Introduction Flashcards
Seperate Property
Property owned by either spouse before marriage
Property acquired during marriage by gift, will, or inheritance
Property acquired during marriage with separate funds
Property covered by valid premarital agreement
Income from separate property
Tort recovery from personal injury (unless spouses sue jointly, then only pain and suffering)
Community Property
Property other than separate property, acquired by either spouse during the marriage.
Community Presumption
All assets acquired during marriage presumptively belong to the community.
All assets acquired on credit during the marriage are presumptively acquired on community credit.
All assets on hand whenever the issue is raised (divorce, death, creditor’s claim) are presumptively community property.
Burden for Overcoming Community Presumption
The party contending that a piece of property is not community property must show that by clear and convincing evidence.
Child’s Earning
Presumptively CP if parents are married, otherwise SP of custodial parent regardless of whether there is a formal custody award.
Can be “relinquished” to the child.
Child’s passive earnings are the child’s property.
Unmarried People’s Property
They will have a tenancy in common.
When does the marital community end?
When there is a final decree of divorce or a decree of legal separation is entered.
Royalty Payments
If the book/song/movie was produced during the marriage, all royalty payments are CP even after divorce.
Compelling Reasons for Justifying Unequal Distribution of Estate
Financial Misconduct of One Spouse
Abuse that generates expenses or affects the spouse’s ability to work
Alimony Factors
Career prior to marriage Length of the marriage Education during the marriage Marketability of each spouse Ability to support themselves Who stayed home with the children Job Skills Obtained During Marriage Financial Support in Obtaining New Skills Such other factors as court deems appropriate
Gifting Community Property
Neith spouse can make a gift of community property without the other spouse’s express consent.
Credit Obtained During Marriage
Credit Obtained during marriage is presumptively community.
Courts may also look at the primary intent of the lender. but subsequent actions of the parties in paying off the loan may change the character of the asset under the proration rule.
Effects of Moving from Common Law State
In common law states, each spouse’s salary is their own separate property and the title of physical items determines ownership.
However, you cannot lose property rights by moving to a new state, so if it was separate property in another state it will remain separate property when moved to Nevada.
Premarital Agreement Coverage
Anything except child support and an alimony aversion clause that would leave one spouse on public assistance.
Defenses to Premarital Agreements
Not voluntary
Unconscionable (when made)
No fair disclosure and no knowledge of other party’s financial situation.
Transmutations
Marital agreements made during marriage
Must be in writing, signed, and notarized.
Spouse to Spouse Land Transfer
Creates a presumption of a gift that can only be overcome by clear and convincing evidence.
Malmquist
If a purchase is made before marriage but paid down with CP, the proration rule applies.
The appreciate of the asset from the date of purchase to the date of divorce is prorated based on the number of monthly payments made from SP vs. CP.
Only funds that reduce the debt apply the proration rule, taxes, upkeep, etc. are not counted.
Life Insurance Acquired Before Marriage but Paid with CP During Marriage
Proration Rule Applies
Family Expense Presumption
It is presumed that expenditures for family expenses were made with community funds. If SP were used for family stuff, there is still a presumption that it is a gift the community with no expectation of repayment.
Commingled Bank Accounts
The burden is on the spouse who wishes to claim the property is SP to prove by clear and convincing evidence (using tracing or exhaustion) that the property was SP.
SP Businesses that Appreciate During Marriage
Use Pereira when the appreciation is due to the Personal Skills and Labor of one spouse. Under this formula, pay interest (fair return) on SP and the rest is CP (to be split 50/50).
Use Van Camp when there is a valuable company/asset (luck, market forces, etc.). Under this formula, take the value of the community labor (spouses services at market rate) subtract the family expenses that were paid from CP. Give what is left to the community (to be split 50/50), the rest is seperate property.
Note Nevada prefers Pereira.
Retirement
Employee Retirement Benefits accumulated during marriage (whether or not vested at time of divorce) are CP.
Take years of service while married divided by total years of employment before retirement.
Ways of Cashing out Retirement Benefits at Divorce
Present Cash Value Approach: requires a reasonable certainty as to value and enough existing funds to satisfy the other spouse’s interest.
Wait and See Approach (preferred): The community interest is in the pension that is ultimately received. Take years of service while married divided by total number of years of employment before eligible for retirement and apply to value at retirement. Right becomes available at the eligible date or retirement, regardless of whether spouse actually retires then.
