The 2018 Annual Estate Planning & Probate Institute The Nuts …€¦ · The 2018 Annual Estate...

The 2018 Annual Estate Planning & Probate Institute

The Nuts and Bolts of Probate

March 23, 2018

UNO Thompson Center, Omaha, NE

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8:30 am Tax ApportionmentJonathan L. Grob, McGrath North Mullin & Kratz, PC LLO, Omaha

9:00 am Life Insurance and Estate Administration Mark Weber and Jeffrey D. Sharp, SilverStone Group, Inc., Omaha

9:45 am Nebraska Inheritance Tax Jesse D. Sitz, Baird Holm LLP, Omaha

10:30 am Break

10:45 am Accountings, Federal and State Income Tax Issues (Form 1041s)

Daniel I. Dittman, Erickson & Sederstrom PC, LLO, Omaha

11:15 am Creditors’ ClaimsRick A. Damkroger and Benjamin J. Wischnowski, O’Neill, Heinrich, Damkroger, Bergmeyer & Shultz, P.C., L.L.O., Lincoln

12:00 pm Lunch (included with your registration)

1:00 pm Informal Probate and Appointment Proceedings (Open Strategies, Special Administrators)

Robert D. Stowell and Jessica L. Piskorski, Stowell, Geweke & Piskorski, P.C., L.L.O., Ord

1:30 pm Formal Testacy and Appointment Proceedings

Robert D. Stowell and Jessica L. Piskorski

2:00 pm Foreign Representatives and Ancillary Administration

Kara E. Brostrom, Baylor Evnen Curtiss Grimit & Witt LLP, Lincoln

2:30 pm Break

2:45 pm Personal Representatives Appointment, Control, and Termination of Authority; Duties and Powers

Matthew D. Baack, Skalka & Baack Law Firm, Hastings

3:30 pm Engagement Agreements Jeffery T. Peetz, Endacott Peetz & Timmer, PC LLO, Lincoln

4:15 pm Intestacy: What are Your Options After the Fact: Post-Death Family Agreements; Alternative Valuations for Taxing Purposes; and Disclaimer

Ramzi Hynek, Rembolt Ludtke, LLP, Lincoln

4:45 pm Adjourn

The NSBA Real Estate, Probate and Trust Law Section presents

2018 Annual Estate Planning & Probate InstituteThe Nuts and Bolts of Probate

Friday, March 23, 2018 • 8:30 am - 4:45 pmUNO Thompson Center • 6705 Dodge St, Omaha, NE 68182

**Also available for viewing via live webcast.***Nebraska MCLE #153192. Iowa MCLE #286569. 6.5 CLE hours, including 1 hour ethics. (Regular/live)

*Nebraska MCLE #153191. Iowa MCLE #286570. 6.5 CLE hours, including 1 hour ethics. (Distance learning)*Only 5 distance learning CLE hours may be claimed per year for Nebraska.*

*This program has been approved for 6.0 hours of CPE, including 1 hour of ethics, by the NE Board of Public Accountancy.*

THANK YOU TO OUR SPONSORS

Faculty Bios

Jonathan Grob, McGrath North Mullin & Kratz, PC LLO: Jonathan Grob is a shareholder at McGrath North and the Co-Chair of the Tax and Estate Planning Practice Group. Mr. Grob earned his J.D. from the University of Nebraska and his LL.M. in Taxation from New York University. He is an adjunct professor at Creighton University School of Law and has earned his Chartered Advisor in Philanthropy designation from the American College. His practice focuses on federal and state tax planning, including the tax aspects of acquisitions, divestitures and joint ventures; business entity formation and reorganization; succession and estate planning; and probate and trust administration.

Mark Weber, Principal, SilverStone Group: Mark Weber has over 30 years in the industry as a financial

consultant to business owners and executives on personal financial and estate planning. He is widely recognized

for his work in both business transition planning and philanthropic estate planning. Mr. Weber obtained his Juris

Doctor from Creighton University School of Law.

Jeffrey Sharp, Principal, SilverStone Group: Jeffrey Sharp has over 30 years of experience providing families with comprehensive wealth management and retirement planning solutions. Mr. Sharp received his Juris Doctor from Creighton University School of Law.

Jesse Sitz, Partner, Baird Holm LLP: Jesse D. Sitz represents clients with respect to corporate and partnership tax matters, estate planning and probate matters, federal and state tax disputes, and tax-exempt matters. He received his Juris Doctor from the University of Minnesota Law School. Mr. Sitz earned the designation of Chartered Advisor in Philanthropy (CAP®) through the American College.

Daniel Dittman, Shareholder, Erickson & Sederstrom, PC LLO: Daniel Dittman is a member of Erickson & Sederstrom’s Estate, Probate and Trust Law Division. His practice consists of estate and gift planning, trust administration, probate of client estates, and federal and state taxation. Mr. Dittman received his Juris Doctor from Creighton University School of Law.

Rick Damkroger, Shareholder, O’Neill, Heinrich, Damkroger, Bergmeyer & Shultz, PC LLO: Rick Damkroger’s

practice areas are business and estate planning, estate and trust administration, and real estate transactions. He

received his Juris Doctor from University of Denver.

Benjamin Wischnowski, O’Neill, Heinrich, Damkroger, Bergmeyer & Shultz, PC LLO: Ben Wischnowski’s

practice areas are business and estate planning, business and commercial transactions, corporate law, estate and

trust administration, and real estate. He received his Juris Doctor from the University of Iowa.

Robert Stowell, Stowell, Geweke & Piskorski, P.C., L.L.O.: Robert Stowell‘s practice areas include estate

planning, agricultural law, probate, trust administration, and real estate. He received his Juris Doctor from the

University of Nebraska College of Law.

Jessica Piskorski, Stowell, Geweke & Piskorski, P.C., L.L.O.: Jessica Piskorski spent seven years practicing

collection law prior to joining the firm, where she now primarily practices estate planning, probate, and trust

administration. She received her Juris Doctor from the University of Nebraska College of Law.

Kara Brostrom, Baylor Evnen Curtiss Grimit & Witt LLP: Kara Brostrom is a member of the Trusts and Estates

practice group. Her practice includes estate planning and estate administration. Ms. Brostrom received her Juris

Doctor from the University of Nebraska College of Law.

Matthew Baack, Skalka & Baack Law Firm: Matt Baack’s practice focuses primarily on real estate

transactions, including 1031 like-kind exchanges; business and corporate law; estate planning; and estate and probate administration. He received his Juris Doctor from the University of Nebraska College of Law.

Faculty Bios

Jeffrey Peetz, Endacott Peetz & Timmer, PC LLO: Jeffrey Peetz’s practice is focused on estate and trust planning and administration, including litigation matters and business and wealth succession planning. He also works with all types of clients from individuals and small business owners to larger sized agricultural operators and community bank owners, advising them on contractual matters related to the operation of a successful business, including business succession planning. Mr. Peetz received his Juris Doctor from Creighton University School of Law and is a fellow with the American College of Trust & Estate Counsel. Ramzi Hynek, Partner, Rembolt Ludtke, LLP: Ramzi Hynek’s practice focuses on estate planning, succession planning, and developing family wealth transfer plans that minimize taxation while achieving each family’s unique needs and goals. She also represents individual and corporate personal representatives and trustees in the administration of estates and trusts. Ms. Hynek received her Juris Doctor from the University of Nebraska College of Law.

Tax Apportionment Jonathan L. Grob

McGrath North Mullin & Kratz, PC LLO

March 23, 2018

UNO Thompson Center

Omaha, NE

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Apportionment, Collection, and Payment ofEstate, Generation Skipping, and Nebraska

Inheritance Taxes

Jonathan L. GrobMcGrath North

[email protected]‐633‐9560

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I. Death Tax Overview

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Federal Estate Tax

● Exemptions– $11,180,000 per person (2018 – 2025)

– $5,500,000+ per person (2026 - ?)

– Inflation Adjusted

– Portable Between Spouses

● Tax Rate– 40%

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Generation Skipping Tax● Applies to:

- Direct Skips, Taxable Terminations, Taxable Distributions

● Exemptions– $11,180,000 per person (2018 – 2025)

– $5,500,000+ per person (2026 - ?)

– Inflation Adjusted

– NOT Portable Between Spouses

● Tax Rate– 40%

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Nebraska Inheritance Tax

● Tax Rates– 0% (spouse and charity)– 1% (siblings, descendants, ancestors)– 13% (aunts, uncles, nieces, nephews)– 18% (all others)

● Exemptions– $40,000 (siblings, descendants, ancestors)– $15,000 (aunts, uncles, nieces, nephews)– $10,000 (all others)

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II. Liability for Death Taxes

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Terms/Concepts

● Liability

– Identifies the person(s) who is/are required to actually pay tax.

● Apportionment/Reimbursement

– Identifies the person(s) who is/are required to ultimately bear the economic burden of the tax.

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Federal Estate Tax

● Primary Liability (IRC § 2002)

– “Executor”

• The term “executor” means the executor or administrator of the decedent, or, if none, any person in actual or constructive possession of any property of the decedent.

– Extent of liability

• The entire federal estate tax but not in excess of the value of the property in the possession of the “executor.”

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Federal Estate Tax● Transferee Liability (IRC § 6324)

– “Transferee”

• Spouses, tranferees, trustees, surviving tenants, persons in possession of property by reason of a power of appointment, and beneficiaries, who receive or, on the date of the decedent’s death, possess, property included in the decedent’s gross estate for Federal estate tax purposes.

– Extent of liability

• The entire federal estate tax but not in excess of the value of the property in the possession of the “transferee.”

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Generation Skipping Tax

● Generally– Taxable Distribution

• Imposed on transferee.

– Taxable termination• Imposed on trustee.

– Inter vivos direct skip• Imposed on transferor.

– Testamentary direct skip• Imposed on executor.

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Nebraska Inheritance Tax

● Broad (§ 77-2003)

– “All” heirs, legatees, and devisees, personal representatives, other recipients of property subject to tax, and trustees shall be liable for the tax.

– The tax is also a lien on the real property subject to tax until paid or terminated.

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III. Apportionment of Death Taxes

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• State Law (§ 77-2108)

– Equitably apportioned UNLESS

• Directed in the decedent’s will OR

• Directed in a written instrument executed intervivos

– Only applies to the “specific fund” dealt within such inter vivos instrument.

Federal Estate Taxes

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• Testator’s Intent

– Must be clear and unambiguous (In re Estate ofEriksen, 271 Neb. 806, 809 (2006)).

– This requires an express direction againststatutory apportionment.


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• Testator’s Intent– These are insufficient:

• “After the payment of my final debts, expenses ofadministration and taxes, I give and bequeath all of myproperty and estate to . . .”

• “I hereby direct that all of my just debts, funeral expensesand costs of administering my estate be paid out of mypersonal property.”

• “All inheritance, succession and estate taxes which maybe levied or assessed upon or with respect to anyproperty passing on account of my death, be first paid outof the property belonging to my estate.”


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• Equitable Apportionment

– In re Estate of Detlefs, 227 Neb. 531, 537 (1988).


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• Equitable Apportionment

– Income and remainder interests (§ 77-2108)

• Tax is charged to corpus withoutapportionment between income and remainderinterests.

– Charitable and Marital Interests (§ 77-2108)

• Tax is not charged against charitable andmarital interests.


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• Certain Federal Tax Statutes

– Should pre-empt state law when applicable.

– “Reimbursement” rights (like a property right).

– Deals with certain non-probate assets.


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• Federal Tax Statutes

– Reimbursement From Executor and Other Transferees(IRC § 2205)

• If tax is collected from a transferee or other person inpossession of property and that person pays more thansuch person’s share of the federal estate tax, thenreimbursement may be sought from the executor orother transferees.

• This provision does not preempt state law concerningapportionment and thus should complement state law.


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• Federal Tax Statutes– Reimbursement From Transferees

• IRC § 2206 – Life Insurance

– Executor may seek recovery for a portion of thefederal estate tax attributable to life insurance.

– Prorate deductions and credits.

– Does not apply to life insurance qualifying for themarital deduction.

– May be waived in Will.


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• IRC § 2207 – Powers of Appointment

– Executor may seek recovery for a portion of thefederal estate tax attributable to property subject to ageneral POA.


– Does not apply to property qualifying for the maritaldeduction.

– May be waived in Will.


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• IRC § 2207A – QTIP Marital Trust

– Recovery from persons receiving QTIP property (both trusteeand distributees).

– Recovery is for the incremental tax (no proration of deductionsand credits). Failure to assert is a deemed gift (and this maybe the case with the other statutes, though 2207A is express).

– May waive in Will or revocable trust of the surviving spouse.

– Best practice is to make a specific reference to the subchapterin which the statute is located (Title 26, Subtitle B, Chapter 11,Subchapter C).


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• IRC § 2207B – 2036 Property

– Recovery from persons receiving QTIP property (both trusteeand distributees).


– May waive in Will or revocable trust.

– Best practice is to make a specific reference to the subchapterin which the statute is located (Title 26, Subtitle B, Chapter 11,Subchapter C).


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• State Law– Neb. Rev. Stat. § 77-2108

• GST taxes are equitably apportioned in the samemanner as Federal estate taxes, and subject to thesame ability of the testator to modify the default rule.

• Federal Law– I.R.C. § 2603(b)

• Unless otherwise directed pursuant to the governinginstrument by specific reference to the generationskipping tax, the generation skipping tax is charged tothe property constituting the transfer.

Federal GST Taxes

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– Neb. Rev. Stat. § 77-2001, et. seq. (default)

• An obligation of the recipients.

• The tax rate and exemption amounts are tied to theclassification of the person receiving such property.

• The PR or trustee has the duty to deduct the tax fromthe property prior to its distribution to the beneficiaries.Neb. Rev. Stat. § 77-2011.

• For a trust with life estate / terms of years, theinheritance tax is charged against and paid out of thecorpus without apportionment between the remainderand life estate / term of years.

Nebraska Inheritance Taxes

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– Neb. Rev. Stat. § 77-2038 (decedent direction)

• The decedent’s will or any written instrument executedinter vivos (to the extent of the property dealt with insuch inter vivos instrument) may provide direction forthe apportionment of the Nebraska inheritance taxesassessed upon any of the decedent’s property.

Nebraska Inheritance Taxes

Questions?

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Jonathan L. GrobAttorney & Shareholder

McGrath NorthFirst National Tower

1601 Dodge Street, Suite 3700Omaha, Nebraska [email protected]

492-633-9560

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Jonathan L. Grob

Jon’s practice focuses on all aspects of Federal and state taxation, estate and gift planning, estate and trust administration, and corporate and business law. Jon regularly advises clients on basic estate planning as well as advanced estate planning techniques including grantor-retained annuity trusts, family limited liability companies, qualified personal residence trusts, intentionally defective grantor trusts, and irrevocable life insurance trusts. Jon has had responsibility for administering, negotiating, and settling numerous trust and estate matters on behalf of individuals, charities and fiduciaries, and regularly advises trust departments concerning all aspects of trust and estate administration and taxation. Jon has successively represented clients in obtaining favorable resolutions of tax cases in Iowa, Nebraska and at the Federal level, including income tax assessments, sales and use tax assessments, and assessments of Federal trust fund penalties. Jon has formed numerous entities and professional practices and has worked on entity reorganizations, mergers, sales and dissolutions. Jon regularly works on non-profit and tax exempt matters and advises private foundations, public charities, public universities, and charitable trusts.

