In re Marriage of Smith

2024 COA 95, 559 P.3d 662

• Court: Colorado Court of Appeals
• Decided: August 22, 2024
• Docket: 22CA2182
• Status: Published

Opinion

SUMMARY

August 22, 2024

2024COA95

No. 22CA2182, In re Marriage of Smith — Family Law —

Dissolution — Disposition of Property — Irrevocable Family

Trust — Donative Third Party Instruments

In this domestic relations case, husband appeals from the

district court’s permanent orders concerning the division of the

parties’ marital estate. A division of the court of appeals considers

whether wife’s beneficiary interest in an irrevocable family trust

constitutes property or an economic circumstance. The division

concludes that wife’s interest in the family trust was discretionary

and, therefore, was not property. The division then concludes, as a

matter of first impression, that wife’s trust interest was not an

economic circumstance because her father’s power of appointment,

as the primary beneficiary of the family trust, rendered her interest

The summaries of the Colorado Court of Appeals published opinions

constitute no part of the opinion of the division but have been prepared by

the division for the convenience of the reader. The summaries may not be

cited or relied upon as they are not the official language of the division.

Any discrepancy between the language in the summary and in the opinion

should be resolved in favor of the language in the opinion.

revocable under section 14-10-113(7)(b), C.R.S. 2023. The division

rejects husband’s additional contentions and affirms the judgment.

COLORADO COURT OF APPEALS 2024COA95

Court of Appeals No. 22CA2182

Boulder County District Court No. 20DR30188

Honorable William G. Meyer, Judge

In re the Marriage of

Sarah Bland Smith,

Appellee,

and

James F. Butterworth,

Appellant.

JUDGMENT AFFIRMED

Division VII

Opinion by CHIEF JUDGE ROMÁN

Tow and Kuhn, JJ., concur

Announced August 22, 2024

Caplan and Earnest, LLC, Craig A. Weinberg, Andrew C. Littman, Boulder,

Colorado, for Appellee

Cox Baker Paige & Bailey, LLC, James S. Bailey, Castle Rock, Colorado, for

Appellant

Polidori, Franklin, Monahan, & Beattie, LLC, Robin Lutz Beattie, Lakewood,

Colorado; Harrington Brewster Mahoney Smits P.C., Emma A. Fletcher,

Denver, Colorado, for Amicus Curiae The Colorado Bar Association, Family Law

Section

1

¶ 1 In this dissolution of marriage case between Sarah Bland

Smith (wife) and James F. Butterworth (husband), husband appeals

the district court’s allocation of the marital estate. He contends

that the court erred by determining that wife’s beneficiary interest

in an irrevocable family trust was neither property nor an economic

circumstance. To resolve this issue, we must determine, as a

matter of first impression, whether wife’s father’s power of

appointment, as the primary beneficiary of the trust, rendered wife’s

discretionary trust interest revocable under section 14-10-113(7)(b),

C.R.S. 2023. We conclude that it did, precluding wife’s trust

interest from the court’s consideration. We reject husband’s

additional contentions and affirm the judgment.

I. Background

¶ 2 The parties married in 2007, and wife initiated the dissolution

proceeding about thirteen years later.

¶ 3 Early in the proceedings, husband requested that wife disclose

information about an irrevocable family trust created by her

stepmother that named wife as a beneficiary. Wife filed a motion for

determination of a question of law, arguing that any interest she

had in the family trust did not constitute property and was not an

2

economic circumstance relevant to the dissolution proceeding. She

attested that she had not received any distributions from the trust

and argued that the trustee, who was her father, had sole discretion

over the distributions. She further argued that her father, as the

primary beneficiary, had a power of appointment over the trust

property, which he could use to revoke her trust interest. The

district court granted wife’s motion and did not further consider her

trust interest when dissolving the marriage.

¶ 4 After a six-day hearing, the district court dissolved the

marriage and entered permanent orders. As relevant here, the

court determined that husband did not have a separate property

interest in the parties’ marital home (2042 Alpine); a lot adjacent to

2042 Alpine that the parties converted into their yard (2032 Alpine);

and a recently sold condominium in New York City (NY Condo). The

court allocated 2042 Alpine and 2032 Alpine to wife, and it equally

divided the equity from the NY Condo. The court also determined

that although wife had recently sold approximately $4 million of

their stock shares in Apple Inc., she did not improperly dissipate

the marital estate. It found that she had done so to pay down

marital debt and facilitate husband’s purchase of a new home. The

3

court then divided the parties’ $49.5 million marital estate,

allocating to husband net equity of about $25 million and to wife

the remaining $24.5 million.

II. Wife’s Family Trust

¶ 5 Husband contends that the district court erred by concluding

that wife’s beneficiary interest in the family trust was neither

property nor an economic circumstance. We discern no error.

A. Legal Principles

¶ 6 When a court divides the marital estate in a dissolution

proceeding, it must first determine whether an interest constitutes

property. In re Marriage of Cardona, 2014 CO 3, ¶ 12. In making

this determination, the court “focus[es] on whether the spouse has

an enforceable right to receive a benefit.” Id. at ¶ 26. When a

spouse has a present, fixed right to a benefit, even if that benefit

will not occur until sometime in the future, that constitutes a

property interest. In re Marriage of Balanson, 25 P.3d 28, 41 (Colo.

4

2001) (Balanson II).

1

However, interests that are speculative are

mere expectancies and do not constitute property. Cardona, ¶ 13.

¶ 7 We review de novo a court’s determination of a question of law

under C.R.C.P. 56(h).

