What if a Divorce Decree Omits an Asset?

When a divorce case is filed in Las Vegas, Nevada law requires that both spouses provide the court with a full disclosure of their assets and debts. Spouses are not allowed to hide assets.  If one spouse suspects the other is hiding assets during the divorce process, there are a number of tools available to obtain the information.

However, despite all the best intentions and the number of protections in place, sometimes a divorce is finalized, and a judgment is made based on financial information that is either inaccurate or incomplete, or both.

In some cases, a spouse may be trying to hide assets they don’t want distributed. In many cases, both parties worked with each other in good faith, but simply neglected to list an asset or a debt.   This is often the case when clients use self-help divorce forms.

What if Something is Missing?

When dividing community property, it is not unusual for some of those assets to be inadvertently omitted or forgotten in the process.  Assets like abandoned life insurance policies, old saving accounts, or brokerage accounts that you no longer put money into are easily forgotten.

Another mistake is not listing an asset because a spouse thinks it isn’t community property and doesn’t need to be mentioned in the divorce decree.   This could include such assets as a gun collection, a bank account with only one spouse’s name, a vehicle, or a pension.

It is immensely important that both spouses try to divide all assets.  Failure to make a full disclosure can potentially expose one spouse or the other to accusations of fraud.  But even when the omission was an honest mistake, it can lead to major hassles.

It is not unusual to find out about a missing asset years after the divorce decree has been granted.

For example, Janet and Mike have been divorced for more than three years.   They were married for 23 years.  Janet was a home maker while Mike worked for several school districts. One day Jane got a letter in the mail containing an account statement for a retirement account Mike earned from a job he had when they first married.  Mike only had the job for 8 years, and then moved to Nevada.  This retirement account was never mentioned in the divorce decree.  Janet and Mike didn’t even remember the retirement account existed or that interest had been accruing while you were married.  With interest the account had ballooned to almost $60,000.   The retirement account is an omitted asset.   Half of the balance at the time of the divorce belongs to Janet.

How to Recover Omitted Assets

When omitted assets are found, it means the previous Divorce Decree no longer is a full and final decree of divorce.   How do you get your share of the asset?

Thankfully, there are measures in Nevada to make it possible for the family court to revisit the situation. Community property or community debts that were omitted as a result of mutual mistake are open to being revisited.   This means you can ask the court to divide omitted assets.  Even if you spouse doesn’t agree.  Which is typical.

For many years, when omitted assets were discovered, the court depended on the Nevada Rule of Civil Procedure 60(b). According to that rule, upon the discovery of “mistake,” “inadvertence,” or “excusable neglect” by a party, the party had up to six months from the date of the order to ask the court to divide an omitted asset or debt. The omission would need to be classified as a “mistake,” “inadvertence,” or “excusable neglect”.

To reopen the case, one party had to reopen the case within six months of the final order.  The problem was, six months was quite limiting.  The judge had the discretion to make exceptions to the six-month rule if they felt it necessary. Judges rarely used this discretion, so six months was the effective deadline to discover the omitted assets.

In 2015, the Nevada legislature decided to extend the time period for reviewing omitted assets.  The purpose of the law was for a divorce to divide all the properly and debts.  Under the new Nevada law, any divorce decree may be reopened within three years of the discovery of an omitted asset.

A community asset is likely to be considered omitted if it was expressly written in the divorce agreement, and the admission was generally known and accepted.   The omission can be a “mutual mistake”, or a “unilateral mistake”.   A mutual mistake is where both spouses forgot about the asset.   If Janet knew about Mike’s pension, then it wouldn’t be a mutual mistake.  If she knew about the pension, she may have waived her rights to the pension.   The court would need to determine what Jane knew at the time they signed she divorce decree.

A unilateral mistake is when one spouse knew about the asset, but the other spouse didn’t.  Unilateral mistakes could lead to a claim of fraud.   If it can be determined that Mike purposely tried to hide that asset, the judge has the discretion to award 100% of the value to Janet.

In our case above, Janet has up to three years to file a claim with the court.   Her first step should be to hire a Las Vegas Divorce Attorney to send Mike a letter.   If Mike ignores the letter, then a motion with the court would be filed.    The court would review the request to divide an omitted asset.  If the motion is filed within three years, the asset is a community asset, and Janet didn’t know about it, then they could will divide the pension equally.

Suspect an Asset has been Omitted.   Contact a Divorce Attorney.   Call (702) 914-0400.