New to estate planning? You’re in the right place. A living trust is a legal document that holds your family’s assets so they pass directly to your loved ones — no probate court, no delays, no public record. That’s the core idea.
If you’re just starting to figure this out, I’d suggest reading Having the Estate Planning Talk with Your Parents first — it walks through the whole picture and how to get the conversation started. Then come back here for the Nebraska-specific rules.
Already know the basics? Keep scrolling — everything below is specific to Nebraska.
You’re not alone in this. As someone who went through the estate planning process with my own aging parents, I know the weight of these conversations — the awkwardness, the guilt, the fear that you’re not doing enough or doing it too late. Take a breath. You’ve found the right place, and Nebraska has some rules you genuinely need to understand before you plan.
Here’s the headline: Nebraska is one of only six states that imposes an inheritance tax — and it’s the only state in America where that tax is administered entirely by counties, not the state government. The county attorney reviews your paperwork, the county court holds a hearing, and the county treasurer collects the payment. It’s a system unlike anything else in the country.
In 2023, Nebraska enacted LB 310, the most significant inheritance tax reform in decades — raising exemptions and cutting rates for remote relatives and non-related beneficiaries. But the tax still catches families who aren’t prepared, especially those leaving assets to anyone outside the immediate family. A close friend inheriting $200,000 still owes over $26,000 in inheritance tax.
The good news: Nebraska has no state estate tax, a modern UPC-based probate system with both formal and informal tracks, TOD deeds for real property (especially important for farm families), and dynasty trusts have been available since 2002. The bad news: Nebraska has no tenancy by the entirety and no domestic asset protection trusts.
Here’s everything you need to know about estate planning in Nebraska — no legal jargon, just clear answers from a son who’s been through it.
Nebraska’s Inheritance Tax: County-Administered and Class-Based
Nebraska has an inheritance tax — not an estate tax. The tax falls on each beneficiary based on their relationship to the person who died. Your surviving spouse pays zero. Your children pay just 1% above a $100,000 exemption. But a friend, unmarried partner, or step-relative? Up to 15% with only a $25,000 exemption. The relationship determines everything.
Nebraska’s inheritance tax is governed by Neb. Rev. Stat. §77-2001 to §77-2037. After LB 310 reform (effective January 1, 2023), the current rates are:
Nebraska Inheritance Tax Classes and Rates (Post-LB 310)
| Category | Who’s Included | Exemption | Tax Rate |
|---|---|---|---|
| Surviving Spouse | Spouse of decedent | Fully exempt | 0% |
| Class 1 | Parents, grandparents, siblings, children, lineal descendants, and their spouses | $100,000 | 1% on excess |
| Class 2 | Aunts, uncles, nieces, nephews, their descendants and spouses | $40,000 | 11% on excess |
| Class 3 | Everyone else — friends, unmarried partners, step-relatives, non-charitable organizations | $25,000 | 15% on excess |
| Under Age 22 | Any beneficiary under 22 at date of death, regardless of class | Fully exempt | 0% |
| Charities | Charitable organizations | Fully exempt | 0% |
What LB 310 Changed (Effective January 1, 2023)
| Class | Before LB 310 | After LB 310 | Change |
|---|---|---|---|
| Class 1 exemption | $40,000 | $100,000 | +$60,000 |
| Class 1 rate | 1% | 1% | No change |
| Class 2 exemption | $15,000 | $40,000 | +$25,000 |
| Class 2 rate | 13% | 11% | -2 points |
| Class 3 exemption | $10,000 | $25,000 | +$15,000 |
| Class 3 rate | 18% | 15% | -3 points |
| Under-22 exemption | None | Full exemption | New |
What the tax costs your beneficiaries:
| Inheritance Amount | Class 1 (Child) | Class 2 (Niece) | Class 3 (Friend) |
|---|---|---|---|
| $100,000 | $0 | $6,600 | $11,250 |
| $200,000 | $1,000 | $17,600 | $26,250 |
| $500,000 | $4,000 | $50,600 | $71,250 |
How County Administration Works (Unique to Nebraska)
This is what makes Nebraska’s inheritance tax unlike any other state:
- The personal representative (or trustee, if assets pass through a trust) prepares an inheritance tax worksheet listing all assets and beneficiaries
- The county attorney reviews and approves the worksheet — they represent the county and the state in inheritance tax matters (§77-2018.02)
- A petition is filed with the county court requesting an order determining and assessing the inheritance tax
- The county court sets a hearing (2–4 weeks after filing) and notice is published in a legal newspaper
- The court enters an order determining the tax owed by each beneficiary
- Payment goes to the county treasurer — not the state — of the county where the decedent resided
Deadline: The inheritance tax must be paid within 12 months of the date of death (§77-2010). Interest accrues from the date of death on any unpaid balance.
