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Keeping records that establish separate property

August 22, 2019 | Firm News

Colorado spouses who own high valued assets have much to lose in a divorce if most of their assets are considered marital property and eligible for division. Upon getting married, spouses should maintain proper documents that establish which of their assets are separate. Because assets take many forms, it is important to be aware of the different kinds of records needed to establish their nature and value.

Some spouses own real estate at the time of their marriage. Per Forbes, people that own a piece of real estate should keep a copy of the property deed, and if possible, the HUD-1 Settlement Statement. Spouses that own stocks can document their ownership through corporate records or formation documents. If you own stock in a closely-held company, the use of minutes can show your ownership, or if your stock is in publicly traded company, a trade confirmation can suffice.

It is also important to maintain account statements from your bank or brokerage accounts. Keeping accounts dating from the date of your marriage establishes the value and the independence of your separate property and can be used to trace those assets if they should be comingled with marital assets. However, this does not guarantee that the assets will not be subject to division upon a divorce if they are comingled.

People that inherit money should maintain a copy of the will or trust document that describes the inheritance and the beneficiary. If you receive a substantial amount of money as a gift, you should keep the card or note that designates it as a gift. NerdWallet also suggests keeping copies of checks that you receive as gifts. You may also want to ask the gift giver for a letter describing the value of the gift.

Additional documents you should maintain include appraisals of property, bills of sale, and tax returns. Still, while these documents can establish the separate nature of a lot of property, there are instances where separate property may still be considered marital property, such as if separate property increases in value during the course of a marriage and market forces are not the reason. It may take additional measures, such as postnuptial agreement, to draw a distinction between separate and marital assets.

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