Many states specify that marital property and debt should be distributed “equitably” in divorce, but the state of Nevada is different.
Nevada is a community property state, which means that marital assets and debt must be split 50/50. For the most part, all property and debt accrued during the marriage are considered marital community property, even if the title or loan document is in only one spouse’s name. But there are exceptions.
Marital Debt Under Nevada Community Property Laws
Under divorce laws, a couple’s assets, and debts are treated either as separate property or marital property. Because Nevada is a community property state, assets and earnings obtained during a marriage are generally considered to be owned equally by both spouses. The same is true of debt.
However, the Family Court has some discretion in allocating debt. For instance, if one spouse gambled away significant funds, the judge might allocate more of the remaining funds to the other spouse. Other factors that could influence the distribution of marital debt include:
- The length of the marriage
- The standard of living during the marriage
- The potential earning capacity and income of divorcing couple
- Health and age of divorcing couple
- Value of marital assets
One factor that a Nevada judge generally cannot consider in property and debt division is the fault of the divorce.
Separate Property and Debt in Nevada
Separate property includes assets that belonged to one party before the marriage, assets specified as separate in a premarital agreement, and assets acquired through inheritance, gift, or proceeds of a personal injury lawsuit. Separate property and separate debt receive similar treatment.
It is common for one spouse to use separate property to contribute to community property. The spouse may convince the court to reimburse the funds that improved or acquired community property. Similarly, if one partner incurred a debt before the marriage but the debt was for the benefit of the couple, such as a loan to remodel the family home, that debt could be shared as marital debt.
It is critical to review the circumstances of each debt with your divorce attorney to get a fair division of marital debt and the appropriate categorization of separate debt.
Prenuptial and Postnuptial Agreements and Debt
A prenuptial or postnuptial agreement defines financial considerations and responsibilities in the event that a marriage ends. Prenups and postnups often contain specific information clarifying marital debts and assets.
Marital Debt and Mediation in Nevada
Divorcing couples can take power into their own hands and agree how to divide community property and debt. Each spouse should work with their own attorney in advance so that they understand their rights and options for an equitable distribution of assets and debt. When it is time to sit down and create a plan, many couples in Nevada find it helpful to work with a mediator.
A mediator is a neutral third party who helps parties find compromise solutions. Mediators are often attorneys, but they have additional training that enables them to facilitate mutual solutions. A mediator does not have the authority to make a decision for the parties but rather guides the parties to their own decision. In that way, mediation gives the divorcing parties more control than leaving things up to a judge. However, resolution through mediation is only possible if the divorcing partners are willing to cooperate.
Contact a Nevada Divorce Attorney for Assistance
The experienced divorce team at Naimi Family Law Group can protect your interests with all divorce issues, including problems with marital debt. Contact us today to learn more about how we can help in your situation.