2

See Henisse v. First Transit, Inc., 247 P.3d

577, 579 (Colo. 2011). We also interpret de novo the language of a

trust and the law governing it. See In re Marriage of Blaine, 2021

CO 13, ¶ 14; Denver Found. v. Wells Fargo Bank, N.A., 163 P.3d

1116, 1122 (Colo. 2007).

B. Discretionary Interest

¶ 8 Husband contends that the district court erred by determining

that wife only has a discretionary interest in the family trust. We

discern no error.

¶ 9 Wife, her sisters, and her father are eligible beneficiaries of the

family trust. The trust directs the following distributions:

My Trustees shall pay or apply all or any part

of the net income [and principal] to or for the

benefit of any one or more of the Eligible

Beneficiaries, in such proportions, equal or

1

In In re Marriage of Balanson, 25 P.3d 28, 41 (Colo. 2001)

(Balanson II), the supreme court affirmed in part and reversed in

part In re Marriage of Balanson, 996 P.2d 213 (Colo. App. 1999)

(Balanson I).

2

The parties do not dispute that no genuine issues of material fact

exist concerning the district court’s C.R.C.P. 56(h) ruling.

5

unequal or all to one person that my Trustees

in their discretion consider advisable for any

such Eligible Beneficiary’s maintenance in

health and reasonable comfort, complete

education . . . or support in such Eligible

Beneficiary’s accustomed manner of living.

(Emphasis added.)

¶ 10 Upon wife’s father’s death, any remaining trust property not

effectively appointed through her father’s power of appointment

(discussed in more detail in Part II.C below) would be placed in

separate “[l]ifetime [t]rusts” for wife and her sisters. Wife’s lifetime

trust is to be created under terms substantially similar to that of

the family trust, and it has the same terms for distributions to wife

and her descendants. After wife’s death, the property in her lifetime

trust would be given to her descendants, also in trust.

¶ 11 The district court determined that, based on these provisions,

distributions of income and principal from the trust — and likewise

her later lifetime trust — are “totally within the discretion of the

trustee.” It concluded that wife’s interest is not property subject to

the court’s allocation.

¶ 12 “Where the trust permits the trustees to distribute to a

beneficiary or beneficiaries so much, if any, of the income and

6

principal as they in their discretion see fit to distribute, a

beneficiary has no property interest or rights in the undistributed

funds.” In re Marriage of Rosenblum, 602 P.2d 892, 894 (Colo. App.

1979); accord In re Marriage of Jones, 812 P.2d 1152, 1156-57

(Colo. 1991). Even if the trust directs that a trustee, within their

discretion, shall pay a beneficiary income and principal, the

settlor’s intent to bestow discretion over that distribution can

render the beneficiary’s interest a mere expectancy. Jones, 812

P.2d at 1156; see 2 Austin Wakeman Scott & Mark L. Ascher, Scott

& Ascher on Trusts § 13.2.3, at 915 (6th ed. 2020) (noting that

under such terms, “the beneficiary is ordinarily entitled only to

what the trustee in a proper exercise of discretion decides to

distribute”); see also § 15-5-103(18), C.R.S. 2023 (defining settlor as

a person “who creates, or contributes property to, a trust”).

¶ 13 Although the family trust indicates that the trustee “shall pay”

the income and principal to the eligible beneficiaries, the plain

language of the trust grants the trustee the “discretion” to

determine any distribution to any one or more of the beneficiaries

that the trustee considered “advisable.” It further provides that the

trustee can make “unequal” distributions, including to only one of

7

the eligible beneficiaries. This broad discretionary authority

includes the trustee’s power to withhold distributions from wife.

See Jones, 812 P.2d at 1157.

¶ 14 The trustee’s discretion over wife’s interest is further

demonstrated elsewhere in the family trust. It directs that when

making a discretionary distribution, the trustee is required to give

primary consideration to wife’s father’s needs, has no obligation to

consider wife’s needs, and cannot distribute anything to wife unless

the trustee expects to have enough trust property to adequately

provide for wife’s father throughout his lifetime. Together, these

provisions demonstrate that wife’s stepmother intended to grant the

trustee complete discretion over distributions, if any, to wife.

¶ 15 We are not persuaded otherwise by United States v. Delano,

182 F. Supp. 2d 1020 (D. Colo. 2001). In that case, the federal

district court determined that the defendant’s interest in a

testamentary trust constituted property for purposes of foreclosing

on a federal tax lien. Id. at 1021-24. The court noted that the use

of the phrase “shall pay” suggested the settlor’s intent to compel

some form of distribution to the defendant despite the trustee’s

discretion over the amount of any particular distribution. Id. at

8

1023. The court analyzed the entirety of the trust to determine the

settlor’s intent and concluded that “[b]ased upon [the trust’s] other

provisions,” the settlor intended the defendant to receive trust

distributions. Id. However, the court emphasized that the

defendant was the sole beneficiary, served as the co-trustee, and

had the authority to terminate the trust and retain the trust

property. Id. Given these additional indications of the settlor’s

intent in Delano, we do not agree with husband that the mere use of

the phrase “shall pay” when directing a discretionary distribution

always creates an enforceable property interest. See Jones, 812

P.2d at 1156-57. And, unlike the circumstances in Delano, the

family trust, as a whole, indicates wife’s stepmother’s intent that

the trustee has discretion over any distributions to wife.

¶ 16 The other federal and out-of-state cases that husband cites in

support of his contention addressed legal issues not presented in

this dissolution of marriage case, and the language of those trust

provisions was different. See Magavern v. United States, 415 F.

