Masterclass on Separate Property in Colorado | Episode 214

Welcome back to Divorce at Altitude! After a brief hiatus, hosts Ryan Kalamaya and Amy Goscha are back with a deep dive into a frequently debated topic in divorces: separate property. They tackle complexities surrounding what constitutes separate property, how it’s treated in Colorado, and the critical nuances involved in tracing its value.

Episode Highlights:
- Introduction to Separate Property: Ryan and Amy break down the difference between marital and separate property and how Colorado’s progressive approach influences the division. They explain how separate property (such as assets acquired before marriage, through gifts, or inheritance) can appreciate during a marriage and how that appreciation is treated as marital property.
- Burford vs. Powell Approaches: The discussion touches on the legal frameworks used to calculate appreciation in separate property. Learn how the Burford approach involves tracing every financial transaction, while the Powell approach takes a more simplified, entity-based view.
- Types of Assets: The hosts dive into various asset classes, such as real estate, retirement accounts, brokerage accounts, trust interests, and business interests, explaining how separate and marital property components are handled differently for each.
- Challenges of Documentation: Ryan and Amy stress the importance of financial records in proving the value of separate property at the date of marriage, including bank statements, appraisals, and tax returns. They also discuss how inheritance documentation, such as wills and trust records, plays a role in tracing separate property.

Key Discussions:
- Complexities of Separate Property in Divorce: Why proving separate property can be challenging, particularly when accounts are commingled or when assets such as businesses and trust interests are involved.
- Real Estate and Retirement Accounts: Real estate is often the easiest to trace, whereas retirement accounts present challenges when factoring in marital contributions and market appreciation.
- Separate Property Documentation: The episode highlights the critical importance of keeping accurate records of gifts, inheritances, and business interests to protect separate property claims during divorce.

📞  Connect with us: 
• Facebook:  https://www.facebook.com/kalamayagoscha  
• LinkedIn:  https://www.linkedin.com/company/kalamaya-goscha/  
• Phone: 970.315.2365 
• Email:  info@kalamaya.law

What is Divorce at Altitude?

Ryan Kalamaya and Amy Goscha provide tips and recommendations on issues related to divorce, separation, and co-parenting in Colorado. Ryan and Amy are the founding partners of an innovative and ambitious law firm, Kalamaya | Goscha, that pushes the boundaries to discover new frontiers in family law, personal injuries, and criminal defense in Colorado.

To subscribe to Divorce at Altitude, click here and select your favorite podcast player. To subscribe to Kalamaya | Goscha's YouTube channel where many of the episodes will be posted as videos, click here. If you have additional questions or would like to speak to one of our attorneys, give us a call at 970-429-5784 or email us at info@kalamaya.law.

************************************************************************

DISCLAIMER: THE COMMENTARY AND OPINIONS ON THIS PODCAST IS FOR ENTERTAINMENT AND INFORMATIONAL PURPOSES AND NOT FOR THE PURPOSE OF PROVIDING LEGAL ADVICE. CONTACT AN ATTORNEY IN YOUR STATE OR AREA TO OBTAIN LEGAL ADVICE ON ANY OF THESE ISSUES.

Transcript

Ryan Kalamaya: 0:00

Welcome back to another episode of Divorce at Altitude. I am Ryan Kalamaya. We've taken a fairly extended vacation from recording, but this week we have a new episode and I am joined by my lovely co founder and partner and co host, Amy what's the topic for today?

Amy Goscha: 0:24

How are you doing?

Ryan Kalamaya: 0:25

I'm good. I'm good.

Amy Goscha: 0:27

Yeah. So we're going to be talking about a complicated topic, but something that comes up on pretty much not every divorce, but a lot of divorces. So we're going to be talking about separate property.

Ryan Kalamaya: 0:38

Indeed. This is somewhat of a masterclass. One of the reasons that we had a delay in recording or extended hiatus was that I have had several trials and you have as well, Amy, but one of the issues that came up in a recent trial that I had was separate property and tracing. We do have episode 29 it's proving separate property in a divorce with Andy Baum who is a valuation expert. So if people are interested. To in this subject, they can check that episode out. But for the lawyers and clients and just general public out there we thought that having a discussion on some of complex issues relating to separate property, it does come up fairly regularly. So Amy, what's where are we going to kick things off on this topic?

