Stephens v. Stephens, 297 Neb. 188

Robert and Janet Stephens married in 1991; they divorced in 2014 after a 25-year marriage with two children. Robert co-founded and owned 34% of Stephens & Smith Construction Co., Inc.; his stock was valued at ~$298,459 at marriage and ~$5,044,934 at dissolution.
Janet suffered a serious mental illness during the last 10 years of the marriage, received SSDI, and often could not work; a guardian ad litem/guardian/conservator represented her and did not participate.
Robert worked full time as president of Stephens & Smith throughout the marriage, participated in high-level decisionmaking, set his salary, guaranteed loans, and was involved in selecting leadership; the company had ~200 employees and several subsidiary and related entities.
The district court treated many business interests variably: it classified certain companies and interests as nonmarital (including Stephens & Smith and related R.I.P.) and others as marital (three properties), awarded Janet half of those marital properties by transfer, and gave Janet a $1.1 million “Grace award” despite treating Robert’s Stephens & Smith interest as nonmarital.
The trial court awarded Janet $1,000/month alimony for 120 months under Neb. Rev. Stat. § 42-362. Robert did not cross-appeal; Janet appealed classification of Stephens & Smith appreciation, duration of spousal support, and ordering transfers when entity documents might not permit them.

Issue	Stephens' Argument	Janet's Argument	Held
Whether appreciation in value of Robert’s Stephens & Smith stock during marriage is nonmarital	Appreciation is nonmarital because growth was passive/market-driven and Robert (owning spouse) did not show marital contribution by Janet	Appreciation is marital to the extent caused by Robert’s active efforts and should be included in marital estate	Court held appreciation is marital to the extent caused by either spouse’s active efforts; reversed exclusion of Stephens & Smith appreciation and vacated Grace award; remanded to include marital portion and redivide
Whether award of support under § 42-362 must continue for duration of Janet’s mental illness	(Not argued by Robert)	Support should continue so long as Janet remains mentally ill	Court affirmed $1,000/month for 120 months as within discretion; did not require indefinite support for duration of illness but left alimony subject to reconsideration given asset reclassification
Whether court erred in ordering transfer of partnership ownership where entity documents may restrict transfers	(Robert ordered to effect transfers; court trusted cooperation of partners)	Concerned the other partners may not consent and transfers might be impracticable	Court affirmed awarding ownership interests (not cash); directed that parties may seek modification if transfers prove impossible

Van Newkirk v. Van Newkirk, 212 Neb. 730 (recognizing limits on treating inherited or premarital assets as marital absent spousal contribution)
Rezac v. Rezac, 221 Neb. 516 (holding appreciation of premarital corporate stock can be marital where owning spouse's efforts caused growth)
Grace v. Grace, 221 Neb. 695 (permitting equitable lump‑sum award from nonmarital business in exceptional circumstances)
Meints v. Meints, 258 Neb. 1017 (adopting three‑step dual classification process for marital vs nonmarital property)
Stanosheck v. Jeanette, 294 Neb. 138 (applying standard for when investment earnings on nonmarital retirement accounts may remain nonmarital)
Coufal v. Coufal, 291 Neb. 378 (applying active appreciation analysis to increased value of premarital capital)