Nebraska Inheritance Tax

As you may know, Nebraska levies an inheritance tax upon beneficiaries of a decedent who owned Nebraska property.  As background, the Nebraska inheritance tax is a state law but the tax itself is paid to the county in which the property is located.  The inheritance tax is applicable to real and personal property.  That means tax is due on items such as cash, vehicles, and real estate.  The inheritance tax is also due on life insurance proceeds if the proceeds are paid to the estate.

How much will you owe in inheritance tax?  It depends upon your relationship with the decedent.

  • If you are a surviving spouse or charity, no inheritance tax is due.
  • If you are an immediate relative, defined as parents, grandparents, siblings, children (including children legally adopted), any other lineal descendent such as a grandchild (including those legally adopted), any person to whom the decedent for not less than ten years prior to death stood in the acknowledged relation of a parent, or the spouse or surviving spouse of any such persons, a 1% inheritance tax is due and each person receives a $40,000 exemption from the inheritance tax.
  • If you are a remote relative, such as an aunt, uncle, niece or nephew related by blood or legal adoption, or other lineal descendants of the same, or the spouse or surviving spouse of any of such persons, a 13% inheritance tax is due and each person receives a $15,000 exemption from the inheritance tax.
  • If you do not fall into the above categories, a 18% inheritance tax is due and each person receives a $10,000 exemption from the inheritance tax.

The inheritance tax worksheet is due 12 months after the decedent’s death and is submitted to the county court where the decedent resided or where the property is located.  And the tax is due regardless of whether you or the decedent was a Nebraska resident.   The question is whether the property was located in the Nebraska.  If the property is in Nebraska, the tax is due.

Don’t let the inheritance tax take you and/or your beneficiaries by surprise.  We’re happy to provide more information, especially for Nebraska’s farmers and ranchers; you just have to contact us!

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