Why this matters for your family: The inheritance tax generates approximately $84 million annually for Nebraska’s 93 counties — making it a significant revenue source for county government. This county-revenue dependency is the primary reason further reform has been politically difficult (LB 468 failed on a 31-11 cloture vote in 2025, needing 33). The tax isn’t going away anytime soon.
What’s Exempt from Inheritance Tax
- Life insurance proceeds payable to a named beneficiary
- Employee benefit plan payments
- Homestead allowance and family maintenance allowance
- Property passing to the surviving spouse
- Property passing to a beneficiary under age 22
- Property passing to charitable organizations
Statute: Neb. Rev. Stat. §§77-2001 to 77-2037
Nebraska Probate: A Modern UPC System
Nebraska adopted the Uniform Probate Code (UPC), codified at Neb. Rev. Stat. §30-2201 et seq. — one of approximately 18 states to do so. The UPC provides a streamlined framework with options for families at every complexity level.
Three Probate Tracks
| Type | When Used | Court Involvement | Timeline |
|---|---|---|---|
| Small estate affidavit | Personal property ≤$100,000 or real property ≤$100,000 | Minimal — affidavit only | 30+ days after death |
| Informal probate | No disputes, straightforward estates | Minimal — registrar processes | Several months |
| Formal probate | Will contests, disputes, complex creditor issues | Full court oversight | 6–18+ months |
Small estate affidavit (§§30-24,125 and 30-24,126): If the total value of all personal property (or all real property) doesn’t exceed $100,000, an affidavit can transfer the property without opening a probate estate. At least 30 days must have passed since death, and no application for appointment of a personal representative can be pending.
Key details:
- Jurisdiction: County court of the county where the decedent resided
- Creditor claims period: 4 months from notice publication (§30-2485)
- Personal representative compensation: Reasonable compensation — no statutory percentage (§30-2481)
- Attorney fees: No statutory schedule; typically less than 2–3% of estate value
Two Trust Types in Nebraska
Nebraska adopted the Nebraska Uniform Trust Code (NUTC), codified at Neb. Rev. Stat. §§30-3801 to 30-38,115. The NUTC provides a comprehensive framework based on the Restatement (Third) of Trusts.
Revocable Living Trust
- Avoids probate — assets pass directly to beneficiaries without court involvement
- You maintain full control — revocable and amendable during your lifetime
- Privacy — trust assets don’t become part of public court records
- Incapacity protection — successor trustee steps in without needing a court-appointed guardian
- Avoids ancillary probate — critical for Nebraska families with property in other states
- Works alongside TOD deeds — trust handles the full plan, TOD deeds handle specific properties
- Does NOT avoid inheritance tax — beneficiaries still owe tax based on their class
Irrevocable Trust
- Once established, you give up control — the trade-off for tax and protection benefits
- ILIT (Irrevocable Life Insurance Trust) — provides liquidity to cover inheritance tax for Class 2/3 beneficiaries
- Medicaid planning — can protect assets if established 5+ years before applying
- Nebraska does not have DAPTs — self-settled trusts get no creditor protection
- Dynasty trusts available: Since 2002, Nebraska has allowed perpetual trusts when the governing instrument opts out of the Rule Against Perpetuities and the trustee has power to sell (§76-2005(9))
- Trust decanting available: Nebraska adopted the Uniform Trust Decanting Act in 2020 (§§30-4501 to 30-4529)
Nebraska Rules at a Glance
Probate Rules
- Court system: County Court (UPC-based)
- Administration: Informal (standard) or formal (contested/complex)
- Small estate affidavit: Personal property ≤$100,000 or real property ≤$100,000
- Creditor claims period: 4 months from notice publication
- Typical timeline: Several months (informal) to 1+ years (formal)
- Personal representative compensation: Reasonable — no statutory percentage
- Attorney fees: No statutory schedule; typically <2–3% of estate value
Tax Rules & Property
- Inheritance tax: Class-based (0% / 1% / 11% / 15%) — county-administered
- No state estate tax
- No gift tax
- Common law (separate property) state
- TOD deeds: Available (§§76-3401 to 76-3423) — especially important for farmland
- Joint tenancy: Available with explicit survivorship language
- No tenancy by the entirety
- Homestead exemption: $120,000 / 160 acres rural or 2 lots urban (§40-101)
- Trust income tax: Up to 5.20% (2025+)
TOD Deeds: Nebraska’s Farm-Friendly Probate Avoidance Tool
Nebraska enacted the Uniform Real Property Transfer on Death Act effective January 1, 2013 (§§76-3401 to 76-3423). TOD deeds are widely used in Nebraska, especially for agricultural and farm property transfers.
