Court Opinion

ID: 9914490
Source: CourtListenerOpinion
Date Created: 2024-01-02 15:04:41.256119+00
Date Added: 2024-06-11T13:13:16.579147
License: Public Domain

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
01/02/2024 09:04 AM CST

                                                         - 513 -
                             Nebraska Court of Appeals Advance Sheets
                                  32 Nebraska Appellate Reports
                                                     SNOW V. SNOW
                                                 Cite as 32 Neb. App. 513

                                        Stephanie L. Snow, appellee, v.
                                         Ronald L. Snow, appellant.
                                                     ___ N.W.2d ___

                                         Filed December 26, 2023.   No. A-22-897.

                 1. Divorce: Child Custody: Child Support: Property Division:
                    Alimony: Attorney Fees: Appeal and Error. In a marital dissolution
                    action, an appellate court reviews the case de novo on the record to
                    determine whether there has been an abuse of discretion by the trial
                    judge. This standard of review applies to the trial court’s determinations
                    regarding custody, child support, division of property, alimony, and
                    attorney fees.
                 2. Judges: Words and Phrases. A judicial abuse of discretion exists if the
                    reasons or rulings of a trial judge are clearly untenable, unfairly depriv-
                    ing a litigant of a substantial right and denying just results in matters
                    submitted for disposition.
                 3. Divorce: Property Division: Equity. Neb. Rev. Stat. § 42-365 (Reissue
                    2016) authorizes a trial court to equitably distribute the marital estate
                    according to what is fair and reasonable under the circumstances.
                 4. Divorce: Property Division. In a marital dissolution action, the pur-
                    pose of a property division is to distribute the marital assets equitably
                    between the parties.
                 5. ____: ____. In a marital dissolution action, there is no mathematical
                    formula by which property awards can be precisely determined, but as
                    a general rule, a spouse should be awarded one-third to one-half of the
                    marital estate, the polestar being fairness and reasonableness as deter-
                    mined by the facts of each case.
                 6. ____: ____. Generally, all property accumulated and acquired by either
                    spouse during a marriage is part of the marital estate. Exceptions
                    include property that a spouse acquired before the marriage, or by gift
                    or inheritance.
                 7. Divorce: Property Division: Proof. The burden of proof rests with the
                    party claiming that property is nonmarital.
                                     - 514 -
          Nebraska Court of Appeals Advance Sheets
               32 Nebraska Appellate Reports
                                SNOW V. SNOW
                            Cite as 32 Neb. App. 513

 8. Divorce: Property Division: Presumptions. Accrued investment earn-
    ings or appreciation of nonmarital assets during the marriage are pre-
    sumed marital unless the party seeking the classification of the growth
    as nonmarital proves: (1) The growth is readily identifiable and trace-
    able to the nonmarital portion of the account and (2) the growth is not
    due to the active efforts of either spouse.
 9. Divorce: Property Division. The appreciation or income of a nonmari-
    tal asset during the marriage is marital insofar as it was caused by the
    efforts of either spouse or both spouses.
10. ____: ____. The active appreciation rule sets forth the relevant test to
    determine to what extent marital efforts caused any part of an asset’s
    appreciation or income.
11. Property Division: Words and Phrases. Appreciation caused by mari-
    tal contributions is known as active appreciation, and it constitutes
    marital property.
12. ____: ____. Passive appreciation is appreciation caused by separate con-
    tributions and nonmarital forces.
13. Divorce: Property Division. Any given property can constitute a mix-
    ture of marital and nonmarital interests; a portion of an asset can be
    marital property while another portion can be separate property.
14. ____: ____. The original value of an asset may be nonmarital, while all
    or some portion of the appreciation of that asset may be marital.
15. ____: ____. The oft-cited three-step process of a marital property divi-
    sion must account for appreciation, which may be treated separately
    from the original capital or value of an asset.
16. ____: ____. In a marital dissolution action, the equitable division of
    property is a three-step process. The first step is to classify the parties’
    property as either marital or nonmarital, setting aside the nonmarital
    property or nonmarital portion of the property to the party who brought
    the property to the marriage. The second step is to value the marital
    assets and marital liabilities of the parties. And the third step is to calcu-
    late and divide the net marital estate equitably between the parties.
17. ____: ____. The active appreciation rule applies to agricultural land
    or farmland.
18. ____: ____. The term “Grace award” has been described as a device to
    fairly and reasonably divide a marital estate where the prime asset in
    contention is one spouse’s gifted or inherited stock or property in a fam-
    ily agriculture organization.
19. Alimony. The purpose of alimony is to provide for the continued main-
    tenance or support of one party by the other when the relative economic
    circumstances and the other criteria enumerated in Neb. Rev. Stat.
    § 42-365 (Reissue 2016) make it appropriate.
                                    - 515 -
          Nebraska Court of Appeals Advance Sheets
               32 Nebraska Appellate Reports
                                SNOW V. SNOW
                            Cite as 32 Neb. App. 513

