Denver Property Division Lawyer

How Colorado Law Treats Marital Property During a Divorce

When it comes to asset division during divorce, there are two types of jurisdictions: community property states and equitable distribution states. Several states in the West are community property states that require 50/50 division of marital property. In contrast, Colorado is an equitable distribution state. From a legal perspective, these states favor a fair distribution of assets, based on contributions to and sacrifices for the marriage that were made by both parties.

It is also important to pay attention to trends in the courtroom. While 50/50 distribution is not required, it is presumed. This means that most courts favor this type of distribution and consider it to be fair. However, Denver judges may make exceptions based on the specifics of the marriage and the couple's finances. The length of the marriage and whether one person became a full-time homemaker are two of the biggest determining factors.

How Our Denver Property Division Lawyers Can Help

No matter how similar your marriage and financial situation may appear to someone else's, you need a unique property division plan. Your attorneys at Johnson Law Group will work with you to protect your rights. If your partner feels willing to cooperate with you, this makes it even easier to expedite the process. When litigation becomes necessary, however, you can count on firm representation in the courtroom.

We Listen

We begin all our property division cases by listening intently to what you have to say about your finances and the marriage. Marriage is a two-person commitment and so is divorce. Because of this, the relationship dynamic may also determine how the Denver property division attorney assigned to your case charts the approach.

We Review

If you are a breadwinner or have otherwise maintained a career, you may have access to all or most of the financial documents necessary to begin the process. Dependent spouses may often have a more difficult time trying to access bank statements and filed tax returns. Our experienced asset division divorce lawyer will assist you in sourcing the additional documentation. We may also liaise with financial experts if you suspect your spouse may be hiding assets from you.

We Recommend

Once we have all the data we need to make informed decisions, we will recommend property division options. If your spouse is on board with an amicable divorce, you can review this together. Our recommendations may take the following into consideration:

• Current Colorado laws on property division
• Current trends in the courtroom regarding property division
• Whether there are children or other dependents involved
• Whether there is a wide gap in current and potential earnings for both parties
• Whether one spouse made career-building contributions to the other
• Current income streams, assets and debts

We Negotiate

In an ideal situation, your spouse immediately agrees to the proposals and we can move forward with a divorce settlement. Unfortunately, this rarely happens. It is important to note that negotiation is not always a bad thing, so enter the process with an open mind. For instance, some spouses want a clean cut to relationships. Your spouse may want to offer more currently owned property or cover some of your debts, in exchange for doing away with alimony. In some cases, this is a settlement worth considering.

We Protect

We are also committed to protecting family relationships, especially when children or other dependents are involved. When spouses cooperate, this works well. If your spouse takes a combative approach, we try to neutralize the situation before it escalates. Some spouses are committed to making things difficult. When this is the case, we may choose a more aggressive stance to protect your rights.

Tax Implications in Denver Property Division Cases

At Johnson Law Group, we understand that property division in a divorce involves more than just splitting assets; it requires careful consideration of the tax implications. While the transfer of property between spouses during a divorce is generally not a taxable event, it is crucial to understand the long-term effects. The original purchase price, or "basis," of the asset transfers with the property. This means that when you eventually sell the asset, you will be taxed on the difference between the sale price and that original basis, potentially leading to capital gains taxes. Careful planning can help mitigate these future tax liabilities.

Alimony payments also have specific tax implications, which have changed in recent years. For divorce agreements finalized before January 1, 2019, alimony payments were typically deductible for the payer and considered income for the recipient. However, the tax laws changed significantly for agreements finalized after this date. Now, alimony payments are no longer deductible for the payer and are not considered income for the recipient. Understanding which rules apply to your situation is essential for accurate financial planning.

Retirement accounts, such as 401(k)s and IRAs, often represent a sizable portion of a couple's assets. Dividing these accounts requires a legal document called a Qualified Domestic Relations Order (QDRO). A QDRO allows for the tax-free transfer of funds from one spouse's retirement account to another. Without a QDRO, any withdrawals from these accounts would likely be considered taxable distributions, potentially incurring significant penalties. We can help you navigate the complexities of QDROs and have your retirement assets divided fairly and without unnecessary tax burdens.