The law in Colorado requires courts to divide the marital estate “equitably.” Note this does not say “equally.” While Courts do usually try to divide the assets and debts equally, the law grants the courts discretion to award a more favorable allocation to one spouse if the other spouse wasted marital assets in anticipation of divorce. Put another way, if you know you are going to file for #divorce and you go to Blackhawk and blow $20,000, the Court can award more money to your ex to pay them back for what you spent.
Courts use an asset division spreadsheet like the one
in the link below to calculate an equal or equitable division of
assets. The Court enters the values of the tangible property, like houses
and cars, the value of the cash and investment accounts, and the value of
all marital debts to come up with a net value of the marital estate.
Here is an asset division spreadsheet for you to download for use in your case.
In this example, column A is where you enter the name of the asset; B is where you enter the exhibit number if you are using this at trial; C is for Fair Market Value of the Asset; D is for the loan on the asset (such as a mortgage on the house or the car loan which lowers the equitable value of that asset); E is the Net Equitable value of the asset; F is the non-marital value of the asset (the amount that a spouse may have come into the marriage with in that assets); G is the Net Marital value of the asset – this is the amount the Court must divide between spouses; and columns H and I are where you can play with the allocation of the marital value to figure out what would be an overall fair allocation. Column J is used to check yourself to ensure you allocated all the values. All line items in Column J should be zeroed if you’ve allocated everything.
You’ll see in the example that I put in phony debts, assets and
values to show you how this works. While each asset or debt is not
necessarily divided equally, the net division at the bottom of the spreadsheet
comes out to be a 50/50 allocation. In the example, I used the house to
equalize the otherwise uneven division of assets. There are countless
reasons that parties do not divide every single asset 50/50. One reason
is that it is a pain to do so, and it is easier to just allocate entire assets
to one or the other spouse and equalize with the largest asset. Another
reason may be that one spouse has an emotional tie to something, such as a
collectible. In this case, Spouse 1 got the entire gun collection.
Collections require valuing several pieces and often one spouse may have an
affinity for the collection more than the other.
You will also notice a non-marital value entered for each
retirement fund. This is because each spouse came into the marriage with
the fund already in existence. Only the appreciated value is marital
property. I also put in the MISC section that Spouse 1 got an inheritance.
As long as inherited money is kept separately titled it retains its non-marital
classification. So this entire asset is not subject to division.
TIP:
The burden to prove something is separate property is on the party claiming
this so if you it’s you, make sure you produce statements showing the value as
of the date of marriage to prove the non-marital value is what you say it is.
There are many ways these assets could have been divided, so
take the example as just one of countless possibilities.
Use this spreadsheet to enter your assets and debts to
figure out ways the court may allocate your property, and to show the court why
what you’re asking for is fair and equitable.
One thing you should consider doing is divide the retirement
assets equally, and do not try to equalize these with other assets because they
typically have different tax consequences (many are deferred-tax
dollars). Also, if you are listing Roth and Traditional IRAs, you might
do this as well as those have different tax consequences. You can also
reduce the value of the deferred tax assets to arrive at an after-tax value.
Pick up a copy of Family Law Boot Camp for more detail on what the Court considers in dividing assets and debts, and how to best argue for the the allocation you want.
