Due to precautions related to COVID-19, we have expanded our options for remote consultations. Please contact our office to discuss whether a full phone consultation or video conference is appropriate for your situation.

  1. Home
  2.  » 
  3. Divorce
  4.  » Are retirement savings separate property in a Colorado divorce?

Are retirement savings separate property in a Colorado divorce?

On Behalf of | Oct 18, 2023 | Divorce |

Those considering divorce in Colorado are compelled to think about their finances carefully. Much of their personal property is subject to division during divorce. Colorado’s equitable distribution statute requires a fair split of marital assets in the event of a litigated process, but it does allow people to retain their separate property.

Some people find the concept of separate property confusing and may misunderstand what they can protect and what they may have to divide unless they can come to an agreement with their spouse sans judicial intervention. For example, many people wonder whether a retirement account held only in the name of one spouse is separate property or whether the value of that account must be divided.

The name on the account isn’t the deciding factor

Contrary to what many people assume, the spouse who holds the accounts does not automatically get to categorize it as separate property. The timeline for deposits into the account will matter far more than the name on the account. The property that people acquire before getting married is usually their separate property. Often people start saving for retirement well before they decide to get married, but that does not automatically mean that the full balance of a retirement account is separate property.

Only the deposits made prior to marriage would have protection from division during divorce proceedings. Whatever people added to the account during the marriage, including contributions made by an employer, will typically be subject to division. Both spouses will usually need to disclose financial accounts, including retirement savings accounts, that they contributed to during the marriage. They will then include those resources in the pool of marital property that they need to divide.

Sometimes, spouses will split the retirement accounts. Other times, they can use their value to justify other decisions regarding the allocation of both marital resources and marital debts. Some people plan ahead before tying the knot and may designate their retirement accounts as separate property in a prenuptial agreement. These individuals may not need to share their retirement savings in the event of a divorce. Most others will need to disclose the account’s balance and consider the value of the retirement savings when making property division decisions.

Ultimately, knowing what resources are at risk during a Colorado divorce may make it easier to negotiate with a spouse or protect certain assets during a litigated divorce. Seeking legal guidance can help individuals to benefit from greater clarity concerning these issues.

Findalaw Network