Education:University of Colorado, Denver, B.S.B.A., cum laude, 2004University of Nebraska, J.D., with high distinction, 2007New York University, LL.M. (Taxation), 2013

Admitted:Nebraska, 2007Iowa, 2007U.S. District Court, District of Nebraska, 2007U.S. Tax Court, 2007U.S. Court of Federal Claims, 2007

Member: Omaha Estate Planning CouncilChartered Advisor in Philanthropy (CAP®)Adjunct Professor, Creighton University School of Law

Present AffiliationPartner, McGrath North, Omaha, NebraskaCo-Chair, Tax and Estate Planning Practice Group

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Chapter 24 - Apportionment, Collection, and Payment of Estate, Generation Skipping, and Nebraska Inheritance Taxes

Table of Contents

24-1 Introduction ..............................................................................................................847

24-2 Liability for Federal Estate Taxes ..........................................................................84724-2(a) Transferee Liability ........................................................................ 84724-2(b) Ten Year Lien .................................................................................. 848

24-3 Liability for Generation Skipping Taxes ................................................................84824-3(a) Transferee Liability ........................................................................ 848

24-4 Liability for Nebraska Inheritance Taxes ..............................................................848

24-5 Apportionment of Federal Estate Taxes ................................................................84924-5(a) State Law Controls ......................................................................... 84924-5(b) Determining the Testator's Intent .................................................... 85024-5(c) Calculation of “Equitable Apportionment” .................................... 85124-5(d) Income and Remainder Interests .................................................... 85124-5(e) Charitable and Marital Deduction .................................................. 85124-5(f) Transfer Tax Credits ....................................................................... 85224-5(g) Interest ............................................................................................ 852

24-6 Federal Statutes Impacting the Burden of the Federal Estate Tax .....................85224-6(a) Reimbursement For “Transferees” ................................................. 85224-6(b) Reimbursement Against “Transferees”........................................... 853

24-6(b)(1) Life Insurance ............................................................85324-6(b)(2) Powers of Appointment ..............................................85324-6(b)(3) Qualified Terminable Interest Property (QTIP) .........85424-6(b)(4) Property Included Under 2036 ...................................854

24-7 Apportionment of the Generation Skipping Transfer Tax ...................................855

24-8 Apportionment of the Nebraska Inheritance Tax .................................................855

24-9 Diffe ence in Various Appointment Statutes .........................................................856

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Chapter 24 - Apportionment, Collection, and Payment of Estate, Generation Skipping, and Nebraska Inheritance Taxes1

24-1 Introduction

The Federal estate tax is imposed on a decedent’s taxable estate under I.R.C. § 2001. Under current law, the Federal estate tax impacts decedents with taxable estates in excess of $11,180,000 (adjusted annually for inflation). Thus, the tax impacts only a small segment of the U.S. population. When the tax applies, however, it is onerous at a 40% tax rate. It is particularly harsh for decedents with illiquid estates such as farmers and small business owners.

The generation skipping transfer (“GST”) tax, in general terms, is imposed on transfers during life or at death that benefit people in generations two or more below the transferor / decedent. As with the Federal estate tax, the GST tax is also an onerous 40% and applies to generation skipping transfers in excess of $11,180,000 under current law (indexed annually for inflation).

Finally, the Nebraska inheritance tax generally applies to Nebraska residents and ranges from 1% to 18% depending on the relationship of the beneficiaries to the decedent, after taking into account exemptions ranging from $10,000 to $40,000.

24-2 Liability for Federal Estate Taxes

Under I.R.C. § 2002, the “executor” is primarily liable for the Federal estate tax. The regulations provide that the duty to pay Federal estate taxes applies to the entire tax, regardless of the fact that the gross estate consists of property which does not come within the possession of the executor or administrator. Treas. Reg. § 20.2002-1. The term “executor” means the executor or administrator of the decedent, or, if none, any person in actual or constructive possession of any property of the decedent. I.R.C. § 2203. In such case, the liability is limited to the extent of the value of property in such person’s possession. Treas. Reg. § 20.2002-1.

24-2(a) Transferee Liability

Notwithstanding the primary liability of the “executor”, I.R.C. § 6324(a)(2) imposes “transferee” liability on spouses, transferees, trustees, surviving tenants, persons in possession of property by reason of a power of appointment, and beneficiaries who receive or, on the date of the decedent’s death, possess property included in the decedent’s gross estate for Federal estate tax purposes. The transferee liability extends to the total value of property in the transferee’s possession, up to the amount of the Federal estate tax due.

1 Significant contributions were made to this Chapter by William J. Lindsay, Jr., the author of the prior version of this Chapter. Austin Bradley, a partner with McGrath North, also contributed to this Chapter’s completion.

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24-2(b) Ten Year Lien

Federal estate taxes are a lien upon property included in the decedent’s gross estate for 10 years from the date of death, until paid. I.R.C. § 6324(a)(1).

24-3 Liability for Generation Skipping Taxes

Under I.R.C. § 2603(a), liability for generation skipping transfer tax is imposed as follows: (a) in the case of a taxable distribution, liability is imposed on the transferee; (b) in the case of a taxable termination or a direct skip from a trust, liability is imposed on the trustee; (c) in the case of an inter vivos direct skip (not from a trust), liability is imposed on the transferor; and (d) in the case of a direct skip at death (not from a trust), liability is imposed on the executor.

24-3(a) Transferee Liability

I.R.C. § 2661 imposes transferee liability with respect to generation skipping transfer taxes in the same manner as the estate tax (see discussion above).

24-4 Liability for Nebraska Inheritance Taxes

The statute covering liability for Nebraska inheritance taxes is broad. Neb. Rev. Stat. § 77-2003 provides that “all” heirs, legatees, and devisees, personal representatives, other recipients of property subject to tax, and trustees shall be liable for the tax. The tax is also a lien on the real property subject to tax until paid or terminated.

Under Neb. Rev. Stat. § 77-2037, the lien of inheritance taxes ceases upon the first to occur of: (a) 10 years from the decedent’s death; (b) payment of the tax finally determined by the county court; (c) a court order releasing the tax lien (see Neb. Rev. Stat. § 77-2039); or (d) 5 years after the county court has determined and assessed the tax (provided a determination of the tax occurred within 10 years from the decedent’s date of death).

PRACTICE TIP: If real estate is to be sold prior to a final determination and payment of the Nebraska inheritance tax, title companies will generally accept a letter agreement from the personal representative or trustee promising to pay the Nebraska inheritance tax due from the proceeds of the sale and other assets of the decedent. In the author’s experience, it is important to advise clients of potential difficulties in closing on a real estate transaction prior to the final determination and payment of the inheritance tax and the possibility that a title company could refuse a letter agreement.

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24-5 Apportionment of Federal Estate Taxes

While the discussion above concerns who is liable for the payment of Federal estate tax, this section discusses the determination of who ultimately bears the economic burden of the tax – i.e., apportionment.

24-5(a) State Law Controls

State law governs the issue of apportionment of Federal estate taxes. See Riggs v. Del Drago, 317 U.S. 95 (1942); See also First Nat. Bank of Omaha v. U.S., 340 F.Supp. 232 (D. Neb. 1972), aff’d 490 F.2d 1054 (8th Cir. 1974).

Nebraska’s apportionment statute is Neb. Rev. Stat. § 77-2108 and it states as follows:

Whenever it appears upon any accounting or in any appropriate action or proceeding that a personal representative, executor, administrator, trustee, or other person acting in a fiduciary capacity has paid or may be required to pay any transfer tax levied or assessed under . . . any Federal estate or generation-skipping transfer tax law heretofore or hereafter enacted upon or with respect to any property required to be included in the gross estate of a decedent or total amount of generation-skipping transfer under the provisions of any such law, the amount of the tax so paid or payable, except as otherwise directed in the decedent's will or except in a case when by written instrument executed inter vivos direction is given for apportionment within the fund of the taxes assessed upon the specific fund dealt with in such inter vivos instrument, shall be equitably apportioned and prorated among the persons interested in the estate or transfer. Such apportionment and proration shall be made in the proportion as near as may be that the value of the property, interest, or benefit of each such person bears to the total value of the property, interests, or benefits received by all such persons interested in the estate or transfer, except that in making such proration, allowances shall be made for any exemptions granted by the law imposing the tax and for any deductions, including any marital deduction, allowed by such law for the purpose of arriving at the value of the net estate or transfer. In cases when a trust is created or other provision made by which any person is given an interest in income or an estate for years or for life or any other temporary interest in any property or fund, the tax on both such temporary interest and on the remainder thereafter shall be charged against and be paid out of the corpus of such property or fund without apportionment between remainders and temporary estates.

Therefore, under this statute, the testator’s intent controls the apportionment of Federal estate taxes. In the absence of a direction by the testator, the tax is “equitably apportioned.”

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If the testator desires to modify the result of Neb. Rev. Stat. § 77-2108, the testator must do so in the testator’s will or in an inter vivos instrument. Note, however, that any inter vivos instrument can only deal with taxes on property “dealt with” in such inter vivos instrument. The statutory language creates a concern that if the testator intends to direct apportionment of Federal estate taxes on assets that are not “dealt with” by the inter vivos instrument (such as a revocable trust), the direction in such instrument is invalid. For example, Federal estate tax may be imposed on a life insurance policy or a joint account. If the testator includes a general apportionment clause in the testator’s revocable trust that all Federal estate tax imposed at the time of the testator’s death should be paid by the testator’s residuary estate, but no such clause is included in the testator’s will, it appears that the life insurance beneficiary and surviving joint owner will be required to share in a portion of the Federal estate tax due under Nebraska law.

24-5(b) Determining the Testator's Intent

The Nebraska Supreme Court has noted that estate taxes will be apportioned under the default rule set out in Neb. Rev. Stat. § 77-2108 unless there is “clear and unambiguous direction to the contrary”; any ambiguities will be resolved in favor of equitable apportionment under the statute. In re Estate of Eriksen, 271 Neb. 806, 809 (2006). Thus, to make the default rule under Neb. Rev. Stat. § 77-2108 inapplicable, there must be an express direction against statutory apportionment. Id.

The Nebraska Supreme Court has held that the decedent’s intention as expressed specifically with regard to apportionment should be considered as a whole in determining if a bequest should be excluded from apportionment. Rasmussen v. Wedge, 190 Neb. 818 (1973). Specifically, the phrase “[a]fter the payment of my final debts, expenses of administration and taxes, I give and bequeath all of my property and estate to . . .” was determined to not be an apportionment clause and the Nebraska Supreme Court directed the default rule under Neb. Rev. Stat. § 77-2108 be applied. In re Estate of Eriksen, supra. The Court determined that this language only generally addressed the payment of taxes but did not address apportionment of taxes. Id. Similarly, “I hereby direct that all of my just debts, funeral expenses and costs of administering my estate be paid out of my personal property” was not sufficient to overcome the application of statutory apportionment. In re Estate of Benton, 191 Neb. 324, 328 (1974). The Court noted that:

. . . the statute is mandatory in its terms. It has been in effect since 1949 and unaltered since 1953. The will of the testatrix and all the codicils were prepared by Nebraska counsel after consultation with the testatrix and were executed in 1963 and later. If the testatrix had desired to direct that taxes of any kind should not be apportioned as provided by the statute, it would have been easy enough to say so clearly and unambiguously, but she did not do so.

Id. (emphasis added); See also In re Estate of Glaser, 217 Neb. 104 (1984) (holding that the following language could not overcome the apportionment statute: “all inheritance, succession and estate taxes which may be levied or assessed upon or with respect to any property passing on account of my death, be first paid out of the property belonging to my estate.”)

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PRACTICE TIP: For high net worth clients, it is important to discuss the issue of Federal estate tax apportionment. For some clients, the discussion may be relatively brief (e.g., the client leaves his or her estate equally to three children, and thus, the three should equally share in the payment of estate taxes). But for clients with complex plans (specific bequests, charitable beneficiaries, extended family recipients, etc.) the issues should be discussed and adequately addressed in the estate plan documents.

24-5(c) Calculation of "Equitable Apportionment"

In basic terms, the statute lays out the following formula for apportioning the tax:

In re Estate of Detlefs, 227 Neb. 531, 537 (1988).

The Nebraska Supreme Court has ruled that the apportionment statute cannot be applied until Federal estate taxes have been finally determined. See Eriksen, supra. Presumably, this also means that values as finally determined for Federal estate tax purposes should be used for purposes of applying the above formula. However, query whether a beneficiary could take the position that a different value should be used.

The county court in which the decedent’s probate proceeding is pending has jurisdiction over apportionment matters and when the court enters an order concerning apportionment, the Nebraska Supreme Court’s review is de novo on the record. Detlefs, supra.

24-5(d) Income and Remainder Interests

As is clear from Neb. Rev. Stat. § 77-2108, the tax on property subject to an income and remainder interest is charged to the corpus of the property and not separately apportioned between the income and remainder interests.

24-5(e) Charitable and Marital Deduction

As noted in Neb. Rev. Stat. § 77-2108, absent a different direction by the decedent, when applying the equitable apportionment formula detailed above, allowances must be made for expenses and deductions, including the marital deduction. As such, where a portion of a decedent’s estate passes to a spouse or to charity, and a portion does not, the statute would impose all of the Federal estate taxes on the non-marital / non-charitable recipients.

Value of Property Received by Interested Person

________________________ X Federal Estate = Apportioned ShareTotal Value Received by Tax of Estate Tax All Such Persons

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PRACTICE TIP: It is advisable to address apportionment in complex estate plans dealing with marital and/or charitable components. It should be noted that to the extent Federal estate taxes are paid from property passing to a spouse or charity, the corresponding marital or charitable deduction will be reduced. Therefore, it is advisable that the decedent’s estate plan specifically indicate that such taxes will not be paid from property passing to a spouse or charity.

24-5(f) Transfer Tax Credits

Under Nebraska Supreme Court precedent, Neb. Rev. Stat. § 77-2108 “does not require that allowances be made for credits given by the IRS against estate and gift taxes.” In re Estate of Detlefs, 227 Neb. 531, 538 (1988).

24-5(g) Interest

Unless the result produced would be inequitable, interest on transfer taxes should be apportioned in the same manner as the estate tax under Neb. Rev. Stat. § 77-2108. In re Estate of Detlefs, 227 Neb. 531, 544 (1988).

24-6 Federal Statutes Impacting the Burden of the Federal Estate Tax

24-6(a) Reimbursement For "Transferees"

As noted above, I.R.C. § 2002 indicates that the executor is primarily liable for Federal estate taxes. Thus, the I.R.S. can go after the executor for payment. Moreover, I.R.C. § 6324(a)(2) allows the I.R.S. to go after a broad group of persons commonly known as the “transferees”; in general, those people in possession of property subject to estate tax. In the event the tax is actually collected from the so-called “transferees”, I.R.C. § 2205 creates a right of reimbursement to the extent that a person other than a qualified executor or administrator is in possession of assets of the estate and has paid more than such person’s share of the Federal estate taxes. In such cases, I.R.C. § 2205 creates a reimbursement right for so-called transferees against the executor.

