Nebraska is one of just six states in the U.S. that employs an inheritance tax. Aside from this, though, the state has a fairly typical set of inheritance and intestate succession laws that mostly dictate how an estate is inherited if there is no will. Below we provide a comprehensive look at Nebraska inheritance laws. But if you want guidance to help with your estate planning, SmartAsset’s free advisor matching tool can pair you with financial advisors who serve your area.
Does Nebraska Have an Inheritance Tax or Estate Tax?
For Nebraskans, your specific relation to the decedent is what will determine how your inheritance from the estate is taxed. This differs from estate taxes in that they are based on what the heir receives, rather than the entirety of the estate prior to any inheritances. More specifically, these taxes go as follows:
|Nebraska Inheritance Tax|
|Class||Who it Includes||Tax Rates and Exemptions|
|Class 1||Parents, siblings, children, grandparents and any spouses/descendants of these relatives||1% on any value over $40,000|
|Class 2||Aunts, uncles, nieces, nephews and any spouses/descendants of these relatives||13% on any value over $15,000|
|Class 3||All other heirs||18% on any value over $10,000|
Nebraska has no estate tax.
Other Necessary Tax Filings
The Nebraska inheritance tax isn’t the only tax you’ll possibly need to file on behalf of either the decedent and his or her estate. For example, you’ll need to pay attention to the following filings:
- Final individual federal and state income tax returns: each due by tax day of the year following the individual’s death
- Federal estate/trust income tax return: due by Tax Day of the year following the individual’s death
- Federal estate tax return: due nine months after the individual’s death, though an automatic six-month extension is available if requested prior to the conclusion of the nine-month period
- This is required only of individual estates that exceed a gross asset and prior taxable gift value of at least $12.06 million ($24.12 million for couples) as of 2022
While a return for a decedent is filed via his or her social security number, an estate needs its own set of identification. In order to make this a reality, the IRS requires you to register for an employer identification number (EIN). The federal government allows you to register online, by fax or via mail.
Dying With a Will in Nebraska
The legal term for dying with a valid will is testate, though each state has its own set of requirements for what makes a will legitimate. In Nebraska, a will must be handwritten or typed up, signed by the decedent and signed by two witnesses who physically watched the decedent’s signature. Spoken wills are not permitted by the state.
It’s also a good idea to name an executor in your will. This person will carry out what you’ve put in writing in your will. Ideally, this should be someone who knows you, your family and the property you own, at least to some degree.
Should you meet these stipulations, your wishes are likely to be followed exactly as you’ve laid them out in your will. Because of this, most inheritance laws don’t apply to this situation.
Dying Without a Will in Nebraska
An intestate decedent is an individual who passes away without leaving behind a valid will instructing how his or her property should be divvied up. In the event this is how your estate is categorized after you die, the intestate succession laws of Nebraska will lay out who your property will be inherited by. But since you won’t have named a personal executor, the state will take care of it for you.
When a will is testate, you can give any type of property to whoever you want, since you have final say. However, when you’re intestate, the state divides your property into two categories: real property and personal property. Real estate, like land and a home, are considered real property, while everything else falls under personal property.
The Probate Process in Nebraska Inheritance Law
Probate in Nebraska may be a necessary process regardless of if the decedent died with or without a valid will. This is put into practice specifically to protect the rights of decedents, either via a valid will or intestate succession law. These proceedings are categorized under three different types: contested estates, uncontested estates and small estates.
- Contested estate: A party can contest the probate will, and a judge will listen to both sides before making a decision.
- Uncontested estate: All possible heirs agree to intestate succession, and the probate court proceeds as per the law.
- Small estate: Estates worth less than $50,000 can be filed as a small estate to skip probate.
Spouses in Nebraska Inheritance Law
When the decedent leaves behind children, how much the surviving spouse is entitled to is dependent on who the children’s parents are, according to Nebraska inheritance laws. If every one of the children are that of the decedent and surviving spouse, the spouse inherits $100,000 of the estate and half of the estate’s balance. But should any of the decedent’s children be from a person other than the spouse, his or her share will fall to just half of the estate.
If a decedent has one or more parent survive them, the spouse will receive the first $100,000 of the intestate estate, along with half of whatever’s leftover, according to Nebraska inheritance laws. Only then are the parents given the balance. However, if none of the above scenarios are applicable, the spouse gets the whole estate.
In Nebraska, surviving spouses that are left out of a decedent’s will are still given inheritance rights to a piece of the spouse’s property. More specifically, this share will be based on whatever the spouse would’ve received under intestate succession.
