many couples divorcing later in life share healthcare coverage and costs. If you are retired or have never worked outside of the home, this can present unique challenges that the divorce process and division of assets and maintenance fees must address. At the age of 60, it is still a few years before you will be eligible for Medicare on your own. You’ll need to consider your own medical coverage during the divorce process.
  • Retirement Funds and Debt: Getting divorced does not mean that you have no more rights to your (soon to be ex-) spouse’s retirement or vice versa. If you have been married for longer than 10 years, you are entitled to a portion of each other’s social security benefits. This remains true even if one or the other of you remarry. And social security is just one piece of the retirement puzzle. If you and your spouse shared retirement funds throughout your relationship, dividing those funds can be messy, as can dividing up debts that have been shared for decades. If you have significant retirement assets, including pension plans, 401ks, Social Security and more, a financial planner who specializes in divorce and the division of assets is essential.
  • Emotional Stress: Then, there is the emotional element. Divorce is nearly universally difficult and painful, but a golden years divorce may bring out other emotions. These divorces can be traumatic to grown children, adding a twist to the impact of divorce on children. Divorcing couples over 60 often feel ashamed or embarrassed. Unlike 30- and 40-somethings who are divorcing, you may find yourself without a peer group. Worse, lifelong friendships can be at risk, as couples who have grown with you through the years struggle to deal with the “division of friendship.” Divorce at this stage of life takes different emotional tolls””and resources for you may not be as readily apparent. It’s wise to find a confidant””a therapist, support group, or other relationship””to help you through the emotional upheaval.

Conclusion

Divorce is different in the Golden Years. Impending retirements, medical needs and benefits, substantially larger assets, and emotional challenges less “researched” by experts in the field all bring a unique set of challenges. Financial planners, therapists, accountants, and a good attorney can be invaluable to you as you navigate the additional complexities of an already trying time in what you might have envisioned were the “Golden Years.”

When Divorce Means Selling Your House

Every once in a while, I hear someone comment that the Denver housing market isn’t suffering as much as other states.

That may very well be, but with single-family home sales dropping an average of 19.6% since last year and median home sales prices down 3.4%, I have also seen how hard it can be for divorcing couples to sell their home for their asking amount.

For that matter, it can be hard for Denver couples to sell their home in a timely manner at all.

Selling a house can take a long time””sometimes months or even more than a year. As of May 2011, the average length of time that a single-family home stayed on the market before being sold was about three and a half months””a month and a half longer than this time last year. That number may also rise depending on the price of your house. The more expensive your home’s listing price, the longer it may take to sell. A house that you owned with your spouse can rapidly become an albatross around your neck if you are still paying mortgage on a relationship that has ended.

So what do you do if you want to move forward with your divorce sooner rather than later, but your house isn’t selling immediately?

  1. Transfer mortgage over to one person’s name ”“ If one of you can afford to pay for the mortgage, you can refinance the house into that person’s name. Pro: Reduces some urgency, giving you more time to sell the house. Con: Requires legal and financial paperwork as well as negotiation for a fair and equitable buy-out.
  2. Joint mortgage responsibility ”“ During the process of your divorce, you can determine a fair division of the mortgage so that both parties remain responsible for the house payments. Pros: The entire mortgage payment will not fall solely onto one person. Con: Your finances and obligations will be tied to your ex until the house sells””potentially long after the divorce has been finalized.
  3. Consider short sale ”“ A short sale is essentially selling your house very quickly for less than the mortgage amount. It requires an agreement with your lender and is frequently easier to accomplish if the couple has good credit. Pro: Enables you to break ties with your (soon-to-be-former) spouse in a quick manner, without defaulting on your loan. Con: House will sell faster, but neither of you will make money from the sale. Research has also proven that short sales may be just as damaging to your credit as a foreclosure. Consider this option carefully.