EXAMPLE: The Decedent dies with cash and investments worth $20,000,000. The personal representative (the Decedent’s daughter) takes control of the cash and investments. The Decedent’s will passes the probate assets equally to the Decedent’s two children (son and daughter). The Decedent also has a joint account worth $10,000,000 with rights of survivorship owned by the Decedent and the Decedent’s son (but fully funded by the Decedent). Assume the Federal estate tax is $12,000,000 and Neb. Rev. Stat. § 77-2108’s default rule applies. The personal representative does not pay the Federal estate tax when due. So, under I.R.C. § 6324(a)(2) the I.R.S. takes the entire $10,000,000 joint account from the Decedent’s son to pay the tax. Under Neb. Rev. Stat. § 77-2108, the son is only responsible for $8,000,000 of the estate tax ((($10mm probate estate + $10mm joint account) / ($30mm estate)) * $12,000,000 estate tax). Therefore, under I.R.C. § 2205, the son can seek reimbursement from the executor for $2,000,000. Similarly, if the personal representative distributed the entire $20,000,000 equally to son and daughter but did not pay the tax and the I.R.S. recovered all $12,000,000 from the son, then the son could seek reimbursement from the daughter for $4,000,000.

853

24-6(b) Reimbursement Against "Transferees"

While the statutes discussed below are reimbursement statutes, it should be noted that the personal representative / executor generally has an affirmative duty to seek recovery of estate taxes that are legally apportioned to property passing outside of the probate estate. Thus, in practical terms, if state law or the decedent’s estate plan apportions estate taxes to non-probate assets, then the Federal tax law provides the executor with a corresponding right to seek reimbursement for the payment of such tax from the probate estate. However, it should be clear that these statutes differ from true apportionment rules because the personal representative / executor is still responsible to pay the tax, but may seek reimbursement as discussed below.

24-6(b)(1) Life Insurance

I.R.C. § 2206 indicates that unless the decedent directs otherwise in his will, if estate tax is imposed on life insurance proceeds receivable by a beneficiary other than the executor, the executor is entitled to seek recovery for the portion of the estate tax attributable to such life insurance proceeds. This statute does not apply to proceeds receivable by a spouse when the marital deduction is applicable to such proceeds. Recovery could be made, however, from a charitable recipient, but the total tax liability would increase as a result of a reduction in the charitable deduction.

PRACTICE TIP: Waiving this recovery right must be done so in a will (“I hereby waive the right to reimbursement provided by I.R.C. § 2206”). This waiver should be exercised with caution. If a life insurance policy is large enough, this statute may be the only way to provide sufficient liquidity for payment of the tax, particularly if the life insurance policy is included under I.R.C. § 2042 from a retained incidents of ownership (where the personal representative / executor does not have control over the proceeds). On the other hand, where the decedent intended to zero-out his or her taxable estate by leaving the entire taxable estate to charity, but established an irrevocable life insurance trust arrangement for family members, the waiver of this right may be advisable to ensure any unanticipated Federal estate taxes are paid by the charity (instead of diminishing the family’s inheritance).

24-6(b)(2) Powers of Appointment

I.R.C. § 2207 indicates that, unless a decedent otherwise directs in his will, if property is included in the decedent’s estate because the decedent possessed a general power of appointment over such property under I.R.C. § 2041, the portion of the estate tax attributable to such property may be recovered by the executor. If there are multiple persons entitled to such property, the executor may recover proportionately from each such person. Like I.R.C. § 2206, this statute contains an exception for property qualifying for the marital deduction, but not for property passing to charity.

854

24-6(b)(3) Qualified Terminable Interest Property (QTIP)

I.R.C. § 2044 provides that if property previously qualified for the marital deduction under I.R.C. § 2056(b)(7), then such property is included in the gross estate upon the death of the surviving spouse. Thus, under this rule, property in a so-called “QTIP” trust is taxable upon the death of the surviving spouse.

I.R.C. § 2207A provides that the decedent’s estate shall be entitled to recover from “the person receiving” the property of the QTIP trust, the amount by which the total estate tax due as a result of the decedent’s death exceeds the amount of tax that would have been due had the QTIP trust property not been taxable upon the decedent’s death. Thus, the recovery right is for the incremental tax caused by inclusion of the QTIP property in the decedent’s gross estate. This means that while I.R.C. §§ 2206 and 2207 effectively prorate deductions and credits in determining the amount recoverable, I.R.C. § 2207A allows recovery for incremental taxes without the benefit of the estate’s deductions or credits.

Under Treas. Reg. § 20.2207A-1(d), with respect to trusts, the “persons receiving” the property include both the trustee and any person who has received a distribution of the trust property. The regulations further indicate that failure of an estate to exercise a right of recovery is treated as a transfer for Federal gift tax purposes of the unrecovered amounts from the persons who would benefit from the recovery to the persons from whom the recovery could have been obtained. Treas. Reg. § 20.2207A-1(a)(2). Presumably, this same result should apply to a waiver under I.R.C. §§ 2206 and 2207. The surviving spouse may waive the recovery right in the spouse’s will or revocable trust. I.R.C. § 2207A(a)(2); Treas. Reg. § 20.2207A-1(a)(2). The waiver must be specific; a general provision specifying that all taxes must be paid by the estate is not sufficient.

I.R.C. § 2207A(d) extends the reimbursement right specifically to penalties and interest attributable to the Federal estate tax.

24-6(b)(4) Property Included Under 2036

Similar to I.R.C. § 2207A, I.R.C. § 2207B contains a reimbursement right for property included in the gross estate by reason of I.R.C. § 2036. In general terms, this statute covers property transferred by the decedent for less than full and adequate consideration in which the decedent retained the possession or enjoyment of the property or the right to designate the persons who may possess or enjoy such property.

The reimbursement right provided for under I.R.C. § 2207B is the amount which bears the same ratio to the total estate tax as the value of the property included

855

under I.R.C. § 2036 bears to the taxable estate. The decedent may direct in the decedent’s will or revocable trust to waive the right of recovery under I.R.C. § 2207B. An exception to I.R.C. § 2207B also applies in the case of a qualified charitable remainder trust under I.R.C. § 664.

Like I.R.C. § 2207A, I.R.C. § 2207B(c) extends the reimbursement right specifically to penalties and interest attributable to the Federal estate tax.

24-7 Apportionment of the Generation Skipping Transfer Tax

Neb. Rev. Stat. § 77-2108 indicates that generation skipping transfer taxes are equitably apportioned in the same manner as Federal estate taxes, and subject to the same ability of the testator to modify the default rule. Similarly, under I.R.C. § 2603(b), unless otherwise directed pursuant to the governing instrument by specific reference to the generation skipping tax, the generation skipping tax is charged to the property constituting the transfer.

24-8 Apportionment of the Nebraska Inheritance Tax

The Nebraska inheritance tax is, by its terms, an obligation of the recipients of property from the decedent. See Neb. Rev. Stat. § 77-2001, et. seq. Indeed, the tax rate and exemption amounts are specifically tied to the classification of the person receiving such property. The personal representative or trustee has the duty to deduct the tax from the property prior to its distribution to the beneficiaries. Neb. Rev. Stat. § 77-2011. However, Neb. Rev. Stat. § 77-2008.02 provides that if a trust is created and a person is given a life estate or term of years, the inheritance tax is charged against and paid out of the corpus without apportionment between the remainder and life estate / term of years.

Notwithstanding the foregoing, Neb. Rev. Stat. § 77-2038 provides that the decedent’s will or any written instrument executed inter vivos (to the extent of the property dealt with in such inter vivos instrument) may provide direction for the apportionment of the Nebraska inheritance taxes assessed upon any of the decedent’s property.

856

24-9 Diffe ence in Various Apportionment Statutes

Statutes IRC 2206 IRC 2207 IRC 220A IRC 2207B NE 77-2108

Description Recipients of Life Insurance

Power of Appointment

Inclusion under

IRC 2041.

QTIP Trust in Surviving

Spouse’s Estate if

included under IRC 2044

Inclusion under IRC

2036.

Nebraska General

Equitable Apportionment

Covers Annuities No No If in QTIP

Trust No Yes

Considers Marital

DeductionYes Yes Yes, by its

nature No Yes

Considers Charitable Deduction

No No No

Yes, if it is in a Charitable Remainder

Trust

Yes

Considers Special Use Valuation

N/A

If an election is made for included property



Yes

Considers Applicable

CreditNo No No No No

Considers Exemptions No No No No Yes

Considers Other

CreditsNo No No No No

Includes Penalties

and Interest

Not in Statute, but

see Detlefs

Not in Statute, but

see DetlefsYes Yes Generally,

see Detlefs

Life Interest Tax on Corpus

No No No No Yes

Formula for Recovery Proportionate Proportionate

Takes amount of tax if in-

cluded, less tax if excluded

Proportionate Proportionate

857

Statutes IRC 2206 IRC 2207 IRC 220A IRC 2207B NE 77-2108

Description Recipients of Life Insurance

Power of Appointment

Inclusion under

IRC 2041.

QTIP Trust in Surviving

Spouse’s Estate if

included under IRC 2044

Inclusion under IRC

2036.

Nebraska General

Equitable Apportionment

Testator May Over-

rideYes Yes Yes Yes Yes

Preempts State Law Probably Probably Yes Probably N/A

Must be Waived by

WillYes Yes

No (waived by surviving

spouse)No No

If Not by Will, Must be Waived by Trust

N/A N/AYes (waived by surviving

spouse)Yes No

Need Special

Provision if Charity Involved

Yes Yes Yes

Only if not Charitable Remainder

Trust

No

Applies to Property

Not in Gross Estate

No No No No No

SpecificReference to Statute

Required to Waive

No No

Yes to subchapter in which section

is located

Yes to subchapter in which section is located

No

Failure to Exercise is a

GiftPossibly Possibly

Yes, see 20.2207A-

1(a)(2)Possibly Possibly

Decedent May Direct Recovery

Under Statute

Yes Yes Yes Yes Yes

858


Life Insurance and Estate Administration

Mark Weber

Jeffrey D. Sharp

SilverStone Group, Inc., Omaha, NE

March 23, 2018

UNO Thompson Center

Omaha, NE

1

1

Welcome

Life Insurance: Tips and Traps for the Probate Attorney

Nebraska Continuing Legal Education

Presented by

Jeffrey D. Sharp, JD, MBA, CFP®, CPWA®, CLUMark Weber, JD, MSFS, CLU, ChFC, CAP

March 23, 2018

Failure to ascertain the original purpose of the life insurance and confirm that need continues today

Best Practice Have in depth conversation on this topic with client

2

Failure to have a clear understanding when the policy is likely to “end” based on realistic assumptions

Best Practice Obtain from the insurance company:

“As Sold” illustration “In Force” illustration

“Alternative” illustrations (increased funding, lower death benefit…)

Downward Trend in Interest Rates

If the policy is “under-performing” failure to set client’s expectations as to realistic options

Best PracticeExplain to client downward trend in interest rates

Increase premiums Repay loans

Lower death benefit Accept more investment risk

3

Failure to determine if there is a loan against the policy before surrender or exchange

Best PracticeIf the client is uncertain, request from carriers:

Loan history Taxable gain projection

Making a gift or sale of a policy before determining the value the insurance company will report to the IRS on Form 712

Best PracticeIn advance of policy disposition

Agent makes verbal inquiry of insurance company Lawyer makes written “privileged” inquiry of insurance company

4

Today’s distribution of term life insurance

Full-time life insurance agents Financial planners

Bankers Property and casualty agents

Realtors Professional associations

Direct mail T.V.

Social Media Internet

Conversion Rights

What are the “conversion” rights on a term policy?

Why are they important?

How do they differ between policies?

Sample Conversion Riders

Insurance Company Conversion Description

John Hancock Earlier of the level term period or attained age 70. Yrs 1 – 4 to any single life permanent product; Yrs 5+ to product designated for conversion

Prudential – Essential Earlier of the level term period or age 65, but at least 5 years – to any individual permanent product

TIAA-CREF Earlier of the level term period or age 75 – to any M proprietary permanent product

Nationwide Earlier of level term period or before attained age 65 – to an individual whole life product

Lincoln Financial Anytime during the level term period or prior to age 70; whichever is earlier. Years 1 – 7 to any single life permanent plan; after 8 to any single life permanent plan made available for conversion

5

Hypothetical Fact Pattern

Jake, 50, healthy, attorney Law firm purchase $2,000,000 30-year level term

on Jake

Purpose:– Payout receivables

– Purchase interest in firm

– Pay off loans

– Replace production

– Hire/train successor

Insurable Interest

Does the law firm have an “insurable interest” in Jake’s life?

Johnson v. Nelson, 290 Neb 703 Nebraska Supreme Court – April 2015 case on “insurable interest”

In Nebraska, an “insurable interest… exists when the beneficiary because of relationship, either pecuniary or from the ties of blood or marriage, has reason to expect some benefit from continuance of the life of the insured.”

How much life insurance can the firm purchase on Jake’s life?

Multiple of Jake’s income Firm’s liability to Jake’s estate

Jake’s share of firm debt Jake’s contribution to firm profit

6

Assume Jake retires at age 65 and wants to buy the policy on his life from the firm

Does Jake have a legal right to purchase the policy? If yes, how is the value of the policy determined?

Assume Jake died while the firm owned the policy on his life. Must the firm pay income tax on the proceeds?

Assume the firm sold the policy on Jake’s life to the secondary market, how would the proceeds be taxed to the firm?

7

Annuity Exchanges –Into, Out of… From existing life insurance contract From existing annuity contract

To Long Term Care policy

Why Exchange?

Into….. No longer need life insurance contract but want to preserve cash and defer taxable gain upon surrender

Out of…… To exit an inferior existing annuity contract yet defer current taxation at surrender

Out of….. To add riders like LTC, Guaranteed Withdrawal Benefit (i.e. income for life) not available on existing contract

Out of….. Financial stability of insurance company has deteriorated

Annuities Taxation

Income Tax – IRC Section 72

Estate Tax – IRC Section 2039

Qualified Taxed pursuant to the normal qualified plan rules

Non-Qualified Ordinary Income on gains. If goal is accumulation, maybe not a good fit

FIFO unless annuitized. Gains first, then return of cost basis

If annuitized, Exclusion Rules apply (i.e. a portion of each payment is return of basis, gain)

Age 59 1/2 10% penalty applies except death, disability, Substantially Equal Periodic Payments (IRC 72(q))

Death benefit riders fully taxable (unlike life insurance) for income tax purposes

8

Annuities – The Cast of Characters

Owner – Can be an individual, trust, IRA. Can be joint owner in the case of non-qualified annuities

Annuitant – the measuring life for purposes of riders including income, LTC, death benefit, etc.

Beneficiary – The person or entity receiving any remaining account balance or income. Can have more than one beneficiary each with different distribution provisions

Annuity Types

Fixed Annuity – annual interest declared and credited Immediate Annuity – predictable current income for a period certain

(i.e. 20 years) or for life(s)

Variable Annuity – transparency of contract costs, rider costs, and fund costs– A security and a separate account asset

Account value not a general account asset of the insurance company

Riders are a general account promise of the insurance company

Annuity Types Cont.

Indexed Annuity – a method of calculating interest earned – Floors, caps, buffers and participation rates relative to an index

– General Asset of the Insurance Company

Qualified Longevity Annuities (QLAC) – Income Starts age 85 typically– Used in IRA’s primarily. Avoids RMD

– Permits other assets to be consumed or invested more aggressively

– Slow increase in demand/interest

– Qualified Plan sponsors slow to adopt out of fiduciary concerns

9

Annuity Riders

Death Benefit – various kinds – Equal to cumulative net cost (i.e. premium less distributions)

– Increase annually for fixed number of years, etc.

