In an opinion¹ released in late April, the Nebraska Court of Appeals reviewed the burden of proof² necessary to establish whether assets are nonmarital for Nebraska marital dissolution purposes. The court held that the “greater weight” burden applies generally but that a higher “clear, unequivocal, and convincing” burden applies when the asset in question is sought to be treated in a manner inconsistent with its recorded legal title.

Facts

Benjamin and Judith Weston were married on June 20, 2008. On Nov. 8, 2012, Benjamin’s parents deeded property they owned, and in which Benjamin had resided since 1987, to Benjamin and Judith as joint tenants.

Beginning in the summer of 2020, the Westons renovated an agricultural structure on the jointly titled property for their residential use. Judith’s mother contributed approximately $124,000 to the renovation project.

Opinion

Citing a 2019 Nebraska Supreme Court opinion, the appeals court noted that equitable division of property in Nebraska is the result of a three-step process.

“The first step is to classify the parties’ property as marital or nonmarital, setting aside the nonmarital property to the party who brought that property to the marriage … The second step is to value the marital assets and marital liabilities of the parties … The third step is to calculate and divide the net marital estate between the parties.”³

The court turned to the first of those steps and Benjamin’s argument⁴ that, despite its joint titling, the real property transfer was a gift to him individually. The court noted that the burden of proof to show that property is nonmarital resides with the party making that claim. The court also noted that although the manner in which property is titled or transferred is not determinative for Nebraska marital dissolution purposes, “[w]hen real estate is conveyed in joint tenancy, any parol evidence to overcome the recorded legal title must be clear, unequivocal, and convincing.”⁵

Agreeing with the trial court, the appellate court concluded that the contested evidence offered by Benjamin was insufficient to overcome the recitals in the deed that the property was jointly gifted.

“[W]e do not believe [that the evidence offered by Benjamin] rises to the clear, unequivocal, and convincing standard. This is particularly true when we give weight to the district court’s decision to accept Judith’s version of the facts over Benjamin’s and his mother’s.”⁶

Looking at the property classification issue in a second context, the court addressed Judith’s argument⁷ that the renovation funding provided by her mother was nonmarital property. The court first outlined its disagreement with the trial court and the litigants relative to their use of the “clear, unequivocal, and convincing” burden of proof with respect to the renovation funding item. The appellate court noted that, unless an exception⁸ applies, “the burden of proof in civil cases requires only the greater weight of the evidence.”⁹

In concluding¹⁰ that Judith satisfied her burden to establish, by the greater weight of evidence, that the renovation contributions were gifts, the appellate court acknowledged the credibility determinations documented by the trial court and reviewed the nature of the evidence offered at trial. Importantly, the appellate court also concluded that the gifts made to Judith by her mother did not lose their nonmarital character because they were spent on renovations that benefited the entire family.

“With some exceptions, the marital estate does not include property acquired by one of the parties through gift or inheritance. And there is no exception where an otherwise nonmarital monetary gift is spent on a family expense.”¹¹

Conclusion

The Weston decision outlines the burdens of proof moving parties possess relative to the classification of property as nonmarital in Nebraska. The case clarifies that the general “greater weight” burden applies to those determinations unless an exception requires application of the more rigorous “clear, unequivocal, and convincing” burden of proof. The decision also identifies the joint conveyance of property as an example requiring application of the exception burden.

Bryan Robertson is a past chairman and 32-year member of the Nebraska Society of CPAs. He serves as an adjunct professor of accounting at Nebraska Wesleyan University. For more information, contact him at broberts@nebrwesleyan.edu.

Endnotes

1. Weston v. Weston, 32 Neb. App. 822.
2. The term “burden of proof” is defined by Black’s Law Dictionary in part as “[t]he obligation of a party to establish by evidence a requisite degree of belief concerning a fact.”
3. Weston v. Weston, 32 Neb. App. 822, at 830 citing Rhode v. Rhode, 303 Neb. 85.
4. At trial, Benjamin and his mother offered testimony regarding the nature of the real estate transfer. Benjamin testified that the real estate transfer was a gift to him from his parents. His mother corroborated that testimony. Judith, however, in her testimony, contested those assertions.
5. Weston v. Weston, 32 Neb. App. 822, at 831 citing Salmon v. Salmon, 219 Neb. 899.
6. Weston v. Weston, 32 Neb. App. 822, at 832.
7. At trial, Judith and her mother testified that there was an understanding between them and Benjamin that the renovation funding was an advance on Judith’s inheritance. Judith’s mother testified that she had discussed the issue with Judith’s siblings and explained to them that the renovation expenditures would be subtracted from the amount of inheritance Judith would have otherwise received. Judith’s mother also testified that she tracked the amount she spent on the renovation on a weekly basis, maintaining an itemized list and calculating an itemized total of $123,947.79. Benjamin, on the other hand, testified that Judith’s parents characterized the renovation funding as gifts to benefit the entire family.
8. The court indicated that deed titling was an exception to the general burden rule created by the Nebraska Supreme Court. “[T]he conveyance of real estate by Benjamin’s parents utilized the ‘clear, unequivocal, and convincing’ burden of proof because it fell under an exception used by the Supreme Court.” Weston v. Weston, 32 Neb. App. 822, at 833.
9. Weston v. Weston, 32 Neb. App. 822, at 833.
10. The appellate court, then, concluded that Judith satisfied her burden of proof. Interestingly, the trial court reached the same conclusion. It did so, though, applying the wrong standard.
11. Weston v. Weston, 32 Neb. App. 822, at 835 citing Becher v. Becher, 209 Neb. 206.