Amy Goscha: 1:29

So I think we need to kick things off on defining what is property and what is not property and how Colorado looks at the division of property. So in Colorado, It's not just splitting everything in half. First, you have to figure out, is it separate? Is it property? Is it separate property or marital property? And if it's marital property, then it's going to be divided equitably by the court.

Ryan Kalamaya: 1:51

Indeed. So we've had different episodes, how to episodes on property, marital property, can check that out. We have an upcoming episode coming with an attorney Raj on intangible property. So an example is A law degree, Amy, you and I have a law degree that is not property that issue has been addressed and it is not property. Whereas the interest in a law firm, for example, our interest in CME gha is a property interest. But then once you define whether it's. Then, Amy, what does the court do with respect to marital property and separate property, and specifically, can you give listeners kind of the baseline or context of what separate property is?

Amy Goscha: 2:34

Yeah, so essentially, we have a statute in Colorado under Title 14, and it defines what is marital property and separate property. High level separate property would be any property that's acquired. Prior to marriage or, by gift or inheritance any property during the marriage is presumed marital. There is a marital component to separate property, meaning if there's an increase in value of separate property during the marriage, The increase in value can be marital. So just based off of even the quote unquote, simple concepts, it gets pretty complicated, I think, pretty quick.

Ryan Kalamaya: 3:10

It does. And indeed, I think it's helpful for listeners to put Colorado in context. We talked about it before, but really when you compare Colorado to Texas, California, New York, other States, Colorado really stands out. I think it's fair to say that Colorado has the most people. Progressive view on marital property when it comes to the relationship of separate property. What I mean by that is that most states have a similar definition where they define separate property as property that people own. Before they got married or at the date of when they have a, a wedding. So if our hypothetical divorce clients, Eric and Melanie Wolf, if Eric Wolf has a million dollars in his bank account, when he gets married and he just keeps that almost every state recognizes that million dollars is not marital property. And, but Colorado the difference is how Colorado views the appreciation. So other states. California, New York, and I'm oversimplifying here is that they will delineate or differentiate active versus passive appreciation. So if Eric has a business that he owns when he gets married and he goes to work each and every day, To that business, and we'll get into the kind of complexities of a separate property relating to a business interest. But if Erica goes to work every day, and Melanie, for example, takes care of the kids, or has the house homemaker role, she is allowing, or she's helping Eric build that business and increase in value. So a lot of states will view that as a marital. Interest that the appreciation on that business, that is in contrast to Eric has a trust fund, or he has some sort of brokerage account that just sits there and, increases in value that Melanie arguably didn't. really have any input or contribution towards. So in other states, they will view that as remaining separate property. Colorado does not distinguish between those active versus passive, those two different fact patterns. Colorado just views The appreciation, and that is in essence, the end of the analysis for that. But as you said, Amy, Colorado, we, it's not necessarily a 50, 50 states. So we then weigh the contributions, but anything that you want to chime in on in terms of Colorado and how it stands compared to other states that you've had a relationship to, or interaction with in a case.

Amy Goscha: 5:56

Yeah. I think, and we're going to get into it, but in business, like valuations in Colorado, the intangible assets and goodwill, are accounted for and some states that's not the case. If you live in Colorado, I always tell clients your business probably is worth. A, more than you think, and for divorce purposes in Colorado, it's looked at just very differently. So I think with that, Ryan, I think it would be great to tell our listeners, what is the baseline in Colorado for some of those benchmark, cases that we look at that give us some more guidance on it. Like what we do with this appreciation,

