Marital Asset Division
Dividing Assets and Debts in Colorado Springs
In every divorce, if the case is not settled, the Court will have to divide all the assets and the debts of the marriage. To be able to provide this information to the Court so it can be divided, you not only have to think about all the assets you have, you also have to determine if it is a “marital asset” (meaning, generally, it was obtained during the marriage) and you have to give each asset a value and provide proof of the value, meaning printing out or creating an electronic file of whatever was necessary for the calculations. If an item is not “marital” such as something purchased or owned before marrying, you will not need to disclose or value this property. However, the chance that something could be considered “marital” even if you claim you owned it before marrying, compels a lot of disclosing and valuing—just to be certain.
Everything you and your spouse purchased during the marriage or own is likely a marital asset. Even if you do not fully own the item because you are still paying a mortgage or a monthly loan payment, the item is still considered an “asset” and a value must be determined.
A home can be valued based on an appraisal or a market analysis from a realtor minus any amount of mortgage owed. Proof of the appraisal or market analysis and the mortgage statement must accompany this determination of the home’s value. If the home was owned by one of the Parties before marrying, a value must be sought for the date of marriage, since the “marital share” of the home will begin on the date of marriage and be based on the home’s value as of that date.
Vehicles, including the car you drive every day, the camper trailer, snow machine and ATV and the Harley all need to be included as assets. Vehicles can be valued based on a NADA or Kelley Blue Book value minus any amounts owed. Print outs of the NADA or KBB and of the monthly loan statement should accompany this determination. For collector cards that may have used substantial marital funds to restore or upgrade them, determining a value can be more complex and require receipt histories and significant record keeping.
Financial investments (mutual funds, stocks, annuities, whole life insurance policies, etc.) and retirement accounts (IRAs, Thrift Savings Plans, 401(k)s, RSUs and pensions, etc.) are assets and you must provide print outs of the statements as proof of the value. Determining the “marital share” of these accounts will need to be determined before they can be divided. This is also the procedure for bank accounts (whether joint or individual), health savings accounts, money market, savings, debit, checking and certificates of deposit and any other type of “account” that could be valued. If you have gold bars under the mattress, don’t forget to include those, too, and when they were purchased and with what money were they purchased.
If you started or had a retirement account, investment account or bank account before the marriage you will need to determine the “marital share” of the account. You can do this by determining the value of the account on the date of marriage and the value today. It can be a tricky process, so you will want to work with your divorce attorney to determine these values and provide the needed documentation.
Furniture, household goods and other personal property tends to not require the same level or specificity of proof—unless it is particularly valuable and will be singled out for distribution to one person or the other. For these valuable household and personal items, receipts or insurance values as proven by insurance declaration can establish the value.
For regular everyday household furniture and items, a number to sum up a Parties’ opinion about the value of all the contents in the home ($5,000, $10,000, etc.) is often sufficient. The reason for this is because the “stuff” in the home does not usually have significant enough monetary value to merit an expensive appraisal or to materially affect the division of assets and debts. Courts will not use precious time to divide blenders and sofas and bedroom dressers and big screen TVs and weed whackers and living room curtains and the many other hundreds of items purchased during the marriage. “Garage sale” values, at best, will be attributed to any list of household items or personal property. This means the $4000 sofa purchased retail will likely be given a value of $200. If, however, an item is considered particularly valuable, an eBay “sold” price for the identical item or an actual appraisal or an insurance declaration may work to establish value.
Jewelry may be listed individually for particular pieces, but, absent proof of current higher dollar values, jewelry will be assigned a value just like everything else in the home. Any jewelry scheduled with an insurance company or purchased for investment is likely worth getting a present day value. However, often the jewelry in a marriage is a gift—meaning it may not even be considered “marital” and will not be valued and will simply remain with the person who received it as a gift. Wedding rings, while technically an asset, are rarely valued and usually remain with the Party in possession. One exception, if one Party is still paying off the engagement or wedding rings, a Court may be inclined to award the ring to the paying Party.
Artwork of particular importance, heirloom furniture and, for example Oriental or Persian rugs, and guns—firearms of any description--are not generally included in the “garage sale” value concept. These items can be specifically valued and often the purchase price is adopted as the value of the item. Even miscellaneous items like frequent flyer miles or Star Wars collectible figurines can be valued and considered when dividing the assets.
Dividing Debts: Just like with assets, material and significant debts must be divided in the divorce. Any monthly payments—whether mortgage, car payment, insurance, health club membership, massage subscription, Netflix, cell phone bill, pet insurance, orthodontia payments or utilities—to name only a few, must be considered by the Court and it must be decided which Party will pay the bill. Bills that occur more frequently (groceries, gas) or only occasionally (oil changes and car maintenance, Caribbean cruises, root canals) can be looked at over a year’s time and divided by 12 months to get an estimate of what is paid monthly—so a budget can be created.
Credit cards—even those with a zero balance—must be disclosed and considered by the Court with the current balance and the monthly minimum that must be paid. Print outs for 3 or more months of each credit card statement will be needed, so plan ahead and get these when you can.
At The Law Office of Jeanne M. Wilson & Associates, PC, we take the time to learn our Client’s financial picture and determine the proof we need to protect the assets and limit the debts. It’s that important to us and it is your financial future at stake.