On television and in the movies, you’ve probably heard bitter spouses say something to the effect of, “If we divorce, I’ll take you for all you have,” or “You’ll end up with nothing!” But are these threats actually true and applicable to real-life divorces? Not exactly. Nevada, like our neighbor California, is a community property, no-fault divorce state. What does this mean to married couples on the brink of divorce? It means that in Nevada divorces, all marital property is subject to a 50/50 split, regardless of which spouses earned the money, and regardless of whose name is on the title.
In a Nevada divorce, the first step is to determine what is marital property and what is separate property. Generally, marital property is all property acquired during the marriage, whereas separate property refers to the following:
- Personal injury awards in one spouse’s name.
- Gifts and inheritances in one spouse’s name alone.
- Property acquired before the marriage took place.
So, if a Las Vegas native had owned his 1969 Oldsmobile 442 for years before the marriage, it would still be counted as “his” when the couple divorces. If a wife bought a condo near the Strip before meeting her husband and she still had it when they filed for divorce, the condo would be considered her separate property. Also, any money that the wife received in rental income on her property would also be considered her separate property.
Debts must be considered as well. The court will have to assign the debts to one spouse or another and they do this be examining who acquired the debt, when, and why. As far as joint debts (debts with both names on the loan), such as credit cards, auto loans, and mortgages, the spouses must understand that even though a debt is assigned to their spouse, as long as their name is on it they can be held liable for the debt if their spouse later refuses to pay it, or can no longer afford to pay it.
In light of the above, when you get divorced, it’s best to walk away without having any lingering joint debts if at all possible. For example, if your spouse is going to keep the house, he or she should take out a mortgage in their name alone. If they cannot qualify for a loan because their income is too low, you may be better off selling the house and splitting the proceeds. Not only that, but if your name is still on a mortgage, it can make it difficult, if not impossible for you to qualify for a new home loan for yourself.
Marital Settlement Agreements
“Do I have to follow Nevada’s community property laws?” No, not necessarily. If you and your spouse can reach a fair agreement, the courts do not need to get involved and you can agree to almost any settlement you want, as long as it’s fair. We highly recommend collaborative divorces where spouses hash things out until they reach a divorce settlement. In a collaborative divorce, the spouses would sign a marital settlement agreement, which would be forwarded to the judge, signed off, and put into a court order.