Lead Opinion
delivered the Opinion of the Court.
4 1 In this dissolution of marriage proceeding, we granted certiorari review to consider whether accrued vacation and sick leave may be considered marital property subject to division under section 14-10-1183, CRS. (2013), of the Uniform Dissolution of Marriage Act ("UDMA"). In this case, the trial court entered an order dividing the value of the husband's accrued vacation and sick leave as part of the marital estate. The husband appealed and the court of appeals reversed, holding that a spouse's accrued leave time is not marital property subject to distribution in dissolution proceedings. In re Marriage of Cardona & Castro, — P.3d —, No. 09CA1996,
T2 We now hold that where a spouse has an enforceable right to be paid for accrued vacation or sick leave, as established by an employment agreement or policy, such accrued leave earned during the marriage is marital property for purposes of the UDMA. Where the value of such leave at the time of dissolution can be reasonably ascertained, it must be equitably divided as part of the marital estate. However, in the event that a court cannot reasonably ascertain the value of such leave at the time of dissolution, the court should consider a spouse's right to such leave as an economic cireumstance of the parties when equitably dividing the marital estate. In this case, we conclude that the trial court erred in considering the value of the husband's accrued leave as part of the marital estate because no competent evidence was presented to establish that the husband had an enforceable right to payment for such leave. We therefore affirm the court of appeals' judgment on narrower grounds.
I.
13 Marta Doris Castro ("Wife") and Felipe Cardona ("Husband") co-petitioned for dissolution of their marriage in May 2007. In its August 2009 Permanent Orders, the trial court divided Husband's accrued, unused vacation and sick leave as marital property.
4 Wife first raised the issue of Husband's acerued leave in a demonstrative exhibit used during opening statements, titled "Petitioner's Proposed Division of Assets/Debt/Arguments Associated therewith." A note at the bottom of the exhibit indicated that Husband held acerued vacation and sick leave that Wife valued at over $23,000, but that Wife did not seek division of that amount if she was permitted to move with the children to Florida:
Not included in the above numbers is ac-erued leave and sick time for [Husband] totaling 452 hours @ 51.40 per hour. The total value of this time is $23,232.80. [Wife] is not requesting 50% of this amount if she is permitted to go to Florida*629 as [Husband] could use this time to do parenting time exchanges and exercise parenting time in Florida.
During opening statements, Wife's counsel asked the court to treat Husband's leave time not as a marital asset, but as an economic cireumstance, again noting that Husband might need to use that leave to visit the children:
[What's not taken into account ... [is that] [there's an additional amount of 452 hours of [leave] time that [Husband] has accrued that has the substantial value of about $23,000.00. She's saying you know if we go to Florida, he'll need that time[.] I'm not asking for division of that. He'll need that time, he has ample time to visit his kids, 452 hours he can take a lot of breaks, a lot of time to see his kids in the coming years okay.
(Emphasis added.)
5 Husband's accrued leave was reflected in his most recent pay stub attached to his sworn financial statement. The pay stub indicated that he had an available total of 279.76 hours of vacation time and 171.85 hours of sick time, for a total of 451.61 hours of accrued leave. The pay stub did not indicate the cash value of the accrued leave, or whether Husband was entitled to cash payment for any portion of the leave.
{6 At the permanent orders hearing, Wife's attorney called Husband to testify to the amount of his accrued vacation and sick leave, the rate at which it accrued, and the fact that the accrued time rolled over from year to year. During this exchange, Wife's attorney asked Husband, "If your job was terminated today they would pay you that accrued leave? You'd be entitled to that?" Husband responded, "According to the law I think that's the way it works yes." This statement was the only evidence presented regarding Husband's potential entitlement to payment for the accrued leave.
T7 Nearly a year after the hearing, Wife filed her proposed permanent orders. Contrary to the position she took at the hearing, Wife requested, among other things, that the court award her half of Husband's accrued leave, which Wife valued at $23,232.00. In its permanent orders, the trial court allowed Wife to relocate to Florida with the children. The trial court also divided the value of Husband's accrued vacation and sick leave as part of its division of the marital estate and required Husband to pay wife $11,616.00 for her "interest in this pay."
18 On appeal, Husband argued that accrued leave is not marital property. A divided panel of the court of appeals agreed and reversed. The majority reasoned that Husband's accrued leave was analogous to un-vested stock options or an interest in a discretionary trust and "is thus not property subject to distribution on dissolution." Cardona, — P.3d at —,
IL.
1 9 The equitable division of marital property is a matter within the trial court's discretion. In re Marriage of Hunt,
IIL.
