How are Marital Assets Divided in a Colorado Divorce?

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By: Bill Henry
PublishedOct 14, 2022
1 minute read

When you get divorced, you leave more than your former spouse behind. All the assets and property acquired over the duration of the marriage must be divided. Yes, assets must be divided fairly — or “equitably,” as Colorado law requires — but divided all the same. Below are some of the questions clients commonly ask when they want to know: How are marital assets divided in a Colorado divorce?


Colorado is an equitable division state. This means that once all marital property has been listed and valued, the court will attempt to distribute it in a more equitable manner, based on each party’s contributions as well as their liability.

Marital property encompasses all assets and debts accumulated by the spouses over the duration of the marriage. It can include:

  • real estate, such as your home, tracts of land, and any other real property
  • home furnishings, such as furniture and appliances
  • collectibles, such as stamps, dolls, coins, etc.
  • jewelry and accessories
  • expensive clothes, such as coats, shoes, or other items
  • sporting equipment, such as treadmills and weight sets
  • business assets owned either jointly or separately
  • financial accounts, including checking and saving accounts, stocks and bonds, etc.
  • pension accounts, including IRAs
  • life insurance plan benefits
  • pets

Not all property in a marriage is divisible in a divorce. This would include non-marital assets, such as any property, investments, savings accounts, or valuable keepsakes either spouse owned before getting married. Non-marital assets also include gifts and inherited items meant specifically for one spouse, as well as any assets specifically left aside for one spouse in a mutual contract, such as a prenuptial agreement.

Colorado Revised Statute 14-10-113 details all factors courts may consider when divvying up marital property in a divorce:

  • the overall value of the property to be divided
  • contributions each spouse made in acquiring the property, including the contributions of homemakers who supported their partner
  • the economic circumstances of each party at the time property is divided
  • the standard of living the couple enjoyed during their marriage
  • current custody arrangements concerning any children
  • debts and liabilities either party has assumed

The most reasonable division of assets you can hope for in a divorce is one you can work out with your spouse and a mediator. If divorcing spouses can divide marital property in a mutually satisfying way, it ensures each party is comfortable moving forward and could save you time and money on court costs and lawyer fees.

Unfortunately, we don’t live in a perfect world, and many divorces are contentious. The courts will decide how assets are divided if spouses cannot reach a consensus. The question above has more information about how Colorado courts determine property division.

It should be understood that spouses will leave the marriage with fewer assets since it’s being divided.

Most of the time, no.

Under Colorado law, property inherited specifically by one spouse during the marriage is considered non-divisible. It is set aside. C.R.S § 14-10-113

For example, if one of your parents passes away during the marriage and leaves a certificate of deposit (CD) account only in your name, your spouse cannot touch it, as it is not considered marital property.

However, there are situations where inheritance can be considered marital property. Let’s continue with the CD example:

Any interest that accrues on the CD during your marriage can be divided. So if you inherited a lump sum of $450,000 in CDs and they accrued $30,000 of interest during the marriage, the court could award each spouse $15,000 from the accrued interest, but the original $450,000 is yours since you were the intended beneficiary.

Here’s another example where your CD inheritance could be divided in your divorce:

Let’s say you inherited $450,000 in CDs and cashed it out to purchase a home. Even though you purchased the house with your inherited money, you and your spouse lived in and contributed to the family home. The court could consider the home and its appreciated value as marital property that should be equitably divided.

Colorado does not divide a house during a divorce. The family house is considered marital property, of course, but since Colorado is not a ‘community property’ state, family courts will never advocate a solution that involves divorced spouses sharing a house 50/50 — unless both spouses mutually agree to such an arrangement.

Many times, divorcing spouses will decide to sell the house and split the profit, especially if neither spouse can afford to remain in the home and pay the mortgage on their own.

If both spouses have a desire to keep the house, the court can decide who that will be based on a variety of factors. If the couple has children, the court may award the house to the parent who has more parenting time in order to preserve stability for the kids.

If the couple doesn’t have children, the court will look to other factors to determine which spouse gets the house.

Retirement earnings or savings are divided much the same as other marital property. Any retirement, IRA, or 401K monies accrued before the marriage are left out of the community property pile and remain with the spouse who earned that money.

Retirement savings earned during the marriage are considered marital property and will likely be divided equitably between the spouses in a divorce.

Since dividing the retirement money means disturbing those accounts, it is important to obtain a Qualified Domestic Relations Order (QDRO) to avoid taxes and withdrawal penalties. A QRDO from the court tells the administrator of the retirement account how to allocate funds to each spouse per the court’s order.

If you and/or your spouse have several different retirement accounts, more than one QRDO might be required to achieve the court-ordered allocation.

Business division is one of the more complicated aspects of marital property distribution in a divorce. And it can also be the most costly.

If you already owned the business prior to getting married, and you were careful, then you worked out an arrangement for dividing business-related assets before tying the knot. Of course, couples go into business when they’re married. So what happens to a thriving business when the marriage crumbles?

Dividing marital property during a divorce tends to be a contentious process, but it’s one that lawyers and courts handle all the time. If an agreement between the divorcing spouses isn’t possible, it’s best to hire an experienced attorney because the value of the business can be considered for asset division, alimony, and child support purposes.

Even if one spouse began the commercial business before getting married, the other will be entitled to a share of the profits and capital the venture earned during the marriage.

Courts will consider a variety of factors when dividing a business, including:

  • when the business was started
  • the business’ current value
  • any liabilities the business carries
  • any increase in the business’ value during the marriage
  • how much each spouse invested in the business

It does not matter if the ‘investment’ was financial, or personal in terms of actual work done to maintain and grow the business. The court considers all of it.

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