Conclusion

I know that a house””or any jointly owned land or property””can be one of the biggest challenges in any divorce, outside of children. While Colorado’s housing market has fared better than some, it is still slow, and selling your house can be both an expensive and drawn-out process.

While it may seem overwhelming or painful to deal with right now””as you are eager to start the next phase of your life””the decisions you make regarding your joint property now will stay with you for the rest of your life.

Each individual and couple has different needs and obstacles to face when selling your house, so there isn’t necessarily a right or wrong path to choose. Hopefully the information I have provided has left you with the comfort that it’s not hopeless, and there are options available to you.

Protecting Your Assets During Divorce: What Every Coloradoan Needs to Know

During your marriage, you were collaboratively building your nest egg for the future. But in a divorce, what happens to your retirement funds, your home, and your debts?

Dividing assets is one of the primary stressors in any divorce. If you’re beginning the divorce process, what do you need to know to protect yourself and secure an equitable share of assets?

Below, we’ve answered four of the most commonly asked questions about property and asset division.

How is “equitable” division of property decided?

In Colorado, “marital property” must be divided equitably, but that doesn’t always mean your assets will be divided equally. Generally, marital property is any property that is acquired during the marriage, unless the property is acquired by gift or inheritance.

The division of marital property is generally a two-step process. First, it must be determined what constitutes marital property. Once that’s defined and valued, that marital property must be divided equitably. To determine what is equitable, the Court will look at all relevant factors including:

  • Contributions of each spouse to that joint property;
  • Economic circumstances of each spouse;
  • Value of property set apart to each spouse; and
  • Any increase, decrease, or depletion in the value of any separate property during the marriage.

Your lawyer and an accountant can help you answer some of these questions proactively during your divorce proceedings, providing comprehensive checklists and worksheets to evaluate asset values and contributions based on economic circumstances and direct inputs.

What happens to my 401K or employer-sponsored retirement funds?

If you and your spouse have employer sponsored retirement accounts such as a 401K or SEP, these assets may be considered marital property, and your spouse may be entitled to a portion of those retirement funds.

The division of an employer-sponsored retirement account is complicated because of rules and requirements placed on employers for management of those funds. To divide assets in an employer-sponsored retirement fund, a Qualified Domestic Relations Order is usually required by the company to effectuate a transfer of those funds, in part to avoid adverse tax consequences.

Your 401K distribution through the divorce process is not subject to your 401K provider’s early withdrawal fee, if the withdrawal is managed and documented correctly. To avoid problems down the road, make sure that the documents required by your company for division of these assets are approved by the company before they are entered as Court Orders.

What happens to our house?

If you and your spouse own a home together, your house is considered marital property and its value””the proceeds secured from selling it””are divided. But remember, so is the debt associated with the home. Particularly in today’s housing market where sales are sluggish and values are dropping, your house as property””and its ultimate division””will be subject to a variety of factors, including joint mortgage ownership, difficulty in selling, one party not wanting to sell, the presence of children, and conflict over what should be done with the house during and after the divorce.

How are debts split?

Like your assets, debts incurred during the marriage are considered marital property. The first step you should take is to find out exactly what your debts are. You may know exactly how much you owe in debt, but if there is any possibility your spouse has spent money you are unaware of, your first course of action should be to get a credit report. This will identify any and all debt taken out in your name.

Once you are aware of what debt you carry under your name, the next step is to stop taking out additional debt. Discuss with your spouse the best course of action for stopping any spending on these accounts. As mentioned above, debts incurred during the marriage are marital property, and as such, will be split equitably. Who ultimately becomes responsible for which debt will be considered when the court decides an equitable allocation of your assets.

Conclusion

The division of marital property can be complex””particularly if you have a house, retirement funds, or debt. Speaking with a lawyer can help you secure a fair division of assets and liabilities. In some cases, you may also want to consult with additional experts””including accountants and financial advisors who specialize in divorce issues””to properly advise on issues related to your joint assets.