110 We are asked to determine whether a spouse's accrued vacation and sick
1 11 In Colorado, section 14-10-118, C.R.S. (2018), of the UDMA requires the court to make an equitable distribution of marital property after considering all relevant factors, including the contributions of each spouse, the value of property set apart to each spouse, the economic cireumstances of each spouse, and any increase, decrease, or depletion in the value of any separate property during the marriage. Balanson,
T12 We require a two-step analysis to determine whether an interest is "marital property" subject to equitable division in a dissolution proceeding: "first, a court must determine whether an interest constitutes 'property'; if so, the court must then determine whether the property is marital or separate." Balanson,
1 18 This case concerns the first step of the marital property analysis: whether acerued vacation and sick leave is "property" for purposes of the UDMA. Although the UDMA does not define the term "property," we have previously noted that the legislature intended the term "property" under the UDMA to be broadly inclusive. Balanson,
11 14 In resolving this issue of first impression, we consider case law from other jurisdictions, as well as relevant Colorado precedent. We conclude that where a spouse has an enforceable right to be paid for accrued vacation or sick leave, as established by an employment agreement or policy, such accrued leave earned during the marriage is marital property for purposes of the UDMA. Where the value of such leave at the time of dissolution can be reasonably ascertained, it must be equitably divided as part of the marital estate. However, where a court cannot reasonably ascertain the value of such leave at the time of dissolution, the court should consider a spouse's right to such leave as an economic cireumstance of the parties when equitably dividing the marital estate. In this case, no competent evidence was presented to establish that Husband had an enforceable right to payment for his accrued leave. Thus, we conclude that the trial court erred in considering the purported cash value of such leave as part of the marital estate. We therefore affirm the judgment of court of appeals on narrower grounds.
A.
1 15 Courts in other jurisdictions disagree on whether accrued leave constitutes marital property subject to equitable division in a dissolution proceeding. Our review of these
€ 16 Courts that conceive of accrued vacation and sick leave as "really only an alternative form of wages" intended to "replace[ ] wages on the days when the worker does not work" have concluded that such acerued leave is not marital property. Thomasian v. Thomasian,
T17 Courts that have held that acerued leave is not property also stress that the accrued leave may not be presently convertible to cash, and may be dissipated when the employee spouse uses the leave time. Abrell,
1 18 By contrast, courts that view accumulated leave as deferred compensation for services performed have concluded that unused leave is marital property. Schober v. Schober,
(19 Courts that conclude that accrued leave is property consistently require the employee spouse to have a vested or contractual right to receive payment for such leave. See, e.g., Schober,
120 Courts have also held that accrued leave is property where the value of the leave could be reasonably ascertained-because, for example, the spouse's employment contract provided guidance on the valuation method for the accumulated leave, see Dye,
B.
11 21 Although this court has not previously considered whether accrued leave constitutes property for the purposes of the UDMA, we have examined whether other types of interests-such as retirement benefits, stock options, and trust interests-qualify as property. Our cases reflect that interests that are enforceable contractual rights constitute "property" for purposes of the UDMA, but interests that are speculative are "mere expectancies." Balanson,
1 22 For example, in Grubb, we held that a spouse's vested right to pension benefits is marital property subject to equitable distribution in a dissolution proceeding, where the pension plan has been funded by employee and/or employer contributions during the marriage.
123 A year later, we held in In re Marriage of Gallo,
124 Similarly, our cases establish that whether a spouse's stock options constitute property for purposes of the UDMA turns on whether the spouse has an enforceable right to those options. Balanson,
125 Finally, our cases reveal that a spouse's interest in a trust constitutes property for purposes of the UDMA where the spouse has an enforceable right to income or principal from the trust, even if the value of such an interest may be uncertain at the time of the dissolution. For example, in Bo-lanson, we held that a spouse's remainder interest in an irrevocable trust constituted "property" under the UDMA because it was a "certain, fixed interest[ ] subject only to the condition of survivorship." Id. at 41. Although the value of the spouse's remainder interest in that case was uncertain, that uncertainty did not convert the spouse's interest into a mere expectancy. Id. By contrast, we concluded in Jones that a spouse's interest in a discretionary trust was a mere expectancy because "the beneficiary of a discretionary trust has no contractual or en-foreeable right to income or principal from the trust, and cannot force any action by the trustee unless the trustee performs dishonestly or does not act at all."
26 Collectively, our cases reflect that, in determining whether a spouse's interest constitutes property for purposes of the UDMA, we consistently focus on whether the spouse has an enforceable right to receive a benefit.
C.
