TAKING FINANCIAL INVENTORY BEFORE YOUR DIVORCE
Diving into stacks of belongings, stocks, debts and savings that need to be dealt with in the face of a divorce can be an especially emotional and taxing task. It’s tempting to rush through it to spare some pain and time or to get bogged down in conflict over less important items that ultimately will cost more in legal fees than they are worth.
Ideally, divorcing couples sit down and take inventory of all of their assets and debts and then decide, together, through compromise, how to fairly divide them. However, if there is no agreement, the assistance of a professional mediator can greatly help you both have this often very difficult conversation. If that still does not work, then it becomes the courts job to create one, at the couple’s expense.
In Colorado, two dates are set that determine the status of property. The date of marriage, and a second date indicating the end of the marriage are set as the boundaries. Anything acquired within this time frame is generally considered marital property. All marital property is shared equally between the spouses. Non-marital property indicates assets and debts that were acquired prior to the marriage, and remained in the name of one party throughout the marriage. Also property acquired by gift or inheritance may also be individual property.
After property has been classified as marital or non-marital, a process called equitable division takes place. During this process, marital property and debts are divided in manner such that each spouse is given a percentage of both such that their bottom lines are close to equal. This does not necessarily mean that each spouse will receive an equal percentage of the property. Courts make these decisions on a case-by-case basis and can weigh many different factors, allowing for great variation in outcomes.
Though this process sounds emotionally and physically exhausting, there are positive aspects of carefully dividing assets and debts. This can be an opportunity to create financial goals and help realize them, especially through the help of a professional mediator and/or a divorce financial planner.
With the help of a professional mediator, this mountain of a task can become manageable, and you can come out of it with a solid financial future. A professional divorce mediator can help you feel confident that when it comes time to sign, there are no mistakes, and you have created and organized, well-thought-out and fair plan for moving forward.