The State of Nebraska REALLY wants you to get married.

If you pass away while owning real property in Nebraska or owning other assets while being a resident of Nebraska, the state wants money.  Cleverly avoiding the term “death tax,” Nebraska is one of six states that imposes an inheritance tax.  Put differently, 44 states feel that folks should not be penalized for inheriting from family or friends.

Up until 2023, the rates were 1% after an exemption of $40,000 for immediate family and their lineal descendants (parents, siblings, kids, and kids of kids), 13% after an exemption of $15,000 for family with at least a degree of separation (uncles, aunts, nieces, or nephews), and 18% after an exemption of $10,000 for everybody else.  Spouses and charities are not taxed at all.  In 2023 these rates were changed to 1% above $100,000, 11% above $40,000, and 15% above $25,000.

This is clearly an improvement although the underlying policy thoughts have not changed.

Nebraska does recognize exception to “unrelated beneficiaries get hosed.”  If the decedent took on a parental role to a person, that person can be treated as a child for Inheritance tax purposes.  A similar exemption does not exist for spouses.  If, for example, a widower finds a companion who shares life with him and perhaps later takes on a caretaker role, supporting their partner in the twilight of his life – that person will be taxed as a stranger, not a spouse.

Aside of the obvious fix of “I guess, just get married,” if this is your situation, you may want to consider some more specialized estate planning.  Vandenack Weaver Truhlsen is made up of experts and thought leaders in this field and can assist with your planning process to make sure that the people important to you, the people you love, will not be penalized.