20. Alimony: Appeal and Error. In reviewing an alimony award, an appel-
    late court does not determine whether it would have awarded the same
    amount of alimony as did the trial court, but whether the trial court’s
    award is untenable such as to deprive a party of a substantial right or
    just result.
21. Alimony. In determining whether alimony should be awarded, in what
    amount, and over what period of time, the ultimate criterion is one of
    reasonableness.
22. ____. There are four factors that are relevant to alimony: (1) the circum-
    stances of the parties, (2) the duration of the marriage, (3) the history of
    contributions to the marriage, and (4) the ability of the supported party
    to engage in gainful employment without interfering with the interests of
    any minor children in the custody of each party.
23. ____. In determining whether alimony should be awarded, a court
    should consider the income and earning capacity of each party and the
    general equities of the situation.
24. ____. Alimony should not be used to equalize the incomes of the parties
    or punish one of the parties, but disparity in income or potential income
    may partially justify an award of alimony.

   Appeal from the District Court for Adams County: Morgan
R. Farquhar, Judge. Affirmed in part, and in part reversed and
remanded with directions.

   Adam R. Little, of Nebraska Legal Group, for appellant.

  Jack W. Besse, of Parker, Grossart & Bahensky, L.L.P., for
appellee.

   Pirtle, Chief Judge, and Moore and Arterburn, Judges.

   Pirtle, Chief Judge.
                       I. INTRODUCTION
   The district court for Adams County dissolved the marriage
of Stephanie L. Snow and Ronald L. Snow and divided the
parties’ property and debts. On appeal, Ronald challenges the
district court’s division of property and its award of alimony
to Stephanie. Based on the reasons that follow, we affirm in
part, and in part reverse and remand with directions.
                              - 516 -
        Nebraska Court of Appeals Advance Sheets
             32 Nebraska Appellate Reports
                          SNOW V. SNOW
                      Cite as 32 Neb. App. 513

                      II. BACKGROUND
   Stephanie and Ronald were married in June 1981. They
had two children who are no longer minors and, therefore, are
not affected by these proceedings. When the parties married,
Ronald was farming with his father, and they raised hogs. The
farm ground was owned by Ronald’s parents. Stephanie testi-
fied that she worked on the farm and worked at the grain ele-
vator during harvest time. Around 1985, Ronald and his father
stopped farming. Ronald opened a mechanic shop located in
a building on his parents’ land and Stephanie helped him in
the shop. He had the shop for about 15 to 20 years, but it was
never profitable.
   Ronald’s father had an antique store that he started almost
40 years prior to trial. The antique store was also located in a
building on Ronald’s parents’ property. Stephanie helped with
the store by arranging and displaying the antiques, as well as
pricing the items. She would also go with Ronald’s father to
auctions to purchase antiques for the store.
   In the late 1980s, Stephanie opened her own business that
repaired and restored wicker furniture. This business was also
located on Ronald’s parents’ property.
   In the mid-1990s, Stephanie started a residential and com-
mercial cleaning business. At the time of trial, she was still
running the cleaning business and it was her only source of
income. She was earning $400 to $500 per week.
   During the parties’ marriage, they lived in a home owned
by Ronald’s parents and located on 10 acres of their property,
referred to as “the cabin.”
   In December 2006, Ronald’s parents titled two parcels of
real property in Ronald’s name, reserving a life estate for
themselves. The first parcel was 176 acres of cropland that
was cash-rented by a third party. This parcel included the
cabin; the house where Ronald’s parents lived; the buildings
that housed the mechanic shop, the antique store, and the fur-
niture repair business; and a building where Ronald’s father
displayed his own antique collection. The second parcel was
                              - 517 -
        Nebraska Court of Appeals Advance Sheets
             32 Nebraska Appellate Reports
                          SNOW V. SNOW
                      Cite as 32 Neb. App. 513

