Useful Information

Division of Pension

Q: I am concerned that if my pension is divided in my divorce, I will be required to pay taxes and penalties. Please advise me.

A: Generally speaking, property division incident to divorce is not a taxable event. However, there may be tax issues in terms of capital gain. In dividing a pension, there are many laws which preclude the application of taxes and penalties to division of pensions in a divorce so long as the orders dividing the pensions comply with certain requirements. There are many different kinds of pensions, and the type of pension determines the form of order which must be drafted to divide the pension. You should consult to determine the type of pension you have and the form of order required for division.

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Q: I have a pension through my employment which provides me a monthly benefit upon retirement. Is this included in the marital estate for property division purposes?

A: There are pensions which are known as "Defined Contribution Plans," which are those plans into which you deposit funds and into which your employer may deposit funds. Those have a clearly ascertainable cash value. Other pensions, known as "Defined Benefit Plans," are those which you describe--they provide a monthly benefit upon retirement. Defined Benefit Plans are included in a marital estate and valued by experts. The valuation of these plans includes consideration of a number of factors. Those factors include the date you began service, the date of your marriage, the expected date of retirement, your life expectancy and other factors the expert may find relevant.

To determine the value, the expert applies all the factors to arrive at a present value for the pension. The present value is included in the marital estate and divided as are the other assets. If there are adequate assets to offset the present value of your pension you may be able to retain the entirety of your pension

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Paying Maintenance - Cohabitation

Q: I am paying maintenance to my spouse and I know that she is living with a significant other. Does the court consider this if I ask it to modify my maintenance obligation?

A: Generally speaking maintenance terminates upon the death of either party or remarriage of the recipient. Therefore, you might think that because your ex-spouse has not formally remarried, modification or termination of this obligation is not possible. Be aware that Colorado recognizes common law marriage. Therefore, a marriage need not be solemnized in a formal ceremony to be a valid marriage in Colorado. Common law marriage requires the agreement of the parties and the mutual and open assumption of a marital relationship. Therefore, additional information is necessary. For example, how are taxes filed, singly or jointly? Do friends and neighbors know the couple as a "married" couple? Are there joint checking accounts, joint credit card accounts? Investigation is required to determine whether a marriage exists.

    The next factor for consideration is whether your ex-spouse is now able to meet his or her needs because of support received on a regular basis from his or her live in partner. There are many factors which must be investigated before you can make a determination as to whether to file a request to modify your maintenance obligation.

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New Laws RE: Custody

Q: I have heard that there are new laws regarding custody. Please explain.

A: Before the changes in the law, parents either shared joint custody or one parent was awarded sole custody. Joint custody means that the parents make major decisions for the child jointly, such as religious upbringing, school selections, and/or any other major decision related to the general welfare of the child. The focus now is to do away with "joint" or "sole" custodial designations, and focus on allocation of parenting responsibilities. Basically, wherever the statute referenced "custody," it now references parental responsibilities. The law "urges parents to share the rights and responsibilities of child-rearing." It provides that the court shall determine the allocation of parental responsibilities, including parenting time and decision making responsibilities. The court may allocate the decision making responsibility with respect to each issue affecting the child, either mutually between both parties or individually to one or the other parent, or in any combination thereof. The factors the court considers are similar to the factors courts considered in determining joint or sole custody.

The statute permits designation of custody for the purpose of other state and federal statutes such as tax purposes, for example. It is difficult to predict whether this change in the law will effect a change in custody litigation. The intent was to end the war over "custody," yet many parents may find themselves in the same dilemma over which parent should be entitled to make certain decisions.

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Home Sold - Dividing Assets

Q: My spouse and I are separated and plan to divorce. We just sold our home but we have not yet filed for divorce. For personal reasons the home was titled in my spouse's name, who now has decided not to divide the proceeds. Do I have any recourse?

