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Community vs. Separate Property
The issue of what is community versus separate property in a marriage usually comes up in divorce situations when the couple decides to break up. However, the issue also comes up in probate situations.
Separate property is defined at N.R.S. 123.130 and is property owned by a person before marriage or acquired afterward by gift or as an award for personal injury damages or specified in certain agreements as separate property. Community property is defined at N.R.S. 123.220 as everything else and includes basically money earned during the marriage. Jack and Jill might get married and agree to keep separate finances, but the money that each of them earns during the marriage is community property, in the absence of certain written agreements.
When community and separate property gets mixed up it can lead to complicated issues. For example, Jack brings a house into the marriage which has considerable equity; Jack pays for the taxes and maintenance with his salary (community property) and Jill pays for improvements with her salary (community property). Is the house now community property, or a mixture of community and Jack's separate property?
As a general rule, community property is owned 50-50 by the two spouses and one spouse could provide for his or her half to go to whomever. On the other hand, in the absence of a will all community property sometimes goes to the spouse.
N.R.S. 123.250 provides in part:
NRS 123.250 Ownership of survivor upon death of spouse; disposal by will of decedent.
1. Except as otherwise provided in subsection 2, upon the death of either husband or wife:
- (a) An undivided one-half interest in the community property is the property of the surviving spouse and his or her sole separate property.
- (b) The remaining interest:
- (1) Is subject to the testamentary disposition of the decedent or, in the absence of such a testamentary disposition, goes to the surviving spouse; and
- (2) Is the only portion subject to administration under the provisions of title 12 of NRS....
The caselaw (prior Nevada Supreme Court decisions) on how you determine if something is community or separate property or some combination is found mainly in divorce cases and is a complicated issue.
Note: The Nevada statutes do not address the issue of whether these community property consideration apply to a Nevada Probate concerning a resident of a non-community property state or country.
How Community Property Considerations Determine Probate Cost and Outcome:
It often happens in a marriage that a valuable asset such as a house is titled only in the name of one spouse. If this asset can be characterized as community property, then the surviving spouse is considered to already own half so that the size of the probate estate is reduced. This can cut down on probate costs and complexity and even sometimes defeat creditors, see our "probate" page.