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How Property And Debts Are Divided During Divorce

Divorce is rarely an easy undertaking, but the entire process can be less stressful if each spouse knows what to expect. Divorce proceedings in Colorado involve equitably dividing assets and liabilities. However, “equitable” does not mean an even distribution, and it may not even mean a fair distribution in some cases. The court determines which party should get which assets and debts in a way that complies with Colorado law and treats each spouse impartially. Understanding how property and debts are divided during divorce can be beneficial as each spouse works toward finalizing the divorce. For help understanding and navigating the intricacies of property and debt division during a divorce, consider contacting and experienced attorney at the Colorado Divorce Law Group by calling (720) 593-6442 to schedule your confidential consultation.

Taking Inventory of Assets and Debt

At the outset of most divorces, the spouses must provide a list of all their assets and liabilities. This list will serve as the starting point for dividing both categories.


Be thorough when listing assets. Failing to disclose an asset can lead to significant penalties from the court. Examples of common assets include:

  • Any real property, such as the marital home or any interest in investment properties
  • Vehicles
  • Equipment
  • Furniture
  • Financial assets, such as investment accounts and bank accounts
  • Retirement or pension accounts
  • Collectibles and other valuables
  • Business assets, such as membership shares
  • Life insurance


Liabilities must also be listed accurately and completely. Examples of common liabilities include:

  • Mortgage obligations
  • Personal loans
  • Vehicle loans
  • Credit card obligations
  • Medical bills

Inventory vs. Value

When listing the inventory, many spouses will estimate the value of each asset. However, while estimates can be a good starting point, getting real numbers and valuations will be much more beneficial for this process. Even if a spouse is unsure of how an asset should be valued, he or she should still list it. If the parties cannot agree on a value, they can hire an appraiser to value the asset.

Classifying Property and Debts

Once the parties have listed their assets and liabilities, the next step is to classify each property or debt obligation as marital or separate. This step is potentially the most critical in understanding how property and debts are divided during a divorce. Only marital property and debts must go through the equitable division process in Colorado. Separate property stays in the possession of the spouse who owns it. One spouse’s debt will also not affect the other spouse if it is not considered marital property.

Martial Property

The default treatment for property is to consider it marital property. Even the owner listed on a title or deed often does not matter when it comes to classifying marital property in Colorado. In many circumstances, titles that each spouse holds in his or her name alone can still be considered marital property. Therefore, a divorcing couple can reasonably expect that most property and debts may be considered marital property. However, if one spouse can prove that one or more items in the inventory should be separate, that property may be treated differently during the divorce.

Separate Property

The Colorado Supreme Court has explained that there are only four exceptions to the general rule classifying property as marital by default. These exceptions include when:

  • One spouse owned the property before the marriage
  • One spouse received the property during the marriage by gift or inheritance, and that gift or inheritance was meant to only provide assets or funds to one spouse rather than the couple together
  • The couple agrees that the property is separate property
  • Property is acquired by one spouse after legal separation

Separate property is not completely ignored in the property division process. Any appreciation in value that the separate property had during the marriage must be considered marital property. Further, the overall value of the separate property may also be considered when the court divides other assets.

Converting Separate Property to Marital Property

If the property cannot be traced back to one spouse, it is often classified as marital property. The most common example is money that may initially have been separate but is comingled with marital funds in a bank account or investment account. In addition, separate property can sometimes also become marital property based on the actions of the spouse. If one spouse receives money as an inheritance or gift and uses those funds to purchase something that contributes to the marriage, such as household goods, real property, or a shared vehicle, then the spouse has converted—by those voluntary actions—what would otherwise have been separate property into marital property.

The concept of converting separate property into marital property can be a critical factor in understanding how property and debts are divided during divorce. If you are concerned about protecting your interests in property acquired during your marriage, a family law attorney from the Colorado Divorce Law Group may be able to help.

Child Support and Marital Home

Child custody and child support obligations are often considered as part of the equitable division process. For instance, in many cases, the court will consign ownership of the marital home to the parent who will have primary physical custody of any children from the marriage. The other spouse often receives other property that is valued similarly to the marital home.

Equitable Division: How Property and Debts Are Divided During Divorce

Sometimes, couples agree on how assets and debts should be treated in a divorce. Absent such a voluntary agreement, however, a judge will decide the best way to equitably divide assets and debts. As part of this process, the judge will consider many factors about the assets and debts and the relationship as a whole. According to the Colorado Revised Statutes, judges must review “all relevant factors,” which often include:

  • The value of the property or debt
  • The contribution of each spouse to the acquisition of the martial property
  • The economic circumstances of each spouse
  • Any increase or decrease in the value of separate property during the marriage, including depleting the value of a property for marital purposes

Contact an Experienced Family Lawyer for Help Today

Many people who find themselves facing the end of a marriage have questions about how property and debts are divided during divorce. Listing all assets and debts is a starting point. For more information about how the property rules may apply to your unique case, consider contacting an experienced family attorney from the Colorado Divorce Law Group by calling (720) 593-6442 to schedule a consultation today.