Ryan Kalamaya: 6:33

right? To determine that appreciation, you, one kind of, fundamental concept that we haven't hit on yet is that the Eric Wolf, if he is claiming separate property, the statute 14, says that he has the burden to prove by clear and convincing evidence that he. owns the separate property and he can trace it back to either the gift, the inheritance, or the date of marriage. And and also the value. So what often happens is we will have experts that will dig in and trace the property. And that is related to that episode I mentioned at the outset in terms of Andy Baum. But when you get into these experts and even if you don't have an expert, there's two approaches. We'll talk about approaches and we'll talk about methods. These are somewhat related to business valuations. There can be different approaches, for example, an income approach versus a market approach versus an asset approach. And in separate property, I think it's helpful to break it down into two areas. Two different approaches. There's the Burford approach and then there's the Powell approach. So the Burford approach is based on a case that came out in remarriage of Burford and that in essence allows the expert or requires the expert to get in to the nitty gritty and to compare and to contrast. And it is An eye opening experience. It results in, Amy, I'm sure you've had Burford tracing cases and they are extremely expensive. And the reason is if people think about if there is a brokerage account. So Eric Wolf had these stocks and bonds and, he has three different stocks, stock A, stock B, Amazon, Boeing, and Netflix, for example. If Amazon doubles in price and Boeing. Because they can't, they have, an erosion of company culture and they can't make planes apparently now they that goes to zero. If you were to, in all things, that being equal the, Netflix remains the same. The, if you looked at the portfolio, it would be the same today as it was When Eric either inherited it or at the date of marriage. And that's because the dupe, the doubling of Amazon is offset by the loss in Boeing. But Burford says, no, that's not how you look at it. You look at it as the doubling of Amazon is marital property, that appreciation. And you don't take the offset from the loss on, on Boeing, which, intellectually, it's. It's hard to reconcile that, but it gets to the policy that we talked about at the beginning is that Colorado is very progressive in this viewpoint of marital property that's in contrast to a Powell approach, which is entering marriage at Powell. That looks at more of the entity. So if that brokerage account, you could say, listen, we're going to take a step back, that brokerage account is an entity and, Powell, a lot of people there'll be disagreements between attorneys and judges and experts about whether which approach. Applies and, Powell could be argued that it's only for retirement accounts or it's only for a real estate investment and it really doesn't apply to a brokerage account, but Amy what, anything that the listeners should know about Burford versus Powell that we haven't covered already?

Amy Goscha: 10:08

One thing I was going to mention though, like on the concept Piece that people need to understand is that you can have a conversion of separate property into marital property. And I think the cases talk about that and that might get in to what we talk about further into the assets but that's 1 thing to look at is did someone have did Eric have a million dollars in a brokerage account, but then did he start pulling money out of that and start. Paying for living expenses or, like Changing the title on a house. So titling also matters.

Ryan Kalamaya: 10:43

It matters significantly. The, when you get into the Burford, when I'm talking about the brokerage account, I, there's the assumption that Eric had this separate account and he maintained that separate account, but for Burford, they would go through, the expert would go through. Each and every month in there, when there's trading, when there's active trading, the result is that there is a conversion of separate property into a marital, and we'll talk about with the withdrawals and the pro rata approach versus marital property at first. But to your point, there was a recent case that just came out. It was a Boulder case that went up to the court of appeals intermarriage of Caporelli. And it. Addressed the common scenario that you and I have seen, Amy. And that is that Eric has this property that was separate property. He either got a gift or he owned property and then he goes and buys a house or the parties, Eric and Melanie go and buy a house and they jointly titled the house and Eric takes 250, 000 from his separate account. And he puts the down payment on the house. That happens. All the time. And Amy, what can we surmise from that case in the law in Colorado about what happens to Eric's 250, 000 when he, uses separate property and puts it into a jointly titled asset

Amy Goscha: 12:11

becomes marital.

