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                                                         - 612 -
                                  Nebraska Supreme Court A dvance Sheets
                                          299 Nebraska R eports
                                              WESTWOOD v. DARNELL
                                                Cite as 299 Neb. 612




                                        Jennifer Westwood, appellant, v.
                                          Cheryl A. Darnell, appellee.
                                                    ___ N.W.2d ___

                                          Filed April 13, 2018.    No. S-17-538.

                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.	 Evidence: Appeal and Error. In a review de novo on the record, an
                     appellate court is required to make independent factual determinations
                     based upon the record, and the court reaches its own independent con-
                     clusions with respect to the matters at issue.
                 3.	 ____: ____. When evidence is in conflict, the appellate court considers
                     and may give weight to the fact that the trial court heard and observed
                     the witnesses and accepted one version of the facts rather than another.
                4.	 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.
                5.	 Property Division. The purpose of a property division is to distribute
                     the marital assets equitably between the parties.
                 6.	 ____. Under Neb. Rev. Stat. § 42-365 (Reissue 2016), the equitable divi-
                     sion of property is a three-step process. The first step is to classify the
                     parties’ property as marital or nonmarital. 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 in
                     accordance with the principles contained in § 42-365.
                 7.	 ____. The ultimate test in determining the appropriateness of the divi-
                     sion of property is fairness and reasonableness as determined by the
                     facts of each case.
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             Nebraska Supreme Court A dvance Sheets
                     299 Nebraska R eports
                          WESTWOOD v. DARNELL
                            Cite as 299 Neb. 612

 8.	 Property Division: Proof. The burden of proof to show that property is
     nonmarital remains with the person making the claim.
 9.	 Divorce: Property Division. As a general rule, all property accumu-
     lated and acquired by either party during the marriage is part of the
     marital estate, unless it falls within an exception to the general rule.
10.	 ____: ____. Exceptions to the rule that all property accumulated and
     acquired during the marriage is marital property includes property accu-
     mulated and acquired through gift or inheritance.
11.	 Divorce: Property Division: Taxes. Ordinarily, a trial court in Nebraska
     should not consider the speculative tax consequences of its distribution
     orders unless it has ordered the immediate liquidation or sale of an asset
     or a party must sell an asset to satisfy a monetary judgment.

  Appeal from the District Court for Lancaster County: Lori
A. M aret, Judge. Affirmed.

   Elaine A. Waggoner, of Waggoner Law Office, for appellant.

   B. Gail Steen, of Steen Law Office, for appellee.

   Heavican, C.J., Miller-Lerman, Cassel, Stacy, and Funke,
JJ., and Steinke, District Judge.

   Heavican, C.J.
                       INTRODUCTION
   The district court entered a decree dissolving the marriage
of Jennifer Westwood and Cheryl A. Darnell and dividing their
marital estate. Westwood appeals. We affirm.

                       BACKGROUND
  Westwood and Darnell were married in Vermont in 2011.
No children were born of the marriage. The parties separated
on or about June 25, 2015. The district court’s decree awarded
each party her personal property, automobile, and retirement
account. Westwood was ordered to pay an equalization pay-
ment to Darnell in the amount of $3,755.67.
  The record indicates that Westwood and Darnell were
both employed by the Nebraska Department of Correctional
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           Nebraska Supreme Court A dvance Sheets
                   299 Nebraska R eports
                     WESTWOOD v. DARNELL
                       Cite as 299 Neb. 612

Services. Both earned comparable salaries and had premarital
retirement accounts to which they continued to contribute after
they married. Household expenses were split equally.
   Westwood quit her job in March 2015. Shortly thereaf-
ter, she withdrew $75,393.04 from her retirement account.
After taxes, penalties, and fees, the sum of $51,999.99 was
deposited in the parties’ joint bank account. The couple then
paid off outstanding marital debts and deposited some of the
money in a new retirement account. Among the bills paid with
the proceeds from the withdrawal were the outstanding bal-
ances of $20,849.73 for Darnell’s vehicle and $12,855.89 for
Westwood’s vehicle.
   When the parties separated in June 2015, they had no mari-
tal debt except the mortgage on their home and the balance on
a credit card which had been used to purchase items for house-
hold improvements. Each party also had a vehicle of somewhat
similar value, a retirement account, and jointly held checking
and savings accounts.
   The parties purchased a home together, though only
Westwood was listed on the deed. The marital home was sold
in August 2015. Westwood kept the $11,150.81 proceeds from
the sale of the home. At some point prior to entry of the decree,
Westwood paid Darnell $1,250.
   Westwood filed for divorce in December 2015. Following a
trial, the district court awarded each party the personal prop-
erty and automobile in her possession, her separate retirement
account, and any bank accounts in her own name. Westwood
was ordered to make an equalization payment to Darnell
of $3,755.67.
   Westwood appeals.