Guaranteed Income Benefit Riders (GIBR) – 3-5% depending on age of annuitant(s)

Guaranteed Withdrawal Benefit Riders (GWBR) – Variation of GIBR

Long Term Care Rider

Fact Patterns – Flags and Planning Pointers

Case 1: Exchange of life insurance or non-qualified annuity to new annuity, but income needs to begin within 180 days of exchange

Best Practice To qualify as non-taxable IRC 1035 change, must wait 180 days

before first distribution. Otherwise, entire gain is taxed

Exceptions:– Annuitize over a fixed period greater than 10 years, or

– Annuitize over the life expectancy of annuitant (or joint annuitants)

Fact Patterns – Flags and Planning Pointers Cont.Case 2: Existing non-qualified annuity has high cost, but valuable income or death benefit riders

Best Practice Surrendering annuity merely to reduce cost MAY NOT be advisable if

guaranteed income riders are valuable. Replacement investment strategy may require lower risk since no income guarantee backstop. Expected return of reduced risk investment strategy may be lower than the higher cost of keeping the annuity

Death benefit may be materially higher than contract surrender value

Don’t forget to factor taxes into the cost incurred to liquidate

10

Fact Patterns – Flags and Planning Pointers Cont.Case 3: Client owns annuity and is merely using to accumulate funds for later use/income

Best Practice: If the primary objective is accumulation, annuity may be an

inappropriate vehicle given that gains are subject to ordinary income rates. No opportunity for the lower capital gain tax regime

Placing the annuity in an IRA may make more sense. All distributions are taxed as ordinary income regardless

Fact Patterns – Flags and Planning Pointers Cont.Case 4: Client owns annuity, two children as beneficiaries, concerned about one being spendthrift

Best Practice: Use the carrier’s Restricted Payout beneficiary designation for the

spendthrift child and stipulate when principal is distributed. This is a good alternative to naming a trust as beneficiary and its higher tax regime

Thank you!

Nebraska Inheritance Tax Jesse D. Sitz

Baird Holm LLP, Omaha, NE

March 23, 2018

UNO Thompson Center

Omaha, NE

920


© 2017 Baird Holm LLP 1

Jesse D. Sitz, Esq.Baird Holm LLP

Determining Nebraska Inheritance Tax

Inheritance Tax—Generally

• Neb. Rev. Stat. sections 77-2001 to 77-2040

• Imposed on beneficiary's right to receive property from a decedent

• Rate is as high as 18%

Property Subject to Tax

• For Nebraska resident decedents:– All intangible property – All tangible property located in Nebraska

• For non-residents of Nebraska– All tangible property located in Nebraska

• Real estate/tangible personal property– Generally, intangibles not subject to tax


Example• EXAMPLE: Arizona resident dies. $2 million of

probate assets physically located in Arizona (real estate) and $5 million of intangible assets held in a revocable trust. A Nebraska bank is the trustee of the trust, and the trust is governed by Nebraska law.– Result: Arizona does not impose an inheritance tax or

estate tax. No property subject to Nebraska inheritance tax.

– What if the Arizona resident owns a SMLLC that owns Nebraska farmland?

Property Subject to Tax (cont'd)

• Gifts includible if included on Form 706– Made within 3 years of death– In excess of annual exclusion amount

• Joint property – To the extent that decedent originally

owned the property or contributed to acquisition of their interest

– No services

Property subject to tax (cont’d)

• Life estates retained by decedent• Life insurance "receivable by executor or

administrator."• Pain and suffering damages; other claims

arising because of pre-death events.• Property held in trust.• Most retirement benefits.


Valuation of Property

• "Clear value" or "fair market value"• Valued as of DoD

– Include accrued but unpaid items• Interest• Rent• Dividends

Valuation of Property (cont'd)• Powers of appointment

– GPOA• Taxable to person with power to exercise

– SPOA• Taxable as if received by beneficiaries

• Partial interests– Annuities, life estates, remainders, term of years– Determined Treas. Reg. § 20.2031-7(d) using 7520

rates

Valuation of Property (cont'd)– Contingent interests

• "dependent upon contingencies or conditions whereby they may be wholly or in part created, defeated, extended, or abridged"

• Three methods:– 1) “Assume the Worst”– 2) “Bond and Wait”– 3) “Probabilities Method”


Deductions

• Funeral costs• Expenses of last illness within six months

of death• Debts which the deceased person was

liable for at the time of death andwhich are in fact paid

• Federal estate tax paid

Deductions (cont'd)• Costs of administration

• Attorney's fees• Court costs• PR fees

• Expenses incurred to sell estate assets• Real estate agents• Broker's fees

Deductions (cont'd)

• Allocation of deductions– Deductions allocated to property bearing

the expense• E.g., real estate agent fees for house

specifically devised to one beneficiary would not be allocated to assets of other beneficiaries.


Credits– Credit available for any inheritance taxes

that have been paid within five years of death on the same property• E.g., farm inherited by beneficiary that dies

within 5 years– Tentative inheritance tax paid

Allowances– Homestead allowance capped at

$20,000• Surviving spouses; minor children

– Exempt property allowance capped at $12,500• Available to surviving spouse and children

(need not be minors)– Maintenance allowance capped at

$20,000

Rates• Surviving spouse and charity

– 0%• "Immediate family"

– 1% of amounts in excess of $40,000• "Remote relatives"

– 13% of amounts in excess of $15,000• All others

– 18% of amounts in excess of $10,000


Interest and Penalties

• If not paid within 1 year of death:– Interest accrues at 14%

• Failure to file penalty of 5% per month, up to 25%– Exceptions:

• Probate proceeding has been opened• Tentative inheritance tax filing and payment

of tentative tax

Liens– If not paid, inheritance tax becomes a

lien on property• E.g., joint tenancy property that is transferred

to non-spouse where no inheritance tax proceeding was started

– Lien may expire after 10 years, but obligation to pay remains on original recipient of property

Procedure

• Petition for Determination of Inheritance Tax filed– No hearing necessary if

• County Attorney(s) and parties responsible for tax waive

• A party to the proceeding (PR or Trustee) agrees to pay the tax

– If no probate proceeding, then DHHS must be given notice


Procedure (cont’d)

• Obtain Order from County Court(s) determining inheritance tax

• Pay County Treasurer(s)• File receipt with Court

Questions?Jesse Sitz

[email protected]

921

Jesse D. Sitz

Jesse D. Sitz, with Baird Holm LLP, represents clients with respect to general corporate matters, estate planning and probate matters, federal and state tax planning issues, and tax exempt matters.

Jesse received his Juris Doctor, cum laude, from the University of Minnesota Law School in 2005. While in law school, he was a member of the Wagner Moot Court Competition Team and the Minnesota Justice Foundation. He received a Bachelor of Science from the University of Nebraska-Lincoln in 1999. Jesse has earned the designation of Chartered Advisor in Philanthropy (CAP®) through the American College. He was named to Super Lawyers 2016 Great Plains Rising Stars list. Mr. Sitz speaks regularly on topics relating to estate and business succession planning and taxation.

922


923

Chapter 26 - Determining Nebraska Inheritance Tax

Table of Contents

26-1 In General .................................................................................................................925

26-2 Property Subject to Inheritance Tax ......................................................................92526-2(a) Property of Nebraska Residents ..................................................... 92526-2(b) Property of Nonresidents ................................................................ 92526-2(c) Gifts ................................................................................................ 92626-2(d) Joint Tenancy Property ................................................................... 92626-2(e) Life Estates ..................................................................................... 92626-2(f) Life Insurance ................................................................................. 92626-2(g) WrongfulDeathClaims;PainandSufferingDamages .................. 92626-2(h) Property Held in Trust .................................................................... 92726-2(i) Retirement Accounts ...................................................................... 927

26-3 Value of Property Subject to Tax ............................................................................92726-3(a) Special Valuation Rules .................................................................. 928

26-3(a)(1) Powers of Appointment ..............................................92826-3(a)(2) Partial Interests - Life Estates, Remainders, Annuities ...............................................92826-3(a)(3) Contingent Interests ...................................................929

26-3(b) Valuation of Assets ......................................................................... 93026-3(b)(1) Real Estate .................................................................93026-3(b)(2) Stocks and Bonds .......................................................93126-3(b)(3) Mortgages, Notes and Cash .......................................93126-3(b)(4) Life Insurance ............................................................93126-3(b)(5) Joint Tenancy Property ...............................................932

26-4 Rates ..........................................................................................................................93226-4(a) Surviving Spouses .......................................................................... 93226-4(b) Immediate Family ........................................................................... 93226-4(c) Remote Relatives ............................................................................ 93326-4(d) Charitable Organizations ................................................................ 93326-4(e) Everyone Else ................................................................................. 933

26-5 Deductions, Credits, and Allowances to Inheritance Tax .....................................93326-5(a) Deductions ...................................................................................... 933

924

26-5(b) Credits ............................................................................................. 93426-5(c) Allowances ..................................................................................... 934

26-6 Procedures to Determine Nebraska Inheritance Tax ............................................935

26-7 Interest and Penalties for Late Payment and Late Filings; Liens .......................93626-7(a) Interest ............................................................................................ 93626-7(b) Late Filing Penalties ....................................................................... 93626-7(c) Liens ............................................................................................... 936

AppendixReferences ........................................................................................................ 937Example Bank Account Request Form ............................................................ 939

925

Chapter 26 - Determining Nebraska Inheritance Tax

26-1 In General

Nebraskaimposesaninheritancetaxonabeneficiary'srighttoreceivepropertyfromadecedent.1 Nebraska inheritance tax is governed by Neb. Rev. Stat. §§ 77-2001 through 77-2040.

26-2 Property Subject to Inheritance Tax

All property, including proceeds of life insurance, is subject to inheritance tax, if made in contemplationofdeath,effectiveatdeath,byreasonofdeath,orheldasjointtenantswithrightsof survivorship.2

26-2(a) Property of Nebraska Residents

Property is subject to Nebraska inheritance tax if the decedent “at the time of death was a resident of this state.”3 For Nebraska residents, only real property and tangible personal property located outside of Nebraska are not subject to Nebraska inheritance tax. Tangible personal property has a situs where it is physically located at the time of death. The rules found in NEB REV. STAT. §77-1201 govern to determine where tangible personal property is located.4 All intangible property has situs where the decedent resided at the time of death.5

26-2(b) Property of Nonresidents

For nonresidents, real and tangible personal property actually located in Nebraska is subject to inheritance tax.6 Intangibles owned by nonresident decedents are not taxable if:

• The decedent is a resident of a state or territory of the United States, which at the time of the transfer did not impose a transfer tax or death tax of any character in respect of personal property of residents of this state (except tangible personal property having an actual situs in such state or territory); or

• The laws of the state or territory of residence of the decedent at the time of the transfer contained a reciprocal provision under which nonresidents were exempted from transfer taxes or death taxes of every character in respect of personal property (except tangible personal property having an actual situs therein) provided the state or territory of residence of such nonresidents allowed a similar exemption to residents of the state or territory of residence of such decedent.7

1 Nielsen v. Sidner (In re Estate of Benton), 215 N.W.2d 86, 88 (Neb. 1974).2 Neb. Rev. Stat. §§ 77-2001, 2002. 3 Neb. Rev. Stat. § 77-2001. 4 See Neb. Rev. Stat. § 77-2014(2)(a)(ii).5 Neb. Rev. Stat. §77-2007.01; In Re Estate of Holt, 246 Neb. 50 (1994).6 Neb. Rev. Stat. §77-2001; see also Neb. Rev. Stat. §§77-2007.01.7 Neb. Rev. Stat. § 77-2007.01.

926

EXAMPLE: Arizona resident (formerly a Nebraska resident) dies. He has $2 million of probate assets physically located in Arizona (real estate) and $5 million of intangible assets held in a revocable trust. A Nebraska bank is the trustee of the trust, and the trust is governed by Nebraska law.Arizonadoesnotimposeaninheritancetaxorestatetax,sothedecedent'sbeneficiariesoweno Nebraska inheritance tax. 26-2(c) Gifts

Gifts made within the three years prior to death are deemed to have been made in “contemplation of death” and are includible.8 However, gifts made in “contemplation of death” are only includible ifagifttaxreturnisrequiredtobefiled.Thismeanstheonlygiftsincludibleforinheritancetaxpurposes are gifts in excess of the annual exclusion amount and which would be disclosed on the Federal Estate Tax Return--Form 706.

26-2(d) Joint Tenancy Property

Joint tenancy property is not includible for Nebraska inheritance tax purposes to the extent that the surviving joint tenant(s) originally owned the property or contributed to acquisition of their interest in the property in money or property (e.g., not services).9

26-2(e) Life Estates

Property“intendedto takeeffect inpossessionorenjoyment”after thedecedent'sdeath isalsoincludible.10 This would include remainder interests, if the remainder interest is in fact being transferred by the decedent. For example, if A at time of his death created a life estate in B with remainderinteresttoC,thenatthedeathofBthereisnoremainderinclusioninB'sestatebecauseB is not the transferor.

26-2(f) Life Insurance

Life insurance is specifically includible, but only to the extent “receivable by the executor oradministrator.”11

26-2(g) Wrongful Death Claims; Pain and Suffering Damage

While there appears to be no explicit Nebraska law on the subject, the proceeds of wrongful death claims would not be includible in the inheritance tax base because a wrongful death claim only arises after death and thus is not property of a decedent.12 On the other hand, any damages for pain,suffering,andothercausesofactionthataccruedtoadecedentpriortodeathandconstitutedaclaimbythedecedent'sestate(ratherthanbyheirs)wouldbesubjecttoinheritancetax.

8 Neb. Rev. Stat. § 77-2002(2).9 Neb. Rev. Stat. § 77-2002(1); see also, In re Estate of Wels, 221 Neb. 741 (1986).10 Neb. Rev. Stat. § 77-2002.11 Neb. Rev. Stat. § 77-2001 and 77-2007(1).12 See, e.g., IRS Rev. Rul. 69-8, 1969-1 CB 219; Rev. Rul. 54-19, 1954-1 CB 179.

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26-2(h) Property Held in Trust

Ifbecauseofthedeathofadecedent,“anypersonshallbecomebeneficiallyentitledinpossessionor expectation to any property or income thereof,” such amounts are includible.13 Accordingly, beneficialinterestsinatrustareincludibleintheinheritancetaxbaseunlessotherwiseexempt.

26-2(i) Retirement Accounts

Paymentsunderanemployeebenefitplanareincludibleunless:

•thebenefitislifeinsuranceotherwiseexcludedfromtaxationpursuanttosection77-2001; or

•thebenefitisnotsubjecttofederalestatetaxationpursuanttosection2039oftheInternal Revenue Code dealing with annuities.14

26-3 Value of Property Subject to Tax

For inheritance tax purposes, property is to be valued at its “clear market value” or “fair market value.”15 For purposes of inheritance tax, the terms “actual value, market value, and fair market value mean exactly the same thing.”16 All assets are valued as of the date of death.