Supp. 217, 219-21 (W.D.N.Y. 1976) (addressing a tax lien for

unpaid federal taxes on a party’s trust interest under New York

law), aff’d, 550 F.2d 797 (2d Cir. 1977); United States v. Taylor, 254

9

F. Supp. 752, 755-56 (N.D. Cal. 1966) (addressing a federal tax lien

on a trust interest under California law); McElrath v. Citizens & S.

Nat’l Bank, 189 S.E.2d 49, 50-52 (Ga. 1972) (reviewing whether a

mandatory trust distribution to the testator’s grandchildren

reduced a father’s obligation to financially support those children).

Moreover, the rulings in those cases, like Delano, are not binding on

us. See Madalena v. Zurich Am. Ins. Co., 2023 COA 32, ¶ 33 (“[W]e

are not bound by out-of-state decisions.”); Buckley Powder Co. v.

State, 70 P.3d 547, 557 (Colo. App. 2002) (“Lower federal courts

have no jurisdiction over state courts, and their decisions . . . do

not bind Colorado state courts.”).

¶ 17 The district court therefore did not err by concluding that

wife’s interest in the family trust is discretionary.

C. Revocable Interest

¶ 18 Husband next contends that the district court erred by

determining that wife’s father’s power of appointment rendered

wife’s trust interest revocable and precluded it from the court’s

consideration under section 14-10-113(7)(b). We disagree.

¶ 19 When dividing the marital estate, generally, the district court

may consider a spouse’s interest in a discretionary trust as an

10

economic circumstance, even if it is not property. Jones, 812 P.2d

at 1158; Rosenblum, 602 P.2d at 894; see § 14-10-113(1)(c).

However, the court’s consideration of a spouse’s interest in such a

trust may be limited by section 14-10-113(7)(b). This statute

states,

“[P]roperty” and “an asset of a spouse” shall

not include . . . any interest under any

donative third party instrument which is

amendable or revocable, including but not

limited to third-party wills, revocable trusts,

life insurance, and retirement benefit

instruments, nor shall any such interests be

considered as an economic circumstance or

other factor.

Id.

¶ 20 The family trust granted wife’s father a power of appointment

over the trust property upon his death. Her father could appoint

the trust property outright or through a newly created trust, within

his discretion.

¶ 21 The district court found that any beneficial interest wife had in

the trust was subject to this power of appointment. The court

determined that it gave wife’s father the power to dispose of the

family trust property, which would in turn revoke wife’s trust

interest. The court then concluded that any interest wife had in the

11

family trust was revocable and that section 14-10-113(7)(b)

precluded the court from considering that interest.

¶ 22 Husband argues that the district court interpreted “revocable”

in section 14-10-113(7)(b) too broadly when it determined that a

power of appointment within the irrevocable family trust triggered

the application of the statute. When interpreting a statute, we

strive to determine and give effect to the legislature’s intent. In re

Marriage of Zander, 2021 CO 12, ¶ 13. We first look to the statute’s

plain language, construing that language in accordance with its

ordinary and natural meaning. Id. If the statutory language is

clear and unambiguous, we apply it as written. Id. But if it is

ambiguous, we enlist other tools of statutory interpretation,

including legislative history, to discern the legislature’s intent. In re

Marriage of Garrett, 2018 COA 154, ¶ 20.

¶ 23 To address this issue, we must determine whether “revocable”

in section 14-10-113(7)(b) applies to “any interest” or “any donative

third party instrument.” A plain reading of the statute does not

provide a clear answer. As written, the term “revocable” in the

phrase “any interest under any donative third party instrument

which is . . . revocable” could reasonably be read to modify either

12

“any interest” or “any donative third party instrument.”

§ 14-10-113(7)(b); see Garrett, ¶ 20 (noting that a statute is

ambiguous if it is susceptible of more than one reasonable

meaning).

¶ 24 Given this ambiguity, we look to the legislative history of

section 14-10-113(7)(b). In 2001, a division of this court concluded

that a vested remainder interest in a revocable or modifiable trust

was a property interest. In re Marriage of Gorman, 36 P.3d 211, 213

(Colo. App. 2001), superseded by statute, Ch. 270, sec. 1,

§ 14-10-113(7)(b), 2002 Colo. Sess. Laws 1055, as recognized in In

re Marriage of Dale, 87 P.3d 219, 224 (Colo. App. 2003). Following

that decision, the legislature enacted section 14-10-113(7)(b) to

overturn that conclusion. See Dale, 87 P.3d at 224.

¶ 25 While Gorman addressed a revocable trust, the speakers in

support of the amendment commented that enacting this statutory

amendment would address the “revocable interest problem” and

that it applied to “anything that can be revoked.” Hearing on S.B.

02-160 before the S. Judiciary Comm., 63d Gen. Assemb., 2d Reg.

Sess. (Mar. 20, 2002) (statements of Sen. Robert Hernandez and

Ron Litvak) (emphasis added). Other comments made to the

13

legislature further clarified that the amendment was intended to

address “interests that can be revoked,” Hearing on S.B. 02-160

before the H. Comm. on Civ. Just. & Judiciary, 63d Gen. Assemb.,

2d Reg. Sess. (Apr. 25, 2002) (statement of Ron Litvak) (emphasis

added), and that “the revocable interest” was the “heart of” the

amendment, Hearing on S.B. 02-160 before the H. Comm. on Civ.

Just. & Judiciary, 63d Gen. Assemb., 2d Reg. Sess. (Apr. 18, 2002)

(statement of William Hunnicutt) (emphasis added). From all this,

we glean that the legislature’s concern was not just with revocable

instruments, but any interest that is revocable. We therefore

conclude that the legislature intended “revocable” within section

14-10-113(7)(b) to modify “any interest.”

