What Marital Assets Can You Claim Without a Pre-Martial Agreement?
Under Colorado, parties can enter into a contract called a pre-marital or prenuptial agreement. In that contract they can agree regarding how their property and assets are going to be divided in the event that there is a dissolution of marriage. Also, in a pre-marital agreement, the parties can agree regarding maintenance, which is spousal support, and also provide a waiver of attorneys fees.
The court generally will enforce a pre-martial agreement if there has been a full and complete disclosure by the parties, and a party has had an opportunity to review the agreement in advance of signing it, and furthermore, that there has been no duress. In other words, the party hasn’t been forced to sign that agreement. Without a pre-martial or prenuptial agreement, the court considers all property that the parties have regardless of how it’s titled, as martial property. Sometimes when you get married, you bring in separate property.
For example, you owned a house prior to being married. That house, the value of that house on the date of your marriage is your separate property. However, any increase in value of that house during the marriage is marital and subject to division. We are seeing that a lot because of the real estate market here in Colorado. Homes are appreciating at an astounding rate. The home that you brought into the marriage may have gone up, and that increase in value is marital and subject to division.
Furthermore, if you have a retirement account, for example a Roth IRA or a 401K account, the value of that account at the date of your marriage is your separate property. However, any increase in value of that account during the marriage … For example, you continuing to contribute, or the stock market is driving the value of the account up, is marital and subject to division. Another issue that folks have is when they’ve inherited your money. For example, your parents pass away and you inherit a farm. The basis of that farm, in other words, the value that you’ve inherited, that’s your separate property.
Let’s just say that that piece of property goes up in value during the marriage, then that increase in value is also marital and subject to division. Keep in mind that if you are starting a separate property claim regarding any asset, it’s your burden to show that it has separate character. For example, if you’re saying that your Van Guard 401K account is your separate property, it’s your duty to show the account statement from date of marriage and then the account statement current in order to show if there’s been any increase in value. That’s your affirmative duty.
Likewise if you brought a house into the marriage, you may have to get an appraisal. That appraisal would include an appraisal as of the date of marriage and then a current appraisal. Again, the burden is on you to show that it is your separate property. In Colorado it doesn’t really matter how an asset is titled. I have a lot of people come in, and say, “I’m not on the title to this house, but the house was acquired during the marriage, and marital funds were used to pay for it.” Just because you aren’t on the deed, doesn’t mean you don’t have a claim to an interest in that piece of property.
However, a lot of people get into trouble when they inherit money from their folks, for example, and they take that cash, and they put it into a joint bank account with their spouse. Guess what? That account has now lost its separate character because you’ve added that party onto the account. The presumption is that you intended to make a gift to the marriage. There may be a contribution argument that the person who inherited that property can make, but it does complicate things. A pre-marital agreement is a good idea if you have assets or children from a prior marriage. We do routinely prepare those agreements on behalf of clients, so feel free to contact us, and we can consult with you, and give you advice as the best way to proceed.