Nevada Community Property Laws

All divorce matters involve some form of division of spousal assets and debts. The manner in which the division occurs depends on the laws in the state with jurisdiction over the divorce case. Each state has their own individual laws, but the laws fall into two general categories: Community property or equitable distribution.

Nevada is one of only nine states that use community property laws. These laws govern property division in all Las Vegas divorce cases. The other eight states with community property laws are Arizona, California, Idaho, Louisiana, New Mexico, Texas, Washington, and Wisconsin. The other forty-one states (and Puerto Rico) base their marital asset and debt divisions on the legal concept of equitable distribution.

Nevada community property laws may seem simple at first. However, there are numerous factors that affect the status of a marital asset or debt. More importantly, even if an asset has community ownership, it does not mean that it is automatically subject to a fifty-fifty division between the divorcing spouses.

Community Property and Equitable Distribution

Community property states treat all assets and debts acquired during marriage, by default, as having joint spousal ownership. Whether only one, or both spouses, is responsible for the action is not material. If one spouse claims an asset as their sole and separate property, they are responsible to provide proof that it is so. The other spouse does not have to prove it’s not.

Equitable distribution states treat marital assets and debts differently than community property states. The legal concept of equitable distribution, in general, favors the spouse most responsible for the action. Apportioning each spouse’s equitable share can turn into a nightmare of legal wrangling. Unfortunately community property law is no less complex. The law just handles the complexities differently.

Community and Separate Property

In general, an asset acquired after the date of marriage is deemed to be the property of both spouses under Nevada community property laws. Examples of community property may include:

• Income – This is often a surprise to a spouse who earns the lion’s share of the marital income. If there is no enforceable agreement to the contrary, every dollar either spouse earns during marriage is community property. Your spouse need not contribute at all and they still have a right to their community portion of all marital income.
• Real Estate – The most common example of this is a marital home, regardless of who is on the title and/or mortgage. Many people confuse the policies of financial services companies with community property laws. The two are not the same. Just because one spouse is not on the title, it does not mean that they have no right to their marital portion.
• Investments – If you or your spouse initiate or continue to support investments during marriage, the investments may be community property.
• Commingled Assets – If either spouse supports an asset using community funds, it may be community property regardless of other factors such as ownership by one spouse prior to marriage.

Examples of separate property may include:

• Any asset specifically listed in an enforceable pre-marital or post nuptial agreement. They key word here is “enforceable.” It is not uncommon for a family court judge to rule an agreement unenforceable for a variety of reasons. These may include whether both spouses had independent legal representation, each had adequate time before signing, the document contains proper wording, and a listing of all financial details, to name just a few.
• Sole Inheritances – If one spouse receives an inheritance, that specifically bequeaths solely to them, and they keep the inheritance separate from all marital finances, it can be the sole and separate property of one spouse.
• Social Security Benefits – Under federal law, social security benefits are always separate property. However, the amount of the benefits are routinely considered when dividing assets and debts during divorce.

Many believe that community property laws are straightforward. They interpret a community property state to mean that all marital property is divided fifty-fifty during divorce. The reality is that Nevada community property laws are fraught with legal gray areas. Factors such as prenuptial agreements, ownership prior to marriage, inheritances, and commingling of separate and community funds are examples which can affect the division of assets and debts during divorce.

Nevada Community Property Law Experts

Our Las Vegas divorce attorneys possess the knowledge and experience required to successfully navigate the intricacies of community and separate property. Both Jennifer V. Abrams and Vincent Mayo offer courtesy phone consultations at no charge. Call 702-222-4021 to speak with one of them about your complex financial divorce issues.