When you buy a home with premarital money, is it still yours in a Nebraska divorce?
If you sold a house you owned before marriage and rolled that equity into the home you and your spouse lived in together, you’re probably staring at one very expensive question: does that down payment stay yours, or does it get split in the divorce? In Nebraska, the answer isn’t automatic because we divide property “equitably,” meaning fairly under the circumstances, not necessarily 50/50. Courts generally follow a three-step framework: classify property as marital or nonmarital, value the marital estate, and then divide the net marital estate under Neb. Rev. Stat. § 42-365.
The good news is that premarital money can stay separate. The hard part is proof. The spouse claiming a nonmarital interest has the burden to trace the funds and show they weren’t commingled beyond recognition. And even when the down payment itself is traceable, Nebraska’s newer “source of funds” rule can still matter because it treats mortgage principal paydown during the marriage as a marital acquisition of equity to the extent marital funds reduced the debt. In other words, your original contribution may remain separate, but the marital estate may still earn a proportional stake in the property through principal reduction.
This post gives you a practical roadmap using a recent Nebraska Court of Appeals memorandum opinion, Patach v. Patach (filed January 27, 2026), where the appellate court held an $80,000 down payment should have been treated as nonmarital because it was traced to the sale of the husband’s premarital home and supported by the parties’ premarital agreement. It also explains what “tracing” really means, when testimony can be enough, how pleadings can unintentionally help or hurt you, and why classification decisions often drive equalization payments.
Nebraska’s property-division framework and why classification drives the outcome
Nebraska’s statute on property division, Neb. Rev. Stat. § 42-365, and the Nebraska appellate cases applying it consistently describe a three-step approach: classify property as marital or nonmarital, value the marital assets and liabilities, and divide the net marital estate equitably.
That first step, classification, is where “premarital down payment” cases are won or lost. If the court classifies your premarital contribution as marital, you effectively share it. If the court sets it aside as nonmarital, it comes “off the top” before the rest of the marital equity is divided, which often changes the entire settlement posture.
The technical piece people miss: Nebraska’s “source of funds” rule and the marital home
Even if you can prove your down payment came from separate property, you still need to understand how Nebraska treats the equity that built up during the marriage. In Stava v. Stava (Nebraska Supreme Court, 2024), the Court adopted the “source of funds” rule for encumbered real estate, explaining that acquisition occurs “when and to the extent” the property becomes unencumbered by paying down principal, and that using marital funds to pay down the mortgage can create a proportionate marital interest in what started as separate property.
Practically, this means a marital home can be a mixed asset: part nonmarital (your traceable down payment or premarital equity) and part marital (equity acquired through principal reduction during the marriage, and sometimes improvements depending on the facts). The math and the documentation matter because the court is often deciding proportions, not labels.
The roadmap case: Patach v. Patach (2026) and why the Court of Appeals reversed
Patach v. Patach is a clean illustration of a very common scenario: a spouse sells a premarital home and uses the proceeds for a down payment on the marital residence. The Court of Appeals framed the issue directly: the husband claimed the district court erred by finding he failed to meet his burden to prove his $80,000 down payment came from a nonmarital source, and the appellate court agreed, vacating that portion of the decree and eliminating the equalization payment.
Two details in Patach are especially useful for real-world divorce cases. First, the premarital agreement defined “separate estate” to include property listed on exhibits and “any proceeds therefrom,” as well as “any increase in equity” from reduction of indebtedness even if paid with marital income. Second, both parties testified that the husband made the $80,000 down payment and that the money came from the sale of the prior house, which the evidence showed was the premarital home.
The Court of Appeals also highlighted something people underestimate: pleadings can ‘close the loop.’ In Patach, the court treated the pleadings as judicial admissions establishing the timeline of where the parties lived, which helped identify the ‘prior home’ referenced in testimony as the husband’s premarital residence
Tracing in Nebraska: what it is, what it isn’t, and why credibility still matters
Tracing is the logic chain that connects the money you’re claiming as nonmarital to a nonmarital source. Closing statements and bank records are ideal, but Nebraska law does not require perfect documentation in every case. The Nebraska Supreme Court has s est may be established by credible testimony, even though documentary evidence may be more persuasive.
That’s not a free pass. Judges can still reject testimony they find self-interested, inconsistent, or unsupported. Patach is helpful because the testimony, the premarital agreement’s definitions, and the pleadings all pointed the same direction, which made the tracing story easy to believe.
Why this fight shows up as an “equalization payment” problem
Most people experience property division as a final number: who pays whom, and how much. But equalization payments are usually downstream from classification. If a $80,000 down payment is treated as marital, you’re effectively splitting it. If it’s treated as nonmarital, you’re getting that amount credited to you before the remaining marital equity is divided, which can shrink n payment depending on the rest of the balance sheet.
That is exactly what happened in Patach: once the $80,000 down payment was set aside as nonmarital, the appellate court’s recalculation meant neither party owed an equalization payment.
What to gather if you’re trying to protect a premarital down payment claim
The simplest way to improve your outcome is to make your tracing story easy to follow. If you have these documents, they tend to do most of the talking:
Closing statement from the sale of the premarital home and the closing statement from the purchase of the marital home.
Bank records showing the deposit of sale proceeds and the outgoing transfer or cashie ayment.
Mortgage statements showing principal paydown during the marriage (this matters for the “source of funds” analysis).
Any premarital agreement language defining “separate estate,” “proceeds,” or equity treatment.
FAQ: Nebraska divorce, the marital home, and premarital down payments
If my name is the only one on the deed, is the house separate property in Nebraska?
Not necessarily. Title matters, but Nebraska courts focus heavily on classification and proof, including where the money came from and what happened during the marriage. If marital funds paid down principal, Stava makes clear the marital estate may acquire a proportionate interest through the source-of-funds approach.
If I used proceeds from the down payment, can I get that money back?
Potentially, yes, if you can trace the down payment to a nonmarital source. In Patach, the Court of Appeals held the $80,000 down payment should have been treated as nonmarital where both parties testified it came from the sale of the husband’s premarital home and the premarital agreement protected “proceeds.”
Do I need bank statements to prove tracing in Nebraska?
Documentation is helpful, but credible testimony can establish a nonmarital interest under Nebraska Supreme Court law. The judge still weighs credibility, consistency, and whether the story fits the surrounding evidence.
Can a prenup protect my future equity and sale proceeds?
A properly drafted premarital agreement can meaningfully change the analysis, especially when it defines “separate estate” and “proceeds” and anticipates real-life events like selling a premarital house and reinvesting the equity t n Patach.
Does refinancing or remodeling change the analysis?
It can. Refinancing can complicate tracing if proceeds are mixed or if debt is restructured in a way that muddies what portion is tied to a nonmarital source. Remodeling can also matter if marital funds increased value or if improvements are tied to marital contributions. If the fact pattern gets layered, this is where the “mixed asset” concept becomes very real and why clean records are worth their weight in gold.
Do I need a forensic accountant?
Sometimes, but not always. If the issue is a single down payment with clean closing statements, many cases don’t require expert work. If there are multiple refinances, multiple acco , me technical enough that a neutral third party helps the court (and helps settlement).