Nevada Property Division
Nevada favors an equal division of marital property, but it allows for an unequal – or in other words, equitable – division to achieve fairness when necessary. Commonly, the courts will consider good and bad marital behavior (almost exclusively that of a financial nature) in deciding whether or not to forego an equal division of marital property in favor of an equitable, or unequal, division of such property. Nevada divorce litigants share in the division of all property acquired between the date of marriage and the date of divorce, so the parties in a Nevada divorce action continue to be financial partners through the conclusion of that matter. Nevada courts are empowered to award, at their discretion, reimbursement of monies used by a spouse from their own separate estate to either acquire or improve a community asset.
The courts consider the length of the parties’ marriage, the parties’ intentions, and all other relevant factors in determining the issue of reimbursement. Nevada does not allow, absent an agreement of the parties to the contrary, division of marital property to occur separate and apart from, or preliminary to, the termination of the status of marriage. There is no power of the court to compel a divisible divorce, of such nature, without the parties agreement.
California Property Division
For the better part of the last 40 years, California has been a state in which an equal division of marital property is mandated by law. In referencing marital property, the discussion is about community property, that is, property acquired by a husband or wife after marriage. Community property acquisition continues until the date of separation; a date which, in and of itself, has been of substantial controversy and debate as statutory and decisional law has changed over the years. With very few exceptions (largely for gifts, inheritances, and the like), any property acquired by a husband or wife between the date of marriage and the date of separation is subject to equal division at the time of dissolution of the parties’ marriage, making the parties’ date of separation of significance.
The California Legislature and its courts have recently provided extensive guidance in determining what does and does not represent a legal separation. For most of our clients, however, they have ceased being financial partners by the time they commence and proceed through the dissolution of marriage process. Spouses using their separate property to acquire or improve a community asset are entitled, by law, to a reimbursement of that contribution. It is a dollar-for-dollar reimbursement, upon which there is no interest paid, no cost-of-living adjustment, etc. A spouse cannot receive reimbursement of such a separate property contribution if that reimbursement sum exceeds the equity in a property to which such reimbursement was made at the time of dissolution. To the extent that fault remains a vestige of California marital property law, it is virtually limited to instances in which a spouse incurs substantial debt in anticipation of a dissolution of marriage. In such instances, the California courts are not bound to make an equal division of that debt, and it may be assigned, in full, to the spouse incurring it.
For more information about the division of marital property in Nevada and California, listen to this podcast featuring divorce attorney Leslie J. Shaw.