Accrued income is includible in the inheritance tax base, even if the decedent had not received the income prior to date of death.17 For example, interest that was accrued but unpaid as of date ofdeathisincludible. ExhibitAisaformthatcanbeusedtoensurethatfinancialinstitutionsprovide the information necessary to report accrued but unpaid interest. Likewise, any accrued dividends (when stock has gone “ex-dividend”) that would be paid to a transferor shareholder must be included.18Finally,anyrentspayableinarrearsforaperiodpriortothedecedent'sdeathshouldbe included.19

If a dispute arises concerning the value of assets in an inheritance tax proceeding, the court has the authority to appoint an appraiser to appraise the property.20 In the alternative, the court may by orderfixadayandgivenoticetoallinterestedpartiesandatsuchtimeappraisethepropertyatthefair market value of the property.21

Valuations of assets are disclosed on Form 500—Nebraska Inheritance Tax Return.22

13 Neb. Rev. Stat. § 77-2002(1).14 Neb. Rev. Stat. § 77-2007.01.15 Neb. Rev. Stat. § 77-2004, 77-2005, 77-2006, 77-2008, and 77-2021.16 Hastings Building Co. v. Board of Equalization, 212 Neb. 847 (1982).17 Lindsay, et al., STATE DEATH TAXES WITH COUNTY ATTORNEYS, PROBATE AND ESTATE PLANNING: INHERITANCE TAX AND

ESTATE TAX BASICS, Nebraska Continuing Legal Education, Inc. (March 19, 1999).18 Id.19 Id.20 Neb. Rev. Stat. §§ 77-2019 and 77-2020.21 Neb. Rev. Stat. § 77-2021.22 Available at http://www.nebar.com/resource/resmgr/Practice_Tools/InhTax_2011.xls (available to NSBA voluntary dues-paying members)

http://www.nebar.com/resource/resmgr/Practice_Tools/InhTax_2011.xls

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26-3(a) Special Valuation Rules

26-3(a)(1) Powers of Appointment

Generalpowersofappointmentaretreatedasatransfertothebeneficiarytowhomthe power was granted.23 If the power of appointment is special or limited, however, taxisimposedasiftheremainderclassofbeneficiariesreceivedtheproperty.24 The exercise or failure to exercise any power of appointment by the donee of a power of appointment is not deemed a transfer subject to inheritance tax.25

26-3(a)(2) Partial Interests - Life Estates, Remainders, Annuities

The present value of annuities, life estates, terms for years, remainders, and reversionary interests is determined under Treas. Reg. § 20.2031-7(d) using the appropriate section 7520 rate, and, if applicable, the mortality component for the valuation date of the interest that is being valued.26 The value of a contract for the payment of an annuity issued by a company regularly engaged in the sale of annuities, and of insurance policies on the lives of persons other than the decedent, is determined under Treas. Reg. § 20.2031-8.27 For purposes of determining age, use the age of the closest birthday.28

EXAMPLE: H dies August 2, 2017, with all assets passing upon his death to his revocabletrust. ThetruststatesthatW,H'swife,isthesolebeneficiarywithanincome interest for her life, with any remainder passing to the child of H and W uponW'sdeath.ThevalueofthetrustassetsatH'sdateofdeathis$1,000,000.Wwas born October 25, 1937.

Step 1—Determine applicable 7520 rate as of date of death.

• The 7520 rate for August of 2017 is: 2.4%29.

Step 2—Determine age of life beneficiar .

• Here, October 25, 2017, birthday is closest to date of death, so age is: 80.

Step 3—Consult Table S, Single Life Factors Based on Life Table, 2000CM to determine proper life factor for 2.4% interest rate (Column G).30

• Line 806, Column G actuarial factor for life estate: 0.17418.

23 Neb. Rev. Stat. § 77-2008.03; Estate of Muchemore, 252 Neb. 119 (1997).24 In re Estate of Nelson, 253 Neb. 414 (1997).25 Id.26 Neb. Rev. Stat. § 77-2008; 316 Neb. Admin. Code Ch. 17-001.27 316 Neb. Admin. Code Ch. 17-001.03.28 316 Neb. Admin. Code Ch. 17-001.06.29 IRS Rev. Rul. 2017-15.30 Available at: http://www.revenue.nebraska.gov/PAD/doc_stamp/int_table.html

http://www.revenue.nebraska.gov/PAD/doc_stamp/int_table.html

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Step 4—Determine life estate and remainder factor amounts by multiplying trust assets by applicable factors.

• Life estate amount = (0.17418 x $1,000,000) = $174,180.

• Remainder estate amount = [(1 – 0.17418) x ($1,000,000) = $825,820.

26-3(a)(3) Contingent Interests

Contingent interests (interests “dependent upon contingencies or conditions whereby they may be wholly or in part created, defeated, extended, or abridged”),31 such as distributions from a discretionary trust, can be handled in one of three ways:

1. “Assume the Worst”—Assume the contingency that results in the greatest tax. If a contingency occurs that would result in lower tax, the taxpayer is entitled to a redetermination and refund. County court can require county treasurer to invest the initial tax paid.32

2. “Bond and Wait”—Thebeneficiariesmayholdoffpayingthetaxuntiltheuncertaintyof thecontingencyisresolved. However, thebeneficiariesmust give a bond equal to twice the amount of the estimated tax.33

3. “Probabilities Method”—Thecourtcanfinallydetermineinheritancetaxbased upon the probabilities that exist as of date of death. The application should contain all relevant facts and the basis for the probabilities involved.34

EXAMPLE: H dies August 2, 2017, with all assets passing upon his death to his revocable trust.The trust states thatW,H'swife, is thesolebeneficiarywithanincomeinterestforherlife,andtheTrusteehastheability,intheTrustee'sdiscretion,todistributeprincipalforthesurvivingspouse'shealth,support,maintenance,andeducation. Any trust assets remaining upon the passing of W pass to the child of H andW.ThevalueofthetrustassetsatH'sdateofdeathis$1,000,000.WwasbornOctober 25, 1937.

Step 1—Determine applicable 7520 rate as of date of death.

• The 7520 rate for August of 2017 is: 2.4%35.

31 Neb. Rev. Stat. § 77-2008.01.32 Id.33 Neb. Rev. Stat. § 77-2009.34 Neb. Rev. Stat. § 2018.05.35 IRS Rev. Rul. 2017-15.

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Step 2—Determine age of life beneficiar .

• Here, October 25, 2017, birthday is closest to date of death, so age is: 80.

Step 3—Consult Table S, Single Life Factors Based on Life Table, 2000CM to determine proper life factor for 2.4% interest rate (Column G).36

• Line 806, Column G actuarial factor for life estate: 0.17418.

Step 4—Determine life estate and remainder factor amounts by multiplying trust assets by applicable factors.

• Life estate amount = (0.17418 x $1,000,000) = $174,180.

• Remainder estate amount = [(1 – 0.17418) x ($1,000,000) = $825,820.

Inthiscase(eventhoughitdiffersfromtheexampleabovewherethelifeestatedid not involve a discretionary distribution of principal), it is our experience that County Attorneys will assume that the principal will be distributed in an “assume the worst” fashion—e.g., that no distributions of principal will be made to the spouse, and therefore, the whole remainder is attributable to children (or other remainder beneficiaries).Inthatevent,a“bondandwait”or“probabilitiesmethod”maybemore appropriate.

26-3(b) Valuation of Assets

As a general matter, the valuation of assets for inheritance tax purposes should coincide with the fairmarketvaluessetforthontheinventoryforthedecedent'sestate.Generally,themethodologiesused on Form 706 for valuation of assets are also applicable to the inventory.

26-3(b)(1) Real Estate

As a general rule most counties will accept any value for real property that is equal to or greater than the value determined for that property by the county assessor. For agricultural property, counties will not accept assessed value for agricultural property because by law agricultural property is assessed at only 75 percent of its actual value for agricultural purposes. Many counties will accept 133 percent of the assessed value. However in urban counties, the 133 percent formula may not be reliable because the market value of the land for agricultural purposes may be less than its value for other purposes—e.g., for the “highest and best use of the property.”

36 Available at: http://www.revenue.nebraska.gov/PAD/doc_stamp/int_table.html.

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Ifthepropertywassoldinanarm's-length,markettransactionthesalepricemaybe used. If the property was sold for a price that is less than the value determined by the assessor, all information regarding the sale should be made available to the county so that the validity of the sale as an indicator of value can be determined. Inmanycasesthesalepricemaybeaffectedbysomeunduestimulus,usuallythedesire of heirs to liquidate assets quickly regardless of whether the price received for those assets represents market value.37 In addition to the assessed value and the sale price, most counties will consider value estimates by professional appraisers and the values determined by the IRS for federal estate tax purposes as evidence of value for inheritance tax purposes. Discounts for minority interests or lack of marketability are valid, but should be documented.

26-3(b)(2) Stocks and Bonds

Stocks and bonds that are traded on national or local exchanges can be valued fairly easily by simply determining the median price that was paid for them on the date of death. In the case of both stocks and bonds, any dividends and/or interest that may have accrued should be included. If date of death occurred on a weekend, determine the median price for the Friday before and Monday after, then add the results from each date and divide by two.

Inthecaseofstocksorbondsthatarenottradedonanexchange,afinancialanalystshould be consulted for the purpose of determining value. Often stock that is not traded on an exchange is stock of a closely held corporation. The value of such stock canoftenbeestimatedbysimplycomputingthepercentageofallthecorporation'sstock held by the decedent and then claiming that percentage of the value of all the corporation'snetassets.Adjustmentsintheformofpremiumsordiscountsmaybeappropriate to determine fair market value.

26-3(b)(3) Mortgages, Notes and Cash

In most cases these assets can be valued by simply referring to bank records or debt instruments. However, some face values may require adjustments for discounts or interest accrued prior to death.

26-3(b)(4) Life Insurance

If the insurance proceeds are payable to the decedent, the decedent's estate orcreditorsofthedecedent'sestate,theyshouldbeincludedatfacevalue.

37 See, Forney v. Box Butte County Board of Equalization, 7 Neb. App. 417 (1998) (sale price is relevant, but not conclusive evidence of fair market value).

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26-3(b)(5) Joint Tenancy Property

Jointly owned assets should be valued in the same manner as all other assets and should be reported at their full value in spite of the joint ownership. If a surviving joint tenant contributed to the acquisition of their joint interest by contribution of cash or property, those contributions to jointly held assets should be claimed on theworksheet to reduce thedecedent'svalueandsupportedbysome typeofdocumentation. A statutory presumption exists regarding contributions to jointly held assets, found in §30-2722, which relates to ownership during life, so all claimed contributions must be supported by evidence, preferably in the form of an affidavitofthesurvivingjointtenant(s)orotherindividual(s)withknowledgeofthe contribution. For property that has been previously acquired by gift, bequest, devise, or inheritance by the joint tenants, and if the interests of the joint tenants are nototherwisespecifiedorfixedbylaw,thentheamountincludibleintheinheritancetax is reached by dividing the total value of the property by the number of joint owners or joint tenants.38

26-4 Rates

Theinheritancetaxrateapplicabletoabeneficiary'sinterestinpropertydependsontherelationshipofthebeneficiarytothedecedent.

26-4(a) Surviving Spouses

No inheritance tax is due on interests passing to a surviving spouse.39

26-4(b) Immediate Family

“Immediate family,” e.g., most ancestors and lineal descendants, enjoy the lowest rate and are entitled to the highest exemption from tax. The applicable rate for immediate family is 1% for amounts in excess of $40,000.40 “Immediate family” consists of a “father, mother, grandfather, grandmother, brother, sister, son, daughter, child or children legally adopted … in conformity with the laws of the state where adopted, any lineal descendant, [and] any lineal descendant legally adopted as such in conformity with the laws of the state where adopted.”41 Relatives of a decedent include relatives of a former spouse to whom the decedent was married at the time of the death of the former spouse and relatives of a spouse to whom the decedent was married at the time of his or her death.42 In addition, “any person to whom the deceased 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” are also considered immediate family.43

38 Id.39 Neb. Rev. Stat. § 2004.40 Id.41 Id.42 Neb. Rev. Stat. § 2005.43 Id., see also In re Estate of Kite, 260 Neb. 135 (2000); In re Straka, 15 Neb. App. 796 (2007); In re Estate of Malloy, 15 Neb. App. 755 (2007).

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26-4(c) Remote Relatives

“Remote relatives” are entitled to a much less favorable inheritance tax rate of 13% imposed on amounts in excess of $15,000.44 Remote relatives consist of aunts, uncles, nieces, and nephews related to the decedent by blood or legal adoption, as well as any lineal decedent of such persons or their spouses.45 Relatives of a decedent also include relatives of a former spouse to whom the decedent was married at the time of the death of the former spouse and relatives of a spouse to whom the decedent was married at the time of his or her death.46

26-4(d) Charitable Organizations

Bequests, legacies, devises, or gifts made to or for the use of any corporation, organization, association, society, institution, or foundation, organized and operating exclusively for religious, charitable,public,scientific,oreducationalpurposesareexemptfromNebraskainheritancetax47 so long as the organization meets one of the following requirements:

• The organization, association, society, institution, or foundation is organized under the laws of this state or of the United States; or

• The property transferred is limited for use within Nebraska; or

• In the event that the organization is organized or existing under the laws of a territory of the United States or of a foreign state or country, at the date of the decedent'sdeaththeterritoryorforeigncountry:(1)doesnotimposeadeathtaxon property transferred to a similar organization, or (2) the laws of the territory, foreign state, or foreign country contain a reciprocal provision for foreign organizations.48

26-4(e) Everyone Else

All other persons receiving property subject to Nebraska inheritance tax face a rate of 18% for amounts in excess of $10,000.49

26-5 Deductions, Credits, and Allowance to Inheritance Tax

26-5(a) Deductions

The Personal Representative or Trustee may deduct from the value of the property subject to tax: funeral costs; expenses of last illness within six months of death; debts which the deceased person

44 Neb. Rev. Stat. § 2005.45 Id.46 Neb. Rev. Stat. § 2005.47 Neb. Rev. Stat. § 77-2007.04.48 Id.49 Neb. Rev. Stat. § 2006.

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was liable for at the time of death and which are in fact paid; any federal estate tax that is paid; and the costs of administration, including court costs, costs of sale of property, personal representative fees, and attorney fees.50 Effective2009, expenses related to the saleof estate assets arealsodeductible.51 However, expenses related to the day-to-day operation and continuation of business interests which have not accrued as a result of the death of the decedent are not deductible.52 Secured debt reduces the fair market value of assets subject to tax and should be taken on Line 25 of the Form 500.

Deductions are taken proportionately against the property which bears such expenses. For example, sincemost estate documents direct payment of estate expenses in effect from the residue, noexpensesaregenerallydeductedfromspecificbequests.Likewise,iftheresiduedirectstheestate40% to a child, 40% to an unrelated person and 20% to charity, each deductible expense is taken 40%againsteach40%bequest(sothedeductionhasdifferenttaxsavingsresults)and20%againstthe charitable bequest which is creating no inheritance tax anyway (so that part of the expense deduction saves no tax).

26-5(b) Credits

Acreditexistsagainsttaxdueforanyinheritancetaxesthathavebeenpaidwithinfiveyearsofdeath on the same property. For example, if the decedent received property upon which inheritance tax was paid within the past 5 years due to the death of the original grantor, there is a credit in the amount of the inheritance tax previously paid.53 A credit is also allowed for tentative inheritance tax paid.54

26-5(c) Allowances

Several allowances can be taken against inheritance tax. A homestead allowance is available for Nebraska decedents in the maximum amount of $20,000.55 The homestead allowance is only available to surviving spouses and minor or dependent children.56

An exempt property allowance is also available for Nebraska decedents.57 A surviving spouse, or, if none, children jointly may take an exempt property allowance of $12,500 (in excess of any security interests in household furniture, automobiles, furnishings, appliances, and personal effects).58 Children need not be dependents or minors in order to receive the allowance.