Ryan Kalamaya: 12:13

It's presumed to be marital unless there is. Unless there is evidence that it was that the parties agreed that it was going to remain separate or it was for convenience. I once had a case where parties had the, one party had been. They invested it with Bernie Madoff actually, and then they got the return on it, the investment that Bernie Madoff kind of Ponzi scheme and the parties jointly titled it in FDIC bank accounts, all around. And they did that because they were trying to make it harder for the Madoff bankruptcy trustee to go back and claw back. And so that was an example of, yes, they jointly titled it. But it was only done for purposes of really not fraud, but to frustrate the bankruptcy trustee, that is a scenario where you could have a claim that remains separate property. But there are so many circumstances where people throughout their marriage, they convert separate property into marital property. And the reality is that it's going to be presumed to be a marital. But if we go back to the separate property. Component we're going through there are different methods that an expert or somebody can look at if Eric Wolf, for example, has this separate property, but then he withdraws. Money from that and there's no real Colorado case that says how you approach this. And just, I think it's helpful for listeners to understand the example. If Eric has a million dollars and that million dollars is invested in just, some sort of money market and there's interest that is generated from that. Then let's say that he has, they're about to buy a house and they take 1. 5 that he has 1. 5 million. So there's 500, 000 of appreciation. If he withdraws 100, 000 to buy that house, to make that down payment, does the 100, 000, does it come out of his separate property and does it reduce the 1, 000, 000 down to 900, 000. Does it come out of the 500, 000? Is it all marital property? So instead of 500, 000, we have 400, 000 or is it a combination? Is it a pro rata approach? And Amy, What what's the kind of result in that scenario if you take those different methods for the remaining separate property?

Amy Goscha: 14:42

So the, yeah, the marital out would be essentially if there was 500, 000 in marital, it would mean in that account, it would mean that there was 400, 000. So that's the marital out first. And then Ryan, what would happen with the pro rata approach?

Ryan Kalamaya: 14:58

So pro rider approach, you would take a combination. You would, take that 100, 000 would be two parts two parts, separate property and one part marital, if I'm doing my, the math correctly, I could be wrong about that, but there would be a portion that would reduce, and so you can, play this out. If Eric is paying credit cards and he's using for example, proceeds from a rental property, that was his separate property. Then, and he uses that rental property or that the rental income to, for example, pay taxes to pay the. Debt on the the rental property. We'll get into, real estate next, the hardest part is when you are paying credit cards and the statute 14, 10, 113 has a factor, explicit factor of what's called depletion of separate property. So frequently what we see is people that inherit. Money or they have money before, then they, you, the separate property never goes up. It always goes down through the marriage. Separate property could be added through various gifts, but generally speaking, it's always going to go down. And it's going to go down faster with a Burford, approach compared to a power approach, but really what the people need to understand is that you can have experts. I've done it where an expert I'll say, Hey expert, you need to take a Powell approach. And the other attorney will say, no, I w I want a Burford approach. And then within the Burford approach, generally speaking, then you'll have another argument. Do you do a pro rata? Do you do a marital property out first? And the results can be. Significant. They, they, if you're involving an expert, oftentimes, there can be, there, there needs to be enough money to really justify involving an expert, because the most expensive expert engagements, they can be 20, 000. I've seen them in the six figures and it's because that Burford approach, they have to go through each and every trade each and every month to verify. Where's the money and they have to go through and then they look at, okay, the credit cards were paid off and we have to take a pro rata approach. It gets really complex and people, I think a lot of attorneys I had a case that involved the difference between marital out first versus pro rata. And the attorney that was first on the case that ended up handing it off to me before trial, cause it was just out Out of their league, they didn't realize what the difference was going to be in, in this situation. It was in excess of a million dollars on the difference between those two approaches. So then the experts testify about which approach they took and oftentimes experts will do two different approaches, but really there's no. Specific law or anything that says the way that I think about it is that if Colorado has this super progressive viewpoint on marital property, you can either lean into that and say the general policy is to be, as expansive on marital property is as possible. And, There's some support for that. If you look at income and how we define income under 15, it's basically any income is income. And so it's Hey, we're going to any property, there's a presumption of marital property and, let's really lean into that on the other hand. If you compare the case law in terms of these withdrawals, because some Texas, California, there, there is robust case law. I'm out pro rata versus marital out first, but they have very bright line rules on and, they view separate property, as I said, at the beginning, very differently than Colorado. So does it make sense to have kind of a counterweight? of the expansive view of marital property by, having a marital out first approach, for example, because that's how we, the expenses that are often paid, for example, with credit cards, they're almost always marital, expenses. So is it fair to reduce that, appreciation in, in, the use or payment of credit cards, those are the certain policy and that's. Where, lawyers arguments can really make a significant difference in having a judge that understands the impact, because if a judge is, recently appointed and Amy, you and I have talked about, some of the newer judges, there's been a considerable amount of turnover in the bench and they don't understand the impact, of this and so it's one of the reasons that, we recorded this podcast is to get into that, that nitty gritty and prompt some thinking by, everyone out there in the community on this topic.

