This is the next post in my series on How Las Vegas Housing Prices Impact Divorce. My last post went over how Clark County Family Court Judges deal with the issue of an upside down home during a divorce. In this article I will discuss what is currently a common occurrence in Las Vegas – how the equity of a home, purchased during the marriage, will be divided at the end of your case. Given the recent run-up in local housing prices this is an important topic.
Las Vegas homeowners who have equity will see the value divided under the Malmquist formula during a divorce
The Nevada Supreme Court decided the case of Malmquist v. Malmquist in 1990. This case laid out the rules as to how home equity is divided during a divorce under several difference scenarios. If spouses bought a home during marriage, and the home appreciates in value than the division is straight-forward; the equity of the home will be equally divided. The first way this can be achieved is to simply sell the home at the end of the case and the proceeds are then divided amongst the two spouses. This is often the easiest, and simplest, way to deal with the issue of a home.
The second way in which home equity can be divided in a Nevada divorce is a little more tricky. Quite often one spouse may wish to keep the residence. This means that the one retaining the home must “buy out” the equity of the other spouse. One way to achieve this is through an unequal division of other community assets. Nevada’s community property laws are only concerned with ensuring that each spouse has an equal share of the assets at the end of the case. Let’s say, for example, that spouse A wishes to keep the home which has $20,000 of equity in it – spouse B would be entitled to $10,000. Spouse A could keep the home and give spouse B an extra $10,000 from A’s share of other assets such as bank accounts, etc. In the end each party would have an equal amount of assets and the Clark County Family Court would consider this an equal property distribution.
An experienced divorce lawyer can help Las Vegas residents work out solutions for the equity of their home
There are two issues that cause common disputes during a Las Vegas divorce. These issues are how people will divide their home equity and how they will divide a retirement asset – such as one spouse’s pension. Quite often these issues can be used to cancel one another out.
It is not uncommon for one spouse to desire the preservation of his or her 401k or pension. Retirement assets are divided along with other community property during a Nevada divorce. If there is equity in a home then, if the numbers work out, the spouse with the pension can waive his or her share of the home equity in exchange for the other spouse waiving his or her share in the retirement asset. This is a common solution in such instances.
If you are a Las Vegas resident and are concerned about what happens to your home equity during a divorce then contact an attorney immediately.