A surviving spouse and minor children whom the decedent was obligated to support and children who were in fact being supported by the decedent are entitled to a reasonable allowance in money

50 Neb. Rev. Stat. § 77-2018.04.51 Id.52 Id.53 Neb. Rev. Stat. § 77-2018.06.54 Neb. Rev. Stat. § 77-2018.07.55 Neb. Rev. Stat. §§ 77-2004; 30-2322.56 Id.57 Neb. Rev. Stat. §§ 77-2004; 30-2323.58 Neb. Rev. Stat. § 30-2323.

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out of the estate for their maintenance during the period of administration.59 The allowance may not continue for longer than one year if the estate is inadequate to discharge allowed claims and is limited to the amount of $20,000.60

26-6 Procedures to Determine Nebraska Inheritance Tax

Nebraskainheritancetaxmaybedeterminedeitherasapartoftheadministrationofadecedent'sestate under the Nebraska Probate Code or in an independent proceeding.61 Venue for determining inheritancetaxisproperinthecountycourtofthecountyinwhichproceedingsinthedecedent'sestate are pending, or, in the absence of such proceedings, in the county court of the county where the property or any part of the property which might be subject to tax is situated.62 A proceeding to initiate inheritance tax may be initiated either: (1) by order of the county court before which any proceeding is pending; (2) by application of the personal representative; (3) by application of the county attorney; or (4) by application of any person having a legal interest in the property involved in determining the tax.63

The determination of inheritance tax requires a court order. The order can be entered with or without notice and with or without a formal hearing. An order can be entered without formal hearing and without notice if: (1) the county attorney of each county in which the property subject to the tax is located has waived notice and entered a voluntary appearance on behalf of that county and the State of Nebraska; and (2) either (i) all persons subject to assessment of tax have waived notice and entered a voluntary appearance; or (ii) a party to the proceeding has agreed to pay the full tax due.64

Ifthereisnoprobateproceeding,andifthedecedentwasfifty-fiveyearsofageorolderorresidedinamedicalinstitutionasdefinedinsubsection(1)ofNeb.Rev.Stat.§68-919,anoticeofthefilingoftheinheritancetaxpetitionmustbeprovidedtotheDepartmentofHealthandHumanServices.65Thenoticemustincludethedecedent'ssocialsecuritynumberand,ifthedecedentwaspredeceasedbyaspouse,thenameandsocialsecuritynumberofsuchspouse.Acertificateoftheprovidingofthenoticetothedepartmentisrequiredtobefiledintheinheritancetaxproceedingsby an attorney for the petitioner or, if there is no attorney, by the petitioner, prior to the entry of an order determining inheritance tax. The notice must be provided to DHHS in a delivery manner and at an address designated by DHHS, which manner may include email. DHHS is required to post the acceptable manner of delivering notice on its web site. Any notice that fails to conform with these requirements is void and constitutes neither notice to DHHS nor a waiver application for purposes of any statute or regulation that requires that a notice or waiver application be provided to the department.

59 Neb. Rev. Stat. §§ 77-2004; 30-2324.60 Neb. Rev. Stat. § 30-2325.61 Neb. Rev. Stat. § 77-2018.01.62 Neb. Rev. Stat. § 77-2018.02(1).63 Neb. Rev. Stat. § 77-2018.02(2).64 Neb. Rev. Stat. § 77-2018.02(5).65 Neb. Rev. Stat. § 77-2018.02(6).

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Iftheforegoingconditionscannotbesatisfied,ahearingdatemustbesettodeterminetheamountof the inheritance tax.66 Upon determination of the amount of inheritance tax, payment is required to be made to the county treasurer.

An inheritance determination can be appealed from the county court to the Court of Appeals in the same manner as an appeal from district court to the Court of Appeals.67

26-7 Interest and Penalties for Late Payment and Late Filing; Liens

26-7(a) Interest

Inheritancetaxmustbedeterminedandpaidwithintwelvemonthsafterthedateofthedecedent'sdeath.68 If not paid, interest will accrue at the rate provided in section 45-104.01, which currently is set at 14%.69 To avoid the accrual of interest, if inheritance tax cannot be determined within 12 months,paymentofatentativeinheritancetaxcanbemadepriortothefinaldeterminationofthetotal amount of tax due.70

26-7(b) Late Filing Penalties

In2007,whatamountstoa“failuretofile”penaltywasalsoimposed.71 The penalty is 5% per month after the 12 month payment period runs, with a maximum penalty of 25%.72 This penalty can be avoided if a determination is made and tentative tax paid, or if the court determines there is good cause. It is not uncommon for taxpayers who do not have a probate estate to be unaware of thenecessaryfilingandpaymentofinheritancetax.

26-7(c) Liens

If the inheritance tax is not timely paid, a lien arises.73 The lien does not apply to any interest in any property passing from the decedent to the decedent’s surviving spouse.74 Liens are usually discharged upon sale of the property by escrowing funds to be used to pay inheritance tax, and manytitlecompanieswillrequirean“attorneycomfortletter”thatrequestsindemnificationagainstliens that are not discharged.

The inheritance tax lien may expire after 10 years from the date of death if there is no inheritance tax determination; however, the liability to pay the inheritance tax still exists upon the recipient of the property.75 There is no time limitation for the collection of the tax.

66 Neb. Rev. Stat. § 77-2018.02(2).67 Neb. Rev. Stat. § 77-2023.68 Neb. Rev. Stat. § 77-2010.69 Id.; Neb. Rev. Stat. § 45-104.1.70 Neb. Rev. Stat. § 77-2018.02(7).71 Neb. Rev. Stat. § 77-2010.72 Id.73 Neb. Rev. Stat. § 77-2010.74 Neb. Rev. Stat. § 77-2003.75 In re Estate of Reed, 271 Neb. 653, 658 (2006).

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References

Michael Thew, NEBRASKA INHERITANCE TAX, THE NEBRASKA PROBATE MANUAL (2010).

Thomas M. Haase, NEBRASKA INHERITANCE TAX, THE NEBRASKA PROBATE MANU-AL, Nebraska Continuing Legal Education, Inc. (1993).

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939

Example Bank Account Request Form

ESTATE OF __________________________, SS#: _______________ Deceased DATE OF DEATH: _________________

Please provide the following information for any accounts owned by the above-named decedent at your institution. This form may be photocopied if there are more than two accounts.

ACCOUNT NUMBER:

TYPE OF ACCOUNT: (CHECKING, SAVINGS, CERTIFICATE OF DEPOSIT, INSTALLMENT LOAN, OR OTHER [PLEASE SPECIFY])

ACCOUNT OWNER(S):

OWNERSHIP INTEREST: (IF MULTIPLE ACCOUNT OWNERS, INDICATE IF JOINT TENANCY, POD ACCOUNT, OR OTHER [PLEASE SPECIFY])

BALANCE ON DATE OF DEATH:

INTEREST ACCRUED SINCE LAST INTEREST PAYMENT AND NOT INCLUDED IN BALANCE ABOVE:

INTEREST PAID JANUARY 1 TO DATE OF DEATH:

COMMENTS:

ACCOUNT NUMBER:

TYPE OF ACCOUNT: (CHECKING, SAVINGS, CERTIFICATE OF DEPOSIT, INSTALLMENT LOAN, OR OTHER [PLEASE SPECIFY])

ACCOUNT OWNER(S):

OWNERSHIP INTEREST: (IF MULTIPLE ACCOUNT OWNERS, INDICATE IF JOINT TENANCY, POD ACCOUNT, OR OTHER [PLEASE SPECIFY])

BALANCE ON DATE OF DEATH:

INTEREST ACCRUED SINCE LAST INTEREST PAYMENT AND NOT INCLUDED IN BALANCE ABOVE:

INTEREST PAID JANUARY 1 TO DATE OF DEATH:

COMMENTS:

Return to: Name: ______________________________ Firm: _______________________________ Address: ____________________________ City/State/Zip: ________________________ Phone: ______________________________ Fax: ________________________________ Email: ______________________________

Prepared by:

(Institution)

(Name/Title)

(Phone Number)

940


Accountings, Federal and State Income Tax Issues (Form 1041s)

Daniel I. Dittman

Erickson & Sederstrom PC, LLO Omaha

March 23, 2018

UNO Thompson Center

Omaha, NE

860


3/19/2018

1

Estate Accounting and Tax Issues

Daniel DittmanErickson & Sederstrom, PC LLO

10330 Regency Parkway Dr. Suite 100Omaha, NE 68114

402-397-2200

Begin with the end in mind…some thoughts about fiduciary selection in the estate

planning process.

Who makes a good fiduciary?

• Clients often gravitate to one or more of their children (usually also beneficiaries) to serve as PR or Trustee. Is this wise?

• Explain responsibilities and liabilities of fiduciaries:• Breach of fiduciary duty claims for failure to account, failure to

preserve, self-dealing, etc.• Liability under 31 U.S.C. 3713(a) and (b) for paying certain claims

before a claim owed to the federal government.• Liability under Neb. Rev. stat 30-2489 for negligent payment of

claim when such payment injures another claimant.• Thoroughly discuss the possibility of a corporate fiduciary.• What is a drafting attorney’s liability for poor future fiduciary

behavior or performance?• Post death, vet the prospective fiduciary. Declining to serve is a viable

option.

3/19/2018

2

Getting off on the right foot…

• Take Control. • Get the date of death values. Don’t rely on the fiduciary.• Assign responsibility for the estate/trust accounting.• Deal with joint accounts up front. Advise against use of non-

estate funds to pay expenses. The funeral home can wait like all the other creditors.

• Use promissory notes with appropriate short term interest rates when liquidity is an issue.

• Discuss Prudent Investor Rule. Neb. Rev. Stat. 30-3883 et seq.• Determine whether fiduciary has reluctance to sell certain assets.

• CDs. See 12 CFR 204.2(c)(1)(i)(d)• Heirloom stocks (often financial advisors push to transfer

securities in-kind). • File Form 56.

Accounting 101

Clients have a plethora of ways to keep an accounting:• Excel• Old school ledgers• Quicken, etc.• Checkbooks• The tool doesn’t matter….only the numbers matter.

• Receipts & Disbursements with explanation• Corroborating account statements.• More sophisticated accounting templates like Quicken aid in

grouping deductions.• Provide templates for the client. • Know when to take over.

Income in Respect of Decedent (IRD)

• Common IRD assets:• IRA and Pensions

• See PLR201208039 in which IRA listed “Estate” as beneficiary. Trust was only beneficiary of estate. The Service allowed beneficiaries of the trust to create separate IRAs with stretch provisions without constituting a taxable distribution.

• Savings Bonds• Deferred Compensation• Wages• Non-qualified annuities (partially IRD)• Growing Crops (partially IRD prorated to date of date)• Installment sales.

3/19/2018

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Don’t forget the 706 Deduction for IRD

• Federal Estate Tax attributable to the net value IRD is deductible as a form 1040 itemized deduction. I.R.C. 691(c)(1) & Treas. Reg. 1.691(c)-1(a).

2018 Fiduciary Income Tax Rates

• $600 Exemption remains.• The base AMT exemption of $22,500, and phase-out threshold of

$75,000, remain unchanged.

Timing Income

• Discuss ways to control timing of income:• Proper fiscal year selection. • Trusts can select fiscal year with proper election under I.R.C.

645 using Form 8855. No probate estate is necessary for the election.

• Estate of trust income distribution to a beneficiary in the beneficiary's tax year that includes the end of the estate’s fiscal year. I.R.C. 662(c).

• 65 Day Rule under I.R.C. 663(b).• Make early distributions in a short fiscal year in which little

to no income is produced to avoid income tax consequences for the beneficiaries.

3/19/2018

4

Distribution of Estate

• Distributable Net Income (DNI) is allocated to beneficiaries as follows:• Mandatory distribution of income is income taxable to

beneficiary whether or not paid.• Any remaining amounts properly paid or credited or required

to be distributed after required income distributions are accounted for are as income to beneficiary receiving the distribution regardless of the nature of distribution (cash or in-kind) (see Treas. Regs. 1.662(a)-1(2) and 1.661(a)-2(e).

• Bequest of a specific sum or money or specific property is not a distribution of DNI (beware capital gains though when transferring in-kind to satisfy specific pecuniary bequest.

• Real estate distributions are excluded from distributions of income if local law passes title directly from the decedent to his heirs or devisees. Rev. Ruling 1.661(a)-2(3).

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Frank C. Heinisch

Frank C. Heinisch is a partner with Heinisch & Lovegrove Law Office, PC LLO, in Geneva, Nebraska. Frank specializes in the areas of estate planning, trusts, elder law, real estate, corporate, probate, tax planning, and tax preparation. Frank is a fellow with American College of Trust and Estate Counsel and has written, lectured and served as co-chairman of over 30 seminars since 1976. He has served on a variety of committees with the Nebraska Bar Association, including serving as Chairman of both the Law Office Management section and the Real Estate, Trust, and Probate section. Frank graduated from Creighton Law School in 1968.

Daniel I. Dittman

Dan graduated cum laude from Creighton University School of Law in 2013. He is a member of Erickson | Sederstrom’s Estate, Probate and Trust Law Division. Dan’s practice consists of estate and gift planning, trust administration, probate of client estates, and federal and state taxation. Dan serves as Planned Giving Counsel to Mosaic, a national not-for-profit organization which serves the needs of individuals with intellectual disabilities. Dan is a member of the Downtown Kiwanis Club of Omaha and Divine Shepherd Lutheran Church. He also enjoys being an adjunct professor at Creighton University School of Law. He is married to his wife Katie and they have three children.

Alan M. Wood

Alan Wood specializes in estate planning, probate and trust administration. His practice also focuses on business law and commercial real estate transactions. In 2005, Alan was elected as a Fellow of the American College of Trust and Estate Council (ACTEC). ACTEC is a national organization of approximately 2,600 lawyers elected to membership by demonstrating the highest level of integrity, commitment to the profession, competence and experience as trust and estate counselors. You can view more information about Alan’s law practice by visiting the Erickson | Sederstrom website Practice Areas covering Estate Planning, Real Estate, Corporate Law and Government Relations.