How Nebraska TOD Deeds Work
- Must be signed before two disinterested witnesses AND a notary public
- Must be recorded with the register of deeds within 30 days of signing — otherwise it’s not valid
- Fully revocable during the owner’s lifetime — you can change your mind, sell the property, or record a new deed
- The beneficiary has no interest in the property until the owner’s death
- If the owner is also a joint tenant and dies first, the TOD deed has no effect — surviving joint tenants take
For farm families: A TOD deed is often the simplest way to keep farmland out of probate. A farmer can record a TOD deed naming their children as beneficiaries, continue farming the land for the rest of their life, and the property passes directly at death — no probate, no trust needed for that specific asset.
The limitation: A TOD deed handles one property and one set of beneficiaries. For families with multiple properties, complex distributions, or incapacity planning needs, a revocable living trust provides the comprehensive solution that a TOD deed alone cannot.
Important for married couples: Nebraska does not recognize tenancy by the entirety. Married couples who own property together hold it as either joint tenants or tenants in common — neither provides the automatic creditor protection that tenancy by the entirety offers in other states.
Official Sources
NE Dept of Revenue — Inheritance Tax · §77-2004 — Class 1 Rates · §77-2005 — Class 2 Rates · §77-2006 — Class 3 Rates · §30-3801 — Uniform Trust Code · §76-3402 — TOD Deeds · Nebraska Judicial Branch — Estates · Nebraska State Bar Association
What Estate Planning Costs in Nebraska
| What You’re Paying For | Typical Range in Nebraska | When You’d Use It |
|---|---|---|
| Simple will | $300 – $800 | Single person, straightforward assets, all beneficiaries are Class 1 |
| Revocable living trust (individual) | $1,500 – $3,500 | Individual wanting to avoid probate and plan for incapacity |
| Revocable living trust (married couple) | $2,500 – $5,000 | Married couple — comprehensive probate avoidance |
| Full estate plan package (trust + will + POA + healthcare directive) | $2,500 – $6,000 | Most families — this is what you actually need |
| Farm/ranch estate plan | $3,500 – $10,000+ | Agricultural families with land, equipment, and succession planning |
Omaha/Lincoln vs. rural Nebraska: Attorney fees are generally higher in the metro areas. Rural Nebraska practitioners typically fall toward the lower end of these ranges. Agricultural estate planning is a well-established specialty across the state.
The math on TOD deeds vs. trusts for farm families: A TOD deed for a single parcel costs $200–$500 to prepare and record. If you have one farm and two children, a TOD deed may be all you need for the real property. But if you have multiple parcels, equipment, grain in storage, operating accounts, and incapacity concerns, a full trust-based estate plan at $4,000–$6,000 is the comprehensive solution.
Want to understand exactly what you’ll pay? Many Nebraska estate planning attorneys offer free or reduced-cost initial consultations. The Nebraska State Bar Association has a lawyer referral service that can connect you with trust and estate specialists. Find Nebraska estate planning attorneys below.
With a Trust vs. Without (Probate) in Nebraska
| Factor | With a Living Trust | Without (Probate) | Why It Matters |
|---|---|---|---|
| Timeline | Weeks to a few months | Several months to 1+ years | Informal probate is efficient but still takes time |
| Cost | $1,500–$6,000 (one-time trust creation) | Attorney fees (typically <2–3% of estate) + filing costs | Trust costs are one-time; probate costs recur each generation |
| Privacy | Completely private | Public record — will and filings accessible | Trust keeps assets and beneficiaries confidential |
| Court involvement | None | Required — even informal probate involves the registrar | Any dispute triggers formal proceedings with full court oversight |
| Real estate | Property in trust passes immediately | Probate or TOD deed (if recorded) | TOD deeds handle individual parcels; trusts handle the whole plan |
| Out-of-state property | No ancillary probate needed | Separate probate in each state | Important for families with property in Iowa, Kansas, Colorado, or vacation states |
| Incapacity protection | Successor trustee steps in seamlessly | Court-supervised guardianship/conservatorship needed | Guardianship is public, expensive, and emotionally difficult |
| Inheritance tax | Does NOT avoid inheritance tax | Same — tax applies either way | A trust avoids probate but does NOT change inheritance tax liability |
Estate Planning Readiness Checklist for Nebraska
Estate Planning Readiness Checklist — Nebraska
Check each item you feel confident about. Your progress is saved automatically.