Amy Goscha: 19:53

Yeah, on the Colorado bench, the statistic is in the last 5 years, it's 40 percent turnover. We have a lot of new judges, and it's not uncommon on some of these tracing cases. I've seen a tracing case that was a week long. It gets Very expensive, but if you have, newer judges, like you will have to spend more time explaining.

Ryan Kalamaya: 20:14

Explaining, for example, what we just did at the very beginning about what's separate property, what's marital property, and then going in and the schedules in the expert reports is They are extensive. They go on for pages and pages. And so you can get in. And then when you overlay that with for example, what if the parties agree that they're going to pay for attorney's fees in their divorce out of marital property? It's a very common agreement. If you have separate property and you'll say, listen, the attorney's fees, they're going to be paid out of marital property. If if Eric Wolf is. Using his brokerage account that stock market has been on an absolute tear and he's, liquidating that, that stock portfolio to pay for attorney's fees. How do you reconcile that when you've got, a two year divorce, for example, and there could be, in excess of 100, in attorney's fees. And then, then the expenses during the divorce, those are, those treated differently in terms of the withdrawals because, oftentimes people's expenses go up, but we could go down, a deep rabbit hole, Amy, let's pivot a little bit and talk about different common assets or situations. where separate property comes in to play. What's the first one that, we see the most common?

Amy Goscha: 21:39

Yeah, I think real estate, I think it's, we would probably agree. It's the easiest one to prove. So when you're looking at real estate, essentially, you're looking at probably getting a retrospective appraisal. If it's property that was owned, prior to marriage the one thing that isn't complicated, but that parties have to realize and attorneys have to realize is there's a mortgage. So we were talking about on the marital appreciation side, not only is usually real estate is going up and then during the marriage, if there's a mortgage, that's also getting paid down. That's increasing the marital property.

Ryan Kalamaya: 22:15

You can have an increase by both ways. I've seen arguments about, okay the property, the real estate is it's a house in Boulder and it was worth a million dollars when the parties got married and it was separate property, Eric separate property, and now it's worth 2 million. And you can do that either retroactive appraisal or retrospective, I should say, and you can have a real estate appraiser go value it. On the date of marriage or month of marriage and then what it's worth today you can also use tax assessments and you're comparing apples to apples. And the reason real estate is the easiest is because it's just not frequently traded. So it's usually that you can go back and go into the clerk and quarters. I can go back and see a real estate document from, 1920. If, if I really want to, but it's not as simple as the million versus 2 million, because what if Eric had a mortgage of 500, 000? And that can be complicated when Eric, for example, refinances or. Or which, commonly happens. We just had an interest rate cut. People, one thing that we're dealing with all the time now is, Hey I locked in a really nice mortgage, several years ago. People were frequently refinancing, but what was Eric's mortgage balance when he got married? Because that is going to determine the Equity that he has. And as you said, Amy, if Eric is paying down that mortgage then that's going to result in more equity, which again gets to the appreciation. But generally speaking, real estate is the easiest what would be the next kind of most challenging asset class when it comes to claiming separate property?

Amy Goscha: 24:02

Looking at retirement accounts. would be the next one. And I think the, Ryan, can you talk about the Powell case?