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Chapter 25 - Accountings and Federal and State Income Tax Issues for the Estate

Table of Contents

25-1 Flow Chart - First Client Conference ....................................................................865

25-2 Flow Chart - Preliminary Matters in Estate Accounting .....................................866

25-3 Flow Chart - Joint Accounts ...................................................................................866

25-4 Flow Chart - Purposes of Estate Accounting .........................................................866

25-5 Flow Chart - Estate Income Tax .............................................................................869

25-6 Period of Administration .........................................................................................871

25-7 Commencement of Administration ........................................................................872

25-8 Nebraska Statutes ....................................................................................................872

25-9 Nebraska County Court Rules ................................................................................875

25-10 Waiver of Accounting ..............................................................................................875

25-11 Full Accounting ........................................................................................................877

25-12 Income in Respect of a Decendent ..........................................................................879

25-13 Quicken Accounting .................................................................................................880

25-14 Claims........................................................................................................................881

25-15 Distribution of the Estate ........................................................................................884

25-16 Income Taxes ............................................................................................................886

25-17 Administration Expenses.........................................................................................894

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25-18 Distributable Net Income ........................................................................................895

25-19 Basis ...........................................................................................................................896

25-20 TrustorTrusteeasBeneficiar of“Estate” ...........................................................897

AppendixAppendix A: Bank Authorization, example ..................................................... 899Appendix B: Bank Letter, example .................................................................. 900Appendix C: Affidavit and Agreement Confirming Title in Successor Trustees ....................................................................................... 901Appendix D: Authorization for Investment Company to Release Information ..................................................................................... 903Appendix E: Letter to Investment Company Requesting Information ............ 904Appendix F: Letter to DHHS to Request Waiver and Certificate .................... 905Appendix G: Certificate of Trust ...................................................................... 907Appendix H: Final Accounting, example ......................................................... 911Appendix I: Supplemental Final Accounting, example ................................... 915

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Chapter 25 - Accountings and Federal and State Income Tax Issues for the Estate

25-1 Flow Chart - First Client Conference

a. Obtain copies of decedent’s:

i. latest bank statements,

ii. brokerage accounts, and

iii. last income tax return with the 1099s used for preparation of the return.

b. Obtain written Personal Representative Authorization to communicate directly with the bank or broker. See Appendix A Bank Authorization.

c. Obtain written Personal Representative Authorization to communicate directly with investment company. See Appendix D, Authorization for Investment Company to Release Information.

d. Have the Personal Representative and/or Trustee sign a letter to DHHS requesting a waiver of the prohibition of trust distribution from a revocable trust that became irrevocable by reason of death authorizing release of Medicaid information to the attorney and sign the DHHS form. [LB 72 (2015) & LB 268 (2017)]. See Appendix F.

Note: Acts of a PR before appointment that are beneficial to the estate have the same effect as those occurring thereafter. See §30-2462. If PR signs before appointment, wait until after appointment before presenting the signed document to the DHHS. File the DHHS waiver with the County Court inheritance tax pleadings with a Certificate of County Court Proceeding Involving Real Estate filed against the real estate or in the alternative file with the register of deeds the DHHS waiver letter with an affidavit that includes the real estate legal description.

e. Have the successor trustee sign an Affidavit and Agreement Confirming Title in Successor Trustees when the decedent was a trustee and there is a successor trustee in order to establish the authority of the successor trustee. The trust needs to be (a) identified, (b) establish the need for a successor trustee, (c) recite how the successor trustee is selected, (d) who is the successor trustee, (e) acceptance to serve as the successor trustee and (f) the legal description of any real estate involved. See Appendix C. This should be filed against the real estate with the Register of Deeds.

f. Having the successor trustee sign a Certificate of Trust is required. See §30-38,101 - §30-38,107. Note: All trustees must sign the Certificate of Trust. §30-38,103(b). See Appendix G.

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25-2 Flow Chart - Preliminary Matters in Estate Accounting

a. Mail letter requesting date of death values from banks, investment companies or financial institutions. See Appendix B and E. Include authorization to release information, Appendix A and D.

b. Apply for an employer identification number (EIN) online at www.irs.gov by clicking on “Apply for an Employer ID Number.” Third party applicants must have a signed hardcopy SS-4 and other written authorization (such as Form 2848) from the Personal Representative before applying.

c. Open an estate bank account giving the bank the estate EIN, Personal Representative Authorization to deal with the bank (Appendix D) and file stamped copy of Letters of Personal Representative, [the bank may request a certified copy]. The mailing address should be in care of the lawyer not the PR. Request fiduciary (PR) checks from the bank, usually the banks will provide them without charge. Keep the blank estate checks with the law office. Have Personal Representative come in to sign them.

d. Obtain records of all accounts held in the decedent’s name for account activities after date of death to the date the account balance is transferred to the estate account.

25-3 Flow Chart - Joint Accounts

a. Avoid using joint account for estate account where someone other than the Personal Representative may draw upon the account.

b. Accounting on joint accounts may be necessary if after date of death estate income and expenses are deposited or withdrawn from the joint account. Avoid joint account with comingled funds. Warn that in order to reconcile a comingled account, all activity will be reported in estate accounting.

c. The best practice is to loan funds from the joint account (or loan from life insurance death benefits) to the estate account. Usually the “loan” is for a short duration. Basic loan formalities should be followed documented by a promissory note. The loan should be paid back with an appropriate short term interest rate applied. If estate liquidity is inadequate, then the Schedule of Distribution should reflect the appropriate adjustments.

25-4 Flow Chart - Purposes of Estate Accounting

a. Accurately report the liquid assets the Personal Representative has managed in his/her fiduciary capacity.

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i. Reconcile the cash accounting to the inventory. A common problem is the funds transferred to the estate account do not match the balance of the source of the funds listed in the inventory. The inventory balance may need to be corrected if there is activity in the account after the date of death. Outstanding checks that cleared the bank after date of death should be included in the accounting.

ii. Reconcile estate accounting to the estate bank account as well as the other accounts that have activity after date of death.

iii. Reconcile estate accounting to the Schedule of Distribution. The best practice is to distribute cash only from the estate bank account. Thus, first transfer funds to the estate bank account then distribute to beneficiaries.

iv. Provide the accounting to the court, Appendices H and I, and to the heirs. The best practice is to include three accounting reports with the Final Accounting pleading:

(1) a journal of the check register,

(2) a summary with category totals, and

(3) a full detailed report of all accounts and all entries totaled by category and subcategory:

(a) include a bank statement confirming the ending balance

(b) a supplemental final report should recite a zero balance at the close of the probate proceeding.

b. Monitor administration of estate

i. Pay claims

(1) Priority of paying claims in an insolvent estate. Neb. Rev. Stat. § 30-2487.

(a) Costs and expenses of Administration,

(b) Reasonable Funeral Expenses,

(c) Debts and taxes with preference under federal law,

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(d) Reasonable and necessary medical and hospital expenses of the last illness of the decedent, including compensation of persons attending the decedent and claims filed by the Department of Health and Human Services pursuant to § 68-919;

(e) Debts and taxes with preference under laws of Nebraska, and

(f) All other claims.

(2) Abatement of the assets of an estate in satisfaction of claims and expenses. Neb. Rev. Stat. § 30-24,100.

(a) property not disposed by will,

(b) residuary devises,

(c) general devises,

(d) specific devises.

ii. Pay costs and expenses of administration incurred in taking possession or control of estate assets and the management, protection, and preservation of the estate assets, expenses related to sale of estate assets, and expenses in the day-to-day operation and continuation of business interests for the benefit of the estate. Neb. Rev. Stat. § 30-2487(c). The best practice is to pay expenses in the fiscal year in which the estate has income to offset the expenses.

(1) Utilities for benefit of estate assets.

(2) Telephone & travel for heirs limited to benefit of estate.

(3) Insurance coverage to maintain estate assets.

(4) Expenses on joint tenancy assets may not be a benefit to the estate (i.e. real estate taxes, insurance and utilities).

(5) Sale expenses are now an administrative expense

(6) Attorney and Personal Representative fees.

iii. Maintain record of liquidation of estate assets.

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iv. Maintain record of distribution of cash of estate to the beneficiaries as reconciled to the Schedule of Distribution report.

25-5 Flow Chart - Estate Income Tax

a. Discuss with Personal Representative who will be responsible for preparing the income tax return for the estate (Form 1041). The Personal Representative will often select the same CPA who prepared the decedent’s personal returns during the decedent’s life. In addition, advise the Personal Representative that he or she is responsible for filing a final personal income tax return (Form 1040) for the decedent for the period of January 1 through the date of death.

b. Attorneys who prepare 1041’s as a part of their practice should consider using appropriate software. Examples of software are Quicken, Turbo Tax, Intuit Pro Series, Intuit Lacerte and GEMS.

c. Form - 1041 Income Tax Return for Estates and Trusts is available online for no charge at: http://www.irs.gov/pub/irs-pdf/f1041.pdf

You may fill in and print the form, but the form does not compute the math. This form has document rights attached to it. You may save the completed form to your computer. These rights allow anyone completing the form with the free Adobe Reader to save their filled-in form.

d. Form - 1041N Nebraska Fiduciary Income Tax Return is available online for no charge at www.revenue.nebraska.gov and clicking on “Forms” and then “Fiduciary Income Tax.”

e. Provide data for tax preparation.

i. Sort accounting records by categories that are limited to fiscal year.

ii. Itemize taxable income and deductible expenses.

iii. Determine taxable distribution for tax preparation.

(1) Allocate income and expenses to beneficiaries vs the estate

(2) Allocate principal and income distributions

(3) Allocate expenses to taxable and non-taxable income

iv. Inheritance tax deductions.

http://www.irs.gov/pub/irs-pdf/f1041.pdf

http://www.irs.gov/pub/irs-pdf/f1041.pdf

http://www.revenue.nebraska.gov

http://www.revenue.nebraska.gov

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f. Establish Fiscal year and monitor:

i. End of Fiscal Year. Use IRS Form 8855 - Election to Treat a Qualified Revocable Trust as Part of an Estate, to permit a testamentary trust to have a non-calendar year fiscal year the same as is permitted for an estate (even without an estate proceeding). The election is irrevocable. I.R.C. § 645

ii. The due date for the Fiduciary Income Tax Return (1041) is three and one-half months after close of fiscal year.

iii. 65 day look back rule permitting the allocation of a distribution to the prior tax year if the distribution is within 65 days of the close of the fiscal year. See 25-16(b)(iii)(3).

iv. Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns. Filing Form 7004 provides an automatic five and one-half (5 1/2) month extension of form 1041 due date. The Form 7004 does not extend the time for payment of tax.

g. Taxable income

i. 1099s not including estate proportionate share of income should use a nominee payee if estate income is included in the deceased individual’s personal form 1099.

(1) At least give full disclosure on the individual income tax reporting the gross 1099 amount and recite a decrease in the gross 1099 income for the amount of 1099 income that should have been allocated to the decedent, include the estate taxpayer identification number.

ii. Stepped up basis

(1) Capital gains after date of death based upon the gain exceeding the date of death value.

(2) Decrease in basis, (step-down); the best practice is to sell before death stock that has declined in value or gift it to the spouse or third party so that the donee retains the donor’s basis.

(3) The stepped up basis of business assets, buildings, irrigation wells, pivots, equipment, etc. should be depreciated as if purchased at date of death for the stepped up basis, notwithstanding

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depreciation previously claimed before death. Best practice is to allocate value to be depreciated on the inventory, item by item to establish the stepped up basis per item. See 25-12b vii, regarding crop stepped up basis.

(4) No stepped up basis

(a) income in respect of a decedent. See 25-12.

iii. Allocate a share of estate expenses to the tax free income such as municipal bonds.

iv. Income in respect of a decedent such as E bonds, retirement plans, landlord growing crops, and the taxable portions of annuities all create taxable income after date of death without a step up in basis.

25-6 Period of Administration

a. Estates of deceased persons are separate income tax entities. The estate entity is taxed on “income received by estates of deceased persons during the period of administration or settlement of the estate.” I.R.C. § 641(a)(3).

b. Neb. Rev. Stat.§ 30-2464(a) imposes a duty on the Personal Representative to proceed …as expeditiously and efficiently as is consistent with the best interests of the estate.

i. Treas. Reg. § 1.641(b)(3) requires that “the administration of an estate cannot be unduly prolonged.” An estate is considered terminated for income tax purposes after the expiration of a reasonable time for the performance of the duties of administration or the distribution of all assets other than reasonable amounts retained for the payment of unascertained or contingent liabilities and expenses.

ii. Since a Personal Representative may be personally liable for a distribution ahead of a claim of the United States, administration logically may be postponed until a final determination of the federal income and estate tax liabilities of the estate. See 31 U.S.C. § 192; see also I.R.C. § 2204.

c. “If the decedent's estate is open for more than two years, attach explanation for the delay in closing the estate, ...” IRS form 1041, page 2, line 8.

d. An estate with S corp stock electing on form 8855 (I.R.C. Code § 645 election) must distribute the stock within two years of death or elect to be a qualified sub chapter S Trust (QSST). I.R.C. §1361(c)(2)(A)(iii). Otherwise, S corp status is lost.

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25-7 Commencement of Administration

a. Administration of an estate is commenced by the issuance of letters, after either formal or informal procedures. Neb. Rev. Stat. § 30-2403

b. The duties and powers of Personal Representatives commence upon appointment, but the Personal Representative's powers relate back in time to give beneficial acts occurring prior to appointment the same effect as those occurring thereafter. Neb. Rev. Stat. § 30-2462.

c. The first fiscal year of an estate for income tax purposes begins on the date of death.

25-8 Nebraska Statutes

a. PERSONAL REPRESENTATIVE

i. Neb. Rev. Stat. § 30-2464(a): “A personal representative is a fiduciary who shall comply with the prudent investor rule set forth in Neb. Rev. Stat. § 30-3883 to § 30-3889.

ii. Neb. Rev. Stat. §30-3201 Prudent Investor Rule: “Except as may be otherwise provided in §8-318, or otherwise provided by law or by the instrument creating the fiduciary relationship involved, each and every trustee, guardian, conservator, executor, or administrator, whether appointed by the courts of this state, or acting under authority other than a court appointment, having funds for investment shall comply with the prudent investor rule set forth in Neb. Rev. Stat. § 30-3883 to § 30-3889.”

iii. A personal representative shall take all steps reasonably necessary for the management, protection, and preservation of the estate in his possession. Neb. Rev. Stat. §30-2470. A personal representative is also “liable to interested persons for damage or loss resulting from breach of his fiduciary duty to the same extent as a trustee of an express trust.” Neb. Rev. Stat. §30-2473.

iv. There is no duty to report accounting in a probate proceeding; but there is provision in Neb. Rev. Stat. §30-24,115 and §30-24,116 for the court to approve an accounting in a formal proceeding.

v. “A Personal Representative shall proceed expeditiously with the settlement and distribution of a decedent’s estate and, except as otherwise specified or ordered in regard to a supervised personal representative, do so without adjudication, order or direction of the court . . .” Neb. Rev. Stat. § 30-2465.

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b. Nebraska’s Uniform Principal and Income Act provides directions to separate principal from income. These rules are default provisions and the document controls. This arena is in the spotlight when there are beneficiaries that have a right to income that differs from the interests of remainder beneficiaries and final distributees.

i. Definitions and Fiduciary Duties

(1) Neb. Rev. Stat. §30-3116 - Act, how cited. – Uniform Principal and Income Act.

(2) §30-3117 Definitions.

(3) §30-3118 Fiduciary duties; general principles.

(4) §30-3119 Trustee's power to adjust.

(5) §30-3119.01 Conversion to total return trust. (Amended 2010)

(6) §30-3120 Judicial control of discretionary powers.

ii. Decedent’s Estate or Terminating Income Interest

(1) §30-3121 Proposed action; notice; objections.

iii. Apportionment at Beginning and End of Income Interest

(1) §30-3122 Determination and distribution of net income.

(2) §30-3123 Distribution to residuary and remainder beneficiaries.

(3) §30-3124 When right to income begins and ends.

(4) §30-3125 Apportionment of receipts and disbursements when decedent dies or income interest begins.

