Reaching the decision to divorce is usually an emotional process, but it also quickly becomes a meticulous financial process as well. Under Colorado’s “fair and equitable” division of marital property law, spouses may keep property and assets that belonged to them before the marriage and any that they inherited or received as gifts.
All the property, accounts, assets, and debts they accumulated during the marriage must be divided in a way that’s fair if not exactly 50/50. Divorcing spouses may negotiate a settlement agreement between themselves with the help of their lawyers, and have a low-conflict uncontested divorce, or they may take disputes to court for a judge to decide in a contested divorce.
Either way, the same economic pool of assets that once supported one household must now support two separate households. This requires an adjustment period during which both spouses must learn how to manage their changed finances. The following tips may help.
One spouse often wishes to remain in the family home after a divorce. Under the fair division of assets law, the spouse who keeps the home often trades some assets to give the other spouse their share of the home’s value. Sometimes; however, a spouse realizes later that they can no longer afford the home—particularly if they owe more on the property than it’s worth in the current market.
It may be difficult to keep up the mortgage payments and pay for maintenance on only one income. Instead, other options include selling the home at a loss, renting it out, or for one spouse to remain in the home and pay rent to the other. One solution that’s growing in popularity is called “birdnesting.” In this arrangement, both spouses retain ownership of the home and also rent a small nearby apartment.
Instead of moving the children back and forth between two households, the children remain in the family home while each parent spends their custody days at home with the children and their non-custody days in the apartment, swapping places.
Once you know the full value of the assets assigned to you in the divorce, it’s important to make a new budget based on your income. Be wary of including any child support in your long-term financial plans since child support ends when the youngest child reaches the age of majority. For example, if you depend on child support to pay your mortgage, you’ll have to consider how you’ll pay for it when child support ends.
Carefully look at your total income and expenditures and create a budget that accommodates your new financial situation.
When a judge assigns one spouse a marital debt but your name is still listed on an account, the creditor may still hold you responsible for the debt. It’s helpful to contact the creditor and present evidence that the debt now belongs solely to your spouse so they can remove your name. Unfortunately, the law does not compel a creditor to comply with the court’s decision on debt division so they may still hold you accountable for a debt that your spouse fails to pay with impacts on your credit rating.
It’s wonderful to prepare for retirement, but it’s easier to put a significant portion of your pay into your retirement when you pool finances with a spouse. It can be helpful to revisit your retirement contribution plan and temporarily keep more money for your monthly take-home pay.
If you haven’t begun a retirement plan because you assumed you’d share your spouse’s pension, it’s important to begin your own plan as soon as possible.
The best way to move forward from divorce under the best possible circumstances is to hire a Denver divorce attorney who will assertively defend your rights and safeguard your best interests during the divorce process so you retain the maximum assets allowable under Colorado divorce law. Call Ciancio Ciancio Brown, P.C. for experienced representation throughout your divorce.