¶ 26 And when we review the other language within section

14-10-113(7)(b), this interpretation is supported by subsection

(7)(b)’s repeated references to and focus on a spouse’s interest.

Indeed, it is the spouse’s interest that is precluded from the court’s

consideration under this subsection. Cf. Portercare Adventist

Health Sys. v. Lego, 2012 CO 58, ¶ 12 (construing statutory words

and phrases together and in context). Moreover, the legislature’s

focus on the spouse’s interest is consistent with the process by

14

which the court determines whether a spouse has property subject

to the court’s allocation, which likewise analyzes the interest held

by the spouse and its enforceability, not necessarily the instrument

that happens to hold that interest. See Cardona, ¶ 12; see also In

re Marriage of Joel, 2012 COA 128, ¶ 19 (noting that we must

construe the dissolution of marriage statutes in harmony where

possible).

¶ 27 Moving then to the ordinary and natural meaning of

“revocable,” that term is defined as “[c]apable of being canceled or

withdrawn.” Black’s Law Dictionary 1579 (11th ed. 2019); see also

Zander, ¶ 13 (recognizing that when the legislature does not include

a statutory definition, we may consult a recognized dictionary).

Given this definition, section 14-10-113(7)(b) would preclude the

court from considering any interest in a donative third party

instrument as an economic circumstance or property if that interest

is capable of being canceled or withdrawn.

¶ 28 However, husband argues that we should limit the scope of

“revocable” to mean “revocable by the settlor,” in accordance with

that term’s definition in the Colorado Uniform Trust Code (CUTC),

which was adopted in 2018. § 15-5-103(17) (stating that for

15

purposes of the CUTC, “‘[r]evocable,’ as applied to a trust, means

revocable by the settlor without the consent of the trustee or a

person holding an adverse interest”). But nothing within the

language of section 14-10-113(7)(b), or the Uniform Dissolution of

Marriage Act (UDMA), §§ 14-10-101 to -133, C.R.S. 2023,

demonstrates any legislative intent to import the CUTC’s definition

of “revocable.” And our survey of the UDMA reveals that when the

legislature intended to rely on a statutory definition outside that

act, the UDMA expressly references the applicable statute. See,

e.g., § 14-10-124(1.3)(c), C.R.S. 2023 (adopting the meaning of

sexual assault as set forth in section 19-1-103, C.R.S. 2023). Had

the legislature intended to adopt the CUTC’s definition, it knew how

to do so, but it did not. See Coats v. Dish Network, L.L.C., 2013

COA 62, ¶ 20, aff’d, 2015 CO 44. We cannot add words to the

statute and import that definition now. See Blaine, ¶ 21.

¶ 29 Thus, applying the ordinary and natural meaning of a

revocable interest as set forth by section 14-10-113(7)(b), we

conclude that wife’s father’s power of appointment fell within the

scope of this subsection. Her father could use the power of

appointment upon his death to dispose of the family trust property

16

without regard to wife’s trust interest. See Univ. Nat’l Bank v.

Rhoadarmer, 827 P.2d 561, 562 (Colo. App. 1991) (“A power of

appointment is a power of disposition . . . .”). By exercising that

power, he could cancel wife’s discretionary interest in the trust’s

income and principal. We therefore agree with the district court

that wife’s father’s power of appointment rendered wife’s trust

interest revocable for purposes of section 14-10-113(7)(b).

3

See

Marc A. Chorney, Interests in Trusts as Property in Dissolution of

Marriage: Identification and Valuation, 40 Real Prop., Prob. & Tr. J.

1, 18 (2005) (“The practical effect of exercising a power of

appointment on the beneficial interest of a divorcing spouse is no

different than if a settlor of a revocable trust amended or revoked

the terms of the trust altering or eliminating the beneficial

interest.”); cf. In re Marriage of Balanson, 107 P.3d 1037, 1040-41

(Colo. App. 2004) (noting a district court’s determination that a

3

The record does not reveal that wife was presently receiving any

income or distributions from the family trust and, as the district

court found, husband made no allegation that she had received any

trust distributions. We thus do not address the extent to which a

court may consider as an economic circumstance the trust income

and distributions a party is actually receiving when it allocates the

marital estate.

17

testamentary power of appointment rendered the wife’s trust

interest only an expectancy interest) (Balanson III).

¶ 30 This conclusion is consistent with cases outside our

jurisdiction. See Noble v. Noble, 2020 VT 105, ¶¶ 5, 8 (upholding

the district court’s conclusion that the wife’s interest in an

irrevocable trust could be eliminated by the wife’s father’s power of

appointment); S.L. v. R.L., 774 N.E.2d 1179, 1182 (Mass. App. Ct.

2002) (“The wife’s remainder interest in [the] trust was susceptible

of complete divestment upon the wife’s mother’s exercise of the

power reserved to her to appoint the remainder trust beneficiaries

under the provisions of her will.”); In re Marriage of Beadle, 1998

MT 225, ¶¶ 7, 9, 33, 37-38 (recognizing that a party’s interest in a

trust remained contingent until a power of appointment expired).

¶ 31 Still, husband argues that section 14-10-113(7)(b) cannot

apply to the irrevocable family trust. He relies on Balanson III and

Dale, which recognized that section 14-10-113(7)(b) did not apply to

a spouse’s vested remainder interest in an irrevocable trust, even

though it could be subject to divestment or defeasance. Balanson

III, 107 P.3d at 1042, 1044, 1046; Dale, 87 P.3d at 224. But

importantly, the trust interests analyzed in those cases were only

18

subject to the condition of survivorship. See Balanson III, 107 P.3d

at 1040; Dale, 87 P.3d at 223. That is not the case here. The

irrevocable nature of the family trust only meant that wife’s

stepmother could not revoke the trust instrument. See

§ 15-5-103(17), (18). Wife’s trust interest was still subject to her

father’s power of appointment, and his exercise of that power could

revoke her interest and deprive her of the trust property. See

§ 14-10-113(7)(b).