57 acres that consisted primarily of pasture ground, which was
also rented to a third party. Ronald’s mother died in 2016 and
his father died in 2019, thereby ending the life estate.
   Stephanie filed a complaint for dissolution of marriage in
May 2021. Trial was held in September 2022. At the time of
the trial, Stephanie was 60 years old and Ronald was 61 years
old. Stephanie and Ronald both testified, as well as Michael
Paul Wilken, a certified general appraiser.
   Stephanie testified that since 2006, she had spent time and
effort improving the cabin, as well as Ronald’s parents’ house.
She testified that she installed ponds around the cabin, did
landscaping, and remodeled Ronald’s parents’ bathroom. She
also presented photographs indicating that she hand painted
a ceiling and tiled the kitchen in the cabin. She also had a
washhouse moved into the yard by the cabin and spent time
fixing it up and decorating it. Stephanie also testified that
after Ronald’s father died in 2019, she did other landscaping,
including moving large rocks and planting flowers and bushes.
She also repainted a fence. She believed that the improvements
she made increased the value of the property at the time. She
testified, however, that at the time of trial, the area around
the cabin was covered in weeds and there was nothing left
of the flowers and bushes she planted. Stephanie stated she
did not want to be awarded the cabin because it needed too
much work.
   In January 2022, a broker from an auction and realty com-
pany conducted a broker price opinion of the cabin and the
10 acres where it is located. The broker concluded that “[t]his
10-acre parcel would carry as much or more value as a new
build site versus evaluating the older house and garage as it is
today and the cropland on a per-acre basis.” The broker opined
that the value of the property at that time was $125,000 to
$150,000. Stephanie agreed that the broker indicated that the
ground itself was worth more than it was with the house as far
as it being used as a new build site.
                              - 518 -
        Nebraska Court of Appeals Advance Sheets
             32 Nebraska Appellate Reports
                          SNOW V. SNOW
                      Cite as 32 Neb. App. 513

   Stephanie and Ronald agreed that Ronald’s father received
the cash rent payments from the tenant farming the land
until he died. After his father died, Ronald started receiving
the cash rent payments, which totaled around $20,000 per
year. Ronald testified that he had to pay around $10,000 in
taxes each year, so he only received $10,000 in net income
per year from cash renting the farm ground. Ronald’s other
income of $2,200 per year came from renting the pasture
ground. He testified that his monthly expenses total $2,859.
He stated that he is “getting by,” but it is difficult to meet
his monthly obligations based on his income. Robert testified
that he would not be able to provide any financial support
to Stephanie.
   Ronald testified that the real property and the two houses
located on the property gifted to him by his parents should
all be classified as nonmarital property. He also testified that
there had not been any substantial improvements made to the
property or the houses. He contended that the antique store,
the furniture repair business, and the mechanic shop were
also nonmarital property. Ronald had no objection to treating
Stephanie’s cleaning business as nonmarital and awarding it to
her. There was also a small piece of land valued at $1,500 that
Ronald’s father had purchased and gave to both Stephanie and
Ronald. Ronald testified that Stephanie could have it.
   Wilken testified regarding an appraisal he performed on
the two parcels of land Ronald received from his parents.
Ronald asked Wilken to complete an appraisal of the total
property on two retroactive dates: January 7, 2019, the date
Ronald’s father died and Ronald gained complete ownership
of the property, and May 12, 2021, the date the complaint
for dissolution was filed. In addition to the farm and pasture
ground on the two parcels, the appraisal included Ronald’s
parents’ former residence, which is where Ronald was living
at the time, and the other buildings on the property. It did not
include the cabin located on the 176-acre parcel.
                              - 519 -
        Nebraska Court of Appeals Advance Sheets
             32 Nebraska Appellate Reports
                          SNOW V. SNOW
                      Cite as 32 Neb. App. 513

