Navigating Nevada Divorce With Separate Bank Accounts: Who Gets What?
Most divorcing couples that I have encountered have either separate or joint bank accounts. My husband and I use a joint bank account for bills and savings, but use separate accounts for our IRA’s. However, Las Vegas divorce attorneys always worry when encountering couples with only separate bank accounts. Eventually, they will ask if these assets are solely theirs. When they do ask, I have to break the bad news.
Who Owns the Money?
Couples who established bank accounts after the marriage began must divide these accounts equally when seeking divorce. Specific accounts that contain marital funds are the marital property of both parties. The name on the account is not important when it comes to deciding who “owns” the account for divorce purposes.
Nevada divorce lawyers and courts look at bank accounts in two ways: community property and separate property. Couples split community property (like money in a bank account) equally. Meanwhile, couples who each own separate property keep their specific accounts or property. Judges will award separate property to the person judged to be the sole owner of that separate property. In Nevada, if a husband opens a separate bank account during the marriage, the account’s classification, whether as separate or community property, depends on how the funds within it are managed.
What is Community Money?
Divorce courts use the word “community” to describe assets owned by both spouses in a marriage. If you purchase a vehicle while married, it is considered a “community vehicle.” If you used your credit and the vehicle is titled in your name, it is still considered community property.
Nevada is a community property state, meaning that assets and debts acquired during the marriage are generally considered jointly owned by both spouses. However, property owned before marriage, or acquired during the marriage by gift or inheritance, is considered separate property. To maintain the separate nature of such property, it’s crucial to avoid commingling it with community property.
This also relates to any purchased property, the furniture inside the properties, any money placed in bank accounts opened after the marriage began, and acquired stocks. During a divorce, community property is equally divided unless there are claims of marital waste. Any debts incurred during the marriage become community property of the couple and will need to be divided. Hiring a divorce attorney will be of significant value when going through this process.
The court may label your assets as “separate” if one spouse came into the marriage with previously owned property, or if they are gifted property after the marriage began. For example, you came into the marriage with a bank account worth $50,000. During the marriage, you never added your spouse’s name to the bank account. This specific bank account would likely be declared separate property and not subject to being divided equally in a divorce.
Are Separate Bank Accounts Marital Property in Nevada?
In Nevada, separate bank accounts can become marital property if the funds are commingled with community assets. Nevada is a community property state, meaning that assets acquired during the marriage are generally considered jointly owned by both spouses and are subject to equal division in the event of a divorce. However, separate property, such as assets owned before marriage, gifts, or inheritances, can retain its separate status if it is kept distinct and not mixed with community property.
If a spouse opens a separate bank account during the marriage and deposits only separate funds into it, that account may remain separate property. However, if community funds are deposited into the account or if the account is used for joint expenses, the account may be deemed community property. This process is known as “commingling.” To maintain the separate nature of such an account, it’s crucial to keep detailed records and avoid using the account for shared financial obligations.
Commingling is defined as ‘to combine funds or properties into a common fund or stock’. The main issue of property commingling occurs when separate and community property are mixed. The separate property is then considered to be community property and will be split equally between the divorcing parties.
In cases where separate and community funds are commingled, the court may require a process called “tracing” to determine the original source of the funds. This can be complex and may require expert financial analysis. Therefore, it’s advisable to consult with a legal professional to understand how Nevada’s community property laws apply to your specific situation.
Commingling can happen in several different ways. One common scenario occurs when you add your spouse’s name to a bank account.
- You added your spouse’s name to your bank account worth $50,000, and you and your spouse both use the account to deposit paychecks and pay bills. The original amount has been commingled. A family court judge would probably consider the $50,000 as community property.
- If your spouse’s name is not added to the bank account, but you both use the account to deposit paychecks and pay bills, commingling can also occur. The court could consider the original amount as separate property if your divorce attorney made a compelling argument. Detailed records can strengthen your argument. This could prove useful if the marriage has lasted for a significant time.
For a more detailed description of what is considered “separate” and “community” property, please review our article written by one of our skilled divorce lawyers: Division of Property and Debt.
Can I Empty My Bank Account Before Divorce?
In Nevada, it is generally not advisable to empty your bank account before or during divorce proceedings. Nevada is a community property state, meaning that assets and debts acquired during the marriage are typically divided equally between spouses upon divorce. Attempting to deplete a bank account can be viewed as economic misconduct, which may lead to serious legal consequences.
How To Keep Bank Accounts Separate in Nevada Divorce
In Nevada, a community property state, maintaining a separate bank account during a divorce requires careful attention to avoid commingling assets. Commingling occurs when separate property is mixed with community property, potentially converting it into marital property subject to division. To keep your bank account separate in a Nevada divorce, consider the following steps:
- Maintain Sole Ownership: Ensure the account is solely in your name, without your spouse’s name added.
- Avoid Depositing Community Funds: Do not deposit income earned during the marriage or other community funds into this account. The account should not receive deposits of community property.
- Keep Detailed Records: Maintain comprehensive documentation of the account’s history, including statements and records of deposits and withdrawals, to prove the source of funds.
- Use Separate Funds: Deposit only separate property, such as inheritance or gifts received individually, into this account. If the gift has both spouses’ names on it (such as a wedding gift check), it can’t go into the separate account without commingling the funds.
- Consult Legal Professionals: Seek advice from a family law attorney to ensure your actions comply with Nevada’s community property laws and to protect your interests.
By adhering to these practices, you can better safeguard your separate bank account during a divorce in Nevada.
Remember to keep detailed financial records from all bank accounts before, during, and after your wedding. These records can be helpful should you need to file for divorce. Many divorce attorneys will use these records if you want to prove that your accounts should remain separate.
Contact an Experienced Las Vegas Divorce Lawyer With Questions About Separate Bank Accounts In Divorce
If you are going through a Nevada divorce and are looking for answers to questions regarding separate bank accounts in divorce or if separate bank accounts are marital property in divorce, contact Las Vegas divorce attorneys at Right Lawyers for a Free Consultation. Our attorneys can answer all of your questions and help you get your life back on track.
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