A: Regardless of how titled, property acquired during your marriage may be marital. However, unless you file for divorce, you are relying upon the good faith of your spouse to act honorably. When you file for divorce there are certain forms which must be completed and issued. The Summons, one of the documents with which the proceeding is commenced, has what is known as an automatic restraining order on its face. It contains statutory language designed to maintain the status quo until either the parties resolve issues, or the court, has the opportunity to intervene. Once you file for divorce this Summons remains in effect. The Summons states pursuant to C.R.S. § 14-10-107:

    ... that upon the filing of a petition for dissolution of marriage or legal separation by the petitioner or co-petitioner, and upon personal service of the petition and summons on the respondent, or upon waiver and acceptance of service by the respondent, a temporary injunction shall be in effect against both parties until the final decree is entered or the petition is dismissed, or until further order of court. This temporary injunction becomes an Order of Court upon personal service or upon waiver and acceptance of service. Either party may apply to the Court for further temporary orders, an expanded temporary injunction, or modification or revocation under Section 14-10-108, C.R.S., or any other appropriate statute.

    If you file for divorce, and you believe the automatic restraining order does not offer adequate protection, you can consult with an attorney and might request that the court enter an expanded restraining order, restraining your spouse from accessing the funds until further order of court or agreement of the parties. You can also ask the court to hear forthwith temporary orders so that the court can hear evidence and determine the best course of action. The court at the time of your final orders can take into account assets that have been dissipated close in time to the filing of your divorce. However, if there are no other assets to offset against the proceeds from the sale of your home, waiting may not be the best course of action. You should consult with a family law attorney as soon as possible.

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Gross Income

Q: Is "gross income" defined?

A: Yes. Colorado law defines gross income as income from any source and includes, but is not limited to, income from salaries, wages including tips, commissions, payments received as an independent contractor, bonuses, dividends, severance pay, pensions and retirement benefits, royalties, rents, interest, trust income, annuities, capital gains, any moneys drawn by a self-employed individual for personal use, some social security benefits, workers' compensation benefits, unemployment, income provided in lieu of wages, gifts, prizes, distributions from general or limited partnerships, corporations, limited liability companies, alimony and maintenance. Gross income does not include child support.

    Generally speaking, gross income includes overtime pay only if the overtime is required by the employer as a condition of employment. It does not include income from additional jobs that result in the obligor working more than a forty-hour work week. These definitions are found at C.R.S. § 14-10-115(5).

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Extraordinary Expenses for Child

Q: My child requires therapy and I am wondering whether my ex-spouse is required to share in those expenses?

A: First you must look to the terms of any agreement or court order you may have. Colorado law requires that extraordinary expenses be shared by the parents in proportion to income. Income, of course, includes maintenance. In order for therapy to be considered an extraordinary medical expense, there must be a "diagnosed mental condition." The law, however, does not require that a parent share in an expense if a parent chooses a provider who is not covered by insurance, when providers are available through insurance. There are situations in which the court might be inclined to order a parent to share in the expense, such as: the family never used therapists available through insurance; both parents agree to use a certain therapist; or therapy is not adequately covered under the insurance plan.

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Custody Agreements

Q: If my spouse and I disagree as to which custody arrangements are best for our children, how does the court determine this issues?

A: The court determines parenting time and allocation of parental responsibilities initially "in the best interests of the child." If the parents are unable to decide, either may ask the court to order an evaluation. An evaluation is a report which must be performed by a qualified mental health professional. The report is filed with the court and contains recommendations as to custody and parental responsibilities.

    A qualified mental health professional is defined by statute as a person who is qualified as competent by training and experience in the areas of:

    -The effects of divorce and remarriage on children, adults and families;
    -Appropriate parenting techniques;
    -Child Development, including cognitive, personality, emotional and psychological development;
    -Child and Adult psychopathology;
    -Applicable clinical assessment techniques; and
    -Applicable legal and ethical requirements of child custody evaluation.

