A Nebraska living trust holds your assets in trust while you have full use and control over them during life and then distributes them after your death. A revocable living trust (also called an inter vivos trust) offers many protections and benefits that may be a good fit as part of your estate planning.
Living Trusts in Nebraska
A living trust in Nebraska allows you as the grantor to place your assets into the ownership of a trust. You select a trustee who manages the assets for your benefit during your lifetime. Most people select themselves as trustee, but you can choose anyone. Once the trust is established, you will like want to move as many of your assets as possible into the trust. There are some assets that cannot be transferred such as retirement accounts. The trust is revocable, meaning it can be changed at any time by you during your lifetime. You can even eliminate it completely. An irrevocable trust is one that cannot be changed once it is created.
You select a successor trustee who will manage the trust after your death. This trustee also has the responsibility of dispersing your assets to your beneficiaries according to the terms you have set in the trust.
One of the benefits of a trust is that it allows you to pass your assets to your beneficiaries without going through the probate process, a court procedure in which a will is approved and acted upon. The probate process takes months and requires the expenses of an executor and attorney, as well as the payment of court fees. Nebraska uses the Uniform Probate Code, so its probate process is considered fairly straightforward. An expedited and inexpensive process is available for estates worth less than $50,000, which may make more sense than a trust for estates of this size, simply based on cost. When you pass your assets with a will, your assets are distributed to your heirs as soon as probate concludes. When you use a trust, your assets can be distributed to your beneficiaries immediately upon your death, whereas with a will nothing can happen until probate concludes. If you own property in more than one state, your living trust allows you to avoid property in all of the states.
Do I Need a Living Trust in Nebraska?
Your living trust Nebraska offers privacy that is not available with a will. A trust is not made public record or taken through a court proceeding like a will and thus the names of your beneficiaries, the assets in the trust, and the provisions of the trust are never revealed publicly. A trust is also much more difficult to contest, so you can have confidence your wishes will be carried out.
Control is another important protection offered when you create a living trust in Nebraska. Although your assets are technically owned by the trust, you continue to use them as you normally would. Nothing in your daily life changes and you remain in control. After your death, the terms you have put in place in the trust continue to control your assets. They are managed by the trustee and distributed at the specific times and dates you select. If you use a will to transfer your assets, they are all transferred when the will is probated. A trust allows you to space out distributions to occur at times you are comfortable with, such as beneficiaries’ birthdays.
A revocable living trust protects you should you become mentally incapacitated. All of your assets are already controlled, owned, and managed by the trust and a conservatorship proceeding is likely unnecessary. Your financial life is protected by the trust.
Living Trusts and Estate Taxes in Nebraska
Living trusts do not exempt your assets from estate taxes, except in special situations. Nebraska does not apply inheritance tax when you leave assets to your spouse. $40,000 is exempt when you leave assets to children or siblings and $15,000 is exempt for gifts to aunts and uncles or nieces and nephews. All other gifts are exempt when below $10,000. Above these amounts, state inheritance tax applies. Federal estate tax applies to estates worth more than $5 million. A marital trust, also known as a QTIP or AB trust, avoids estate or inheritance tax by transferring assets from the deceased spouse to the surviving spouse. A living trust does not shield assets from Medicaid or creditors.
How to Create a Living Trust in Nebraska
Creating a living trust in Nebraska is a two-step process. First you create and sign the trust document in front of a notary public. You complete the trust by transferring ownership of assets into it. This last step is essential. A living trust may be the answer to many of your estate planning issues. A trust can offer privacy and control that cannot be achieved through other methods.
If you're ready to create a living trust, LegalZoom can help. Start by answering a few simple questions. LegalZoom will review your answers and send your complete living trust package by mail.