If you are considering divorce, you likely have questions about how your assets will be divided. The first thing to know is that Colorado follows the principles of equitable distribution in divorce.
Assets acquired during the marriage are considered marital property. However, they won’t necessarily be split equally between the parties. Instead, they are divided in a way that the court deems fair. This is known as equitable distribution.
Property acquired before marriage, as an inheritance, or as a gift is generally classified as separate property and not part of the division. Yet, classifying and dividing them can be more complex if separate and marital property are commingled. As well, certain trust interests may be classified as property that has a marital component of value even if the spouse of the trust beneficiary is not named in the trust.
Trusts are a unique asset to classify. Even if classified as a party’s separate property, they may still be considered when determining support issues.
If you are considering divorce and are the settlor or beneficiary of a trust, you need the help of a divorce lawyer in Denver, CO with extensive experience in complex property division.
At Hogan Omidi, PC, our Colorado family law attorneys have the experience, skill, and resources to protect your property interests and will compassionately guide you through every step of your divorce, custody, and asset division process.
Call us at (303) 691-9600 or visit our contact page to schedule a consultation.
Classifying Trusts as Marital or Separate Property
Whether your trust is considered separate or marital property depends on the type of trust, when it was established, whether you or your spouse is a grantor or beneficiary of the trust, and how any distributions from the trust have been used, among many other factors.
The first consideration is whether your trust is revocable or irrevocable.
Revocable Trusts
If you or your spouse created a revocable trust during your marriage, it will likely be disregarded in the divorce since it could be revoked.
Revocable trusts created by spouses are more straightforward to divide. They may be dissolved and the assets divided, or both spouses can be named equal trust beneficiaries.
If you or your spouse are the beneficiary of a revocable trust created by someone else, your interest will not be considered a marital asset, because the person who created the trust still has the power to revoke it. the answer might be different if the trust was originally revocable but the person who had the power to revoke it has died.
Irrevocable Trusts
If you or your spouse are the beneficiary of an irrevocable trust, your interest may be considered marital property in some situations. If either of you received distributions from the trust during your marriage, those funds may or may not be considered in your divorce.
The determination will depend on a complex array of factors including whether you kept the funds separate, or you used the funds to make a joint purchase or otherwise commingled them in a marital account.
Simply classifying your or your spouse’s interest in a trust as separate does not mean it will not be considered during your divorce.
Even if that asset is not subject to property division, it may be an economic circumstance that is considered when determining your income for setting child support, deciding whether either of you should receive alimony, and deciding on the “equitable distribution” of marital assets.
Property division in divorce cases is not often straightforward. You should consult an experienced family law attorney with an intimate understanding of complex property divisions.
Schedule Your Consultation
At Hogan Omidi, we understand that divorce can be a challenging experience. Our attorneys work to guide you through this process with as little stress and strife as possible while ensuring your interests are fully protected.
If you are considering divorce and have complex property considerations, you need the help of a Denver family law attorney with a proven record of success.
Our attorneys have decades of experience resolving divorce matters outside of court. Yet, we are always prepared to go to trial if a fair settlement is not reached. We will fight tirelessly to protect your interests.
Call us today at (303) 691-9600 or complete the short form on our contact page to schedule a consultation to discuss your divorce, custody, and property concerns.