When your home is Separate Property: Pitfalls during marriage and divorce
So, you bought your home before you got married. Only your name is on the title and only your name is on the mortgage. Well then it is your separate property right...even though you are now married right... IF you want to sell the property you can and the proceeds would be your separate property right?...
Well, these questions do not lend themselves to yes/no answers. Lets examine a few possible scenarios and how the law would treat your separate property home.
Marital Interest in Separate Property:
The day you got married your spouse began to acquire a "Marital Interest" in your separately owned home. This interest is equal in value to the increase in value of the home during the marriage. So your spouse does have an interest in your separately owned home if the market value has increased during the marriage.
Commingling of Separate Funds with a Marital Asset:
Lets say that you sell your home that you owed separately and you and your new spouse purchase a home together. You take the money that you earned through the sale of your house and put it in as a down payment on the new marital home that you own together with your spouse. That money was your separate money but you have now commingled it with your new marital home. The law would presume this money was a gift to the marriage and the new home is marital property to be divided if you were to get a divorce. You might be able, during a divorce, to bring sufficient evidence that this was not meant to be a gift to the marriage and if the money is traceable, you might be able to overcome the presumption that the money was a gift to the marriage.
Keeping your Separate Property Separate:
If you sell a home that is your separate property during your marriage (or any separate property for that matter) you can keep that property separate by putting the proceeds into a separate account with only your name on it. You can invest that money in a separate account. The only part that would become marital is the increase in value of money or investment during the marriage. You could also buy another house in your name only with those proceeds and it would remain separate property.
Selling your Separate Property Home during your Divorce:
If you are in the process of getting divorced you might not be able to sell your separate property home without the consent of your spouse because there is an automatic injunction during a Colorado divorce against disposing of marital property. If there has been an increase in value in your home during the marriage, then your spouse has a marital interest and you cannot sell during the divorce process without their consent.
Well, these questions do not lend themselves to yes/no answers. Lets examine a few possible scenarios and how the law would treat your separate property home.
Marital Interest in Separate Property:
The day you got married your spouse began to acquire a "Marital Interest" in your separately owned home. This interest is equal in value to the increase in value of the home during the marriage. So your spouse does have an interest in your separately owned home if the market value has increased during the marriage.
Commingling of Separate Funds with a Marital Asset:
Lets say that you sell your home that you owed separately and you and your new spouse purchase a home together. You take the money that you earned through the sale of your house and put it in as a down payment on the new marital home that you own together with your spouse. That money was your separate money but you have now commingled it with your new marital home. The law would presume this money was a gift to the marriage and the new home is marital property to be divided if you were to get a divorce. You might be able, during a divorce, to bring sufficient evidence that this was not meant to be a gift to the marriage and if the money is traceable, you might be able to overcome the presumption that the money was a gift to the marriage.
Keeping your Separate Property Separate:
If you sell a home that is your separate property during your marriage (or any separate property for that matter) you can keep that property separate by putting the proceeds into a separate account with only your name on it. You can invest that money in a separate account. The only part that would become marital is the increase in value of money or investment during the marriage. You could also buy another house in your name only with those proceeds and it would remain separate property.
Selling your Separate Property Home during your Divorce:
If you are in the process of getting divorced you might not be able to sell your separate property home without the consent of your spouse because there is an automatic injunction during a Colorado divorce against disposing of marital property. If there has been an increase in value in your home during the marriage, then your spouse has a marital interest and you cannot sell during the divorce process without their consent.