Ryan Kalamaya: 24:10

Yeah. So the Powell case, it looks at the entity approach and how much was that retirement account at the date of the marriage? There it's, it happens, but it's not as common that someone inherits a retirement account. Oftentimes it's, Eric, and especially Amy, when we're seeing people getting married later in life or having a second marriage, they will, it's, you can, it's a fact that they have retirement savings. The issue is when they get married and so they're separate property, the issue is proving it. And because people the financial institutions generally need to maintain records for five to seven years. And if you maintain the same financial institutions, Schwab TD Ameritrade, although, TD Ameritrade got bought out by Schwab and so now it's just Schwab E Trade or Fidelity, Vanguard, the, if you have the same Financial institution. I have seen it where people go back and they find, that, that statement of what their retirement account was worth, but it is more common that someone says, I, I. Had this and I can't find it. And then you get into the issue of how much was there a market appreciation and how much were contributions during the marriage in terms of the increase, because if it was, if you had it an IRA or a 401k. At the date of marriage and then the spouse just moved or changed jobs and then they just they didn't make any contributions You know one one thing I've seen is well the S& P 500, you know did with Google Finance You can figure out the rate of return was 25 percent over this time. And so you could back into what was the likely scenario? And it depends on that portfolio is a 60, 40, equities versus bonds. I've seen backing into that. Is that clear and convincing evidence? I don't know, but at least you can quantify it some, somewhat, but the Powell approach looks at that. Entity that account and doesn't, and says, what was it then versus what is it now? The Burford approach you get into, did Eric trade, did he invest from Netflix and then sold that and put it into Apple? And you really get into that, which kind of leads to the next problematic asset class. And that is a brokerage account. Amy, anything on, that you want to say about the brokerage accounts that people should, you know understand?

Amy Goscha: 26:43

Yeah. I think just those get harder because of, we went over the approach before, but just the transactions in and out and what like securities are being held. Really looking at that and just counting the increase and not the decrease. So it gets really complicated. Most scenarios

Ryan Kalamaya: 27:00

are going to contemplate a Burford approach. And again, the history, the statements then we move on. Beneficial interests and trusts. That is something that gets really complex. We had a episode with G. Deffenbaugh. estate planning attorney talking about that. And I think it's helpful for people to understand if Eric is a beneficial he has a beneficial interest. His dad sets up, for example, an irrevocable trust. There's different ways that we're going to view that because in terms of the valuation, because oftentimes what's going to happen is there's going to be, what is the, what was the trust worth at the date of marriage or the date of gift? And then that. Account often is going to increase in value because it's going to be invested in stocks, bonds, real estate, whatever. But then there's a discount because Eric, he, it may be based on his father's the, his father's age and his father's death. And that's going to be based on an actuarial table. During the marriage. His father is getting older and is getting closer to that kind of expected date of death. So there's the discount becomes less. And then meanwhile, you compound that with the fact that often the investments are going to increase, but the. I would suggest that the most complex or the most difficult valuation in terms of separate property versus marital property is the business that is owned at the date of marriage or that, is somehow gifted. That might not be as complex when you gift because, there's oftentimes gift tax returns, but, the business that's owned at the date of marriage what that, what the business was worth versus what it's worth now is really challenging.

Amy Goscha: 28:45

Yeah. One thing I was going to say about trust interest is a lot of times you'll see an, like an, I an irrevocable life insurance trust where the child is a beneficiary. And so a lot of times what's challenging with that is also looking at not just the transactions, but the worth or what are the assets that are like held within the trust and the value in those.

Ryan Kalamaya: 29:06

Yeah. Generally speaking, my experience has been those islets, those irrevocable life insurance trusts. They, there's not much appreciation or marital property because it could say that Eric is going to receive 5 million upon his dad's death and then his dad will pay the premiums and that is the gift. And so each and every year there's a gift. gift, which just keeps on increasing in value. But there's other things that, we can talk about inflation, for example, on the marital pro or the gift. There's no case law in Colorado. So an example, it's just for listeners. We've gone through a phase, economic phase where inflation is a hot topic. It will for many years, decades, even it was not really a a discussion point cause there was very little inflation. But just an example is if Eric received, some sort of gift let's say that his. Family gifted him the family business and there's an appraisal and a gift tax return. And I think it's, we'll talk about some of the documentation to close this out, but if there was a gift that Eric received, then in 2010, for example, and it says that The gift was 2 million and now it's worth 4 million. Part of that increase is from inflation. If you run inflation on a, on 2 million from 2010 to now, it's somewhere in the neighborhood of three, 3 million, the total amount. So the appreciation just through inflation is a million, plus dollars. So does. Does, is that fair to, Eric is, does Melanie get the benefit? Because if you compare that asset in 2010 to how it, what it's worth today, you would take into account inflation, but no, no Colorado cases really discuss that. But Amy, I mentioned documents. What are the things that we frequently are asking our clients to produce or that we see when we're discussing separate property in a call or a divorce?

