How Are Inherited Assets Treated In A Nevada Divorce?

During any divorce, property division can become contentious; that is especially true in high-net worth divorces. Because Nevada is a "community property" state, most assets acquired during a marriage are considered the property of both spouses in a divorce; the burden of proof is on each spouse to convince the court that there is some reason to divide assets unevenly.

What property is "separate" property?

Nevada law says that property owned before marriage and property acquired after marriage by "gift, bequest, devise, descent, or an award for personal injury damages", including the profits from such property, is considered to be each spouse's separate property.

Part of this definition includes inherited assets. If assets were left just to one spouse with no mention of the other spouse, and if those assets were not commingled with other marital assets, they are separate property in Nevada. While that sounds pretty straightforward, it is not quite as simple as it seems.

Commingled assets are marital property

If inherited assets are deposited into a joint bank account during the marriage and the funds used for things that benefited both spouses, both the inheritance and assets purchased with the funds will likely be considered community property.

The same holds true when one spouse inherited funds before getting married. If, after the marriage, those funds are not kept segregated and are ultimately used to benefit both spouses in the marriage, the assets have effectively been commingled and will be marital property subject to division in the divorce proceeding.

Burden of proof is on the spouse who claims property is separate property

In the absence of a pre-nuptial agreement, the lines between separate property and marital property become blurred. In the event the spouse who inherited assets can prove during a divorce that the inherited assets were commingled but were not intended to benefit the other spouse, it is sometimes possible to treat those assets as separate property. However, making that case is often difficult.

A family law attorney who has experience working with high-net worth clients is an important ally, and will work with you to help you protect the assets you are entitled to under Nevada law.

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