    The evaluator must perform an assessment of the family and report those findings to the court. Generally speaking, custody evaluators use psychological testing to provide objective data along with their observations. Usually a parent-child interactional assessment is performed. This means that the evaluator will observe you and your child interact, as well as observing your spouse and child in separate sessions. The evaluator will generally develop a history of the family, including information you have about your child's growth and development. The evaluator may act with another mental health professional as part of a team. It may be that members of the team handle different parts of the assessment.

    In terms of psychological assessment, some evaluators administer a few tests, or a combination of the Rorschach Test, the Minnesota Multi-Phasic Personality Inventory, the Thematic Apperception Test, Sentence Completion Test, Millon Clinical Multiaxial Inventory Test and others. Some evaluators administer tests to the children as well. An abridged assessment can be performed by a Child and Family Investigator.

    Some people find undergoing a custody evaluation to be a stressful process. It is important to first determine whether such an evaluation is necessary in your case. Then it is important to meet with your attorney before the process begins so that you feel as comfortable as possible with the process.

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Determining Custody - Parenting Time

Q: I am divorcing and I am unsure as to what the courts consider in determining custody. If I do not have joint custody, does that mean I spend less time my children?

A: No. In a divorce, courts determine custody, now known as allocation of parental responsibility based upon consideration of the best interests of the children. This is defined by statute--C.R.S. § 14-10-124. These factors include:

    - the wishes of the parents;
    - the wishes of the child;
    - the interaction and relationship of the child with his parents, siblings and significant others;
    - the child's adjustment to his home, school and community;
    - the mental and physical health of all individuals involved;
    - the ability of the custodian to encourage the sharing of love, affection and contact between the child and the noncustodial party;
    - the ability of the parties to cooperate and make decisions jointly;
    - whether past pattern of involvement of the parties with the child reflects a system of values, time commitment and mutual support which would indicate an ability as joint custodians to provide a positive and nourishing relationship with the child;
    - the physical proximity of the parties to each other;
    - whether an award of joint custody will promote more frequent or continuing contact between the child and each of the parties;
    - whether there has been child abuse or neglect;
    - whether there has been spousal abuse.

    Allocation of parental responsibilities generally relates to making the major decisions for a child and does not relate to the amount of time a child spends with either parent. Major decisions are those such as education, medical care and religious upbringing.

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Q: Are there penalties if my ex-spouse fails to permit me time with my children?

A: The parent not granted custody of a child is entitled to reasonable parenting time rights unless the court finds, after a hearing, and that parenting time by the parent would endanger the child's physical health or significantly impair the child's emotional development. C.R.S. § 14-10-129. If you advise the court by way of motion that there is a failure to comply with a parenting time order, the court will determine whether the matter should be set for hearing. There are sanctions which may result if the court finds a failure to comply after having held a hearing. Those include that the court may order that a bond or other security be posted; may require make-up parenting time under certain conditions; may order a fine not to exceed $100 per incident of denied parenting time; may enter an order for family counseling at the non-complying parent's expenses; may find the non-complying party in contempt of court; may enter an order for an award of attorney fees, court costs and expenses. C.R.S. § 14-10-9.5. You need to consult with an attorney to determine whether you have a court order and whether the order has been violated.

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Marital Versus Non-Marital Property

Q: I inherited a large amount of money from my grandmother while I was married. I am now getting divorced. Will my inheritance be divided as marital property?

A: In a divorce, the court will set apart and award each party his or her separate property. Marital property will then be divided between the parties in a proportion the court deems just. The court will classify property as either marital or separate. All property acquired during a marriage is presumed to be marital. However, property acquired by gift or inheritance is the receiving party's separate, non-marital property when initially received. This property may be excluded from the marital property classification and set aside. In order for gifted or inherited property to remain separate, non-marital property, it cannot be co-mingled and cannot have been jointly titled. This means the party receiving the property must keep it separate. The burden to prove that the property is separate is on the person making the assertion. To sustain this burden, the person must be able to trace an asset to the gift or inheritance originally received.

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