¶ 32 Husband also argues that our interpretation of section

14-10-113(7)(b) would mean that the legislature impliedly overruled

the conclusions in Jones and Rosenblum that allowed the district

courts there to consider a discretionary trust interest as an

economic circumstance. Jones, 812 P.2d at 1158; Rosenblum, 43

Colo. App. at 147, 602 P.2d at 894. However, again, the trusts at

issue in those cases did not consider a party’s interest that was

subject to revocation. They only determined that, unless otherwise

limited, a discretionary trust interest, while not property, could be

considered an economic circumstance.

19

¶ 33 In sum, the district court did not err by excluding wife’s

discretionary and revocable interest in the family trust from its

consideration as a property interest or economic circumstance.

III. Husband’s Alleged Separate Property

¶ 34 Husband next contends that the district court reversibly erred

by determining that he had no separate property interest in 2042

Alpine, 2032 Alpine, or the NY Condo proceeds. We disagree.

A. Additional Facts

¶ 35 Before the marriage, husband accumulated a series of patents.

He received little financially from these patents until he initiated

multiple lawsuits, alleging that various companies had infringed on

his patents. Shortly after the marriage, husband negotiated a

settlement in the first of these lawsuits, and over the next few years,

he secured additional settlements in his favor. Through these

lawsuits, husband received over $27 million.

¶ 36 After the first settlement, the parties used the proceeds to

purchase 2042 Alpine and 2032 Alpine. When purchased, the

properties were titled in only husband’s name. Wife indicated that

they did so because she was a neurologist and they wanted to

protect the properties from any potential medical malpractice

20

claims lodged against her. Ten years later, husband executed a

quitclaim deed on 2042 Alpine, granting that property to himself

and wife as tenants in common. Husband did not execute a similar

deed for 2032 Alpine.

¶ 37 The parties also used a portion of the patent litigation

settlement money to buy the NY Condo and titled it in a holding

company created by husband. The parties later sold the NY Condo

and received net equity of about $373,000.

¶ 38 At the dissolution hearing, husband argued that the patent

litigation settlements were largely his separate assets because they

were derived from his premarital patents. He asked the district

court to set aside as his separate property the settlement money he

contributed to buy 2042 Alpine ($2.235 million) and 2032 Alpine

($1.07 million). He also argued that because he contributed his

separate property to purchase the NY Condo, the court should set

aside to him the sale proceeds ($373,000).

¶ 39 The district court assumed, without deciding, that the patent

litigation settlements were husband’s separate assets. However, it

determined that husband had gifted to the marriage the separate

funds used to buy 2042 Alpine and 2032 Alpine. It also determined

21

that the separate funds used to buy the NY Condo were so

commingled with marital assets that they had lost their separate

character.

B. Legal Principles

¶ 40 Before dividing the marital estate, the district court must

determine whether an asset is marital and subject to the court’s

division or separate and shielded from division. In re Marriage of

Medeiros, 2023 COA 42M, ¶ 49; see § 14-10-113(1).

¶ 41 All property acquired during the marriage is presumed

marital. § 14-10-113(3). However, a party may overcome this

presumption by showing that the property was acquired in

exchange for that party’s separate assets. See § 14-10-113(2)(b).

The party seeking to have the property declared separate bears the

burden to establish that it retains its separate character. Medeiros,

¶ 52; see also In re Marriage of Seewald, 22 P.3d 580, 586 (Colo.

App. 2001) (“A spouse claiming ownership under [the] exchange

provision must prove a series of exchanges back to an original

separate asset.”).

¶ 42 The district court’s classification of property as marital or

separate is a legal determination that is based on the court’s factual

22

findings. In re Marriage of Morton, 2016 COA 1, ¶ 5. We defer to

the court’s factual findings unless they are clearly erroneous and

independently review its application of the law. Id.

C. Patent Litigation Settlements

¶ 43 As an initial matter, wife argues that we need not address

husband’s separate property contentions because, as a matter of

law, the patent litigation settlements were marital assets and thus

2042 Alpine, 2032 Alpine, and the NY Condo never had a separate

property component. However, because we discern no error in the

district court’s determinations that any separate assets husband

used to purchase these properties lost their separate character, we,

like the district court, will assume, without deciding, that the

patent litigation settlements were husband’s separate property.

4

D. 2042 Alpine

¶ 44 Husband argues that the district court erred by determining

that he had no separate property interest in 2042 Alpine. We

disagree.

4

We therefore express no opinion as to whether post-marital

settlement proceeds from lawsuits concerning premarital patents

are marital or separate assets.

23

¶ 45 Property that a spouse places in joint ownership during the

marriage reflects an intent by the donor spouse to make a gift to the

marriage. Balanson II, 25 P.3d at 37; In re Marriage of Krejci, 2013

COA 6, ¶ 4; see also Dale, 87 P.3d at 227 (recognizing that whether

a gift occurred is a question of fact for the district court to resolve).

When such a transfer occurs, the court may presume that the

jointly owned property is marital absent clear and convincing

evidence to the contrary. Balanson II, 25 P.3d at 37; Krejci, ¶ 4.

