How a living trust in Nebraska may offer your family a ray of hope

What is a living trust?

A living trust is a legal body that maintains particular financial and material possessions for the benefit of one or more other parties. Because it is made while you, the owner or grantor, are still alive, it is called "living." However, you can nominate anybody you believe would honor his or her fiduciary duty to administer your assets following your desires.

The trust agreement specifies your beneficiaries, what they will get after your passing, and when. You can make provisions for someone's maintenance or postpone the distribution of assets until an heir reaches a specific age. In addition, a living trust is commonly not included as a public record; it offers greater privacy than a will.

Making a trust does not require funding. You only need a small amount of money to start your trust, and you can add as many assets as you have later. Even funding your trust after your death is an option. Depending on your needs and worries, each option has some advantages.

Revocable living trusts

Revocable trusts are a common part of estate plans. This type of living trust is always subject to change or revocation (cancellation). As the "trustee" of your trust, you may designate yourself easily. This means the trust and its assets remain under your control as long as you are alive. You'll also appoint a "successor trustee" in your trust instrument who will run the trust after your death and distribute the trust's assets to your beneficiaries. If you set up a shared living trust, as married couples frequently do, your successor trustee would take over once both spouses have passed away.

Irrevocable living trusts

Irrevocable trusts cannot be changed or canceled once established. Irrevocable trusts are effective tools for achieving particular objectives, such as lowering taxes, but they necessitate renunciation of ownership and management of trust assets.

Some examples of assets that can be added as trust assets in a living trusts document:

• Partnership in a business;
• Real estate;
• Securities, such as bonds.
• Expensive jewelry;
• Valuable furniture;
• Antiques and family heirlooms;
• Expensive art;
• Valuable collections, such as coin collections;
• Copyright interests;

How does a living trust in Nebraska work?

In Nebraska, living trusts enable you, the grantor, to transfer ownership of your assets to a trust as a part of his/her estate plan. You appoint a successor trustee to look after the trust property for your benefit while still alive. Most people choose themselves to be trustees, although anyone is acceptable.

As soon as the revocable trust is created, you should transfer as many assets as possible into the trust. Retirement accounts are among the assets that cannot be transferred. The trust is a revocable living trust, meaning you can modify it anytime. You could even entirely get rid of it. However, once established, an irrevocable trust cannot be altered.

After passing, the trust and trust assets are managed by a successor trustee you appoint. The distribution of your assets to your beneficiaries following the conditions you have established in the trust is another duty of this trustee.

One advantage of using a trust is leaving your assets to your beneficiaries without going through the probate process. Probate is a legal process by which a will is acknowledged and carried out. Months-long probate proceedings need hiring an executor and an attorney and paying court costs. Nebraska's probate procedure is thought to be pretty simple because it follows the Uniform Probate Code. For estates under $50,000, a quick and affordable approach is available.

When you pass away with a will, your assets are given to your heirs after the probate process. With a trust, your assets can be transferred to your beneficiaries immediately after your death, but with a will, nothing can be done until the probate process is over. Your living trust enables you to avoid property in all the states if you own property in multiple states.

Why do you need a living trust in Nebraska?

Setting up a living trust is essential to transfer your possessions to your beneficiaries. It will spare them time, trouble, and money after your passing. Property left in a will (rather than a living trust) may be held in probate court for months or even years, resulting in lengthy court processes, costs, and solicitors' fees. In contrast, assets left in a trust can frequently be given to your beneficiaries immediately without legal counsel.

The Uniform Probate Code can simplify the probate procedure, and Nebraska has fully implemented it. In other words, Nebraska's probate process may not be as complicated as in other states. Additionally, Nebraska provides "small" estates with a streamlined probate process. If any of the following apply, your inheritors may choose to avoid probate entirely and employ a significantly quicker affidavit (sworn statement) process, if:

• $50,000 or less is the total value of your personal property after deducting your debts, or
• Your Nebraska real estate is worth $50,000 or less overall.

Suppose the amount of your estate is below a specific threshold (such as the homestead allowance, family allowance, exempt property, funeral costs, and medical costs associated with your most recent illness). In that case, your estate may be able to use a simple and speedy type of probate known as "summary administration."

