What do you need to know about Marital Property vs. Non-Marital Property when going through you divorce and dividing assets and debts? What is his? What is hers? What is yours?
Simply put, marital property is property that was acquired during the marriage and non-marital property is property that was acquired before marriage. In Nebraska, the marital estate includes property accumulated and acquired during the marriage through the joint efforts of the parties.
Common marital property includes (but is not limited to):
- Home (a home purchased during the marriage, regardless of whose name appears on the financial documents)
- Vehicles (any vehicle purchased during the marriage, regardless of whose name appears on the financial documents and/or title)
- Bank Accounts (bank accounts that have money in them that was accumulated during the marriage)
- Tax Liabilities (income tax liability incurred during the marriage is one of the accepted costs of producing marital income and should generally be treated as marital debt)
- Retirement Accounts, 401(k)s; Pensions; Investment accounts; Stocks, etc. (only the portions accumulated from the date of marriage on should be included in the marital estate. The court looks on a case by case basis whether the account valuation should be from date of marriage to date of separation or date of marriage to date of trial.)
- Credit card debt accumulated during the marriage
Common non-marital property includes (but is not limited to):
- Property acquired by gift
- Property acquired through inheritance
- Property acquired after a judgment of legal separation
- Property acquired before the marriage
- Increase in value of property by a method such as stock, stock options, and retirement
Now that you have an idea of what is marital property vs. non-marital property, now what do you do?
Under Nebraska law, the equitable division of property is a three-step process. Understanding the three-step process will be crucial in property dividing your marital estate.
STEP ONE: Classify the property as marital vs. non-marital. It is important to assess what property is marital vs. non-marital. All non-marital property should be set aside to the party who brought that property to the marriage. See Neb. Rev. Stat. 42-365. See also Wiech v. Wiech.
STEP TWO: After you have set aside all non-marital property to the party who brought that property to the marriage, it is now time to value the marital assets and liabilities. Place a value on the assets of each party as well as on all of the debts of each party. See Neb. Rev. Stat. 42-365. See also Wiech v. Wiech.
STEP THREE: Calculate and divide the net marital estate. After you have placed a value on all marital assets and debts, it is time to calculate and divide the marital estate in accordance with Neb. Rev. Stat. 42-365. The net marital estate should be equalized between the parties.
The ultimate test in determining the appropriateness of the division of property is fairness and reasonableness as determined by the facts of each case. See Neb. Rev. Stat. 42-365. See also Wiech v. Wiech. It is important to remember to offset the marital estate by any pre-marital debt that was brought into the marriage (Example: student loans, bankruptcy debt, credit card debt paid through the marriage).