¶ 46 The district court found that husband contributed his

separate assets to purchase 2042 Alpine and initially titled the

property only in his name. The court next found that husband later

transferred title to himself and wife as tenants in common, and

given this transfer to joint ownership, it presumed that 2042 Alpine,

in its entirety, was marital property. The court also found that

husband did not overcome this presumption of marital property,

and, thus, it determined that he had gifted these separate assets to

the marriage.

¶ 47 Husband does not dispute executing the quitclaim deed.

However, he argues that this deed does not support the

presumption that he gifted his separate property to the marriage.

24

In his view, that presumption applies only to property placed in

joint tenancy, which confers to each joint tenant a right to possess

the entire property; it does not apply to tenants in common, who

own separate fractional shares of a property. See Taylor v.

Canterbury, 92 P.3d 961, 964 (Colo. 2004). He argues that with the

quitclaim deed, he gifted, at most, half of his separate property

interest to the marriage and retained the remaining interest as his

separate property.

¶ 48 While tenants in common own separate fractional shares, they

still receive joint ownership of the property. See Reishus v.

Bullmasters, LLC, 2016 COA 82, ¶ 24. And the presumption that a

spouse’s transfer of title renders the property marital applies to any

form of legal title that gives both spouses joint ownership in the

property, including tenancy in common. See 1 Brett R. Turner,

Equitable Distribution of Property § 5:43, at 751 (4th ed. 2021);

cf. § 14-10-113(3) (including “tenancy in common” as a “form of

coownership” when determining marital property).

¶ 49 Moreover, husband’s quitclaim deed did not indicate any

intent for him to retain a portion of his interest as his separate

property. Husband quitclaimed the entirety of 2042 Alpine to

25

himself and wife as tenants in common, and the deed identified no

specific fractional interest withheld. We therefore do not agree with

husband that holding title as tenants in common precluded the

district court from finding that husband intended to gift his

separate property interest in 2042 Alpine to the marriage. See

Balanson II, 25 P.3d at 37; Krejci, ¶ 4.

¶ 50 The record also supports the district court’s determination

that husband did not overcome the marital property presumption

by clear and convincing evidence. See Balanson II, 25 P.3d at 37;

Krejci, ¶ 4; see also MGM Supply Co. v. Indus. Claim Appeals Off., 62

P.3d 1001, 1005 (Colo. App. 2002) (“Whether [the] burden of proof

has been satisfied is a question of fact . . . .”). Although husband

claimed a separate property interest, wife testified that, when they

bought 2042 Alpine, they intended it to be marital property and had

agreed to execute a joint ownership deed when she was no longer at

risk of having a medical malpractice claim lodged against her. Wife

also testified that there was no indication that she was not an equal

owner of 2042 Alpine, highlighting that they jointly refinanced the

property, deposited those funds into their joint account, and used

marital funds to pay the mortgage. “We are not at liberty to

26

re-evaluate the conflicting evidence and set aside findings

supported by the record.” In re Marriage of Evans, 2021 COA 141,

¶ 45; see also In re Marriage of Thorburn, 2022 COA 80, ¶ 49 (noting

that credibility determinations and the weight, probative force, and

sufficiency of the evidence, as well as the inferences and

conclusions to be drawn therefrom, are matters within the district

court’s sole discretion).

¶ 51 The district court therefore did not err by concluding that

husband gifted to the marriage the separate assets he used to buy

2042 Alpine.

E. 2032 Alpine

¶ 52 We also reject husband’s argument that the district court

erred by determining that 2032 Alpine was marital property.

¶ 53 A spouse may gift their separate property to the marriage

when there is simultaneously intent, delivery, and acceptance of the

gift. See Dale, 87 P.3d at 227; see also Balanson II, 25 P.3d at 37;

Krejci, ¶ 4. We defer to the court’s finding of a gift unless the

finding lacks record support. See Dale, 87 P.3d at 227.

¶ 54 The district court noted that title for 2032 Alpine was in

husband’s name alone and that the money used to buy it came

27

from the patent litigation settlements. But the court found that,

when husband acquired 2032 Alpine, he intended the property to

be marital and he intended to jointly own the property with wife.

The court highlighted that, during the marriage, husband described

2032 Alpine as marital property shared with wife. The court

concluded that husband gifted to the marriage any separate assets

he used to buy 2032 Alpine.

¶ 55 Husband argues that even if he intended to make 2032 Alpine

marital property, his intent alone was not enough to establish a

valid gift to the marriage. He argues that because title remained

solely in his name, he never delivered the gift to the marriage.

However, the form in which title is held is not dispositive in

determining whether property is marital. See Martinez v. Gutierrez-

Martinez, 77 P.3d 827, 828-29 (Colo. App. 2003); see also

§ 14-10-113(3). And in the absence of joint title, the court may

consider any other relevant evidence when determining whether the

spouse intended a gift to the marriage. See In re Marriage of

Meisner, 715 P.2d 1273, 1275 (Colo. App. 1985).

¶ 56 Husband’s statements, highlighted by the district court, not

only supported the court’s finding that he intended 2032 Alpine to

28

be marital property, they also indicated that he believed he had

effectuated the gift to the marriage. See Dale, 87 P.3d at 227. In

particular, he confirmed that 2032 Alpine was their “marital

property” and that merely placing wife’s “name on the deed doesn’t

affect at all” its characterization as marital. Moreover, wife testified

that they treated 2032 Alpine as their marital property, using it and

2042 Alpine as one property for the family.

¶ 57 We therefore are not persuaded that, under the circumstances

here, the district court erred by finding that husband gifted to the

marriage the separate property he used to acquire 2032 Alpine. See

Meisner, 715 P.2d at 1275 (upholding the district court’s finding of

marital property when evidence supported its finding that the

husband intended to make a joint investment from his separate

assets).

