Nebraska Estate Planning Tax Laws: A Comprehensive Guide

1. Federal Estate Tax: The federal estate tax is a tax imposed on the transfer of a person’s estate upon death. The federal estate tax applies to estates with a taxable value exceeding $13.61 million per individual (for the year 2024). Unused exemptions can be carried over to the surviving spouse in many circumstances. The law is scheduled to “sunset” and return to the pre-2018 tax laws but adjusted for inflation. It would equate to approximately one-half of the current amount. However, it’s essential to keep in mind that federal estate tax laws are subject to change, so consulting with an estate planning attorney and a tax professional for the most up-to-date information is advisable.
2. Nebraska Inheritance Tax: Nebraska imposes an inheritance tax. This tax is based on the amount of property transferred to beneficiaries and is paid by the recipient of the inheritance, not the estate itself. The Nebraska inheritance tax rates vary depending on the relationship between the deceased and the beneficiary, with closer relatives often receiving preferential treatment or exemptions. Spouses are exempt from inheritance tax.
3. Nebraska Estate Tax: The Nebraska estate tax has been repealed for estates of decedents dying on or after January 1, 2007. Therefore, Nebraska does not currently have a state-level estate tax.
4. Gift Tax: Federal law imposes gift taxes on certain transfers of property during a person’s lifetime. The federal gift tax applies to gifts exceeding $18,000 per individual per year (for the year 2024), but there are exceptions and exclusions for certain types of gifts, such as gifts to spouses and qualified charitable organizations. The $18,000 limitation, however, is often misunderstood. That is the amount you can give to any and as many individuals as you want without completing a gift return. If you gift above $18,000 you are still okay, you just have to report the amount that exceeds the $18,000 on a gift tax return. Hold tight, you are still okay. The gifts do not create a tax until your gifts over your lifetime exceed the federal estate tax (for 2024, $13.61 million). When you die, the gifts in excess of the annual will be added to your estate value at the time of your death to determine if the combination of gifts and estate amounts exceed the federal estate tax. If so, there will be a tax on the excess. Nebraska does not have its own separate gift tax, so individuals primarily need to consider federal gift tax implications.
5. Estate Planning Strategies: Despite the repeal of the Nebraska estate tax, estate planning remains essential for minimizing taxes, protecting assets, and ensuring the orderly distribution of wealth. Common estate planning strategies in Nebraska may include creating wills, establishing trusts, utilizing lifetime gifts, implementing charitable giving strategies, and structuring beneficiary designations to maximize tax efficiency and achieve specific estate planning goals.

It’s important to note that tax laws are subject to change, and estate planning should be tailored to individual circumstances and objectives. Consulting with both a qualified estate planning attorney and tax professional familiar with federal and Nebraska tax laws and regulations is crucial for developing an effective estate plan that addresses your unique needs and goals.

The attorneys at Adams & Sullivan work with beneficiaries, executors and trustees to make sure that your wishes are followed, and that a precise distribution of assets and property is executed. If a family dispute erupts over an irregularity such as a last-minute change to a will or allegations of undue influence or incompetency, Adams & Sullivan can seek a negotiated outcome or aggressively litigate in your best interests in probate court.

• Wills and Living Trusts
• Living Wills
• Special Needs Trusts
• Revocable or irrevocable trusts
• Durable and medical powers of attorney
• Guardianships and conservatorships
• Strategy for charitable giving
• Asset protection