When a couple decides to divorce, they may have questions about how their property will be divided. First, it’s helpful to understand the difference between marital property and separate property.
Marital property includes items that were purchased during the marriage. Separate property includes property owned before marriage, gifts or inheritances to one spouse.
When a couple in Colorado divorces, the court will determine how to divide the couple’s property equitably. It does this by adding up the entire value of the property and distributes a percentage to each spouse.
Equitable distribution does not always mean that the property is divided equally, however. It means that it is divided fairly, but one spouse may receive a larger portion of the property than the other.
Dividing retirement accounts
Couples may not be aware that their retirement account can also be subject to division. For many people, a retirement account may be their largest asset besides their house. These accounts can be complex to divide and there are specific tax requirements.
Generally, funds contributed to a retirement account are considered marital property. Sometimes, however, one spouse will offer the other spouse an alternative, rather than paying a share of the retirement account.
If the court orders a spouse to provide retirement funds to the other spouse in a divorce, the ordered spouse may be able to withdraw the funds without a financial penalty.
An experienced family law attorney can provide advice and answer questions about the property division process. It’s important that it is completed correctly.