   Wilken testified that he conducted his appraisal using three
different methods of valuation: the sales comparison approach,
the cost approach, and the income approach. He explained each
method of valuation, and it was also set forth in his report,
which was entered into evidence. He then reconciled those val-
ues as the most accurate way to value real estate. In utilizing
this approach, he valued the real estate (both parcels minus the
cabin) on January 7, 2019, at $860,000.
   Wilken used the same process for May 12, 2021. His opin-
ion as to the value of the real estate on May 12 was $950,000.
Wilken testified that in his professional opinion, the $90,000
in appreciation of value between the two dates was due
entirely to external market forces. He stated that he was not
given any information regarding any improvements that had
been made and that based on his inspection of the property,
it did not appear there had been any recent improvements on
the property.
   Following trial, the court entered a decree dissolving the
parties’ marriage and dividing their assets and debts. Citing
Grace v. Grace, 221 Neb. 695, 380 N.W.2d 280 (1986), the
trial court found that Stephanie should receive some credit for
the value of the real estate, which included the 1-acre tract
given to Stephanie and Ronald by Ronald’s father and the
two parcels gifted to Ronald by his parents. It stated that both
personal and business property were comingled between the
parties and Ronald’s parents for the length of the marriage.
The court found that it was “impossible for [it] to unwind
the comingling of land, homes, antiques, business assets, per-
sonal property, and farm real estate. There is no doubt that
[Stephanie] contributed significantly to the various businesses
engaged in by her nuclear family and her inlaws.” It awarded
all real estate to Ronald and found that law and equity sup-
ported a finding that the cabin was a marital asset with a
value of $163,870. The court concluded that because the cabin
could not be partitioned from the remaining real estate, it
                               - 520 -
        Nebraska Court of Appeals Advance Sheets
             32 Nebraska Appellate Reports
                           SNOW V. SNOW
                       Cite as 32 Neb. App. 513

awarded an equalization payment to Stephanie by Ronald for
half the value of the cabin, or $81,935.
   The trial court further found that law and equity demanded
an equalization of the other real estate and that a division based
upon a percentage of value was appropriate. The court found
that 25 percent of the value of the remaining real estate should
be paid by Ronald to Stephanie. The court took the value of
all the real estate, $946,500, and subtracted the value of the
cabin, resulting in $782,630 as the value of the remaining
real estate. It then calculated 25 percent of $782,630, which
is $195,657.50. The two equalization payments in favor of
Stephanie and against Ronald totaled $277,592.50 and were to
be paid in 6 months. It also awarded Stephanie spousal support
in the amount of $1,000 per month for 120 months, as well as
attorney fees in the amount of $5,000.

               III. ASSIGNMENTS OF ERROR
  Ronald assigns the trial court erred in (1) making an appar-
ent “Grace award,” rather than setting aside premarital and
nonmarital property; (2) failing to properly classify certain
nonmarital assets; (3) including a marital value on nonmarital
property, rather than setting it aside; (4) improperly valuing
and dividing the marital estate; (5) ordering a “massive” cash
equalization payment; and (6) awarding Stephanie alimony.

                  IV. STANDARD OF REVIEW
   [1,2] In a marital dissolution action, an appellate court
reviews the case de novo on the record to determine whether
there has been an abuse of discretion by the trial judge.
Novotny v. Novotny, 32 Neb. App. 142, 995 N.W.2d 64 (2023).
This standard of review applies to the trial court’s determina-
tions regarding custody, child support, division of property,
alimony, and attorney fees. Id. A judicial abuse of discretion
exists if the reasons or rulings of a trial judge are clearly unten-
able, unfairly depriving a litigant of a substantial right and
denying just results in matters submitted for disposition. Id.
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        Nebraska Court of Appeals Advance Sheets
             32 Nebraska Appellate Reports
                           SNOW V. SNOW
                       Cite as 32 Neb. App. 513

