Nebraska Marital Property Division Guide

Nebraska follows equitable distribution principles when dividing property in divorce. Under Neb. Rev. Stat. § 42-365, courts use a three-step process to reach a fair division—classifying property, valuing assets, then dividing them equitably. Nebraska is not a 50/50 state; the goal is reasonableness based on each case's facts. Understanding these rules is essential whether you're pursuing an uncontested or contested divorce.

The Three-Step Division Process

Nebraska courts follow a structured approach to property division:

• Step 1: Classify—Determine what is marital property vs. separate property
• Step 2: Value—Assess the fair market value of all marital assets and liabilities
• Step 3: Divide—Allocate property equitably based on statutory factors

Marital vs. Separate Property

Only marital property is subject to division. This includes assets acquired during the marriage. Separate property typically remains with its original owner:

• Marital property—Assets acquired during marriage through either spouse's efforts
• Separate property—Assets owned before marriage, gifts, and inheritances
• Retirement plans and pensions—Included in marital estate whether vested or not

The Source of Funds Rule

In the 2024 case Stava v. Stava, the Nebraska Supreme Court adopted the source of funds rule for mixed-asset situations. This means:

• When marital funds pay down a mortgage on separate property, the marital estate acquires an interest
• The interest is proportionate to contributions from marital funds
• Passive appreciation is allocated based on each estate's share of contributions

For strategies to safeguard inheritances, gifts, and premarital assets, see our guide on protecting separate property in Nebraska.

Factors Courts Consider

Nebraska courts have broad discretion under § 42-365. While there's no mathematical formula, judges consider:

• Duration of the marriage
• Contributions of each spouse—both financial and non-financial
• Economic circumstances of each party
• Homemaking and child-rearing contributions
• Earning capacity and future needs

Not a 50/50 State

Nebraska law does not require equal division. The ultimate test is reasonableness—what is just and equitable given the unique facts of your case. Courts aim for a fair outcome, not an automatic half-and-half split.

Special Asset Considerations

Certain assets receive special treatment:

• Severance pay—Classified based on purpose (compensation for past work = marital; future wages = separate)
• Deferred compensation—Included in marital estate
• Annuities—Subject to division

The Family Home

Learn more about who gets the house in a divorce and how Nebraska courts handle real estate division.

Need a Full Property Analysis?

Nebraska's three-step classify-value-divide framework, 2024 source-of-funds rule (Stava), and equitable distribution factors all shape your property division outcome. Get a personalized analysis.

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Next Steps

Understanding Nebraska's equitable distribution system is essential for protecting your financial interests. Key takeaways:

• Nebraska uses a three-step process: classify, value, divide
• Only marital property is subject to division
• The source of funds rule applies to mixed assets
• Nebraska is not a 50/50 state—reasonableness is the test
• Both financial and non-financial contributions are valued

For official forms and court information, visit the Nebraska Judicial Branch Self-Help Center. Review the Nebraska divorce timeline to understand the process. Consulting with a Nebraska family law attorney is recommended for divorces involving significant assets.