                  ASSIGNMENTS OF ERROR
   On appeal, Westwood assigns that the district court erred
in its division of the marital property by (1) not classifying as
separate property the proceeds from Westwood’s withdrawal
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               Nebraska Supreme Court A dvance Sheets
                       299 Nebraska R eports
                           WESTWOOD v. DARNELL
                             Cite as 299 Neb. 612

of $51,999.99 from her retirement account; (2) failing to con-
sider that Darnell was unjustly enriched by payment of the
loan on her vehicle; and (3) failing to consider that Darnell
refused to file taxes jointly, thus refusing to share in the tax
burden imposed upon the withdrawal of Westwood’s retire-
ment funds.
                   STANDARD OF REVIEW
   [1] 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 regard-
ing custody, child support, division of property, alimony, and
attorney fees.1
   [2,3] In a review de novo on the record, an appellate court
is required to make independent factual determinations based
upon the record, and the court reaches its own independent
conclusions with respect to the matters at issue.2 However,
when evidence is in conflict, the appellate court considers
and may give weight to the fact that the trial court heard and
observed the witnesses and accepted one version of the facts
rather than another.3
   [4] 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.4
                          ANALYSIS
   In her first assignment of error, Westwood asserts that the
district court erred in treating as marital property the funds
Westwood withdrew from her retirement account.

 1	
      Osantowski v. Osantowski, 298 Neb. 339, 904 N.W.2d 251 (2017).
 2	
      Id.
 3	
      Id.
 4	
      Id.
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               Nebraska Supreme Court A dvance Sheets
                       299 Nebraska R eports
                          WESTWOOD v. DARNELL
                            Cite as 299 Neb. 612

   [5-7] The purpose of a property division is to distribute the
marital assets equitably between the parties.5 Under § 42-365,
the equitable division of property is a three-step process. The
first step is to classify the parties’ property as marital or non-
marital. The second step is to value the marital assets and mari-
tal liabilities of the parties. The third step is to calculate and
divide the net marital estate between the parties in accordance
with the principles contained in § 42-365.6 The ultimate test
in determining the appropriateness of the division of property
is fairness and reasonableness as determined by the facts of
each case.7
   [8-10] The burden of proof to show that property is non-
marital remains with the person making the claim.8 As a
general rule, all property accumulated and acquired by either
party during the marriage is part of the marital estate, unless
it falls within an exception to the general rule.9 Such excep-
tions include property accumulated and acquired through gift
or inheritance.10
   Westwood relies on Lisec v. Lisec11 to support her conten-
tion that the money she withdrew from her retirement account
maintained its status as her separate property. In Lisec, the wife
argued that she was entitled to proceeds received from the sale
of the marital home, because she provided the downpayment
for the home from nonmarital funds. Specifically, the wife had
received a gift of money from her mother, which she deposited
into the parties’ joint checking account and then used to make

 5	
      Neb. Rev. Stat. § 42-365 (Reissue 2016).
 6	
      Gangwish v. Gangwish, 267 Neb. 901, 678 N.W.2d 503 (2004).
 7	
      Id.
 8	
      Id.
 9	
      Id.
10	
      Id.
11	
      Lisec v. Lisec, 24 Neb. App. 572, 894 N.W.2d 350 (2017).
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               Nebraska Supreme Court A dvance Sheets
                       299 Nebraska R eports
                           WESTWOOD v. DARNELL
                             Cite as 299 Neb. 612

the downpayment on the home. The wife argued that these
funds retained their identity as gifted funds.
   The Nebraska Court of Appeals affirmed the district court’s
conclusion that the proceeds should be considered marital
property, noting that the home was placed in both parties’
names and that the settlement agreement the parties entered
explicitly provided that jointly titled property was to be con-
sidered marital property.
   Westwood argues that the Court of Appeals’ decision was
premised on the settlement agreement; otherwise, the house
proceeds would have been considered nonmarital property.
Thus, in her case, because there was not a settlement agree-
ment providing as much with regard to these retirement funds,
the funds would be considered nonmarital even after their
deposit in the parties’ joint account.
   Westwood’s contention with respect to the funds with-
drawn from her retirement account is without merit. As an
initial matter, Lisec is inapposite. Gifts and inheritances,
even when received during the marriage, are presumed to be
nonmarital. But retirement funds are not. Rather, retirement
benefits earned during a parties’ marriage are considered to be
marital property; only those benefits earned prior to marriage
would be considered to be nonmarital.12 Westwood provides
no authority to support the contention that retirement funds
are converted into separate property after being withdrawn
from a retirement account.
   The burden is on Westwood to show that the funds in ques-
tion are nonmarital. She has not met this burden. As noted,
Westwood directs us to no authority suggesting that such
funds are presumed to be nonmarital. Nor did Westwood pre­
sent sufficient evidence to show that the funds withdrawn
were her nonmarital property earned prior to marriage and
not benefits earned during the marriage. Finally, the funds

