Nevada is a community property state.  In Nevada, married couples own property either as Separate Property or Community Property.  The statutory definitions of Community Property is given in NRS § 123.220 and the statutory definition of Separate Property is given in NRS § 123.130.  Generally, Separate Property is all property owned by the spouse before marriage and that property acquired after marriage by gift, inheritance, or award of personal injury damages, including all the rents, issues, and profits of separate property.  Community Property is all property that is not Separate Property which is acquired after marriage.  In addition, in the absence of a pre-nuptial or a post-nuptial agreement, the labor and skills of a spouse are considered to be a community asset and therefore, all income generated during the marriage from such labor and skills is also community property.  See Johnson v. Johnson, 89 Nev. 244 (1973).  Therefore, if a spouse owns vacant land prior to marriage, that vacant land and all the appreciation of that vacant land is that spouse’s separate property.  However, if that spouse after marriage builds something on that property, an apportionment must be made between separate property and community property because the spouse’s labor and skills improved the property after marriage.

Another typical situation is where one spouse owns a house prior to marriage which becomes the marital residence after marriage.  The spouse that originally owned the house continues to pay the mortgage, insurance, and all property taxes out of his earned income.  In this specific case, the spouse’s separate property becomes partly community property because community funds were used to pay down the mortgage.  See Malmquist v. Malmquist, 106 Nev. 231 (1990).  The standard that governs the court for division of marital assets is that the court must make an “equal disposition of community property.”  However, the court may make an unequal disposition of the community property in such proportions as the court deems just if it finds a “compelling reason” to do so.  NRS § 125.150(1)(b).  A “compelling reason” which would justify unequal division of community assets is the financial misconduct of one of the spouses, such as waste or secretion of community assets in violation of a court order.  See Lofgren v. Lofgren, 112 Nev. 1282 (1996).  In addition, maintaining an extra-marital relationship with the use of community funds may constitute marital waste and justify an unequal distribution of community assets.

The attorneys at Lin & Associates (702-DIVORCE) are ready to ensure that your rights under Nevada law are fully protected.