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DONALD v. DONALD

Cite as 296 Neb. 123

Lacy J. Donald, appellee, v. 

Alex S. Donald, appellant.

___ N.W.2d ___

Filed March 17, 2017. No. S-16-547.

1. Divorce: Child Custody: Child Support: Property Division: Alimony: 

Attorney Fees: Appeal and Error. In an action for the dissolution of 

marriage, an appellate court reviews de novo on the record the trial 

court’s determinations of custody, child support, property division, 

alimony, and attorney fees; these determinations, however, are initially 

entrusted to the trial court’s discretion and will normally be affirmed 

absent an abuse of that discretion.

2. Evidence: Appeal and Error. When evidence is in conflict, an appellate court considers, and may give weight to, the fact that the trial judge 

heard and observed the witnesses and accepted one version of the facts 

rather than another.

3. Child Custody. Joint physical custody must be reserved for those cases 

where, in the judgment of the trial court, the parents are of such maturity 

that the arrangement will not operate to allow the child to manipulate 

the parents or confuse the child’s sense of direction, and will provide a 

stable atmosphere for the child to adjust, rather than perpetuating turmoil or custodial wars.

4. ____. Numerous parenting times do not constitute joint physical 

custody.

5. ____. The paramount consideration in determining child custody is the 

best interests of the children.

6. Child Support: Rules of the Supreme Court: Presumptions. The 

Nebraska Child Support Guidelines are to be applied as a rebuttable 

presumption and offer flexibility and guidance rather than a stringent 

formula.

7. Divorce: Jurisdiction: Armed Forces. Federal law precludes a state 

court, in a dissolution proceeding, from exercising subject matter jurisdiction over Department of Veterans Affairs disability benefits.

Nebraska Supreme Court Online Library

www.nebraska.gov/apps-courts-epub/

06/15/2017 05:13 PM CDT
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DONALD v. DONALD

Cite as 296 Neb. 123

8. Divorce: Property Division: Armed Forces: Pensions: Waiver. 

Pursuant to federal law, a state court cannot include the amount of military retirement pay that a veteran waives in order to receive disability 

benefits as divisible marital property.

Appeal from the District Court for Lancaster County: Steven

D. Burns, Judge. Affirmed as modified.

Sean M. Reagan and A. Bree Robbins, of Reagan, Melton & 

Delaney, L.L.P., for appellant.

Tara L. Gardner and Joel Bacon, of Keating, O’Gara, Nedved 

& Peter, P.C., L.L.O., for appellee.

Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy, 

Kelch, and Funke, JJ.

Cassel, J.

I. INTRODUCTION

Alex S. Donald appeals from a decree dissolving his marriage to Lacy J. Donald. He presents two issues regarding 

child custody and support, urging that his additional daytime 

parenting time during Lacy’s working hours required a joint 

physical custody classification and use of the joint custody 

child support worksheet. As we will explain, the relevant statutes and guidelines dictate otherwise. He presents a third issue 

regarding classification of his lump-sum disability payment 

from military service as marital property. Because federal law 

prevents a state court from doing so, we modify the decree to 

exclude the payment’s proceeds. As so modified, we affirm 

the decree.

II. BACKGROUND

1. Overview

Approximately 2 years 1 month after Alex and Lacy were 

married, Lacy filed a complaint for dissolution. There were 

two minor children born to the parties. At the time of trial, both 

children were under 4 years of age.
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DONALD v. DONALD

Cite as 296 Neb. 123

After a 2-day trial, the court awarded legal and physical custody of the children to Lacy, subject to Alex’s parenting time, 

ordered Alex to pay child support, and divided the marital 

estate. During the marriage, Alex received a lump-sum disability benefit payment from the Department of Veterans Affairs 

(VA). In dividing the property, the court classified this payment 

as part of the marital estate and ordered that its proceeds be 

divided equally.

Because Alex’s appeal contests only the award of custody, 

the child support order, and the classification of the lump-sum 

disability benefit payment as marital property, we summarize 

only the facts that are relevant to those issues.

2. Child Custody

(a) Parties’ Contentions Below

Both parties testified that prior to their separation, Lacy 

worked outside of the home while Alex cared for the children 

during the workday. Alex was injured serving in the military 

and throughout the marriage was unable to work. By the time 

of trial, the parties had not reached an agreement regarding 

the custody arrangement and instead both offered different 

parenting plans.

Lacy proposed that she receive joint legal custody and primary physical custody of the minor children. Alex proposed 

joint legal and physical custody.

