Family Law, Divorce, Custody and Child Support Attorneys in Colorado Springs, Colorado

Spousal Maintenance: Statutory or Contractual?

Individuals facing the dissolution of marriage process often seek to have spousal maintenance awarded to him or her. There are many reasons for wanting to be awarded spousal maintenance, but perhaps the most common reason deals with a disparity in income between the parties. For instance, it is not uncommon for the parties to agree that during the marriage, one party will forego a career, or work part-time, in order to raise the parties’ children and the other party will be the primary “breadwinner.” It is perfectly acceptable for the parties to have defined each other’s role in the marriage. However, it is also understandable that the parties’ may not have considered the long-term ramifications of this type of decision. One of those ramifications may concern how each party will support himself or herself after the divorce is finalized.

As such, the party who cared for and maintained the home and raised the children may have surrendered his or her career to do so. Further, if this was your agreement during the marriage, and suppose you were married for 15 years, you suddenly have to devise a plan to make ends meet on your own. In this instance, you will very likely be seeking spousal maintenance and will have two options: statutory and contractual.

Statutory maintenance is the type which is awarded by the Court. The Court may award maintenance for such amounts and for such periods of time that the Court deems just. The Court will consider several factors, set forth in C.R.S. § 14-10-114, including the financial resources of the party seeking maintenance, which may include marital property apportioned to him or her; the time necessary to acquire education or training sufficient to enable to party who requests maintenance to find suitable employment, as well as his or her future earning capacity; the standard of living established during the marriage; the duration of the marriage; the age and physical and emotional condition of the spouse seeking maintenance; and the ability of the other spouse to meet his or her needs while paying maintenance to the requesting spouse.

Contractual maintenance is the type which results in the parties reaching an agreement about how much maintenance will be paid, and for what duration of time, to the requesting spouse. This may be beneficial to the parties, as it takes the matter away from the Court to decide and eliminates the uncertainty as to what the Court may or may not award. It may also be beneficial because the parties may agree that the contractual maintenance is never modifiable by a Court. Ever. Whether maintenance is awarded  by the Court pursuant to statute, or contracted for between the parties without clear language designating the maintenance as non-modifiable, the general rule is that maintenance is modifiable upon a showing of changed circumstances so substantial and continuing as to make the terms unfair.

Spousal Maintenance: Statutory or Contractual?

When a party files a dissolution of marriage action, often times they will reach an agreement concerning the allocation of the parties’ property, including their assets and debts. This is known as a Separation Agreement and it may also contain a provision concerning spousal maintenance. This is referred to as “contractual” spousal maintenance.

Imagine that the Court issues a Decree for Dissolution of Marriage. Subsequently, imagine that the parties decide to reconcile their relationship and might even move in together. So what happens to those provisions set forth in your Separation Agreement? Largely, this will based upon the time frame specified in the Separation Agreement that provides for when certain events must happen. For example, the agreement may provide that “within thirty days of the date of the Court’s issuance of a Decree for Dissolution of Marriage, the Petitioner shall sign over the car title to Respondent.” In this situation, whether that provision of the separation agreement is still in effect will likely depend upon whether this provision has been satisfied prior to the reconciliation. However, if your separation agreement addresses on-going obligations, such as the monthly payment of spousal maintenance, whether that provision is still in effect is not as cut and dry.

The Colorado Court of Appeals has consistently held that reconciliation does not automatically terminate a property settlement; however, in determining whether a reconciliation has terminated a property settlement agreement, the trier of fact must ascertain from the evidence whether the parties intended to revoke the agreement upon reconciliation. Morrell v. Morrell, 687 P.2d 1319, 1322 (Colo. App. 1984). Moreover, the burden of attempting to prove that the reconciliation did not terminate the agreement lies with the party arguing for this proposition.

The portions of the separation agreement that have not yet been fully executed are those which may be terminated upon the parties’ reconciliation. This is important to keep in mind if you are intending to reconcile with your former husband or wife. Should the reconciliation head south, the likelihood that the party who was supposed to receive maintenance or other property pursuant to separation agreement may very well try to obtain those payments or his or her share of property.

