Economic Fault: Divorce 101

Blog | 4.18.2016

Colorado has No Fault Divorce, which means you do not have to prove cruelty or adultery, but that also means the court does not want to hear any testimony about affairs, altercations or addictions.  However the court will consider economic fault in the context of property division and may consider domestic violence, especially in the presence of minor children; addictions that impair parenting abilities or inappropriate behavior surrounding extramarital relationships that impact the children in its decisions regarding children.

This blog focuses on economic fault.  If you can show the actual economic cost of an affair, altercations or addictions and they are substantial, the court may consider them for some period of time before the divorce but the length of time that the court will look back before the divorce petition is filed will vary from one judge to the next. As the divorce petition is filed the court will look much more closely at economic transactions or costs that negatively impact the value of the marital estate and are outside the normal budget of the family. For some time Colorado has had a statutory provision that (1) restrains both parties from transferring, encumbering, concealing, or in any way disposing of any marital property, without the consent of the other party or an order of the court, except in the usual course of business or for the necessities of life; and (2) requires each party to notify the other party of any proposed extraordinary expenditures and to account to the court for all extraordinary expenditures made after any co-petition is filed or after one party has filed a petition and served the other party.

Transferring marital property does not prevent a party from closing a joint bank account or withdrawing funds from a joint bank account while placing those funds in an account in that one party’s name so long as that party preserves those funds or accounts for their use on ordinary and necessary living expenses.  If the family has, however, been living above or at the limit of its means by practices such as steadily increasing credit card debt or taking out second mortgages to fund a lifestyle the family really cannot afford, the court may not penalize past behavior by finding economic fault and the family may be in an even poorer economic position by having to fund two households than one joint household.

By: Jennifer Holt