(b) District Court’s Parenting Plan

The district court did not adopt either party’s proposed parenting plan; instead, it incorporated one of its own creation into 

the decree. The court’s plan provided that Alex would have parenting time on alternating weekends—beginning Friday at 5:15 

p.m. and ending Sunday at 8:15 a.m.—and 5 weeks of summer 

parenting time. After the children began attending school, the 

alternating weekend parenting time would be adjusted to begin 

on Thursday at the conclusion of school and end on Monday 

morning at the commencement of school.
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DONALD v. DONALD

Cite as 296 Neb. 123

The court also found that “[t]here [was] no reason why the 

daytime parenting time arrangement that occurred before the 

separation should not continue.” Thus, before the children 

began school, and later during summertime school vacations, 

Alex would have parenting time every weekday from 7:45 a.m. 

until 5:15 p.m. Throughout each school year after the children 

began to attend, Alex’s weekday parenting time would begin at 

the conclusion of school instead of 7:45 a.m.

The parenting plan allocated Alex’s parenting time. Alex 

will have approximately 80 parenting-time overnights a year 

before the children begin attending school. After that, Alex will 

have approximately 120 parenting-time overnights a year.

3. Child Support

Child support was largely calculated based upon the amount 

of parenting time allocated between the parties. Because the 

children would both be in school within 3 years of entry of 

the decree, the court found that Alex’s parenting time would 

soon “reduce significantly” with the loss of the weekday parenting hours. Therefore, the district court elected to calculate 

child support based on the parenting-time allocation after the 

children were in school. The court recognized Alex’s additional daytime parenting time prior to the time the children 

were in school by implementing a downward deviation from 

the guidelines.

The court calculated child support using a sole custody 

worksheet and determined Alex’s share of child support to be 

$855 per month. But the court also attached a child support 

deviation worksheet showing a downward deviation of $200 

per month for the time period beginning May 1, 2016, through 

August 31, 2019. The court did not specifically explain how it 

calculated the downward deviation but did note that the eldest 

child would be starting school within 1 year.

4. VA Disability Benefit Payment

The parties disputed whether a lump-sum disability benefit 

payment was marital property subject to division. The lump-sum 
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DONALD v. DONALD

Cite as 296 Neb. 123

payment was for past-due disability benefits after Alex retroactively received an increase in monthly compensation.

(a) Monthly Disability 

Benefit Payments

Alex received a service-connected injury while deployed 

and serving in the U.S. Marine Corps in 2008. The VA initially 

assessed his injury and associated major depressive disorder at 

70 percent disability. This assessment entitled him to receive 

monthly disability benefit payments at a scheduled rate set by 

the VA.

(b) VA Reevaluation

In November 2015, after the parties had separated, the VA 

reevaluated Alex’s disability. The VA determined that Alex was 

entitled to “individual unemployability” status because he was 

“unable to secure or follow a substantially gainful occupation 

as a result of service-connected disabilities.” This meant that 

although his disability was assessed as a 70-percent disability, 

the VA would compensate him at the 100-percent disability rate 

due to his individual unemployability.

The VA made the determination of individual unemployability retroactive to April 2013 and issued a lump-sum 

payment, totaling $41,906.47, for the disability benefits he 

should have received at this increased rate. After receiving 

the lump-sum payment, Alex deposited $30,000 of the payment into a health savings account and the remainder into a 

checking account.

(c) District Court’s Disposition

No evidence or testimony was offered to establish whether 

Alex was also entitled to retirement benefits or whether the disability benefit payments included or otherwise waived retirement benefits. Nonetheless, the court concluded that the entire 

lump-sum payment was marital property. After including the 

lump sum in the marital estate, the court ordered Alex to pay 

an equalization payment to Lacy, totaling $37,000.
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DONALD v. DONALD

Cite as 296 Neb. 123

III. ASSIGNMENTS OF ERROR

Alex assigns that the district court erred in (1) not awarding 

the parties joint physical and legal custody of the parties’ minor 

children, “taking into consideration the significant amount of 

parenting time awarded”; (2) not deviating further in the child 

support calculation; and (3) including Alex’s lump-sum disability benefit payment from the VA in the marital estate and 

dividing the payment equally between the parties.

IV. STANDARD OF REVIEW

[1] In an action for the dissolution of marriage, an appellate 

court reviews de novo on the record the trial court’s determinations of custody, child support, property division, alimony, 

and attorney fees; these determinations, however, are initially 

entrusted to the trial court’s discretion and will normally be 

affirmed absent an abuse of that discretion.1

[2] When evidence is in conflict, an appellate court considers, and may give weight to, the fact that the trial judge heard 

and observed the witnesses and accepted one version of the 

facts rather than another.2

V. ANALYSIS

1. Child Custody

(a) Generally

Alex assigns that the district court erred by not awarding 

the parties joint physical and legal custody of their minor 

children, “taking into consideration the significant amount of 

parenting time awarded to [him].” Although he submits that 

his parenting plan should have been adopted, he focuses most 

of his argument on the proper characterization of the custody awarded.