                          V. ANALYSIS
             1. Relevant Law Regarding Division
                       of Marital Estate
   [3-5] Neb. Rev. Stat. § 42-365 (Reissue 2016) authorizes a
trial court to equitably distribute the marital estate according to
what is fair and reasonable under the circumstances. Parde v.
Parde, 313 Neb. 779, 986 N.W.2d 504 (2023). In a marital dis-
solution action, the purpose of a property division is to distrib-
ute the marital assets equitably between the parties. Id. There
is no mathematical formula by which property awards can be
precisely determined, but as a general rule, a spouse should be
awarded one-third to one-half of the marital estate, the polestar
being fairness and reasonableness as determined by the facts of
each case. Id.
   [6,7] Generally, all property accumulated and acquired by
either spouse during a marriage is part of the marital estate.
Novotny v. Novotny, supra. Exceptions include property that a
spouse acquired before the marriage, or by gift or inheritance.
Id. The burden of proof rests with the party claiming that prop-
erty is nonmarital. Id.
   [8] In Stephens v. Stephens, 297 Neb. 188, 899 N.W.2d
582 (2017), the Nebraska Supreme Court held that accrued
investment earnings or appreciation of nonmarital assets dur-
ing the marriage are presumed marital unless the party seeking
the classification of the growth as nonmarital proves: (1) The
growth is readily identifiable and traceable to the nonmarital
portion of the account and (2) the growth is not due to the
active efforts of either spouse.
   [9] Prior to the decision in Stephens, the Nebraska appel-
late courts treated separate property as remaining nonmarital
unless both spouses contributed to the improvement or opera-
tion of the property or the spouse not owning the property,
or not receiving the inheritance or gift, significantly cared
for the property during the marriage. See Parde v. Parde,
supra. But in Stephens, the court held that the appreciation or
income of a nonmarital asset during the marriage is marital
                               - 522 -
        Nebraska Court of Appeals Advance Sheets
             32 Nebraska Appellate Reports
                           SNOW V. SNOW
                       Cite as 32 Neb. App. 513

insofar as it was caused by the efforts of either spouse or both
spouses. See Parde v. Parde, supra.
   [10-12] The active appreciation rule sets forth the relevant
test to determine to what extent marital efforts caused any part
of an asset’s appreciation or income. Id. Appreciation caused
by marital contributions is known as active appreciation, and
it constitutes marital property. Id. Passive appreciation is
appreciation caused by separate contributions and nonmarital
forces. Id.
   [13,14] After Stephens, appellate courts have adhered to the
framework that any given property can constitute a mixture of
marital and nonmarital interests; a portion of an asset can be
marital property while another portion can be separate prop-
erty. See Parde v. Parde, supra. The original value of an asset
may be nonmarital, while all or some portion of the apprecia-
tion of that asset may be marital. Id.
   [15,16] The oft-cited three-step process of a marital prop-
erty division must account for appreciation, which may be
treated separately from the original capital or value of an
asset. Id. Thus, in a marital dissolution action, the equitable
division of property is a three-step process. The first step is to
classify the parties’ property as either marital or nonmarital,
setting aside the nonmarital property or nonmarital portion
of the property to the party who brought the property to the
marriage. The second step is to value the marital assets and
marital liabilities of the parties. And the third step is to cal-
culate and divide the net marital estate equitably between the
parties. Id.
   [17] In Parde v. Parde, 313 Neb. 779, 986 N.W.2d 504
(2023), the court determined that the active appreciation rule
applied to agricultural land or farmland.

               2. Equitable Lump-Sum Awards
   In the present case, Ronald was gifted two parcels of land
from his parents. One parcel was 176 acres of primarily
cropland, but it also contained the cabin, the house where
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        Nebraska Court of Appeals Advance Sheets
             32 Nebraska Appellate Reports
                          SNOW V. SNOW
                      Cite as 32 Neb. App. 513