Most families begin exactly where you are. Here are the best next steps:
- What Is a Living Trust? — the complete beginner's guide
- Having the Estate Planning Talk — how to start the conversation
- How to Avoid Probate — why this matters
You have a solid foundation. Fill in the remaining gaps:
- Funding Your Trust — how to retitle assets
- The 5 Documents Every Family Needs
- Estate Tax & Gift Tax Guide
You understand the fundamentals and you're prepared to work with a professional. The next step is finding an estate planning attorney who knows Nebraska law.
Common Estate Planning Mistakes in Nebraska
Nebraska has the highest inheritance tax rate in the nation — 18% for remote relatives and unrelated heirs (those outside the immediate family and lineal line). Even “close” relatives like nephews and nieces face rates up to 13%. The revenue goes directly to counties, making reform politically difficult.
Unlike estate tax (paid by the estate), Nebraska’s inheritance tax is paid by each individual heir — and the rate depends on their relationship to the deceased. Non-spouse heirs can face significant tax bills.
A trust only avoids probate for assets that have been retitled into it. An unfunded trust is just an expensive stack of paper. Real estate, bank accounts, and investments all need to be moved into the trust’s name.
A will does not avoid probate — it goes through it. A will tells the probate court what you want, but the court still controls the process. Only a trust, joint ownership, beneficiary designations, and certain deeds bypass probate entirely.
Retirement accounts (401k, IRA) and life insurance pass by beneficiary designation — not by your will or trust. Outdated designations (like a former spouse) override everything else in your estate plan.
The best way to avoid these mistakes? Work with an estate planning attorney who knows Nebraska law. A qualified attorney will catch the state-specific issues that generic online advice misses.
Other Important Planning Tools in Nebraska
Healthcare Directives
Nebraska provides two primary advance directive documents:
- Health Care Power of Attorney (§30-3408) — appoints an agent to make healthcare decisions when you cannot. Effective any time you can’t make your own decisions, not limited to end-of-life situations.
- Living Will (Rights of the Terminally Ill Act, §§20-401 et seq.) — specifies which life-prolonging treatments you want or don’t want. Applies only when you have a terminal condition and cannot communicate.
Execution requirements: Must be signed and dated by the principal, in front of two adult witnesses OR before a notary public. Witness restrictions apply — neither witness can be a life/health insurance provider, and the agent named in the document cannot serve as a witness.
Learn more about healthcare directives →
Durable Power of Attorney (§§30-4001 to 30-4045)
Nebraska adopted the Uniform Power of Attorney Act effective January 1, 2013. Key features:
- Durable by default — a POA survives the principal’s incapacity unless it says otherwise
- Must be acknowledged before a notary public to be valid (§30-4005)
- Covers real property, personal property, financial accounts, business operations, taxes, and gifts
- Third-party acceptance provisions require institutions to honor a valid POA
Learn more about powers of attorney →
Surviving Spouse’s Elective Share (§30-2313)
Nebraska follows the original 1969 UPC elective share model. The surviving spouse can elect to take up to one-half (50%) of the augmented estate, regardless of what the will provides. The augmented estate (§30-2314) includes the probate estate plus certain lifetime transfers made during the marriage — designed to prevent disinheritance through inter vivos gifts.
The election must be filed within 9 months after the date of death or 6 months after probate of the will, whichever expires later.
Important: Nebraska uses a flat 50% elective share rather than the sliding scale (based on length of marriage) that some UPC states use. This is particularly relevant for second marriages and blended families.
Long-Term Care Considerations
Nebraska Medicaid covers long-term nursing home care with strict asset limits ($4,000 for an individual). The look-back period is 5 years (60 months). Nebraska’s estate recovery program (§68-919) pursues recovery from estates of recipients who were 55 or older. Recovery does not apply if there is a surviving spouse, child under 21, or blind/disabled child. Funeral expenses take priority over Medicaid recovery claims.