Before turning to his primary arguments, we recall that a 

statute requires a court, in determining custody and parenting 

1 Mamot v. Mamot, 283 Neb. 659, 813 N.W.2d 440 (2012).

2 Millatmal v. Millatmal, 272 Neb. 452, 723 N.W.2d 79 (2006).
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DONALD v. DONALD

Cite as 296 Neb. 123

arrangements, to consider certain factors relevant to the best 

interests of the minor child.3 And we have summarized additional factors that a court may consider in making a child 

custody determination.4 We see nothing in the district court’s 

decree to suggest that the court disregarded any appropriate factor.

[3] To the extent that Alex argues for an alternating-week 

joint physical custody arrangement, we find no abuse of discretion by the district court. Joint physical custody must be 

reserved for those cases where, in the judgment of the trial 

court, the parents are of such maturity that the arrangement 

will not operate to allow the child to manipulate the parents or 

confuse the child’s sense of direction, and will provide a stable 

atmosphere for the child to adjust, rather than perpetuating 

turmoil or custodial wars.5 In this regard, the district court’s 

implicit assessment of witness credibility is particularly important. We now address Alex’s primary arguments.

(b) Physical Custody

Alex’s assignment of error and argument as it relates to joint 

physical custody is primarily one of definition. He contends 

that the significant amount of parenting time awarded warranted a characterization of joint physical custody.

[4] Nebraska’s Parenting Act6 defines joint physical custody as “mutual authority and responsibility of the parents 

regarding the child’s place of residence and the exertion of 

continuous blocks of parenting time by both parents over 

the child for significant periods of time.”7 While Alex does 

have liberal parenting time under the decree with all the 

3 See, Neb. Rev. Stat. § 43-2923 (Reissue 2016); Schrag v. Spear, 290 Neb. 

98, 858 N.W.2d 865 (2015).

4 See Schrag v. Spear, supra note 3.

5 Zahl v. Zahl, 273 Neb. 1043, 736 N.W.2d 365 (2007).

6 Neb. Rev. Stat. §§ 43-2920 to 43-2943 (Reissue 2016).

7 § 43-2922(12).
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DONALD v. DONALD

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weekday parenting hours, he does not exercise “continuous 

blocks of parenting time” for “significant periods of time.” 

And numerous parenting times do not constitute “joint physical custody.”8

Furthermore, Alex does not challenge the fact that Lacy has 

the sole authority on the children’s place of residence, since 

they primarily reside with her. Because the parenting plan as 

ordered does not fit the statutory definition of joint physical 

custody, the district court did not err in its characterization of 

the physical custody award. We therefore affirm the physical 

custody award.

(c) Legal Custody

Alex’s argument does not meaningfully distinguish between 

joint physical and joint legal custody. However, joint legal custody is separate and distinct from joint physical custody; it is 

“mutual authority and responsibility of the parents for making 

mutual fundamental decisions regarding the child’s welfare, 

including choices regarding education and health.”9 Therefore, 

we address it separately.

[5] The paramount consideration in determining child custody is the best interests of the children.10 At trial, Lacy testified that she has been chiefly responsible for finding and 

hiring babysitters, enrolling and registering the eldest child in 

preschool, and arranging for and taking the children to their 

medical appointments.

Lacy also testified that since the parties’ separation, she has 

had problems working with Alex on dividing and sharing the 

children’s expenses—including the eldest child’s preschool 

registration. On the other hand, Alex testified that he believed 

8 See Heesacker v. Heesacker, 262 Neb. 179, 629 N.W.2d 558 (2001).

9 § 43-2922(11).

10 See, generally, Neb. Rev. Stat. § 42-364(3) (Reissue 2016); Kamal v. 

Imroz, 277 Neb. 116, 759 N.W.2d 914 (2009); Maska v. Maska, 274 Neb. 

629, 742 N.W.2d 492 (2007).
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DONALD v. DONALD

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he and Lacy could set aside personal differences to communicate and put the children’s best interests first.

Upon our de novo review, we find no abuse of discretion in the district court’s determination that it was in the 

best interests of the children for Lacy to have legal custody. 

Lacy was primarily responsible for making the big decisions 

concerning the children prior to the parties’ separation. And, 

during the proceeding’s pendency, she was the primary decisionmaker regarding the eldest child’s education. We give 

weight to the fact that the district court heard and observed 

the witnesses and accepted Lacy’s account of the parenting 

disagreements over Alex’s. We affirm the award of legal custody to Lacy.

2. Child Support

Alex’s argument concerning child support is closely related 

to his argument concerning child custody. He argues that he 

was awarded de facto joint custody. And, he contends that 

the district court should have calculated child support using a 

joint custody worksheet based on the number of parenting-time 

hours he was awarded.