Ronald’s parents lived, and the buildings that housed the
mechanic shop, antique store, wicker repair business, and
Ronald’s father’s antique collection. The other parcel was 57
acres of pasture ground.
   In evaluating the marital estate, the trial court treated the
cabin separately from the rest of the property and buildings.
It determined that the cabin was a marital asset and awarded
Stephanie 50 percent of the value of the cabin. The court also
awarded Stephanie 25 percent of the value of the remaining
real estate.
   [18] Ronald argues that the trial court erred in its division
of property because it gave Stephanie an equitable lump-sum
award or a “Grace award.” A “Grace award” became a com-
mon term of art in dissolution cases, particularly involving
farms and ranches, and derived from the Supreme Court’s
opinion in Grace v. Grace, 221 Neb. 695, 380 N.W.2d 280
(1986). A Grace award has been described as a device to
fairly and reasonably divide a marital estate where the prime
asset in contention is one spouse’s gifted or inherited stock
or property in a family agriculture organization. See Charron
v. Charron, 16 Neb. App. 724, 751 N.W.2d 645 (2008). The
Supreme Court expressly abrogated Grace v. Grace, supra,
and its related line of cases in Stephens v. Stephens, 297 Neb.
188, 899 N.W.2d 582 (2017).
   The Stephens court explained that it found inapplicable to
the modern dual classification system any statements in prior
cases that failed to recognize as a marital asset appreciation
through the active efforts of the owning spouse. It further
stated that for purposes of the active appreciation rule, there
was no reason to treat appreciation of a nonmarital asset differ-
ently from income derived from a nonmarital asset during the
marriage. It concluded that the principles set forth in Grace v.
Grace, supra, were no longer applicable under the dual clas-
sification system.
   We conclude that the trial court abused its discretion in
awarding Stephanie an equitable lump sum, or Grace award,
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        Nebraska Court of Appeals Advance Sheets
             32 Nebraska Appellate Reports
                          SNOW V. SNOW
                      Cite as 32 Neb. App. 513

rather than setting aside nonmarital property and applying the
active appreciation rule. Ronald argues that under the proper
analysis, he met his burden to show that the real property
gifted to him was nonmarital and that any growth or apprecia-
tion was passive and, therefore, nonmarital. We agree.
   The evidence showed that the property at issue was gifted
to Ronald by his parents. In 2006, Ronald’s parents trans-
ferred title to two parcels of land to Ronald but maintained a
life estate so they could continue to live on the property and
receive the cash rent from the tenants farming the land and
using the pastures. Stephanie testified that when the land was
deeded to Ronald, she understood that it was a gift made spe-
cifically to him. Accordingly, the evidence is undisputed that
the property was gifted to Ronald by his parents, making it
nonmarital property that should be set aside to Ronald.
   We must next determine whether any appreciation of the
property after it was gifted to Ronald was active or pas-
sive and, therefore, whether the appreciation was marital or
nonmarital.
   Ronald presented evidence from a certified general appraiser
regarding the appraised value of the property on two different
dates: January 7, 2019, the day Ronald fully inherited the
property, and May 12, 2021, the day the complaint for dis-
solution was filed and the parties separated. Wilken valued
the property at $860,000 as of January 7, 2019, and $950,000
as of May 12, 2021. Wilken testified that in his professional
opinion, the $90,000 in appreciation of value between the
two dates was due entirely to external market forces. We
conclude that Ronald met his burden of proof to show that
the appreciation in value of the nonmarital real property was
entirely passive.
   It then became Stephanie’s burden to rebut Ronald’s evi-
dence that the appreciation of his nonmarital real property
was passive. She failed to do so. Stephanie did not present
evidence to rebut Ronald’s appraised value of the property on
either date. She presented limited evidence of improvements
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        Nebraska Court of Appeals Advance Sheets
             32 Nebraska Appellate Reports
                          SNOW V. SNOW
                      Cite as 32 Neb. App. 513

