I own my home free and clear and am getting married soon and I am concerned if we get divorced if my home becomes joint property and have to split the procedes of it. We both have homes and assets but friends keep telling me to get a prenup to protect my assets.
In general terms, only that property/assets and debt acquired during the marriage is community property. However, assets include your income and if you are using your income to pay expenses on the home, including taxes, insurance, repairs, etc., then the community is acquiring an interest in the home through these payments. The only way to be very clear as to what will remain separate property after the date of marriage is through a proper prenup.
In addition to my colleague's response, you can also identify your separate property by following the procedures in NRS 123.130 - NRS 123.170, a link to which is below.
If these statutes are not followed, the Court, in a divorce proceeding, will presume that all of your property and debts are community in nature. You will have the burden to prove your house (and any other property) is separate property as owned before marriage.
Courts may also award a spouse the separate property of the other spouse as spousal support. See NRS 125.150(4). A prenuptial agreement can give an extra level of protection in identifying separate property and in defining what alimony, if any, a party may receive upon divorce. Keep i mind, however, that nothing is 100% guaranteed.
I would suggest consulting with an experienced family law attorney before getting married.
Get the prenup your friends are right:
Separate PropertyProperty owned by one spouse before marriage Property given to just one spouse Property inherited by just one spouse either spouse earns during marriage
Things bought with money either spouse earns during marriage
Separate property that has become so mixed with community property that it can't be identified
These rules apply no matter whose name is on the title document to a particular piece of property. For example, a married woman in a community property state may own a car in only her name -- but legally, her husband may own a half-interest.Often a new couple acquires a family residence. If the marriage terminates in subsequent years, there can be difficult community property problems to solve. For instance, often there is a contribution of separate property; or legal title may be held in the name of one party and not the other. There may also have been an inheritance or substantial gift from the family of one of the spouses during the marriage, whose proceeds were used to buy a property or pay down a mortgage. Case law and applicable formulas vary among community property jurisdictions to apply to these and many other situations, to determine and divide community and separate property interest in such a residence and other property.
Community property issues often arise in divorce proceedings and disputes after the death of one spouse. These disputes can often be avoided by proper estate planning during the spouses' joint lifetime. This may or may not involve probate proceedings. Property acquired before marriage is separate and belongs to the spouse who acquired it. Property acquired during marriage is presumed to belong to the community estate except if acquired by inheritance or gift, or by exchange for other separate property. This definition leads to numerous issues that can be difficult to ascertain. For instance, where a spouse owns a business when marrying, it is clearly separate at that time. But if the business grows during the marriage, then what of the additional property acquired during marriage? Do they not result from labor of the spouses? Were some of the funds that were used to pay for the property community funds while a portion of the funds were separate property?
Community property may consist of property of all types, including real property ("immovable property" in civil law jurisdictions) and personal property ("movable property" in civil law jurisdictions) such as accounts in financial institutes, stocks, bonds, and cash.
A pension or annuity may have first been acquired before a marriage. But if contributions are made with community property during marriage, then proceeds are partly separate property and partly community property. Upon divorce or death of a party to the marriage, there are rules for apportionment.
Options are also difficult to ascertain. A stock option is a right to purchase shares of a company at a fixed price. Companies with growth potential sometimes award stock options as compensation to employees, during times when there is not enough money to pay a suitable salary. By accepting a stock option for compensation, an employee invests his or her own trust in the belief that he or she will help make the company acquire a higher value. Thereafter, the employee works and contributes value to the company. If the company later acquires a higher share valuation, then the employee may "cash in" his options by selling them at the fair market value. The employee's trust in this future value motivates his work without immediate compensation. That effort has value. If the marriage is terminated before the shares are cashed in, then the parties must decide how to apportion the community property portion of the options. This can be difficult. Case law precedents are not yet available for all situations involving stock options.
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