There are essentially four "Main Issues" people must consider in a separation,
Property Issues, Pension & Retirement, Tax & Consequences and Military/Gov. Benefits
Colorado is an “equitable property” state. What this means is that fairness cannot be measured by a mathematical formula. Each situation is unique. Achieving a fair outcome is not necessarily measured upon what a judge may or may not do. The law encourages and fosters the party’s ability to “self-determine” what is fair in their circumstances.
The concept of marital property has expanded. When I first started emphasizing and limiting my practice to family law; Colorado did not consider future military retirement benefits to be marital property; and Colorado viewed the estate planning devices of relatives to be “exempt” from consideration as a marital interest. Over the decades the definition of what constitutes marital property has expanded and many items that may be difficult to value, nevertheless may be considered marital property. If the parties cannot reach their own solution as to the value of marital resources, I have ability, through my decades of litigation, to refer the parties to any number of qualified experts who are equally experienced and knowledgeable of family law issues.
Pension and retirement benefits… There are vast differences in every pension benefit. Withdrawing and/or transferring pension benefits may have significant tax consequences. There are, however, specific legal documents which when done properly will shield the transfer of pension accounts or benefits from one spouse to the other from the penalties and taxes that could be incurred if not properly transferred. Another advantage of mediation is the ability of the parties to select one accountant expert to assist in the evaluation and division of pension benefits. In “traditional litigation” each side could be expected to hire his/her independent expert to review and comment upon the reports of others. This “battle of the experts” is a major component of the high costs of litigation. Being able to agree to retaining one expert can be a major savings, with the understanding that if either party desires further additional input, such request can be accommodated, without having to “declare war”. The cornerstone to any successful resolution is: that both sides have the information necessary to make an informed agreement.
Tax filings and tax consequences: There are certain forms that the IRS may require whenever a tax dependency exemption is being awarded. The Colorado Support Guidelines address how Colorado handles the situation, but often the IRS may have different rules. Prior marital taxes have been known to be the subject of an audit, after a divorce has been granted. Failure to account for the tax basis of certain properties may have significance in the division of other assets / liabilities. So often, even with the best of intentions, parties who “do their own divorce” are not aware of the tax consequences that may transpire. Having the agreements looked over by an expert can be quite beneficial to both parties. With the assistance of an experienced accountant, the parties may find a “win/win” solution to the complexity of the IRS code, such as allocation of tax exemptions, head of household designations, the right to declare the expenses of work related daycare, and other tax related issues.
Military retirement and governmental benefits … The Colorado courts have remarked that: in many cases an employee's retirement plan represents one of the most valuable assets accumulated during the marriage … There are two distinct types of plans and how these plans are valued is often misunderstood. In an Collaborative approach the parties and their counsel would generally agree upon the retention of an expert to gather the necessary releases, procure the data, and evaluate the same based upon generally accepted accounting principles. What is critically necessary is to be informed as to the resources which this community offers particularly in the field of government pensions. Many government sponsored retirement plans operate under a very strict set of rules with defined deadlines as to when retirement “division orders” need to be processed.
