Colorado: What is Separate Property in Divorce?

Colorado is a marital property state, which is also sometimes referred to as “equitable distribution.” Marital property generally refers to any property acquired by either spouse during the length of the marriage. In contrast, separate property is generally anything of value that was acquired before the marriage began.

Exceptions to property rules

There are a few exceptions to both types of property. Inheritances and gifts acquired during marriage do not count as marital property, though gifts from one spouse to another can be considered either marital property or separate property, depending on the circumstances.

Unless intended otherwise, separate property used for purchases, exchanges, or transformed into different property will remain separate. For instance, if cash from stocks purchased prior to marriage is used to purchase different stocks during the marriage, the new stocks will still be considered separate property.

Let's say a home was purchased as separate property. During the course of a marriage, mortgage payments were made with marital funds, or the value of the property increased (or both). Thus, the value of the payments and the increase in value would be subject to division during divorce. In these cases, the value of the home at the date of marriage would be needed to determine what portion of the home’s value is up for division.

The role of prenuptial and postnuptial agreements in separate property

Separate property can be protected or changed through the parties’ written agreement. This can be done by entering into either a prenup or a postnup agreement. Prenups and postnups are contracts that predetermine the nature of property during the marriage as well as how it would be divided in the event of a divorce. These documents can be complex, so a lawyer should be used for drafting purposes and to fully advise you of your rights.

Suggested download: The Ultimate Colorado Divorce Checklist