Therefore, it is important to make your intentions known, just to be on the safe side. If you and your former spouse intend to reconcile, and you are still on the hook for making payments or transferring property pursuant to the separation agreement, it may be wise to put those intentions in writing. For good measure, and depending on the circumstances, you may want to file your intentions with the Court.

The Effect of Reconciliation on Separation Agreements

“Marital fault” (also referred to as “marital misconduct”) is a phrase frequently used when one spouse places the blame for a marriage not succeeding on the actions of the other spouse. Colorado courts are not permitted to consider marital fault upon distribution of assets or debts during a dissolution of marriage action. C.R.S. §1 4-10-113. However, Colorado courts have held that should a party to a dissolution of marriage proceeding deplete an economic resource of the marriage, they court may consider such “economic fault” during its division of assets.

Generally, only the marital property existing at the time of the dissolution of marriage is available for distribution between the spouses. The only exception is that a court can value marital property that has been dissipated as of the date it still existed.

The concept of depleting the economic resources of a marriage may seem straightforward. However, pursuant to the temporary injunction that goes into place once a petition for dissolution of marriage is filed with the court, and subsequently served on the other party, both spouses are permitted to utilize the assets of a marital estate for “reasonable and necessary” living expenses.  As the Court may consider the economic fault of a party based on actions committed prior to and after the commencement of the divorce, the line between reasonable spending, and depletion to the extent of economic fault, may blur easily.

The concept of economic fault is more widely applied to situations that occur prior to the commencement of a dissolution of marriage action. For instance, in In re Marriage of Hunt, the Court of Appeals stated that “’economic fault’ is a limited concept which comes into play only in extreme cases such as the spouse’s dissipation of marital assets in the contemplation of divorce.” 909 P.2d 525, 542 (Colo. 1995).

The divorce process is often emotional and stressful. The period of time leading up to the commencement of a divorce action is sometimes even more trying. Individuals who are typically cool-headed may make rash decisions during these times. Actions by one spouse that are deliberate and committed under circumstances where the other spouse is not consulted or given the potential to mitigate potential damages, can be considered as economic fault by the Court. One situation where the Court differentiated between marital fault and economic fault occurred where a husband stopped making lease payments on a business lease owned by husband and wife. In re Marriage of Jorgenson, 143 P.3d 1169 (Colo. App. 2006). The actions by husband were considered economic fault.

In conclusion, it is important to keep the concept of economic fault in mind, especially when making decisions concerning the assets of your marriage, if you anticipate a divorce in your future.  Actions taken that may be construed as depleting an economic resource of the marriage may be used against you and, therefore, may impact the amount of property you receive upon the distribution of assets.

Marital Fault or Economic Fault? What Colorado Courts May and May Not Consider

Colorado District Courts are not immune to the ongoing recession.  Court dockets have become so full that it often takes up to nine months to schedule permanent orders hearings in domestic cases.  Accordingly, parties are contemplating the resolution of the marital issues without court intervention at an increasing level.  To settle a case without court intervention requires several things, but most importantly, a separation agreement and a parenting plan, when children are involved.  

Separation agreements come in many forms and often include any legally binding written document signed by both parties that memorializes any agreements the parties have made with respect to the disputed issues.  Separation agreements, often referred to as stipulations, are generally filed with the Court and ultimately become the Court’s orders.  A good separation agreement should attempt to resolve all of the issues.  These issues include, but are not limited to:  allocation of debts and assets, resolution of future disputes, spousal maintenance, separate property, insurance and many more.  Depending on the complexity and amount of issues in any case, separation agreements can be brief or appropriately lengthy. 

The amount of conflict and the complexity of the issues often impact the ability of the parties to negotiate, or alternatively, the amount of time the parties will require to conduct a contested hearing in the district court.  Lengthy contested hearings are difficult to come by and the courts often prefer to entertain only those issues that are actually in dispute.  Therefore, there is often inadequate time to address all of the issues in domestic cases.

