Community Property: I’ve Heard Nevada Is A Community Property State but I Don’t Know What That Means?
If you live in Nevada and are married, there is a good chance you have heard the term Community Property. Only nine out of the 50 United States use Community Property for property ownership. Nevada is one of them. What does that mean? This article works to help explain some of the specifics. The experienced probate attorneys at Lee Kiefer & Park LLC can help you understand how community property factors into your probate and trust administration.
Lee, Kiefer, & Park, LLC, is a team of probate and estate lawyers. The firm is located in Las Vegas and provides legal services throughout Nevada. The attorneys are knowledgeable and reputable. Managing partner Kennedy E. Lee and partner Matthew W. Park have been listed as preeminent lawyers by the widely respected Martindale-Hubbell lawyer rating service. Each of the founding partners has been selected as Super Lawyers and Legal Elite. All of the attorneys received their degrees from well-respected law schools.
History of Community Property in Nevada
Before Nevada became a state, it belonged to the Utah Territory which used the Spanish and Mexican system for community property. Then Nevada received statehood in 1864. The first statutes enacted regarding community property followed Mexico’s community property laws almost exactly. Then, almost ten years into Nevada’s existence, a new law was created that has stood the test of time regarding community property with tweaks from time to time. Annette R. Shermack, Nevada Community Property Law, 15 La. L. Rev. 559, 559 (1955)
What Is Community Property?
According to the Nevada Revised Statutes, Community Property in Nevada consists of all property, except for separate property, acquired after marriage by either spouse. Items that are brought into the marriage, gifts received by one spouse during the marriage, and inheritances to one spouse remain the separate property of the spouse to whom it belonged. If it is forgotten who brough the property into the marriage, the property is deemed community property. Property will continue to keep its character unless affirmative steps are taken to change it, such as a contract. Property’s character cannot be altered by a Will.
Spouses can agree to give one spouse the power to sell community property and either spouse can manage the property. Normally, each spouse can only dispose of their half of the property. To purchase real property, both spouses must participate in the contract. Other types of property ownership exist for real property such as homes, where more flexibility is given to change the character of the property.
The law gives spouses a wide range of authority in managing their separate property. Each spouse can sale or dispose of this property without the consent of the other spouse.
Community Property and Divorce
At the time of divorce, the court order revokes any prior disposition of property to the former spouse or relative of the former spouse stipulated in a Will. Any power given to the former spouse or relative of the spouse to dispose of property is also revoked by divorce. If an agreement existed for the spouse or their relative to act as a trustee or personal representative, that agreement is revoked as well. See Divorce Post
It is incumbent upon the court to protect the property once a petition for divorce has been filed. If the court feels that it is probable that either party will interfere with the property, the Court can take steps to ensure this does not happen. An agreement can be made prior to Court for division of property, but if not, the Judge has wide latitude in how to divide the property.
Community Property and Death
Certain things happen with separate property at the time of the death of a spouse. If the property is held as community property with a right of survivorship, the property vests in the surviving spouse. The surviving spouse takes entire ownership of the community property at the death of a spouse.
Any property that is left at that time is disposed of in two ways. First, if there is a testamentary disposition, the property passes according to the instrument. If an instrument does not exist, the surviving spouse assumes the property. This property could be subject to probate. At death, the money that is in a joint acco9unt belongs to the surviving spouse.
With or without a Will, the Estate must be administered through the Probate process in Nevada Revised Statutes Title 12. Usually, for the surviving spouse to have authority over the property of the Estate, her or she must first obtain Letters of Administration from the Probate Court. In order to get these letters, the individual requesting the letters must prove the decedent did in fact die, and that notice has been given. The Court has the discretion to investigate the petition more closely by hearing to determine among other things, the “character and value of the decedent’s property.” This is a principle that dates back to the early days of Nevada statehood.
We always have and always will be proud to call ourselves Nevadans. Nevada strives to make it a place where property rights can be protected and dealt with in a fair and equitable manner. The scholar Shermack, cited too earlier, praised Nevada many years ago. I believe this still stands today.
“It is believed that Nevada has been able to steer such a clear course by virtue of the fact her courts have generally resorted to the fundamental civil law concept of community property. . . .”
We hope this has made the concept of Community Property a little easier to understand. As you might imagine, many nuances exist. If you have any questions about how Community Property might work at your death or the death of a loved one, contact Lee Kiefer & Park LLC for a free consultation, either by using the online form or by calling 702-333-1711.