F. NY Condo

¶ 58 We further reject husband’s contention that the district court

erred by not setting aside as his separate property the equity from

the NY Condo sale.

29

¶ 59 Separate property that is so commingled with marital property

that the party cannot trace it back to its original separate form is

marital property. In re Marriage of Corak, 2014 COA 147, ¶ 11.

¶ 60 The district court acknowledged that the parties purchased

the NY Condo with the proceeds from the patent litigation

settlements. But it found that any separate character those funds

had was lost when husband commingled them with marital assets.

The court thus determined that husband had not satisfied his

burden to trace any part of this equity to his separate assets.

¶ 61 The record supports the district court’s determination.

Evidence revealed that the parties used marital and separate funds

to purchase the NY Condo for $4.3 million. While husband claimed

that he used about $3.5 million of his separate assets, his expert

confirmed that those funds were commingled with marital assets

before husband and wife purchased the NY Condo. Then, during

the marriage, any remaining separate character in those funds was

lost through further commingling with marital property to execute a

$3 million mortgage on the NY Condo and pay off the debt on

another marital asset. Wife also testified that they used over

$350,000 of marital funds to pay the mortgage. The court therefore

30

did not clearly err by finding that husband failed to sufficiently

trace a portion of the NY Condo sale proceeds to his separate

assets. See id.; see also Medeiros, ¶ 52; Seewald, 22 P.3d at 586.

¶ 62 In sum, the district court did not err by declining to set aside

any portion of 2042 Alpine, 2032 Alpine, or the NY Condo proceeds

as husband’s separate property.

IV. Overall Property Division

¶ 63 Husband next contends that the district court erred by

effectuating a relatively equal division of the marital estate, arguing

that he contributed substantially more to the accumulation of the

marital estate and the court’s ruling did not indicate that it

considered all the statutory factors. We discern no error.

A. Legal Principles

¶ 64 The district court has great latitude to equitably divide the

marital estate based on the facts and circumstances of the case.

See LaFleur v. Pyfer, 2021 CO 3, ¶ 61. To achieve an equitable

division, the court must consider all relevant factors.

§ 14-10-113(1). Such factors include each spouse’s contribution,

financially and as a homemaker, to the acquisition of marital

property; the value of property set aside to each spouse; the

31

spouses’ economic circumstances; and any change to the value of a

spouse’s separate property during the marriage. Id.

¶ 65 We may not disturb the district court’s decision absent a

showing of a clear abuse of discretion, meaning that its decision

was manifestly arbitrary, unreasonable, or unfair, or based on a

misapplication of the law. See LaFleur, ¶ 61; Medeiros, ¶ 28.

B. The Parties’ Contributions

¶ 66 The district court found that husband generated over $27

million from the patent litigation settlements and that this

contribution to the marriage formed “the foundation” of the parties’

marital estate. The court also found that husband contributed

“exponentially more than” wife to the success of that litigation and

that husband’s investment strategy during the marriage allowed the

parties to grow their marital estate. But the court determined that

husband’s monetary contributions were not entitled to greater

weight and did not outweigh wife’s contributions as “a homemaker,

child co-rearer [and] . . . an emotionally supportive spouse.” The

court found that wife sacrificed her career as a neurologist to care

for the family and raise their children as a stay-at-home mother. It

also found that throughout the marriage, wife performed most

32

domestic responsibilities. The court then determined that both

parties made substantial contributions to the marriage and that

after considering all relevant factors, its relatively equal allocation of

the marital estate was equitable.

¶ 67 Though husband believes that the district court should have

placed greater weight on his financial contributions and given him a

disproportionate share of the marital estate, it was within the

court’s sound discretion to weigh the relevant factors and determine

an equitable allocation of the marital estate. See In re Marriage of

Powell, 220 P.3d 952, 959 (Colo. App. 2009). While wife’s

noneconomic contributions were of a different character, that does

not mean they were any less important to the acquisition and

growth of the marital estate. See § 14-10-113(1)(a); In re Marriage

of Burford, 26 P.3d 550, 557 (Colo. App. 2001).

¶ 68 Husband also suggests that the record does not support the

district court’s findings about wife’s contributions. However, wife

testified that, before the marriage, she operated her own medical

practice and that, after the patent litigation settlements, she left her

practice so that she could facilitate their marital lifestyle. She also

testified that she supported husband throughout the marriage,

33

including the patent litigation; completed most of the household

tasks during the marriage; and cared for their children.

¶ 69 The district court thus weighed the parties’ relative

contributions during the marriage to determine an equitable

allocation of the marital estate.

C. Other Statutory Factors

¶ 70 We also reject husband’s argument that the district court

failed to consider the remaining statutory factors when it divided

the marital estate.

¶ 71 The district court is not required to make specific findings as

to each statutory factor; its findings need only be sufficient to allow

us to determine whether its allocation of the marital estate is

supported by competent evidence. Powell, 220 P.3d at 959.

¶ 72 The district court expressly indicated that it had “consider[ed]

all the factors in § 14-10-113.” While it focused on the parties’

contributions and determined, with record support, that those

contributions supported a relatively equal division, the court also

acknowledged that husband made substantial gifts to the marriage

from his separate property, which formed the foundation of the

marital estate. See § 14-10-113(1)(b), (d). And the court discussed

34

each party’s economic circumstances, including their abilities to

earn incomes in excess of their reasonable financial needs. See

§ 14-10-113(1)(c).