12	
      Lorenzen v. Lorenzen, 294 Neb. 204, 883 N.W.2d 292 (2016).
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               Nebraska Supreme Court A dvance Sheets
                       299 Nebraska R eports
                           WESTWOOD v. DARNELL
                             Cite as 299 Neb. 612

in question were withdrawn from Westwood’s retirement
account, placed into the parties’ joint checking account, and
used to pay marital debts. This supports the conclusion that
the funds were considered marital property. Westwood’s first
assignment of error is without merit.
   In her second assignment of error, Westwood argues that
the district court erred in not finding that Darnell was unjustly
enriched by having her automobile loan paid off using the
funds withdrawn from Westwood’s retirement account.
   After clarifying Westwood’s contention during the oral
argument for this appeal, we observe that the term “unjust
enrichment” is used here in a colloquial sense: Westwood
simply argues that the equities of this situation demand that
the retirement proceeds be treated as separate property. And
we have concluded that the burden to show that the funds
were nonmarital was on Westwood and that she failed to meet
this burden. As such, there is no merit to this assignment
of error.
   In her third and final assignment of error, Westwood con-
tends that the district court erred in not considering that
Darnell refused to file joint tax returns when dividing the mari-
tal estate. Westwood contends that a joint filing would have
shifted the tax burden as to the withdrawal of funds from her
retirement account.
   [11] Ordinarily, a trial court in Nebraska should not con-
sider the speculative tax consequences of its distribution
orders unless it has ordered the immediate liquidation or sale
of an asset or a party must sell an asset to satisfy a monetary
judgment.13 In Bock v. Dalbey,14 we were faced with the
questions of (1) whether a district court can consider the tax
consequences of one party’s refusal to file a joint return in
dividing the marital estate, and (2) whether it has discretion

13	
      Bock v. Dalbey, 283 Neb. 994, 815 N.W.2d 530 (2012).
14	
      Id.
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                Nebraska Supreme Court A dvance Sheets
                        299 Nebraska R eports
                            WESTWOOD v. DARNELL
                              Cite as 299 Neb. 612

to order the parties to file a joint return to preserve assets for
the marital estate or to equalize its division of the estate. We
generally held that a district court does not have discretion to
order parties to file a joint tax return. We further noted:
         Married individuals can elect whether to file a joint or
     separate return. For joint returns, the federal government
     taxes the income of a married couple in the aggregate.
     Filing jointly generally, but not always, produces substan-
     tial tax savings. But a “[couple] filing a joint return are
     jointly and severally liable for all tax for the taxable year
     (not merely the amount shown on the return), including
     interest, additions for negligence, and fraud penalties if
     applicable.” The right of election under the federal tax
     code and the possible exposure to liability have prompted
     several courts to hold that a trial court cannot order a
     party to file a joint return.
         ....
         Here, the statutory remedy is found in . . . § 42-365
     . . . . This statute authorizes a trial court to equitably
     distribute the marital estate according to what is fair and
     reasonable under the circumstances. Because § 42-365 is
     broad in its scope, we agree with the decisions of courts
     that hold a trial court may adjust its equitable division of
     the marital estate to account for the tax consequences of
     filing separate returns.
         Therefore, under § 42-365, we hold that if a party seek-
     ing an equitable adjustment presents the court with the
     tax disadvantages of filing separate returns, a trial court
     may consider a party’s unreasonable refusal to file a joint
     return. Evidence of a tax disadvantage would normally
     include the parties’ calculated joint and separate returns
     for comparison.15

15	
      Id. at 996-97, 1001, 815 N.W.2d at 533, 536.
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          Nebraska Supreme Court A dvance Sheets
                  299 Nebraska R eports
                     WESTWOOD v. DARNELL
                       Cite as 299 Neb. 612

   We do not opine today on whether evidence other than a
completed joint tax return could serve as sufficient evidence
of a tax disadvantage. In this instance, Westwood has failed to
introduce any evidence, apart from her and Darnell’s separate
tax returns and her testimony that the tax consequence would
have been different, to support her contention regarding the
consequences of a joint filing. Westwood’s third and final
assignment of error is without merit.
                       CONCLUSION
  The decision of the district court is affirmed.
                                                    A ffirmed.
  Wright, J., not participating.
