Yes. Under Nevada state law, “community property” refers to all the assets and debts that a couple acquires during marriage. In the event of a divorce or legal separation, this community property (and community debts) are divided 50/50 unless the couple contracts otherwise.
Note that any separate property each spouse brings into the marriage remains each spouse’s separate property. Then in the event of divorce, each spouse gets to keep their separate property.1
Example: In Nevada, Mary has $0 and Ted has $10,000 in his own bank account when they get married. During the marriage, Mary is a homemaker while Ted works. By the time they decide to divorce, they have a joint bank account holding $100,000 which Ted earned.
Under community property rules, Ted and Mary would evenly divide the $100,000 bank account ($50,000 each) since it was acquired during the marriage. The $100,000 is considered community property even though Mary did not earn that money.
Meanwhile, Ted gets to keep the $10,000 he brought into the marriage since it is separate property, not marital property.
How can I get around community property laws?
The best way to avoid having community property laws apply to you is by having a prenuptial agreement where you clearly outline how property is to be divided in the event of divorce.
If you are already married, it is not too late – you and your spouse can always draw up a postnuptial agreement with the same terms.2
Even while you are divorcing, you can draw up a settlement agreement to divide your real estate and personal property in any way you like. Just be sure to have an experienced divorce law attorney representing your best interests and property rights.
Also be careful not to engage in any commingling of your separate property with marital assets while you are married. In the event of divorce, asset division will be trickier to determine.
Can community property laws apply to unmarried couples?
Nevada community property laws apply not only to married couples but also to:
- registered domestic partners, and
- couples who draw up a cohabitation agreement where they agree to follow community property laws in the event they split up.3
Community property laws also apply to unmarried couples who “in good faith” believed they were married, but – unbeknownst to them – a legal impediment kept them from being legally married. This is called the putative spouse doctrine.4
Example: Henry gets divorced and marries Sarah. Then Henry and Sarah file for divorce in the state of Nevada. They have a $100,000 fortune in cash and real property that Sarah earned during the marriage, which – under community property laws – they would divide 50/50.
Sarah’s Las Vegas divorce attorney then discovers that Henry was never legally divorced the first time because his former lawyer failed to file the paperwork. Since Henry and Sarah were therefore never legally married, Sarah’s attorney argues that community property laws should not apply and that Sarah should keep the $100,000 she earned.
However, Nevada’s putative spouse doctrine kicks in here because Sarah and Henry genuinely thought they were married. Therefore, the $100,000 is considered community assets, and the division of property will be 50/50.