she made over time and argued they increased the value, but
the improvements were primarily made inside and around the
cabin and do not meet the definition of active marital apprecia-
tion. Further, Wilken’s appraisal did not include the cabin.
   Stephanie also argues that in determining the appreciation
in value of the property, it should be assessed as of December
12, 2006, the day the property was deeded to Ronald, rather
than January 7, 2019, when his father died. She contends that
while Ronald’s father’s death ended the life estate, Ronald was
given an interest in the property on December 12, 2006.
   Although Ronald’s name was put on the title in 2006 and
he received an interest in the property at this time, he did not
inherit or receive the ground free and clear until 2019, when
his father died. Before his parents died, they maintained a
life estate on the property, including full rights to occupy
the property and rights to receive income from the property.
Further, Ronald did not pay inheritance tax on the property
until 2019, after his father’s death.
   In addition, there is no evidence that any appreciation in
the property between 2006 and 2019 was caused by the active
efforts of either spouse. Ronald and his father stopped farm-
ing in 1985. After that, the farm ground was rented by a third
party. The pasture ground was also rented by a third party.
There was no evidence that any of the businesses that were
operated on the property contributed to any appreciation in the
property. As a result, any appreciation in value to the property
between 2006 and 2019 was passive.
   We conclude that the district court erred in awarding
Stephanie a Grace award, specifically, an equitable lump-sum
award equal to 25 percent of value of the real estate. While
we recognize that application of the active appreciation rule
to the facts of this case produces what could be viewed as an
inequitable division of property, particularly given the length
of time Stephanie lived on the property, the pertinent case law
does not provide for any exceptions to the rule’s application.
Here, the evidence is clear that the appreciation in value was
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        Nebraska Court of Appeals Advance Sheets
             32 Nebraska Appellate Reports
                           SNOW V. SNOW
                       Cite as 32 Neb. App. 513

due to external market forces and not to any significant efforts
by either party. The real estate consisting of the two parcels
Ronald was gifted by his parents and its passive appreciation
should have been set off to Ronald as nonmarital property and
not included in the marital estate. We reverse that portion of
the court’s decree awarding Stephanie $195,657.50 and remand
the matter to the district court for a division of the marital
estate, setting off the two parcels of real estate and its apprecia-
tion to Ronald as nonmarital property.
             3. Classification of Certain Assets
   Ronald next assigns that the trial court abused its discre-
tion by failing to properly classify certain assets as nonmari-
tal assets.
                  (a) Inherited Real Property
   Ronald first argues that the trial court erred in failing to
classify and set aside the real property he was gifted as his
nonmarital property. As set forth above, Ronald proved, and
Stephanie did not dispute, that Ronald’s parents gifted the
property at issue to Ronald. The property should have been
classified as nonmarital property.
                          (b) The Cabin
   The trial court found the cabin was a marital asset with
a value of $163,870 and awarded Stephanie an equalization
payment equal to half the value of the cabin, or $81,935. The
court’s value of the cabin was based on its insured value as of
June 2022. Ronald argues that the cabin was part of the total
real property he was gifted and should not have been treated
separately or classified as a marital asset. We agree.
   The cabin is located on the property Ronald was gifted and,
therefore, is part of the nonmarital property. Although the par-
ties lived in the cabin for most of their marriage, it was owned
by Ronald’s parents until it was gifted with the property to
Ronald. There was no mortgage on the cabin and no evidence
that the parties paid any rent. We conclude that the trial court
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erred in classifying the cabin as a marital asset and awarding
Stephanie an equalization payment equal to one-half of the
value. Upon remand, the trial court is to treat the cabin as part
of Ronald’s nonmarital property.
                    (c) Miscellaneous Assets
   Ronald next argues that other various assets were classi-
fied as marital when they should have been classified as non-
marital. The district court attached a “Settlement Statement”
to the decree, which is a spreadsheet detailing how it valued
and awarded the parties’ assets and debts. Ronald points out
several items that he claims were undisputedly nonmarital,
yet the court listed them on the spreadsheet and awarded them
to Ronald.
   The court’s spreadsheet states a value for each asset or
debt and which party is to receive each item. It does not indi-
cate whether the court found that all the items listed on the
spreadsheet are marital or whether some of the items awarded
to Ronald were nonmarital. Further, although the spreadsheet
assigns values to the assets and debts, it does not calculate the
division of the marital estate. In other words, it does not con-
tain a balance sheet showing the total value of marital assets
and debts each party was awarded, or a division of the net
marital estate.
   Upon remand, the district court is ordered to use the three-
step process set forth above to classify the parties’ property as
marital or nonmarital, setting aside Ronald’s nonmarital real
property and appreciation; to produce a balance sheet valuing
the marital assets and liabilities; and to calculate and divide
the net marital estate equitably. See Parde v. Parde, 313 Neb.
779, 986 N.W.2d 504 (2023).
                 4. Valuation and Division
                     of Marital Estate
   Ronald next assigns that the trial court abused its discre-
tion in valuing and dividing the marital estate. He argues that
the court “incons[iste]ntly or arbitrarily valued several items
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of marital property.” Brief for appellant at 26. He suggests
that the court adopted Stephanie’s inflated valuations only on
property that was awarded to Ronald, despite Ronald’s testify-
ing he did not want such property at Stephanie’s values. In
contrast, when awarding property to Stephanie, the court often
gave her the benefit. This argument is also based on the court’s
“Settlement Statement” attached to the decree, as discussed
above. As stated above, upon remand, the district court is to
produce a balance sheet dividing the parties’ assets and debts
and calculating any equalization payment needed.

