How Does Community Property Work?

man with both hands separating a puzzle

The division of property is an issue of critical importance when couples divorce. For each spouse, it is a representation of the hard work and contributions they made to their marriage. And moreover, it represents an earned financial security and prosperity that each wishes to carry forward into the future. If you are considering a divorce, it would be beneficial to have some understanding of how property division works in Nevada.

Nevada Courts Generally Split Community Property Equally

Nevada is a community property state. When couples divorce without a prenuptial agreement, courts are mandated under Nevada law to resolve property division cases by making an “equal disposition of community property of the parties”.

What is community property? It consists of all of the property that was acquired by either or both spouses between the date of their marriage and the date of their divorce. This includes but is not limited to: the net value of all such income, retirement and pension contributions during the marriage, business interest, investments, savings, and real and personal property.

Separate Property Remains Separate

In contrast, separate property is property that each spouse already owned before they got married, or that was obtained during marriage but is a gift, inheritance or personal injury proceeds. The distinction between community property and separate property can be a really big deal when it comes to divorce. Separate property is outside the scope of the court’s authority to distribute upon divorce. This means that property a spouse brings into the marriage stays with that spouse.  It may, however, be considered when awarding alimony in determining the financial condition of the parties.

Further, the use of separate property during the marriage has important implications within the context of community property. For example, when separate property is used to purchase a boat during the marriage, then that boat likely remains the separate property of the spouse. However, when a spouse uses separate property to pay for a house or home improvements for a joint property, then a court may or may not reimburse that spouse’s separate property contribution from the net value of the community property.

As a caveat, separate property can also become marital property if it is comingled with community property—such as if it is transferred into a joint account that each spouse uses and contributes to. A knowledgeable attorney can help you identify and preserve your financial interests.

A Court Can Make an Unequal Disposition of Community Property

There are exceptions to the general rule of a 50-50 split of community property. In the circumstance that a court finds “a compelling reason to do so”, the court has discretion to make an unequal disposition of community property between the parties. This is the exception to the rule, which means that it is uncommon. Notably, destroying or wasting community property may constitute a “compelling reason” from a court, but marital misconduct is not  a basis for an unequal distribution.

Contact Viloria, Oliphant, Oster & Aman L.L.P.

Viloria, Oliphant, Oster & Aman, L.L.P. is a full service law firm that provides legal advice and representation to individuals in need. If your marriage is ending and you want to protect your property rights, it is critical that you speak with an attorney. Our smart, experienced lawyers understand that this is a time of uncertainty for you, and will provide you with the attention and information you need to make confident decisions. Call Viloria, Oliphant, Oster & Aman L.L.P. today at (775) 227-2280 to schedule a consultation or contact our office through our website.

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