A Brief Overview of Classifying Property in Nebraska Divorce Cases
If you have been married for any length of time you have most likely acquired property, real and/or personal, that is considered marital property. You may have also come to the marriage with your separate premarital property. Such property, or at least a portion of it, is likely considered nonmarital. How your property is classified will determine whether it is marital and, therefore, subject to division by the court in your divorce decree. The following is a very brief analysis of the different categories of property in Nebraska, and some of the factors the court considers when determining what constitutes the marital estate.
- Marital Property: Generally speaking, marital property is property acquired by either spouse during the marriage. This includes real or personal property, regardless of how it is titled, purchased, or acquired by either spouse (with a couple distinct exceptions). That said, this may not include property purchased by you during the marriage, such as a house, if your downpayment on that property came from a nonmarital source that can be readily identifiable and traceable in the marital property.
So, for example, if you sold your premarital home and used your proceeds from its sale for the downpayment on your marital home then, in divorce, you would be credited with the amount of your downpayment as a separate, nonmarital interest in the property. The same can be said for any other property you purchased during the marriage with nonmarital property and can sufficiently trace between the nonmarital and marital property. However, absent the use of nonmarital property, everything you and your spouse purchase or acquire during the marriage is marital property. In other words, everything purchased with monies earned during the marriage is marital property, subject to division in the divorce.
- Nonmarital Property: Your nonmarital property includes all your property that is not marital, namely all property owned separately by you prior to marriage. In Nebraska, your nonmarital property also includes any property that came into your possession by either gift or inheritance. However, nonmarital property can become marital property based on the actions of the parties. For example, putting your spouse’s name on a financial account can make the inherited or gifted money in the account marital property. Or, adding your spouse’s name to a tract of land that you inherited from your late aunt can make the property marital property. In fact, any property that is otherwise nonmarital property can become marital property based on your conduct. In order to be awarded your nonmarital property as your separate property, you need to trace and document how it has remained separate and apart from your marital property.
- A Third Kind of Property and the Active Appreciation Rule: In Nebraska, a third type of property includes both a marital and non-marital interest. To determine how much of certain property is nonmarital you need to understand the Active Appreciate Rule. Again, all property acquired during a marriage is presumed marital, excluding inheritance and gifts to one spouse. Also, the appreciation, or increase in value of otherwise nonmarital property is presumed marital. In such a case, the burden shifts to the spouse claiming the appreciation is nonmarital to show: 1) The growth is readily identifiable and traceable to the nonmarital portion of the asset, and 2) The growth is not the result of the “active efforts” of either spouse.
For example, a house owned by just one spouse prior to the marriage is nonmarital. If neither party moves into and lives in the property during the marriage, makes no improvements to it and otherwise takes no efforts to appreciate its value, then all of its appreciation during the marriage is nonmarital; i.e. simply the result of market forces. On the other hand, if the new spouse moves into the premarital property and contributes to the mortgage, maintenance and upkeep, then most if not all its increase in value is likely marital. This rule also applies to farmland, agricultural land, business interests, and various financial accounts. The appreciation of the asset is presumed marital unless its growth is readily traceable to the nonmarital portion of it, and the growth is not due to the active efforts of either spouse.
What’s yours, what’s mine, and what’s ours? In Nebraska, the answers(s) to those questions depend on a variety of factors before concluding where the property fits in the above categories. For further assistance and advice with this and other issues in your case, please contact Scott V. Hahn at Slowiaczek Albers & Whelan PC, LLO to schedule your initial consultation.