- DIVORCE PROCESS
- CHILD SUPPORT
- PROPERTY DIVISION
- BUSINESS VALUATION
- TRUSTS IN DIVORCE
- PARENTAL RESOPSIBILITIES (CUSTODY)
A divorce, known as “dissolution of marriage” in Colorado, commences with the filing of a Summons and Petition in the District Court. The court will then issue a case management order setting out certain requirements for the conduct of the case and will set an Initial Status Conference.
Each party is required to provided mandatory disclosures to the other of various financial documents like tax returns and account statements. If there are disputes involving the children, child experts might be appointed to assist the parties and the Court in determining what is in the children’s best interests. After the disclosure process is complete, assets requiring valuation have been addressed, and information gathering has concluded, the settlement process begins.
Settlement discussions can occur directly between the parties and their attorneys or by using a mediator. Parties who settle their divorce and meet certain requirements can submit their written agreement to the Court for consideration and approval.
If settlement efforts fail, the judge will conduct a trial and issue orders addressing the allocation of parental responsbilities (decision-making and parenting time), child support, the division of marital assets and debts, and spousal maintenance.
Child Support is calculated by means of a mathematical formula based on the income of both parties and other factors. Unfortunately, this calculation can be complex and technical.
Families with combined income in excess of $360,000 cannot have child support determined by the formula and the amount is instead determined by considering a variety of factors including the needs of child and the income of the parents.
Property of the marriage is to be divided “equitably.” Equitably does not mean equally, but in many cases the division of marital property will be substantially equal.
Marital property means all property acquired by either spouse subsequent to the marriage except: (a) Property acquired by gift or inheritance; (b) Property acquired in exchange for separate property; (c) Property acquired after a decree of legal separation; and (d) Property excluded by valid agreement of the parties. The filing of the divorce does not change the rule: all property acquired until the granting of the decree is marital unless it fits within an exception.
The simplest way to approach division of property is to make a list of all of the assets and then place them in “his” and “hers” columns. The goal is to have the values of the items in each column be equal, or such other ratio as you determine to be fair.
An expert may be needed to determine the value of a business or do a real estate appraisal. You will need to determine if it would be cost-effective and valuable to your case to have such valuations or appraisals.
Cases involving business valuation or professional practice valuation are particularly complex because they involve a mix of objective and subjective factors. These cases require both a competent valuation expert and an experienced divorce attorney to make sure the correct objective factors are used and that the subjective factors are applied appropriately.
Valuing an interest in a publicly traded company is relatively easy. Closely held businesses are another matter because there is no market history to gauge value. It becomes necessary to use experts to locate comparable sales, value business assets or capitalize income.
This process is quite variable depending on the judgments made. Value can be dramatically increased or decreased due to different choices of discount rates, tax assumptions or risk factors. Valuation reports can differ by millions of dollars depending on the assumptions made the the experts. You will need an attorney conversant with these techniques as well as the experts who do this type of work.
The valuation process has become considerably more complicated since the Great Recession challenged some long held financial assumptions. Because all valuations are based on expectations of the future, it is critical to understand how the disrupted business climate may affect a particular enterprise. Awareness of the rapidly changing business climate is crucial to accurate business valuation.
If you or your spouse is an entrepreneur who has created a thriving business or professional practice, you need a law firm that understands the nuts and bolts of the valuation process so that both parties are treated fairly.
Attorneys in our firm have handled cases involving very complex business valuations and have taught a number of seminars for attorneys and accountants on business valuation issues.
Trusts in Divorce
Trusts are legal creations that are not technically owned by anyone. The trust is managed by the trustee and one or more beneficiaries have rights under the trust.
If a spouse is a beneficiary of a trust, that beneficial interest may constitute property under Colorado law and the property right may be marital property. When trust issues are involved in a divorce there is generally a collaboration between the divorce lawyer and a trust lawyer to determine how to appy the trust and divorce laws to determine what, if any, marital property may exist.
Our firm has handled numerous cases involving very large and complex trust issues.
Parental Responsibilities is the term used in Colorado to define the divorce orders relating to children. This was formerly referred to as “custody”. There are two components to parental responsibilities.
Decision making is just what it sounds like: how are decisions regarding the children going to be made after the divorce. The day to day decisions like bedtime, tv viewing and having friends over are made by the parent with whom the children are residing at the time. Major decisions, like religious upbringing, education and medical care are often made jointly, although this power can reside in one parent when in the best interests of the child.
Parenting time defines where the child will spend her time:
- On a weekly basis
- During holidays
- On school vacations
There is literally an infinite variety of timesharing plans that work well for children and there definitely is not a “one size fits all” plan than can or should be applied in every case. If the parents cannot agree on the schedule they can enlist the help of count appointed mental health professional to make recommendations.