Frequently Asked Questions Property Valuation In Divorce

Property includes virtually all assets owned by a couple, including the family home, rental property, cars, boats, art or antique collections, bank accounts, investments, stocks and bonds, cash value of life insurance, retirement plans, stock options, deferred compensation, and businesses. C.R.S. 14-10-113. Most divorcing couples have household furnishings, cars, and bank accounts, stocks, or bonds. Many own or are buying a family home, which may be a couple's most valuable asset. Some have pensions  or a business.

Separate property includes what a person brings into the marriage, inherits during the marriage, or receives as a gift to him or herself during the marriage. C.R.S. 14-2-201, C.R.S. 14-10-113. Marital property is everything acquired during the marriage regardless of which spouse owns the property. C.R.S. 14-10-113, C.R.S. 14-10-113. Marital property also includes the increase in value of separate property. C.R.S. 14-10-113. Co-mingled separate property is treated as marital property.

No. Marital property does not depend on how property is titled alone. C.R.S. 14-10-113. If it was acquired during the marriage, it is marital property. C.R.S. 14-10-113, C.R.S. 14-10-113.

One of the first tasks is to identify the assets. These assets are listed on a Sworn Financial Statement  (SFS) that both parties have to sign under penalty of perjury and file with the court. The list should include all assets such as: cash, checking accounts (personal, joint, or business accounts), savings or money-market accounts, children's bank accounts, retirement accounts (IRAs, defined contribution plans, and pension plans from current and previous employers), non-retirement investment accounts (mutual funds, brokerage accounts, annuities, cash value of life insurance, certificates of deposit, and stocks or bonds), real estate (family home, vacation homes, rentals, land, and business property), employer-funded incentive programs (stock-option programs, country club initiation fees, and accumulated vacation and sick days). The SFS identifies the information needed.

You should collect supporting documents for every item on the asset list possible. There is a list of mandatory disclosures to use as a guide.

When separate property increases in value during the marriage, the increase in equity is marital property. C.R.S. 14-10-113. The court considers any increases or decreases in the value of the separate property of the spouse during the marriage or the depletion of the separate property for marital purposes. C.R.S. 14-10-113.

You have most likely co-mingled the asset and turned it into marital property. C.R.S. 14-10-113, C.R.S. 14-10-113.

Inheritances are the separate property of the recipient. C.R.S. 14-2-201, C.R.S. 14-10-113. However, if deposited into joint financial accounts, they are now co-mingled with marital funds and likely cannot be traced back as separate property. Gifts from one spouse to another are presumed to be marital property. C.R.S. 14-10-113. Property acquired by gift, bequest, devise, or descent to one party is separate property. C.R.S. 14-10-113.

Household goods are valued at thrift shop value – what a person would pay for the item at a thrift shop. C.R.S. 14-10-113.

Career assets are assets related to employment or former employment such as life, health and disability insurance, banked vacation and sick days, Social Security benefits, unemployment benefits, stock options and RSUs, pension and retirement savings plans.

Important questions include: Does one spouse prioritize cash more than longer-term value assets such as retirement accounts? Will one spouse take less than 50% if his or her share is all in cash? Is one spouse more interested in future security than in present assets? Is there a possibility of hidden assets or investments? The court divides marital property in such proportions as the court deems just after considering all relevant factors including factors such as: the contribution of each spouse to the acquisition of the marital property, the contribution of a spouse as homemaker; the value of the property set apart to each spouse; and the economic circumstances of each spouse at the time the division of property is to become effective. C.R.S. 14-10-113.

In a divorce, it is important to have the business appraised, though many people are reluctant to expend the funds to do so. It is easy to undervalue a business without a professional business valuation. Janko Family Law Case Profile – Husband said that the business that he was running was worth $0 because he could not sell it. A business valuation determined that the business was worth $175,000. If Wife had agreed to the value of $0, she would have left that money on the property division table. C.R.S. 14-10-113.

There are Certified Business Appraisers (CBAs) who determine the value of businesses of different sizes across many industries.

This is the most common solution and works best for most couples. The spouse who runs the business keeps it and buys out the other spouse's interest or gives them other assets of equal value. C.R.S. 14-10-113. If there are no assets large enough to trade, the business-owner spouse could sign a property settlement note to pay the other spouse over time. In the case of a professional business such as a medical or legal practice, only the spouse that is the licensed professional can own the business.