5 things you need to know before getting a Colorado Civil Union

So you are ready to take the plunge into a civil union. Congratulations. But, before you jump, it is really important to understand what that will mean in terms of your finances.

All the Colorado laws that apply to married couples will now apply to the two of you.

What does that mean?

Here are the Top 5 things you need to know about your finances on the other side of a civil union:

1. Alimony laws will now apply to you

Both partners will have the same rights to maintenance, or alimony, as do married couples. If the civil union lasts for a number of years, about 5, then you can expect that if one partner makes significantly more than the other partner, and especially if one partner stays at home and plays a domestic role, the latter partner will have a case for maintenance. Maintenance is need based and currently there are many factors the court looks at to determine if there needs to be maintenance and if so, how much and for how long.

2. All money earned will now be owned by both of you

Any money earned during a civil union is property of the union. It does not matter whose name is on an account or a stock portfolio or a retirement account. If the money entered the account during the civil union then it is union property and is owned by both partners. All civil union property would be subject to division if the civil union ended. The law in Colorado is that the money would be divided equitably. In most short term marriages this tends to be 50-50. There are circumstances that could warrant an unequal division but it is typically not solely based on who makes more money.

3. All property purchased is treated the same way

Property purchased during a civil union is owned by both partners and subject to division upon the end of the union. For instance, if you bought a home and only one partner’s name is on the deed, it is still owned by both of you because it was purchased during the union. The same is true for any other kind of property from art work to furniture to time shares in the Bahamas to stock options.

4. Separate Property stays separate … sometimes

All property and funds are separate until the day you enter a civil union. That property will stay separate as long as you do not co-mingle it with union property. For instance, you have a savings account with $5,000 in it. If that account remains in your name only and you do not co-mingle it with union funds, then that initial amount will remain separate. If however, you add it to a joint account, it will be considered a gift to the union. If you use that $5,000 as part of a down payment on a house then it will be considered a gift to the union (unless you have clear evidence that you both had a different intent). If you put your paycheck into that account post Union, it will be considered to be co-mingled because your salary is now civil union property.

Also, if the funds or property increase in value during the civil union, then that increase in value will be union property even if it remains separate property. So if you have a stock portfolio from before marriage and you did not add funds to it but it doubled in value during the union then that increase must be divided between the two of you.

5. Gifts and Inheritance

An inheritance is separate property no matter when it occurs. However, any increase in value during the civil union is union property. Co-mingle rules apply as well. A gift is also considered separate property. But, any increase in value to the gift is union property. If the gift is between the partners then it will only be considered a gift if it is personal, non-business property. The ring is yours, the car is yours, the land in Aspen is still union property even if it is a gift from your partner. Co-mingle rules still apply.

OK, so there are six things you need to know:

6. Any of these laws can be changed by entering into a Pre-Union Agreement.

Working with a law firm like Matthews and Matthews, you can learn more about what to expect in your circumstances and how you can create a Pre-Union Agreement to supersede the state statute if that is what you want or need to do.