T 27 Applying the principles from the cases above, we now turn to whether a spouse's accrued vacation and sick leave is property for purposes of the UDMA.
1[ 28 We agree with those courts that conceive of accrued vacation and sick leave as a type of compensation earned for services already performed. Schober,
129 Although section 8-4-101(8)(a)(III) of the Wage Claim Act refers only to "vacation" pay, other forms of leave (such as sick leave) may be compensation for services performed where the employee has an enforceable right to receive payment for such leave. In this sense, accrued leave is similar to other forms of "deferred" compensation, such as a pension benefit or stock options granted in exchange for past or present services. An employee who has acerued such leave has already earned an enforceable right to the remuneration, and later receives this compensation when the employee either uses the time for a permissible purpose or is paid the value of the accrued leave. See Abrell,
130 Whether an employee has an enforceable right to be paid for accrued leave will depend on the terms of any agreement between the employee and the employer. See Cheyenne Mountain Sch. Dist. No. 12 v. Thompson,
D.
131 Once an interest is determined to be marital property, it must be valued before it can be equitably divided. See Balanson,
132 We acknowledge that several courts view the value of such leave as speculative and uncertain because a spouse may use the accumulated vacation and sick days and ultimately never receive cash payment for such leave. These courts conclude that accrued leave therefore is not property for purposes of a dissolution proceeding. See, e.g., Abrell,
133 However, we recognize that in some cases, the value of such leave at the time of dissolution may be so difficult to ascertain as to be speculative. We note that employment agreements and policies can vary substantially. Under some policies, different types of leave may be combined in one comprehensive paid time off ("PTO") plan, whereas other policies split vacation leave, sick leave, and/or personal leave into separate plans. Some employers allow leave to accrue and "roll over" from year to year, while others adopt a "use it or lose it" approach, under which accrued leave is forfeited if the employee does not take time off. Policies may also vary with respect to the timing and the rate at which different types of leave may be cashed out, and depending on the terms of the governing employment agreement or policy, an employer may retain the right to change the terms of compensation for leave that has already accrued. In light of these complexities and the unique nature of accrued leave as a form of compensation, we recognize that it may not always be possible for a court to determine the value of a spouse's accrued leave at the time of dissolution in order to equitably divide that value as part of the marital estate. And yet, the spouse's right to the accrued leave has some value, even where a reasonable dollar estimate cannot be attached to it. Thus, where a court cannot reasonably ascertain the value of such leave at the time of dissolution,
134 In sum, we conclude that where a spouse has an enforceable right to be paid for accrued vacation or sick leave, as established by an employment agreement or policy, such accrued leave earned during the marriage is marital property. Where the value of such leave at the time of dissolution can be reasonably ascertained, it is subject to equitable division under the UDMA.
IV.
135 In this case, whether Husband's accrued vacation and sick leave was property subject to equitable distribution turns on whether Husband had an enforceable right to be paid for such time. We conclude that the trial court erred in determining that Husband's acerued leave was marital property because no competent evidence was presented to establish that Husband had any enforceable right to payment for any of his accrued vacation or sick leave, The record indicates that Husband had accrued 451.61 hours of unused leave time as of July 3, 2008, and that this leave time rolled over and continued to accumulate from year to year. However, nothing in the record established that Husband had an enforceable right to receive any sort of cash payout for such time. The court of appeals' opinion states that "Husband testified that he had accrued vacation and sick leave at his employment and that he would be paid for the unused time only if and when he left his job." Cardona, — P.3d at —,
v.
136 We hold that where a spouse has an enforceable right to be paid for accrued vacation or sick leave, as established by an employment agreement or policy, such acerued leave earned during the marriage is marital property. Where the value of such leave at the time of dissolution can be reasonably ascertained, it is subject to equitable division under the UDMA. However, where the value of such leave at the time of dissolution cannot be reasonably ascertained, the court should consider the employee spouse's right to such leave as an economic circumstance of the parties when equitably dividing the marital estate. In this case, we conclude that the trial court erred in considering the value of Husband's accrued leave as part of the marital estate because no competent evidence was presented to establish that Husband had an enforceable right to payment for such leave. We therefore affirm the court of appeals' judgment on narrower grounds.
Notes
. We granted Wife's petition for a writ of certio-rari on the following issue:
Whether the court of appeals erred in finding that accrued vacation and sick leave time is not marital property subject to division pursuant to section 14-10-1113, C.R.S. (2010).
. Section 14-10-~113(3), C.R.S. (2013), incorporates a presumption that all property acquired by a spouse subsequent to the marriage is "marital" property. Balanson,
. The statutory provision at issue in Hartman required employers who refused to pay compensation due upon termination to pay both the compensation plus a penalty for such refusal.
