Protecting Separate Property in Nebraska

Nebraska is an equitable distribution state—courts follow a three-step framework: classify assets as marital or nonmarital, value the estate, then divide it fairly under Neb. Rev. Stat. § 42-365. However, separate property can be protected: assets owned before marriage, gifts, and inheritances remain yours if properly preserved. Whether you're navigating an uncontested or contested divorce, understanding Nebraska's active appreciation presumption and tracing requirements is essential.

Nebraska's Equitable Distribution System

Under § 42-365, courts use a three-step process guided by fairness and reasonableness:

• Classify: Determine what is marital vs. nonmarital property
• Value: Assess the net marital estate
• Divide: Allocate property equitably (often near 50/50, but not required)

Nebraska courts frequently achieve rough parity, with the target typically ranging from one-third to one-half per spouse, adjusted by circumstances.

What Qualifies as Separate Property

Under Nebraska law, nonmarital (separate) property includes:

• Premarital property: Assets owned before the marriage
• Gifts and inheritances: Property received by gift, bequest, devise, or descent during marriage
• Rents, issues, and profits: Income from separate property remains separate
• Traceable exchanges: Property acquired in exchange for nonmarital assets

Critical rule: The spouse claiming nonmarital status bears the burden of proof. Title alone doesn't control—you must trace the asset to a separate source.

The Active Appreciation Presumption

Nebraska applies a powerful presumption under White v. White (2020): growth of a nonmarital asset during marriage is presumed marital unless the owner proves both:

• Readily traceable: The growth is identifiable and traceable to the nonmarital corpus
• Not due to active efforts: The growth resulted from market forces, not either spouse's contributions or management

Example: If you inherited a brokerage account that grew via passive index fund reinvestment with no active trading, you may prove the appreciation is nonmarital. But if you actively managed the portfolio or deposited marital funds, the growth becomes marital.

The 2024 Source-of-Funds Rule (Stava v. Stava)

In 2024, Nebraska adopted the source-of-funds rule in Stava v. Stava: when marital funds reduce the principal on a loan secured by premarital property, the marital estate acquires a proportional equity interest—including its share of passive appreciation:

• Formula: Marital Interest = Value × (Marital Contributions / Total Contributions)
• Proportional sharing: Both marital and separate contributions share appreciation based on their equity share
• Key insight: Passive appreciation on the marital portion is marital property—it's not appreciation of nonmarital property

This formula applies when premarital real estate has mortgage payments made with marital earnings during the marriage.

No Bright-Line Separation Date

Unlike some states, Nebraska does not use a rigid separation date to end property classification. Under Vanderveer v. Vanderveer (2021):

• Income remains marital: Wages earned during marriage are marital, regardless of separation
• Joint benefit test for debts: Debts are marital if incurred for joint benefit, not by date
• Flexible valuation: Courts may use different valuation dates for different assets (Rohde v. Rohde, 2019)

Post-separation debts for family housing, medical care, or children may still be marital; attorney's fees and personal luxuries typically are not.

Estimate Your Nebraska Divorce Costs

Property disputes involving tracing and Stava calculations can increase legal costs. Nebraska filing fees are approximately $200. Use our calculator to estimate your total expenses:

Protection Strategies

• Maintain separate accounts: Keep premarital and inherited funds in accounts in your name only
• Document baseline values: Get appraisals at marriage to establish the nonmarital portion
• Avoid commingling: Don't deposit separate funds into joint accounts
• Track all contributions: Preserve records showing which funds (marital vs. separate) paid for improvements or debt reduction
• Use passive investments: If growth is purely market-driven with no active management, you can better prove nonmarital appreciation
• Get written agreements: A prenuptial or postnuptial agreement can clearly define separate property

Key Takeaways

• Equitable distribution: Three-step classify-value-divide framework under § 42-365
• Separate property protected: Premarital, gifts, inheritances, and traceable exchanges
• Active appreciation presumption: Growth is marital unless passive and traceable (White)
• Source-of-funds (Stava 2024): Marital paydown creates proportional marital equity
• No separation cutoff: Joint benefit test controls debt classification (Vanderveer)
• Burden on claiming spouse: You must prove nonmarital character with documentation

For the complete Nebraska marital property guide and divorce timeline, see our detailed resources. For official forms, visit the Nebraska Judicial Branch Self-Help Center.