                   5. Equalization Payment
   Ronald assigns that ordering him to pay an equalization
payment of $277,592.50 was an abuse of discretion because he
lacks sufficient cash or liquid assets to make the equalization
payment. Because the trial court abused its discretion in the
method used to divide the marital estate and we are remanding
the matter to the trial court, we need not address this assign-
ment of error.

                           6. Alimony
   Ronald also assigns that the trial court erred in award-
ing Stephanie alimony. He argues that the alimony award of
$1,000 per month for 120 months is “untenable and deprives
[him] of a substantial right” because there was no evidence
demonstrating Stephanie had a need for support. Brief for
appellant at 29.
   [19,20] The purpose of alimony is to provide for the contin-
ued maintenance or support of one party by the other when the
relative economic circumstances and the other criteria enumer-
ated in § 42-365 make it appropriate. See Dooling v. Dooling,
303 Neb. 494, 930 N.W.2d 481 (2019). In reviewing an ali-
mony award, an appellate court does not determine whether it
would have awarded the same amount of alimony as did the
trial court, but whether the trial court’s award is untenable such
as to deprive a party of a substantial right or just result. Id.
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   [21-24] In determining whether alimony should be awarded,
in what amount, and over what period of time, the ultimate
criterion is one of reasonableness. See id. There are four fac-
tors that are relevant to alimony: (1) the circumstances of the
parties, (2) the duration of the marriage, (3) the history of con-
tributions to the marriage, and (4) the ability of the supported
party to engage in gainful employment without interfering with
the interests of any minor children in the custody of each party.
Simons v. Simons, 312 Neb. 136, 978 N.W.2d 121 (2022).
In addition, a court should consider the income and earning
capacity of each party and the general equities of the situation.
See id. Alimony should not be used to equalize the incomes
of the parties or punish one of the parties, but disparity in
income or potential income may partially justify an award of
alimony. See Marcovitz v. Rogers, 267 Neb. 456, 675 N.W.2d
132 (2004).
   In considering the four factors set forth above, Ronald was
61 years old at the time of trial and Stephanie was 60 years
old. The parties had been married for 41 years. Ronald earns
his income by renting the farm ground and pasture ground
that he inherited from his parents. Although he presented evi-
dence to show that he struggles “to meet [his] monthly obliga-
tions,” he does not work and there was nothing to indicate he
cannot work. During the marriage, there were three businesses
operated on his inherited land, but at the time of trial, he was
not operating any of these businesses.
   During the marriage, Stephanie worked on the farm and at
the grain elevator during harvest time, helped Ronald’s father
operate the antique store, and ran the wicker furniture repair
business. At the time of trial, Stephanie had her own cleaning
business. She testified that she was able to pay her expenses
with her current income but struggled at times. She did not
produce evidence that she needed to or would pursue further
education to improve her employment prospects, nor did she
produce evidence that her income was lower due to career
interruptions during the marriage.
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  Based on the totality of the evidence before us, the trial
court did not abuse its discretion in awarding Stephanie ali-
mony. This assignment of error fails.
                      VI. CONCLUSION
   We conclude that the trial court abused its discretion in its
division of the marital estate. We remand the matter to the
trial court to recalculate and divide the marital estate con-
sistent with this opinion. The court’s award of alimony to
Stephanie is affirmed.
                   Affirmed in part, and in part reversed
                   and remanded with directions.