Children in Nebraska Inheritance Law
In only one situation under Nebraska intestate succession law will children receive all of their parent’s property when they die: if there’s no surviving spouse. But as many people will leave behind a widow or widower, the children’s shares alter depending on if the surviving spouse is their parent, according to Nebraska inheritance laws.
For example, if all of the decedent’s children are from his or her current marriage, the children are only given whatever’s left after the spouse inherits the first $10,000 of the estate and half of the balance. But when at least one of those children are from a past relationship, the children are given half of the estate to split between them.
|Intestate Succession: Spouses & Children|
|Inheritance Situation||Who Inherits Your Property|
|– If spouse, but no children or parents||– Entire estate to spouse|
|– If spouse, and all children are of decedent and spouse||– First $100,000 of the estate to spouse |
– 1/2 of the estate’s balance to spouse
– Leftover split evenly among children
|– If spouse, and some or none of the decedent’s children are of the spouse||– 1/2 of the estate to spouse |
– 1/2 of the estate split evenly among children
|– If children, but no spouse||– Entire estate split evenly among children|
|– If spouse and parent(s), but no children||– First $100,000 of the estate to spouse |
– 1/2 of the estate’s balance to spouse
– Leftover to parent(s)
When a child is biologically that of the decedent, his or her inheritance rights are the strongest of any type of child, according to Nebraska inheritance laws. This applies regardless of if the child was born before the decedent’s death or posthumously. Adopted children also fall under this umbrella, as they’re considered full-fledged children under Nebraska law.
Stepchildren and foster children may spend a large amount of time in your home. But this does not guarantee them any sort of rights to your inheritance though, unless you’ve legally adopted them.
Grandchildren do not automatically receive inheritances under intestate succession, according to Nebraska inheritance laws. In fact, they’re only eligible to inherit from a decedent’s estate if the decedent’s child (their parent) has predeceased them.
Children who are born within the confines of your marriage are assumed to be biologically yours. On the other hand, if an illegitimate child is to receive a part of your intestate estate, paternity must be proven beyond a reasonable doubt, according to Nebraska inheritance laws.
Unmarried Individuals Without Children in Nebraska Inheritance Law
The entire point of intestate succession is for your property to be inherited by a member or members of your near or distant family. So what happens to your property if you have no surviving children or spouse? Nebraska law lays out the following stipulations:
|Intestate Succession: Extended Family|
|Inheritance Situation||Who Inherits Your Property|
|– If parents, but no spouse and children||– Entire estate to parents|
|– If no parents||– Estate split evenly among siblings|
|– If no siblings||– Estate split evenly among paternal/maternal grandparents|
|– If no grandparents||– Estate split evenly among paternal/maternal aunts and uncles|
|– If no aunts and uncles||– Estate to nearest lineal relative, such as cousins|
In Nebraska, items within an estate that are not inherited will escheat to the state. This means that the county where the decedent lived or where the property was located will take control of said real and/or personal property.
Non-Probate Nebraska Inheritances
Certain oft-seen accounts and assets that a person might have in his or her possession upon death will not pass through probate or intestate succession. For the most part, this is because they typically already have a beneficiary listed. These include:
- IRAs and 401(k)s
- Pay-on-death bank accounts and investments
- Transfer-on-death registered vehicles
- Joint tenant property
- Payouts for life insurance
- Living trust property
However, you can choose to name your estate as the beneficiary on these accounts, which will subject them to intestate succession, other inheritance laws or your personal will.
Other Situations in Nebraska Inheritance Law
In order to become a legal heir to a decedent’s estate in Nebraska, you must live for more than 120 hours, or five days, after the individual’s death, according to Nebraska inheritance laws.
Should a possible intestate or testate heir murder a decedent, he or she will lose all inheritance rights to the estate.
Relatives who share solely a half-blood relationship with you will inherit the same as your full-blooded relatives in Nebraska.
The immigration status of heirs will not affect their inheritance rights. This applies regardless of if they’re an illegal alien or non-citizen.
Resources for Estate Planning
- Managing your own estate and handling the intricacies of inheriting money from the estate of a loved one who has passed away includes many complex factors to consider. It can be such an overwhelming venture that you might want some help, especially in understanding Nebraska inheritance laws. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- It’s possible to build your own estate plan on your own. However, there are a handful of DIY mistakes you’ll want to avoid making when doing so.
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