DRASKOVICH VS. DRASKOVICH
Mar 21, 2024140 Nev. Adv. Op. 17, 545 P.3d 96 (2024) · 84998 · Nevada Supreme Court
Reversed in part, vacated in part, and remanded.Robert Draskovich is a criminal defense lawyer who has been practicing since 1997. When he married Laurinda in 2012, he was already a 65% partner in a law firm called Turco & Draskovich (T&D), where he had his own clients, staff, and pay separate from his only partner. Laurinda did not bring significant assets to the marriage and was a homemaker.
In December 2018, T&D dissolved. The next month, Robert formed a new corporation called the Draskovich Law Group (DLG), which he wholly owned. According to uncontested testimony, DLG was "the very same practice" as Robert's share of T&D - same office, same clients, same staff, same assets. Only the letterhead and the name on the firm vehicles changed. By the time the divorce began in 2022, DLG was worth roughly $1,210,000.
The trial judge ruled that because DLG was incorporated during the marriage, it was presumed to be community property (property owned jointly by both spouses) under Nevada law, and that Robert had not produced clear and convincing evidence of a separate property value. So the judge treated the entire firm as community property. The judge also denied Laurinda's request for alimony, partly because she would receive enough community assets to generate over $3,000 per month in passive income.
The Nevada Supreme Court reversed the community property ruling. It held that simply incorporating a business during a marriage does not automatically make the business community property. Courts must look at the "totality of the circumstances" to decide whether a business is genuinely a new acquisition or just a continuation of a pre-marriage enterprise under a new corporate name. Here, every meaningful aspect of Robert's law practice continued unchanged from T&D into DLG, so DLG is the continuation of his pre-marriage practice and is his separate property.
That does not end the analysis. A separate-property business can still grow during a marriage because of the working spouse's labor or because of community resources, and the community is entitled to a fair share of that kind of growth. On remand, Laurinda will have the chance to prove by clear and convincing evidence what portion (if any) of DLG's increase in value during the marriage is attributable to community sources, such as Robert's "toil or talent" during the marriage. If she makes that showing, the district court must apportion DLG's value between separate and community interests.
Because the alimony decision rested partly on how community property was distributed, and because that distribution will change once DLG is reanalyzed, the Supreme Court also vacated the alimony ruling and sent it back for fresh consideration.