This is the second post in my series on the impact of Nevada’s property laws as they relate to the division of home equity and other investments during a divorce. My last post provided information on how increased stock values impact community property division. I also discussed the difference between separate property and community property and when purchasing stocks during the marriage will affect the division of assets. In this article I will discuss the impact that increased home prices can have on your divorce. It is best to speak with an attorney regarding your specific situation. Contact my office to speak with a lawyer if you require assistance.
The price of a home often depends on the state of the current market. In recent years, that market has resulted in an increase to the value of most homes. For those that have purchased a home during the marriage, the Court will likely divide the value of that home between the spouses equally. This means that any equity will be considered community property and split evenly. Oftentimes, this will result in the sale of the marital home. The spouses will agree on a selling price and then divide the proceeds amongst the two of them. Nonetheless, if you have purchased your home before entering the marriage, you may be wondering whether the value of your home is considered separate property. The answer is: it depends.
It is true that purchasing your home before marriage typically means that it will be considered separate property and thus exempt from division in a divorce. However, if that home has increased in value during the marriage, both spouses may profit from that appreciation. For example, let’s say that you purchased a home before entering your marriage, but you and your spouse have both contributed in paying the mortgage or the payments were made from a joint account. In that case, any increase in the home’s value during the course of the marriage would be subject to an even distribution. If your home was originally worth $600,000 and it is now $800,000, then you and your spouse would split the extra $200,000 in equity.
There’s another less common scenario in which an individual may have the opportunity to shield their home from community property division. We can use the previous example in which one purchased their home before the marriage. Suppose you are continuing the mortgage payments during the course of the marriage, but with separate funds. This may be the case if you pay your mortgage out of an inheritance or an investment fund that existed prior to the marriage. If so, any equity that exists during the marriage would be your sole and separate property. This is because the increase in the value of the home was not impacted by the contributions of your spouse.
Property division in a divorce can potentially be a complicated process. This is why it is important to retain a attorney experienced in divorce cases to assist you. My practice is exclusively devoted to family law and I have a great deal of experience with such matters. Contact my office today to speak with a Las Vegas family law lawyer today.