. - Such payment-received in addition to the employee's regular salary or wages-reflects that the accrued leave is not a mere gratuity, but is instead compensation for services performed.
. We have approved the use of delayed methods of distribution in the context of pension benefits to address difficulties in valuing assets that an employee spouse is not yet eligible to receive. See, e.g., Hunt,
. Although accrued paid leave is a form of compensation for services performed, we note that only such leave accrued during the marriage can qualify as marital property subject to equitable division. By contrast, maintenance and child support payments reflect disbursements of a spouse's income that is earned after dissolution. As such, accrued leave that qualifies as marital property subject to equitable distribution should not be considered in determining future maintenance and support awards.
. Nothing in the record before us suggests that the trial court improperly considered the value of Husband's accrued leave in determining the maintenance award.
. The court of appeals remanded this case for further proceedings on the issues of property division, maintenance, and child support. Cardona, — P.3d at —,
Concurrence Opinion
concurring in the judgment.
¶ 37 I agree with the majority's conclusion that the accrued vacation and sick leave of the husband in this case could not be equitably divided. I write separately however, because I believe the majority erred in two ways. First, in any case where the court divides a spouse's acerued leave as property and then orders maintenance or child support, the accrued leave is counted twice. Second, the majority minimizes the difficulty of determining the actual value of the leave on the date of distribution. In my opinion, the actual value of the accrued leave on the date of distribution is indeterminate and speculative and should only be distributed when a present value can be calculated. Hence, I respectfully concur in the judgment only.
I.
¶ 38 A trial court cannot equitably distribute property if it is counted twice. According to the majority, accrued leave is not a mere gratuity, but is instead compensation earned for services performed. Maj. op. 129 n 4. In other words, it is income. Even if the majority is correct that accrued leave is a type of compensation for services already performed, the employee spouse does not realize this income until the employee spouse either takes time off or receives payment in lieu of taking the leave. Thus, when a trial court equitably divides acerued leave as property, the court is actually dividing future income.
T 39 What the majority fails to consider is that future income is also used to form the basis for child support and maintenance orders. Courts calculate child support and maintenance based on income. § 14-10-115, C.R.S. (2018) (child support guidelines); § 14-10-114, CRS. (2013) (maintenance guidelines). And, future income is used to make the actual payments. See In re Marriage of Huff,
IL.
T41 Second, the majority's holding minimizes the requirement that a marital asset have a determinable present value. Simply put, a trial court cannot equitably distribute an asset that will not be realized until some date in the future if its present value cannot be accurately determined. Exeept in very rare cirenmstances,
{42 As the majority acknowledged, property must be valued before courts can equitably divide it. Maj. op. 131; In re Marriage of Balanson,
" 43 Unlike calculating the present value of a pension, it will be nearly impossible for a court to determine the present value of accrued leave. In order to determine the present value of acerued leave, a court must consider a bevy of speculative and indeterminate factors such as future illness, vacations, company policy, lifestyle changes, job changes, family needs, and retirement. The majority acknowledges that several jurisdictions share my concern and have thus found that the present value of accrued leave is indeterminate and speculative. See Maj. op. 17 (citing Akers v. Akers,
4 44 Even if the trial court had evidence of the terms of the leave policy of the husband's employer, the facts of this case present a perfect example of the difficulties of valuing accrued leave. As previously noted, at the time of the permanent orders, the court valued the husband's accrued leave at $23,232. The trial court ordered the husband to pay one-half of this "value" of the accrued leave, $11,616, to the wife. In so doing, the trial court in effect assumed that the husband would never use his accrued leave as time off. Yet, the exact opposite occurred. The trial court allowed the wife to relocate to Florida with the children. Because the wife and his children relocated, the husband used his leave to visit his children. By the time this Court heard oral arguments, the husband had used all of his accrued leave. As a result, the actual present value of the husband's acerued leave on the date of distribution in this case was zero.
IH.
1 45 The facts of this case demonstrate the inequities of double counting accrued leave as both income and property and the difficulties of calculating the present value of the ac-erued leave. To avoid inequitable results, if a trial court orders child support or maintenance, it should treat accrued leave only as income. On the other hand, if the trial court does not order child support or maintenance, it should consider accrued leave only as an economic cireumstance when it divides marital property. Hence, I concur in the judgment only.
. For example, if a spouse, whose accrued leave is vested and payable at retirement, is on the cusp of retirement, the present value can likely be calculated because nearly all of the future contingencies have been removed.