Nevada is a community property state – one of only nine in the US. But what is a community property state? What does that mean? It means what’s mine is yours- equally. Well, kind of.
Let’s break it down.
In Nevada, property owned by married couples is either owned jointly, which is community property, or separately by one spouse as their separate property. Nevada law protects the separate property of a spouse in a divorce.
In a divorce, all community property is divided equally. That doesn’t necessarily mean that each spouse gets exactly half of each asset. Instead, assets and debts are listed on a balance sheet and assigned to either spouse so that each party gets one half of the whole marital estate. Sometimes assets cannot be divided in a perfectly equal way and one spouse is left owing money to the other to make it equal. This is called an equalizing payment.
The thing is – what you think is yours might not be yours. For example, the income you earn during marriage is not your separate property. It’s community property, along with everything you save and everything you buy. Simply keeping your earnings in separate bank accounts and not placing your names jointly on assets or debts does not make them separate property under the law.
Absent a prenuptial agreement, your income and everything it affords is community property. The retirement you save during marriage, the investments you make during marriage, the home you buy during marriage, anything that you purchase with your income during marriage will be divided equally between you and your spouse in a divorce. That can be a hard pill to swallow if you are the higher earning spouse. It’s even tougher to swallow when one party is a spender and the other is a saver.
Just let that sink in.
In the next few weeks, we’ll cover more about community property laws including separate property, different ways assets are divided, and why everyone should consider a prenuptial agreement.
Gloria Petroni is a licensed Nevada Attorney with over 40 years of experience. She is a family law specialist and practices in the areas of family law, probate and estate planning. This article is meant to be informative. It is not a substitute for legal advice. Every case is different. If you have questions about your case, you should contact a Nevada licensed attorney. We would love to hear from you.