Amy Goscha: 31:12

Just in general, documents to figure out what it was valued at the date of marriage or around the date of marriage and then also if there's been movement in an account like that. And IRA or something, and there was a rollover to, to be able to trace that. So all the documents that show exactly like where, that went, but particularly with, businesses, we're looking at sometimes businesses have to be valued depending on, like what they do for certain regulations on a certain basis. So we're looking at, business financials, we're looking at was your business valued for a reason? But basically we have to prove what the value was at the date of marriage.

Ryan Kalamaya: 31:56

So the date of value at the marriage, so DOM is I think the hardest because you're looking at bank statements, sometimes tax returns investment statements. So they're they kind of gold standard is Eric and Melanie Wolf get married. We're recording this in September. Super common marriage, wedding month because of the weather. So it would be September of 2024 if it, and then if Eric and Melanie get in 10 years, then Eric would have to come up with a statement from, the sets from September. People are getting married and they're worried about this. They can, save their their kind of statements network statements, so if people are submitting credit applications or they're doing network statements seeing that with financial advisors, they do these kind of monthly reporting, those are the kind of Documents we mentioned before there's tax assessments for the real estate, profit and loss balance sheets. You can go back and ask, a bookkeeper if there's been QuickBooks, for example, the balance sheet backdated to a particular date. But then I think the, the gifts and the inheritance, those Often there is contemporaneous documentation or there should be because gift is the gift door. So if Eric Wolf's father is gifting him, if it's in excess of, it used to be 10, 000 and now I think it's 14, 000 cash. Then he's going to have, his dad's going to have to do a gift tax return. So you can pull those up. 2012 was a really common month or a year rather on gifting because the estate tax was about to change. We're in a climate right now where people are, we're, it's a political season and our election year. People are talking about the death tax and there's going to be a sunset on it right now. The exemption is very high historically. And so that's supposed to sunset, I believe in 2025. And so what happens is if Congress doesn't, do anything, the people are going to really start taking advantage of gifting. And generally speaking, the observation I've made, Amy, is in doing this work is that families tend to have two different. Perspectives on transferring generational wealth or estate planning. They either gift the, the income or the wealth or the property early, and then they avail themselves of that exemption. And then the assets grow. Over time and, or they hold back in trusts or something and they say that this person is going to get this, but regardless, if someone dies and Eric receives money in an inheritance, then we're going to talk, we're going to be, asking him for the will, the trust documents. The estate tax return and the valuations. Oftentimes what happens is the IRS will go through and they need to see what, what was a property worth and they'll get an appraisal or there'll be these valuation, these valuations done. And so you do see these contemporaneous valuations. It's a real challenge to have that conversation with Eric to say, Hey, I'm really sorry that your father, I need all the documentation from his estate and Eric, gets emotional and says, this is blood money. I can't believe you're asking this. And he, it could be a fresh death or something that is really emotionally, challenging. And you overlay that with the divorce, the emotions with a divorce. It can be really challenging.

Amy Goscha: 35:28

Yeah, and it can also be complicated because sometimes, parents live in other states, and so you have property, in other states, and you have to look at talking with attorneys in other states. So that gets complicated as well.

Ryan Kalamaya: 35:42

It does well, and hopefully this gives ideas to people out there and prompts a discussion and some thought on a separate property. It is a contentious issue and it can get intellectually. Challenging and complex for divorce lawyers and people, Eric and Melanie going through a divorce, but hopefully people learn something and we always appreciate people joining us on Divorce at Altitude. If you found this helpful or informative, please give us a review on whatever podcast player you're listening to or send this over to a friend. And we always welcome feedback via email. Our email is online readily available. So feel free to reach out to us and say something you liked or something you didn't like. But until next time, thanks for joining us on Divorce at Altitude. hey everyone. This is Ryan again. Thank you for joining us on Divorce at Altittude. If you found our tips, insight, or discussion helpful, please tell a friend about this podcast. For show notes, additional resources or links mentioned on today's episode, visit Divorce at Altittude dot com. Follow us on Apple Podcasts, Spotify, or wherever you listen in. Many of our episodes are also posted on YouTube. You can also find Amy and. Law or 9 7 0 3 1 5 2 3 6 5. That's aaa.