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Boulder Family Law Blog

Life insurance can cause conflict in divorce

Colorado couples who are contemplating divorce often have many questions about property division and asset distribution. However, few of those thinking about a divorce consider one important part of the marital assets: life insurance policies. Dividing insurance policies can be difficult and time-consuming and may end up hurting both parties financially if the division is not done carefully.

Life insurance is purchased so that cash may be obtained in the future. Because of this, it is different from a home or other investments. There is usually no current value in a life insurance policy because it is designed to pay out on the death of the owner. Term policies in particular have very little cash value until the end of the policy, and even then the amount may be so small as to scarcely warrant consideration in property division. However, the proceeds of a life insurance policy may be very large and a divorcing spouse may be concerned that the owner of the policy will change the beneficiary and the proceeds will go elsewhere.

Spouses not always liable for ex's credit card bills in CO

Coloradans will be happy to hear that their state is not one in which creditors can pursue someone for their ex-spouse's debts. The division of assets during a divorce differs according to state law, and in Colorado, this means that no one has to pay their ex's credit card bills.

One woman wrote into an advice columnist with a story: a relative of hers is going through a divorce, and she discovered her husband had maxed out two credit cards. The husband spent until he hit their limits at $7,000 and $15,000 respectively, and then hid any evidence of this from his wife. Unfortunately, if she lives in a community property state, she may have to pay some of this debt even if she wasn't a joint account holder. She will have to prove that her husband did not spend the money in any way that benefited her.

Wealthy or not, couples should have prenuptials

In the past, the prenuptial agreement has been connected to society's wealthiest and famous as a tool to protect themselves during a high asset divorce. However, this document is not made for them alone. Whether you make a seven-figure salary or farm a small plot of land, a prenuptial agreement should be included as part of a marriage plan and premarriage counseling.

Besides dividing property, a prenuptial agreement offers many other advantages to make a divorce easier for both parties. One of the protections is for future earnings. While one partner may have few assets at the beginning of a marriage, a huge salary increase or revenue from a newly opened business can alter this situation in a matter of years. A detailed agreement can protect these earnings during a divorce proceeding.

Divorcing your husband when you earn more than him

Traditionally, the husband has the greater income in a marriage. Usually, it is the wife who negotiates for alimony in divorce proceedings, and there are many more ex-husbands paying spousal support than ex-wives.

However, according to USA Today, the gap in income between husbands and wives is straying from the traditional trend. A study revealed that in dual-income family households from 2006 to 2011, it is becoming less rare for the wife's income to exceed that of her husband. It is not prevalent for the wife's income to be greater, by no means, but it is not unheard of anymore. For those women who do earn more than their husbands, there are a few key factors they must keep in mind if they are thinking about a divorce.

Couples thinking about a divorce should put children first

It is not uncommon for Colorado residents in unhappy marriages to stay together out of concern for their children. However, it could be that staying together instead of getting a divorce ends up being worse for children involved. While couples may want positive role models for their children, a couple that is always arguing may end up providing their children with poor role models.

This is not to say that a couple should not attempt to work past their differences if they have children. That said, if a man and woman cannot get past their problems, they could end up creating an uncomfortable environment for their children, especially if they are fighting all the time. Children in this situation may end up believing that all marriages are filled with arguments and misery.

Gift and income tax issues for the unmarried

The debate in favor of gay marriage places some emphasis on financial rights, such as taxation issues. However, although a joint-tax return with a designation of "married" is important, it stands in stark contrast to what happens when married couples part ways. During a divorce, they can exchange money without any tax implications whatsoever. The same can't be said for same-sex partners who may not have the same rights as married couples.

The American tax code does not tax either spouse with either an income or a gift tax when a marriage ends. However, when an unmarried couple separates, the whole amount is taxed. Those who support the Defense of Marriage Act argue that those laws apply to any heterosexual or gay unmarried couple that splits.

U.S. Supreme Court ruling could impact Colorado laws

The U.S. Supreme Court's ruling on a California gay marriage ban could seriously impact recently passed Colorado legislation that permits same-sex couples the legal right to form civil unions. The highest court in the land heard arguments on March 25 and 26 from supporters and opponents of Proposition 8 in California that prohibits the marriage of same-sex partners. A Colorado law has banned gay marriage since 2006 even as DOMA stops the federal government from recognizing gay marriage.

The state legislature navigated around the issue by voting in civil unions instead. While they admit that it is not the same as full acceptance of same-sex marriage, it gives same-sex couples some legal protection. However, the Supreme Court could decide that Colorado and eight other states that make a distinction between civil unions and marriage have unfair laws.

Recent Powerball winner raises questions about lotto jackpots and child support

From nurses and mechanics to doctors and schoolteachers, everyone has dreams about winning the big lottery payday. Mortgages, student loans and everyday expenses would be a thing of the past while dream homes, luxury cars and fabulous vacations would be the new reality. However, it's important for people to realize that even in the off chance that they somehow manage to win some money in the lotto, they still cannot escape their court-ordered responsibilities, especially child support.

Consider the recent case of a New Jersey man, Pedro Q., who made headlines last weekend after he won $338 million in one of the largest Powerball jackpots ever. Earlier this week, state officials indicated that a routine debt check revealed that he owed $29,000 in back child support for his five children who range in age from five to 23.

Here, state officials indicated that the arrears will be deducted from his mega paycheck -- roughly $152 million after taxes -- along with nine percent annual interest that has been accruing since 2009.

Alimony could reshape celebrity divorce settlement

No matter how much savings, property holdings, or other financial assets are involved between a separating couple, one important question that should always be addressed is the possibility (or, in some cases, necessity) of alimony and other forms of spousal support.

Alimony has traditionally been included in a divorce settlement when it's clear that one spouse may be at a significant financial disadvantage following the separation. Both here in Colorado and across the nation, such a stipulation has become increasingly rare as income disparity between men and women continues to decrease.

However, alimony may, in some cases, be sought for reasons other than financial security. One celebrity divorce case that has been well-storied in both tabloids and online gossip sites may showcase this very situation. Demi Moore has, according to recent reports, requested spousal support from her estranged husband Ashton Kutcher as a part of the couple's current divorce settlement.

State lawmakers approve same-sex civil unions

When the Colorado voted to ban same-sex marriage in 2006, many involved were dismayed; in Denver, Colorado Springs, Boulder, and across the entire state gay and lesbian couples in a committed, healthy relationship were denied the right to legal recognition of their partnership, and thus, the formal benefits and privileges that heterosexual couples enjoy.

This inequity in family law appears to be shifting in the state's current legislative session. Led by strong push by Democratic representatives, lawmakers voted to approve the allowance of civil unions for same-sex couples in Colorado. All that remains is for Governor Hickenlooper to sign the bill, which would allow for civil unions to begin as soon as May 1st.

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