You might not need to set up a living trust in Nebraska if one of these alternatives is likely accessible. A will may also be deemed sufficient in Nebraska due to the state's comparatively straightforward probate process compared to other states. Still, creating a Nebraska living trust has a few vital benefits.

A living trust is not required to transfer real estate in Nebraska if you use a transfer-on-death deed. This deed can keep your house out of probate without the help of a living trust in Nebraska.

Do you still need a will if you set up a living trust in Nebraska?

You will indeed still require a will. This may be confusing, as the purpose of living trusts is to fulfill the requirements for a will and avoid probate. However, you should still create a will for either one or both of the reasons listed below.

• A will can help you to assign a guardian for minor children. You cannot designate a guardian for your minor children through a trust. You should make a will and select a guardian if you have little children.
• A will can help you consider any assets you haven't given into your trust yet. People frequently create trusts but fail to formally transfer ownership of assets to the trust. Sometimes, after creating their trust, people acquire or inherit assets and forget to transfer property or are unaware that they should include those assets as the trustee of their trust. In either case, the assets won't be allocated following the trust's rules. To specify how properties that are not included in the irrevocable trusts should be divided between beneficiaries or heirs, you need to have a will as a backup.

If you don't make a will, as established by Nebraska state law, your closest relatives will inherit any property that isn't transferred via your living trust or another way (such as joint tenancy).

How much would it cost you to set up a Nebraska living trust?

The cost of setting up a trust primarily relies on the process you use. Depending on whether you hire a lawyer on an hourly or project basis, costs might potentially reach $1,000 or more. Some online programs cost less than $100 if you wish to keep prices down. The additional charges are linked to transferring assets to the trust.

A living trust is a legal entity that includes a legal document. Thus, it must be precise. So it is very advised to choose a knowledgeable attorney experienced in handling a client's estate plan and the trust documents. This approach will assist you in avoiding the numerous risks associated with DIY estate preparation.

How to set up a Nebraska living trust

In most states, creating a living trust is very similar. Depending on where you live, you may need to be aware of a few laws and conditions. These are the steps to follow when drafting a living trust in Nebraska:

Select the type of trust

Most individuals favor revocable living trusts over irrevocable ones because they can keep control of their estate, shift assets out, and even dissolve the trust entirely. If you are married, you should probably create a joint trust, but if you got married later and have distinct assets, you could want to create two separate trusts.

Choose assets

Choose the assets you wish to include in the living trust and collect the necessary documents. Bank accounts, brokerage accounts, and certificates of deposit (CDs) are a few examples.

Designate a trustee

Select a trustee to act on your behalf in managing the trust. You can designate yourself as the trustee, but you'll also need to name a replacement if you pass away.

Create the trust document

You should think about having a lawyer assist you with this, but you can also create the trust document on your own using specialized software.

Sign the agreement

A notary public and witnesses must sign the trust agreement.

Retitling your assets will allow you to transfer them into your trust. You can perform this on your own, but it's advised that you enlist the aid of a specialist to guarantee that it's done correctly.

Can you lower your estate taxes through a living trust in Nebraska?

Except in certain circumstances, living trusts do not exempt your assets from estate taxes. Only estates costing more than $5 million to nearly $12 million are taxable under the federal estate tax. The federal estate tax exemption, popularly known as the death tax, is $11.4 million for single people and $22.8 million for married couples. There is no state estate tax in Nebraska.

However, if your estates are worth nearly $12 million in value (or if your and your spouse's estate value is close to $24 million), you might be able to establish a more complex trust (such as an AB trust) to lower or avoid federal estate taxes. A marital trust, or QTIP or AB trust, can help a spouse by transferring ownership of assets from the deceased spouse into the surviving spouse's name.

This way, the surviving spouse can avoid estate or inheritance tax. A living trust in Nebraska won't affect your estate tax unless you have a very substantial estate. (However, since the exemptions established by the Trump Tax Plan are expected to expire in 2025, it is advisable to monitor them.)

No inheritance tax will be paid when you leave assets to your spouse in Nebraska. When leaving assets to your children or siblings, $40,000 is excluded, and you can donate up to $15,000 to your aunts, uncles, nieces, and nephews. Below $10,000, all additional contributions are exempt. Nebraska is one of the multiple states that levy a state inheritance tax on gifts that exceed these sums. Also, remember that a living trust does not protect assets from Medicaid or creditors.