It is very difficult for parties to get on with their lives without resolving property distribution, payment of marital debt, spousal maintenance, etc.  Separation agreements can be temporary, permanent and be as comprehensive as necessary given the circumstances in each case.  Therefore, it is important to draft them with meticulous reflection and insight into the past, present and the future.  Experienced domestic attorneys have confronted a multitude of marital issues and have become experts in drafting separation agreements that help decrease the chances of future litigation.  When actual agreements are made, the parties often feel they have achieved their goals, which often facilitates the closure they desire. 

Separation Agreements

During a dissolution of marriage, it is essential that you consider the ramifications of any agreement, or Court Order for that matter, in good times and in bad.  Not every dissolution of marriage is messy and expensive.  No every divorce is high conflict.  But even in the situations when your parting ways may be on amicable terms now, there may be a time in the future when your relationship with your former spouse may be more stressed. 

This is why, even in a peaceful dissolution of marriage, you have to be careful about the ramifications of your agreements several years down the road.  This is somewhat foreseeable with children’s issues, such as parenting time and decision-making authority, but this realization is more often overlooked when addressing the financial issues of a dissolution of marriage. 

Commonly, attorneys utilize standard language to effectuate the agreements of the parties when determining how to transfer title to vehicles or real property.  The point of this discussion is that it is imperative that you consider not only what your financial plans are currently, but also what your financial plans may be in the future.  For example, husband and wife are often jointly titled on their house and they are oftentimes, also, both liable for the mortgage. Upon a decree of dissolution of marriage, either the husband will take the home, the wife will take the home, or the parties will place the home on the market and sell the home.  There are benefits and detriments to each of these situations, but there is much to be considered in each of these situations too. 

If the house is listed on the market for sale, what happens if the house does not sell?  Does the agreement address how long the house will remain on the market?  How is the listing price determined?  What happens if one of the parties continues to reside in the home but does not maintain the home in a saleable condition?  If the house is awarded to one or the other party, how long does that party have to refinance the property into their name alone?  What happens if they cannot refinance the home?  What happens if the party responsible party does not make the mortgage payments timely, and the home goes into foreclosure? 

Divorcing parties cannot consider every possible scenario for every vehicle, and property and debt out there, but there are several methods and language which can be utilized to cover the most common problems that arise.  Ultimately, the parties are the best suited to determine what problems are likely to arise and in the end, agree how to best protect their future interests by addressing those issues during the dissolution of marriage process and not waiting until it is too late.

Long Term Effects of Agreements

Making the decision to move out of the marital home is a very difficult decision to make in the beginning of the dissolution process. It is a decision that should be discussed with an attorney because it could affect several issues of your case, including maintenance, child support, parenting time, and most importantly who stays in the marital home during the process and after the dissolution.

If you have children, moving out of the marital home could adversely affect the amount of parenting time you receive with your children.    In most cases, the children will stay in the marital home throughout the process of the dissolution.   If you move out, than you will be the one that has to make sure their new home has adequate accommodations and you are able to transport them to and from their daily activities, if they are to stay the night at your new home.    While dividing your family into two homes is inevitable, it is not necessarily in your best interest to move out until a parenting plan is in place.

When and if you decide to move out, make sure you find a place that is adequate for your children and for yourself.   If you decide to find a cheap place, just because it is cheap, then the Court may determine that is all you need for rent in the long run and this could adversly affect the amount of money you keep of your own paycheck for your living expenses and could provide an avenue for your ex to get more money for maintenance.    Maintenance is calculated by your spouses need and your ability to pay, if you lower your bills by renting a cheap place it could be costly in the long run.

Consult with an attorney before you move out, because once you move out it is extremely difficult to get back in, in most cases.   Your spouse will have a difficult time getting an Order from a Court to have you removed from the marital home, but if you move out your spouse may change the locks and it may be an uphill battle to move back into the marital home.

The decision to move out of the marital home divides your one family home into a two family home, which is difficult both from an emotional standpoint if there are children and is always difficult regarding the financial situation. In most cases, prior to the divorce families are just getting by, and now you are going to have to financially pay for two separate households. It is very difficult, but in most cases, one party has to move out to make the process go smoother, and eventually the inevitable will come.    But what is most important, is that you know how your decision to move out will impact not only the near future but also the process of the divorce and long term commitments to your spouse and children.

It is a difficult decision and one that should be made with the advice of an attorney.