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Denver Family Law Blog

The significance of "assets" in divorce

Divorce is always more complicated than couples expect, especially when you start hearing legal terms such as property division, equitable distribution or parental rights. However, there is one legal term that most couples do not deeply analyze – the word “asset.”

In most situations, asset means property owned by a person or company and is associated with having value or use. However, in a divorce context, asset takes on a more significant meaning because everything a couple “owns” may not be considered an asset in the eyes of the court, and even if it is, it may not be considered a marital asset and subject to division.

Could Your Prenup Be Invalid?

You had the idea for the prenuptial agreement long before you and your spouse got married. You knew what you wanted: financial protection. You had a lot more wealth than your significant other. While you were dating, you didn't worry about it that much. Getting married was a serious step forward, though, and you knew you needed to protect those assets.

So, you got the prenup. You have assumed ever since that it would protect you during a divorce. It gave you peace of mind.

Putting a price on business during a divorce

Entrepreneurs are under a massive amount of stress. Between managing employees, balancing accounts and providing services, business owners have to maintain everything to keep their company from sinking under the competition.

It’s even more stressful under the weight of a pending divorce.

What is marital or separate property in a Colorado divorce?

One of the first steps you need to take when trying to figure out how the courts will split up your assets in a Colorado divorce is to determine which assets are marital property and which ones are separate property. Your marital assets,  which may include your family home, are usually subject to division under Colorado's family law statutes, while in most cases your separate property will remain yours even after the divorce is over.

Figuring out what is your separate property and which assets are marital propertycan sometimes be confusing.

Divorce and property division: How to stay financially secure

Once you decide to divorce, matters of property and debt division will take over your life. It's not the only thing to think about during the divorce process, but it will definitely require quite a bit of your attention.

Your goal is to make decisions that allow you to remain financially secure during and after your divorce. While no two people are the same, there are some steps every divorcing individual can take to lessen the impact on their finances.

  • Create a post-divorce budget: With your financial situation changing, a post-divorce budget is a must. You should have a clear idea of your income and monthly expenses, as this will allow you to make the necessary changes. Also, consider anything you may need to purchase after your divorce, such as a home, car and/or medical insurance.
  • Create a property and debt division checklist: It's critical to have a clear idea of the property that's subject to division. The same holds true of debt. For example, you may have both separate and marital property and debt. Defining the two will help prevent errors that cost you money.
  • Close joint accounts and open individual accounts: Leaving joint accounts open is inviting trouble. This allows your soon-to-be ex-spouse to make purchases that both of you could be responsible for. Once the wheels are in the motion, close all joint accounts and open individual ones that you can personally use.
  • Update documents: There are many financial documents that require your attention after divorce. These include but are not limited to titles on real estate and motor vehicles, estate planning documents, security passwords, and beneficiaries on life insurance and retirement accounts.

Determining the real value of art in a divorce

For a decade, you have collected art. Your collection has grown and the value of each piece has also gone up. You didn't necessarily do it as an investment -- you did it because you love it -- but you feel like it was a wise financial move, as well. You spent probably $5 million on the collection, but you now value it at nearly $20 million.

Here's the problem: Your spouse just filed for divorce. And the two of you don't agree on the value of the artwork at all. How are you supposed to split it up?

Don't allow outside influences to make your divorce stressful

Going through a divorce isn't a journey that has to be traumatic for everyone involved. With some effort from both adults, it is possible for the process to be handled in a manner that doesn't involve tearing important relationships to shreds.

The work that you put into having an amicable divorce is beneficial to everyone, including family members close to you and your children. Not only can this help to keep the stress down now, it can also be beneficial for child custody situations because it sets the tone for the parenting relationship.

Placing a fair value on non-financial assets before your divorce

During your marriage, you and your spouse will generate income and acquire assets, as well as potentially acquiring debt. You each have a share in those assets and debts, regardless of whose income purchases what or whose name is on which account. If you choose to divorce, the courts in Colorado will have to divide both your assets and your debts unless you have a prenuptial agreement in place.

Certain possessions are much easier to split than others, as they have a clear and provable value. Other assets can be harder to place a fair value on, but it is of absolute importance that you take the time and invest the effort into determining the fair market value for non-financial assets, which can often represent a substantial amount of the total overall value of your marital estate.

Can you contest that prenup?

You ask for a divorce, and your spouse reminds you of the prenuptial agreement that you have in place. It severely limits your ability to seek what you consider a fair property division solution. Your spouse tells you that there is nothing you can do and that, if you want to get divorced, you have to abide by the prenup.

Is that true? It may be. A prenuptial agreement is a legally binding contract. It does carry a lot of weight.

Myths about uncontested divorce in Colorado

There are so many horror stories about modern divorce that many couples who want to end their marriage are eager to avoid what they perceive as a dangerous or volatile process. In their desire to avoid embarrassment or conflict, many couples rush into processes like mediation or decide to file an uncontested divorce without really considering all of their options.

Court-based divorces have become the standard for a number of reasons, including the help of a neutral court system to resolve issues and more transparency with the financial outcome. Uncontested divorce has a number of shortfalls. The most common myths about uncontested divorce can make it seem a lot more attractive than it really is, particularly in high-asset divorce scenarios.

McGuane & Hogan, P.C.
3773 Cherry Creek North Drive Suite 950
Denver, CO 80209

Toll Free: 800-574-3771
Phone: 303-691-9600
Fax: 303-691-9900
Denver Family Law Office

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215 South Monarch Street
Aspen, CO 81611

Toll Free: 800-574-3771
Phone: 970-920-7878
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