How is a Homestead Exemption Affected By a Divorce in Nevada?
Full Question:
Answer:
When the execution is against a husband or wife, the judge may direct the $550,000 to be deposited in court, to be paid out only upon the joint receipt of the husband and wife, and the deposit possesses all the protection against legal process and voluntary disposition by either spouse as did the original homestead. If an unmarried person is making the homestead declaration, it must state that the person is a householder. Whether you are joint tenants with survivorship rights or tenants in common may be a factor. Each tenant in common may declare a homestead covering his or her interest in the property. The homestead protection is subject to the rights of each co-tenant to enforce partition of the property.
The lone instance of the Nevada Supreme Court creating an equitable exception to the homestead laws occurred in Breedlove v. Breedlove, 100 Nev. 606, 691P.2d 426 (1984). Here, the parties had five children during the course of their marriage, which ended in divorce. The wife received custody of the children and the husband was ordered to pay child support amounting to $175 per week. This occurred in Indiana. The husband defaulted on his payments, moved to Nevada, and re-married. The wife obtained a judgment from an Indiana court awarding her approximately $90,000 in child support arrearages. She filed the judgment in the Clark County District Court, and the husband had notice of this fact.
Shortly thereafter, the husband filed for a homestead exemption on his home in Nevada, which he shared with his second wife and her children from a previous marriage. The first wife moved in the district court to have the homestead exemption ruled inapplicable to her judgment, arguing that public policy requires an exception to the homestead laws when a party is seeking to enforce a child support award against the homesteader. The district court denied the motion. The supreme court reversed. The court acknowledged that, on its face, the homestead law is enforceable against any party seeking to execute on the homestead, unless that party can demonstrate that she comes within one of the statutory exceptions.
See also:
http://www.nvbar.org/pdf/pamphlets/homesteadpamphlet.pdf
http://aroundcarson.com/2008/01/14/nevada_declaration_of_homestead_update
Please see the following NV statutes:
NRS 115.050 Execution against homestead.
1. Whenever execution has been issued against the property of a party
claiming the property as a homestead, and the creditor in the judgment
makes an oath before the judge of the district court of the county in which
the property is situated that the amount of equity held by the claimant in
the property exceeds, to the best of the creditor's information and belief,
the sum of $550,000, the judge shall, upon notice to the debtor, appoint
three disinterested and competent persons as appraisers to estimate and
report as to the amount of equity held by the claimant in the property and,
if the amount of equity exceeds the sum of $550,000, determine whether the
property can be divided so as to leave the property subject to the
homestead exemption without material injury.
2. If it appears, upon the report, to the satisfaction of the judge that
the property can be thus divided, he shall order the excess to be sold
under execution. If it appears that the property cannot be thus divided,
and the amount of equity held by the claimant in the property exceeds the
exemption allowed by this chapter, he shall order the entire property to be
sold, and out of the proceeds the sum of $550,000 to be paid to the
defendant in execution, and the excess to be applied to the satisfaction on
the execution. No bid under $550,000 may be received by the officer making
the sale.
3. When the execution is against a husband or wife, the judge may direct
the $550,000 to be deposited in court, to be paid out only upon the joint
receipt of the husband and wife, and the deposit possesses all the
protection against legal process and voluntary disposition by either spouse
as did the original homestead.
NRS 115.010 Exemption from sale on execution and from process of court;
amount of exemption; exceptions; extension of exemption.
1. The homestead is not subject to forced sale on execution or any final
process from any court, except as otherwise provided by subsections 2, 3
and 5, and NRS 115.090 and except as otherwise required by federal law.
2. The exemption provided in subsection 1 extends only to that amount of
equity in the property held by the claimant which does not exceed $550,000
in value, unless allodial title has been established and not relinquished,
in which case the exemption provided in subsection 1 extends to all equity
in the dwelling, its appurtenances and the land on which it is located.
3. Except as otherwise provided in subsection 4, the exemption provided
in subsection 1 does not extend to process to enforce the payment of
obligations contracted for the purchase of the property, or for
improvements made thereon, including any mechanic's lien lawfully
obtained, or for legal taxes, or for:
(a) Any mortgage or deed of trust thereon executed and given, including,
without limitation, any second or subsequent mortgage, mortgage obtained
through refinancing, line of credit taken against the property and a home
equity loan; or
(b) Any lien to which prior consent has been given through the acceptance
of property subject to any recorded declaration of restrictions, deed
restriction, restrictive covenant or equitable servitude, specifically
including any lien in favor of an association pursuant to NRS 116.3116 or
117.070,
(by both husband and wife, when that relation exists.
4. If allodial title has been established and not relinquished, the
exemption provided in subsection 1 extends to process to enforce the
payment of obligations contracted for the purchase of the property, and for
improvements made thereon, including any mechanic's lien lawfully obtained,
and for legal taxes levied by a state or local government, and for:
(a) Any mortgage or deed of trust thereon; and
(b) Any lien even if prior consent has been given through the acceptance
of property subject to any recorded declaration of restrictions, deed
restriction, restrictive covenant or equitable servitude, specifically
including any lien in favor of an association pursuant to NRS 116.3116 or
117.070,
(unless a waiver for the specific obligation to which the judgment
relates has been executed by all allodial titleholders of the property.
5. Establishment of allodial title does not exempt the property from
forfeiture pursuant to NRS 179.1156 to 179.121, inclusive, 179.1211 to
179.1235, inclusive, or 207.350 to 207.520, inclusive.
6. Any declaration of homestead which has been filed before July 1, 2007,
shall be deemed to have been amended on that date by extending the
homestead exemption commensurate with any increase in the amount of equity
held by the claimant in the property selected and claimed for the exemption
up to the amount permitted by law on that date, but the increase does not
impair the right of any creditor to execute upon the property when that
right existed before July 1, 2007.