The child support guidelines provide a rebuttable presumption that support shall be calculated using a joint custody worksheet when “a specific provision for joint physical custody 

is ordered and each party’s parenting time exceeds 142 days 

per year.”11 But, no specific provision of joint custody was 

ordered. Nonetheless, Alex argues that the district court should 

have deviated from the guidelines and used the joint custody 

worksheet because his parenting-time hours exceed 142 days 

per year.

Notably, Alex calculates his days of parenting time by converting the number of parenting-time hours he has with the 

children into equivalent days. After adding his 35 days of summer parenting time, Alex estimates that he has approximately 

11 Neb. Ct. R. § 4-212 (rev. 2011).
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DONALD v. DONALD

Cite as 296 Neb. 123

180 total days of parenting time per year before the children 

attend school.

[6] While the Nebraska Child Support Guidelines are to be 

applied as a rebuttable presumption and offer flexibility and 

guidance rather than a stringent formula,12 we do not believe 

that the guidelines can be construed so as to allow for Alex’s 

requested deviation. Our guidelines specifically provide that 

“a ‘day’ shall be generally defined as including an overnight 

period.”13 Alex does not dispute that under this definition, his 

parenting time falls far short of the threshold for a joint physical custody calculation.

In effect, the district court treated Alex’s extra daytime 

parenting time as an alternative to third-party childcare. This 

was economically beneficial to both parties. In recognition of 

Alex’s contribution to this economic benefit, the court provided a downward deviation from the child support guidelines. 

And the court sufficiently explained its deviation. Because we 

find no abuse of discretion in the deviation ordered, we affirm 

that part of the decree as well.

3. VA Disability Benefit Payment

Finally, Alex assigns that the district court erred by including a lump-sum VA disability benefit payment in the marital 

estate. We agree.

[7,8] The evidence presented at trial clearly established that 

the lump-sum payment was for retroactive service-connected 

disability benefits. And federal law precludes a state court, in 

a dissolution proceeding, from exercising subject matter jurisdiction over VA disability benefits.14 In the same way, a state 

court cannot include the amount of military retirement pay 

12 See, Neb. Rev. Stat. § 42-364.16 (Reissue 2016); Gress v. Gress, 271 Neb. 

122, 710 N.W.2d 318 (2006).

13 § 4-212.

14 See, Ryan v. Ryan, 257 Neb. 682, 600 N.W.2d 739 (1999); Kramer v. 

Kramer, 252 Neb. 526, 567 N.W.2d 100 (1997).
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that a veteran waives in order to receive such benefits as divisible marital property.15 It is therefore an abuse of discretion to 

divide service-connected disability benefits, or any amount of 

waived military retirement pay, as part of the marital estate in 

a dissolution proceeding.

Lacy argues that it is possible the lump-sum payment 

included nondisability retirement benefits that were not waived. 

She further argues that Alex did not produce evidence establishing that the lump-sum payment was solely disability compensation. We disagree.

Alex presented evidence at trial and established that the 

lump-sum payment received from the VA was purely disability compensation. The lump-sum payment simply included 

the difference between the disability rate of compensation 

Alex had previously received and the new retroactive rate. 

Therefore, the evidence persuades us that the payment should 

not have been included in the marital estate.

After excluding the health savings account and the balance 

of the bank account representing the remainder of the lumpsum payment from the marital estate, we find that a recalculation of the equalization payment is also in order. Accordingly, 

we modify the decree to exclude the lump-sum payment and 

reduce the equalization payment ordered to $15,968.77.

VI. CONCLUSION

The parenting plan as ordered did not fit the statutory definition of joint physical custody. Therefore, the district court 

did not err in its characterization of the physical custody 

award. We also conclude that the child support guidelines do 

not allow for a “day” to be construed as including any nonconsecutive 24 hours when determining whether to use the joint 

custody worksheet in support calculations. The district court 

was correct to use the sole custody worksheet in calculating 

15 See id. See, also, 10 U.S.C. § 1408(a)(4)(B) and (c)(1) (2012); Mansell v. 

Mansell, 490 U.S. 581, 109 S. Ct. 2023, 104 L. Ed. 2d 675 (1989).
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child support and did not abuse its discretion in ordering a 

deviation for the first 3 years.

Evidence presented at trial established that the lump-sum 

payment Alex received was purely for service-connected disability compensation. Because federal law precludes state 

courts, in proceedings to dissolve a marriage, from exercising 

jurisdiction over such disability compensation, we modify the 

divorce decree to exclude the lump-sum payment from the 

marital estate. We also reduce the ordered equalization payment to $15,968.77. As so modified, the decree of the district 

court is affirmed.

Affirmed as modified.