¶ 73 In sum, the district court did not abuse its discretion by

ordering a relatively equal allocation of the marital estate.

V. Economic Fault

¶ 74 Finally, husband contends that the district court erred by

determining that wife did not improperly dissipate the marital

estate when she sold their Apple stock and by declining to account

for the resulting lost assets when it allocated the marital estate. We

are unpersuaded.

A. Legal Principles

¶ 75 In dividing the marital estate, the district court must disregard

marital misconduct. § 14-10-113(1); In re Marriage of Jorgenson,

143 P.3d 1169, 1173 (Colo. App. 2006). But, in extreme cases, the

court may consider economic fault, such as a spouse’s dissipation

of marital assets. In re Marriage of Hunt, 909 P.2d 525, 542 (Colo.

1995); Jorgenson, 143 P.3d at 1173. That is, when one spouse

depletes the marital estate for an improper or illegitimate purpose

in contemplation of the dissolution, the court may take such

35

conduct into account when it allocates the estate. See In re

Marriage of Riley-Cunningham, 7 P.3d 992, 995 (Colo. App. 1999).

¶ 76 Whether a spouse dissipated marital property is a question of

fact. See Martinez, 77 P.3d at 831. We will not disturb the district

court’s finding unless it has no record support. See id.

B. Sale of Apple Stock

¶ 77 A few months after wife initiated the dissolution proceeding,

she sold approximately $4 million of the parties’ Apple stock. Wife

testified that she executed this sale with the intent to “preserve”

their marital assets. She explained that the parties had agreed that

husband could purchase a new home. She testified that shortly

before husband was to close on his new home, he informed her that

he needed an additional $2.75 million and that he intended to

withdraw money from the parties’ securities backed line of credit

(SBLOC). Wife testified that the SBLOC had only $975,000 of

remaining credit and that husband wanted to increase the credit

limit to $15.95 million. She said that increasing the SBLOC’s limit

posed a substantial risk to their marital assets. She explained that

the SBLOC relied on the successful performance of the investments

and that given the “very risky market” in 2020, they could be

36

financially ruined if the financial institution demanded payment on

the SBLOC’s outstanding debt. She also noted such an event

almost came to fruition a few years earlier.

¶ 78 Wife testified that in light of her concerns and husband’s

impending home purchase, she sold the Apple stock. She explained

that she then paid down the SBLOC debt, which allowed husband

to use the SBLOC to buy his new home without increasing their

credit limit.

¶ 79 The district court found that wife disposed of this marital

asset without husband’s consent and in violation of the automatic

temporary injunction imposed on this dissolution of marriage case.

See § 14-10-107(4)(b)(I)(A), C.R.S. 2023 (restraining a party in a

dissolution proceeding from disposing of marital property without

the other party’s consent). However, it determined that her conduct

did not rise to economic fault. The court explained that wife was

motivated by husband’s insistence on using the SBLOC to purchase

his new home. It found that she liquidated the Apple stock to pay

37

down the SBLOC debt to facilitate his home purchase and not

increase their SBLOC liability.

5

¶ 80 Husband disagrees with the district court’s determination. He

highlights that wife’s stock sale resulted in a substantial tax liability

and forfeited almost $2 million of future profits. But economic fault

is “strictly confined” to “extreme cases” where a spouse depletes the

marital estate for an improper or illegitimate purpose in

contemplation of the dissolution. Jorgenson, 143 P.3d at 1173; see

Riley-Cunningham, 7 P.3d at 995. Although wife’s stock sale

financially impacted the marital estate, the court credited wife’s

explanation and determined, with record support, that she did not

improperly dispose of the stock in contemplation of the dissolution

of their marriage. See Jorgenson, 143 P.3d at 1173;

Riley-Cunningham, 7 P.3d at 995. We must defer to this

determination. See Martinez, 77 P.3d at 831; see also Thorburn,

¶ 49.

5

Wife also used a portion of the stock sale proceeds to pay off

approximately $132,000 of her premarital student loan debt. To

account for this payment, the district court included a $132,000

offset to wife in its property division. Neither party challenges this

determination.

38

¶ 81 Still, husband complains that the district court should have

allocated to wife the tax liability created by the stock sale. The

parties confirmed that they had paid that liability before the

permanent orders hearing. Therefore, this tax liability was no

longer an outstanding marital debt. See In re Marriage of Turner,

2022 COA 39, ¶ 15 (recognizing that the determination of whether

something is property subject to division is established as of the

date of the permanent orders hearing when the hearing preceded

the decree). In the absence of economic fault, the court was not

obligated to allocate the paid tax liability, and it acted within its

discretion by declining to otherwise account for that liability when

allocating the marital estate. See Jorgenson, 143 P.3d at 1173;

Riley-Cunningham, 7 P.3d at 995; cf. In re Marriage of Davis, 252

P.3d 530, 537-38 (Colo. App. 2011) (noting the district court’s

discretion to sanction an individual for violating a court order); In re

Marriage of Schmedeman, 190 P.3d 788, 791 (Colo. App. 2008)

(acknowledging that, during a marriage, the spouses may dispose of

property as they see fit).

39

¶ 82 We therefore will not disturb the district court’s

determinations concerning wife’s disposal of the Apple stock.

6

VI. Disposition

¶ 83 The judgment is affirmed.

JUDGE TOW and JUDGE KUHN concur.

6

Husband generally asserts that wife sold other stock shares after

the permanent orders hearing. However, the district court

addressed this issue in its post-trial order, and husband develops

no legal argument contesting that decision. We therefore will not

further address it. See In re Parental Responsibilities Concerning

S.Z.S., 2022 COA 105, ¶ 29.