Nebraska’s $120,000 homestead exemption provides meaningful creditor protection for the family home. For additional asset protection beyond the homestead, irrevocable trusts established more than 5 years before applying for Medicaid are the primary planning tool.
Learn more about long-term care planning →
Find a Nebraska Estate Planning Attorney
Find a Nebraska Estate Planning Attorney
Nebraska families face a unique combination: a county-administered inheritance tax that hits non-family beneficiaries at up to 15%, no tenancy by the entirety for married couples, and a flat 50% elective share that’s especially relevant for blended families. Whether you’re in Omaha, Lincoln, or rural Nebraska — and especially if your family includes farmland, non-Class 1 beneficiaries, or assets in multiple states — professional guidance is how you protect what your family has built.
Use the directories below to find a qualified estate planning attorney in your area, or email us and we’ll point you in the right direction.
Where are you in this journey?
- My parents are getting older — just starting to think about this
- We need a plan now — ready to take action
- Settling an estate — dealing with a parent’s passing
Nebraska attorney directories:
- Nebraska State Bar Association
- NSBA — Lawyer Referral Service
- American College of Trust and Estate Counsel (ACTEC) — Find a Fellow
- National Academy of Elder Law Attorneys (NAELA)
Questions to Ask Before You Hire a Nebraska Estate Planning Attorney
- How many estate plans do you create per year, and what percentage of your practice is trust and estate work?
- My parents’ estate includes beneficiaries in different inheritance tax classes — can you walk me through the tax exposure for each beneficiary?
- How does the county inheritance tax process work, and will you handle the worksheet filing with the county attorney?
- Do you recommend a trust or TOD deeds for our farmland — or both? What’s the right combination?
- What’s included in your flat fee (trust, pour-over will, POA, healthcare directive, trust funding)?
- Will you help with funding the trust — retitling deeds, bank accounts, and investment accounts?
- My parents own property in [Iowa/Kansas/Colorado] — how do you handle multi-state planning?
- Do you handle agricultural estate planning and farm succession? (if applicable)
Recent Nebraska Updates
- January 2023 — LB 310 (Inheritance Tax Reform): The most significant inheritance tax change in decades. Class 1 exemption tripled from $40,000 to $100,000. Class 2 exemption raised to $40,000, rate cut from 13% to 11%. Class 3 exemption raised to $25,000, rate cut from 18% to 15%. New full exemption for beneficiaries under age 22.
- May 2025 — LB 468 (Further Reform — Failed): Would have moved toward a flat 1% rate for close relatives and 7% for others, replacing lost county revenue through increased fees. Failed on a 31-11 cloture vote (needed 33). The bill technically remains alive but did not advance further in 2025.
- 2025 — LR13CA (Constitutional Amendment — Pending): Proposed amendment to prohibit the state and counties from levying an inheritance tax. Would require both legislative passage and voter approval.
- January 2025 — Iowa Inheritance Tax Repeal: Neighboring Iowa’s inheritance tax officially ended January 1, 2025 — increasing pressure on Nebraska as one of the remaining six inheritance tax states.
- November 2020 — Trust Decanting Act: Nebraska adopted the Uniform Trust Decanting Act (LB 808), allowing trustees to transfer assets between trusts to update terms. Notice to qualified beneficiaries is required.
- January 2013 — TOD Deeds Available: The Uniform Real Property Transfer on Death Act took effect, giving Nebraska families (especially farmers) a new probate avoidance tool for real property.
Last reviewed: February 2026
Last updated: February 2026. I review Nebraska’s estate planning rules quarterly and update this page whenever laws change. Bookmark it.
Go Deeper: Estate Planning Guides
| Guide | What You’ll Learn |
|---|---|
| Living Trusts: The Complete Guide | What a living trust is, how it works, and whether your family needs one — the foundation |
| How to Avoid Probate | Every method to keep your family out of court — trusts, TOD accounts, joint tenancy, and more |
| Having the Estate Planning Talk | How to start the hardest conversation your family will ever have — with scripts and strategies |
| Estate Tax Planning | Federal and state estate taxes, gift tax exclusions, and the step-up in basis explained |
| How to Fund Your Trust | The step everyone forgets — how to actually move your assets into your trust |
| The 5 Documents Every Family Needs | Trust, will, powers of attorney, healthcare directive — the complete package |
| Protecting Your Parents’ Legacy | Long-term care, Medicaid, blended families, and the threats nobody warns you about |
| Compare State Estate Planning Rules | See how your state compares on probate costs, estate taxes, and trust-friendly features |