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Property Down-Payment May Be a Gift to Your Spouse

Property Distribution

In Nevada, if you use your separate property funds as a down payment towards the purchase of your marital residence, you may be unintentionally gifting one-half of that amount to your spouse and may not be able to recover it upon divorce.

This issue presents itself in two common scenarios. The first scenario is when, after marriage, one spouse takes separate property funds acquired prior to marriage, and uses the funds as a down payment towards a residence titled jointly in both spouses names. The second scenario is when one spouse owns a home prior to marriage and, after marriage, refinances the house into both spouses’ names.

If the property acquired by separate property is titled in the names of the husband and wife as joint tenants, it is presumptively a gift of one-half of the value of the funds used. Regardless of your intentions at the time of the transaction, it is presumed that you are gifting the separate property to the community estate to be equally divided with your spouse upon divorce. You will have to prove to the court that this was not your intention. With a knowledgeable attorney, you may successfully argue for reimbursement under NRS 125.150(2), which allows the court to provide reimbursement to a party for his or her separate property contribution to property which is held by the parties as joint tenants, up to the value of the sums contributed, under certain circumstances. In order to succeed in a request for reimbursement, you will have to present substantial evidence of conduct, expressions or intent at the time of the transaction at issue. To protect yourself, you should always enter into a written agreement with your spouse expressing your mutual understanding with respect to the separate property being used and the intent behind jointly titling the property.

Jessica H. Anderson
Divorce Attorney Reno, NV

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