(5) §30-3126 Apportionment when income interest ends.

iv. Allocation of Receipts During Administration of Trust

v. Receipts From Entities

(1) §30-3127 Character of receipts.

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(2) §30-3128 Distribution from trust or estate.

(3) §30-3129 Business and other activities conducted by trustee.

vi. Receipts Not Normally Apportioned

(1) §30-3130 Principal receipts.

(2) §30-3131 Rental property.

(3) §30-3132 Obligation to pay money.

(4) §30-3133 Insurance policies and similar contracts.

(5) §30-3134 Insubstantial allocations not required.

(6) §30-3135 Deferred compensation, annuities, and similar payments.

(7) §30-3135.01 Trust; marital deduction; when provisions applicable.

(8) §30-3136 Liquidating asset.

(9) §30-3137 Minerals, water, and other natural resources.

(10) §30-3138 Timber.

(11) §30-3139 Property not productive of income.

(12) §30-3140 Derivatives and options.

(13) §30-3141 Asset-backed securities.

vii. Allocation of Disbursements During Administration of Trust

(1) §30-3142 Disbursements from income.

(2) § 30-3143 Disbursements from principal.

(3) § 30-3144 Transfers from income to principal for depreciation.

(4) § 30-3145 Transfers from income to reimburse principal.

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(5) § 30-3146 Income taxes.

(6) § 30-3147 Adjustments between principal and income because of taxes.

viii. Miscellaneous Provisions

(1) § 30-3148 Uniformity of application and construction.

(2) § 30-3149 Application of act to existing trusts and estates.

25-9 Nebraska County Court Rules

a. Neb. Ct. R.§ 6-1435 -CREDITOR-DEBTOR INFORMATION

If the person nominated as personal representative, guardian, or conservator is indebted to the estate or is a creditor of the estate, it shall be his or her duty and the duty of his or her attorney to so inform the court in writing before the appointment is made.

b. Neb. Ct. R. § 6-1437(a) - CLAIMS OF PERSONAL REPRESENTATIVES

No personal representative who has individual claims of his or her own which arose against the decedent prior to the death of the decedent shall pay the claims in excess of an aggregate amount of $250 without first specifically informing the court of his or her adverse interest and obtaining the approval of the court.

c. Neb. Ct. R. § 6-1438 - REPORT OF FEES TO PERSONAL REPRESENTATIVE

In all probate matters where an interlocutory or final report is filed, or an account of administration to distributees is made in closing an estate by a sworn statement, or a schedule of distribution is filed with the court and any such document reports payment of any fee paid or to be paid to a personal representative, guardian, conservator, or attorney, the document must specify whether the fee was by agreement of the parties or was fixed by the court.

25-10 Waiver of Accounting

a. Avoid Accounting

i. There are two schools of thought on probate accounting: (1) avoid and (2) tender a full accounting. The middle ground of partial accounting may expose the personal representative and possibly counsel for the personal representative to misfeasance and malpractice. Either proper accounting should be provided or waived.

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ii. To avoid rendering an accounting have all interested persons waive an accounting.

Interested person is defined to include heirs, devisees, children, spouses, creditors, beneficiaries, and any others having a property right in or claim against a trust estate or the estate of a decedent, ward, or protected person which may be affected by the proceeding. It also includes persons having priority for appointment as personal representative, and other fiduciaries representing interested persons. The meaning as it relates to particular persons may vary from time to time and must be determined according to the particular purposes of, and matter involved in, any proceeding... Neb. Rev. Stat. § 30-2209(21)

A person . . . may waive notice or any other requirement for the mailing or receipt of instruments by a writing signed by him or his attorney and filed in the proceeding. Neb. Rev. Stat. § 30-2221.

iii. The use of no accounting is limited. First, it may expose the personal representative to personal liability without adequate accounting records. Remember that an informal closing of an estate terminates the appointment of a personal representative under Neb. Rev. Stat. § 30-24,117(b) one year after the filing of a closing statement. § 30-2453(a) .

“Unless previously barred by adjudication and except as provided in the closing statement, the rights of successors and of creditors whose claims have not otherwise been barred against the personal representative for breach of fiduciary duty are barred unless a proceeding to assert the same is commenced within six months after the filing of the closing statement. The rights barred by reason of the filing of the closing statement do not include rights to recover from a personal representative for fraud, misrepresentation, or inadequate disclosure related to the settlement of the decedent's estate.” Neb. Rev. Stat. § 30-24,119.

iv. A formal closing may be had upon notice and after claim date whereby the court may enter an order, upon appropriate conditions, adjudicating the settlement and directing or approving distribution of the estate and discharging the personal representative from further claim or demand or any interested person. Neb. Rev. Stat. § 30-24,116. After the time for appeal, the order is final.

v. The opportunity to partake of the various income tax benefits may be severely restricted if not lost by waiving the accounting.

vi. The waiver of accounting is appropriate when estate an is closed informally and especially if the personal representative and the sole devisee are one and the same, provided there are no substantial business assets and the potential income of the estate is minimal. It is wise to use a receipt of final and complete

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distribution that accepts the settlement of the estate without a formal accounting. Rather than filing a voluminous final report in a non-controversial case, all interested persons may waive the filing of the final report, acknowledging that they have received a copy of the report and accept the report as true and correct.

25-11 Full Accounting

a. The best practice is a full estate accounting even when the personal representative is the sole beneficiary. There is a certain peace of mind to wrap up all the loose ends with a complete accounting. Often the non-beneficiaries, adult children want to know what happened to the estate funds and the parent is unable to render an accounting without assistance. The attorney for the estate should take the responsibility to see proper accounting is made.

b. The best practice is for the law office to provide the accounting as a part of the probate proceeding legal services. Few individual personal representatives keep adequate books. Decrease the surprises and keep the responsibility of maintaining the accounting within the law firm.

c. Keep control. Write all the checks with the personal representative having sole authority to sign the checks. Make the bank deposits for the personal representative.

d. When the bank account is opened, arrange for the bank statements and cancelled checks to be mailed directly to your law office. Make sure the estate checking account draws interest. Often the personal representative is not prompted by the bank to make arrangements for an interest-bearing account.

e. Directly after the initial interview, mail letters [Appendix B and E] to confirm the bank and investment balances as of dates of death. Banks will require the personal representative’s signature with Letters of Appointment before the information is released. The best practice is to include with your request for information from the bank, an authorization signed by the personal representative for the bank to provide the requested information directly to you. [Appendix A and D] Also provide the bank with the estate's employer identification number.

f. IRS form SS-4 needs to be signed. Apply online for employer identification number (EIN) first thing at https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online using the law office as the mailing address. The sooner banks or other financial institutions are put on notice to report the income earned after the date of death in the name of the estate, the less hassle there is to explain to the IRS what was pre-death and post-death earnings. Both the banks, insurance companies and Farm Services Agency will want the estate EIN immediately. Applying for an EIN online will also alert the IRS to be looking for a fiduciary return.

g. To avoid personal liability with the IRS the personal representative must identify fiduciary capacity on a Form 56.

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h. All is for naught if the Personal Representative is not alerted from the very start that the assets, income and expenses of the estate are estate matters and not personal matters. Pay estate expenses through the estate checking account. The personal representative usually violates this rule before he or she knows any difference. There is an urge to pay the decedent’s bills promptly in his memory, especially if there are joint funds. It helps to explain that the court supervises an estate proceeding and the personal representative will be rendering an accounting to the court. Also, expenses paid by the personal representative may lose the tax deduction afforded an estate that may not be available to the individual.

i. To remedy the situation, have the estate reimburse the individual for estate expenses paid personally or have the erroneous deposit of estate funds into an individual’s account reimbursed into the estate account. Clear up such reimbursements without delay.

ii. The duties and powers of a personal representative commence upon his appointment. The powers of a personal representative relate back in time to give acts by the person appointed which are beneficial to the estate occurring prior to appointment the same effect as those occurring thereafter. Prior to appointment, a person named executor in a will may carry out written instructions of the decedent relating to his body, funeral and burial arrangements. A personal representative may ratify and accept acts on behalf of the estate done by others where the acts would have been proper for a personal representative.” Neb. Rev. Stat. § 30-2462. See § 30-2223, LB998 §8 (2014) “Right of disposition of remains and funeral arrangements ...” including a form to direct disposition of remains.

i. If the decedent had a bank account or other source of funds that are not in joint tenancy, such funds are transferred into the estate checking account.

j. Often all liquid assets are held in joint tenancy. In such an event request a surviving joint tenant to loan funds to the estate account. A loan is better than a contribution of funds since a loan can be paid back without the presumption of a distribution of income. Ensure that these funds are designated as a loan to the estate. Also be sure to designate the loan in the accounting for the estate. Remember a personal representative's fiduciary duty does not permit, much less require, the personal representative to take possession of property held in joint tenancy which does not lawfully belong to the estate. Zimmerman v. FirsTier Bank, 255 Neb. 410, 585 N.W.2d 445 (1998), as cited in In re Estate of Rosso, 270 Neb. 323 (2005). An insolvent estate would be an exception to this rule. An insolvent estate would be an exception to this rule. See 25-14 a. xiii.

k. The accounting should include all liquid assets and revenue that ultimately flow through the estate checking account. All liquid funds should flow through the estate checking account. All claims and administration expenses should be paid from the estate checking account. All distributions should be made either in kind or through the estate checking account. In other words a CD may be transferred to a devisee if it is not cashed or rewritten; otherwise disburse

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CD proceeds through the estate checking account; cash them and deposit the CD proceeds in the estate checking account. CDs may be redeemed prematurely without penalty by reason of death of the owner, even if the CD is in decedent’s name and another name. Federal Reserve (2-343.12) and (2-343.15) Regulation D (Rulings and Opinions) and 12 CFR 204.2(c)(1)(i)(d).

l. Often more than one estate account must be maintained, such as a stock broker account, savings account and CD investments. Accounting should both reflect the balance in each account to verify the balance and accumulated together to provide the overall picture for tax and distribution purposes. A copy of the estate accounting with documentation to confirm the balance of each account should be presented to the personal representative periodically and at least at the time of the notice for the final closing to interested persons. Accounting with a running balance is helpful.

m. In the initial interview, be sure to discuss insurance

i. Is there adequate auto, casualty and liability insurance coverage and when is the premium due?

ii. Is there a refund due for premiums paid for medical, life, disability, accident or auto insurance?

iii. What is the status of the health insurance claims? A good form of accounting is to include both medical expenses paid and health insurance benefits as two (2) subcategories under Medical Expenses.

n. There is a duplicity of entry for funds in the inventory that are liquid or liquidated and reported in the estate accounting, such as interest earned before date of death, insurance premium refunds and benefits, various items of income in respect of a decedent as well as CDs and assets that are cashed. Maintain such items under a ledger category called inventory.

25-12 Income in Respect of a Decedent

a. Income in respect of a decedent, [IRD] is income received after date of death that would have been reported on the decedent’s individual income tax return if the decedent had lived. There is no step-up in basis. IRD results in a double tax at the estate level, as distributions of IRD are taxable as income and the value of IRD is subject to death taxes (i.e. Nebraska Inheritance Tax and possibly Federal Estate Tax). However, see paragraph “c” below regarding a potential deduction allowed to beneficiaries for estate tax paid on IRD assets.

b. Examples of IRD include income accrued prior to date of death and received after date of death:

i. US government Series E & EE bonds or H or HH bonds that carry E bond interest that accrued but has not been previously taxed.

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ii. IRA and Pensions

iii. Deferred Compensation

iv. Wages

v. Self-Employed Compensation

vi. Non-Qualified Annuities (only partially IRD)

vii. Raised crops or crop rental share. If the crops are growing the crops are allocated to date of death as IRD estate asset, with no step up in basis, and after date of death as ordinary income to the estate, subject to both estate tax and income tax. An active farmer’s crops are an inventory asset with a stepped up basis, Rev. Rul. 58-436, 1958-2 C.B. 366.

viii. Installment Sales

c. Federal Estate tax attributable to IRD is deductible as a form 1040 itemized deduction. I.R.C. §691(c)(1); Reg § 1.691(c)-1(a). The deduction is determined as follows:

i. Compute the “net value” of all IRD items included in the decedent's estate reported in the form 706. The net value is the total value of the IRD items in the estate, reduced by any deductions in respect of the decedent. These are items which are the converse of IRD: items the decedent would have deducted on his final income tax return had he lived.

ii. Determine how much of the federal estate tax was due on the net IRD by calculating what the estate tax would have been without it.

iii. The deduction is the percentage of the estate tax on the IRD.

25-13 Quicken Accounting

a. Quicken is an accounting solution for fiduciary reports. Quicken is an inexpensive extremely popular checkbook management program that has grown into an extremely sophisticated single entry bookkeeping system. The “Basic or Starter” version of Quicken is all that is needed and can be purchased online (www.quicken.com) or anywhere software is sold for $39.99. The “Deluxe” Version is $74.99 and is compatible with the template marketed by ACTEC, the American College of Trust and Estate Counsel. The ACTEC template can be purchased at www.actec.org/publications/quicken-templates. Google: Fiduciary Accounting with Quicken. This is not for QuickBooks. Such template conforms with the National Fiduciary Accounting Standards and Model Account Format and contains reports tailored to trust and estate matters.

http://www.quicken.com

http://www.actec.org/publications/quicken-templates

http://www.actec.org/publications/quicken-templates

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25-14 Claims

a. Until termination of his appointment a personal representative has the same power over the title to property of the estate that an absolute owner would have, in trust however, for the benefit of the creditors and others interested in the estate. Unless otherwise specifically ordered by the court, this power may be exercised without notice, hearing, or order of court. Neb. Rev. Stat. § 30-2472.

i. A decedent’s property that devolves to the devisee, heir or the successor involving lapse, renunciation, or other circumstances is subject to homestead allowance, exempt property and family allowance, right of creditors, elective share of the surviving spouse and to administration. See Neb. Rev. Stat. § 30-2401.

ii. The time for presenting a claim arising before date of death is two months after the date of the first publication of notice to creditors. A creditor that fails to file a timely claim may apply to the court within sixty days after the claim expiration date for additional time and the court, upon good cause shown, may allow further time not to exceed thirty days. Neb. Rev. Stat. § 30-2485(a)(1).

iii. All claims, other than for administration expenses, against a decedent’s estate which arise at or after the death of the decedent... are barred four months after the contractual performance is due by the personal representative and four months after any other claim arises. A proceeding to enforce a secured claim is excluded. Neb. Rev. Stat. § 30-2485(b)(1).

iv. Payment of a secured claim is based upon the amount allowed if the security is surrendered, or if the security is exhausted, upon the amount of the claim allowed less the fair value of the security; or the balance due after the security is converted into money. Neb. Rev. Stat. § 30-2491.

v. Note, that the personal representative may pay an encumbrance, renew or extend any obligation secured by the encumbrance or satisfy the lien whether or not the holder of the encumbrance has filed a claim. Payment of the encumbrance does not increase the share of the distributee unless the distributee is entitled to exoneration. Neb. Rev. Stat. § 30-2496 . A specific devisee of mortgaged property takes subject to the lien.

vi. Claims of Personal Representatives requires court approval before paying pre-death claims due the personal representative in excess of $250.00. Neb. Ct. R. § 6-1437(a).

vii. In closing an estate, specify whether the fee paid to a personal representative or attorney was by agreement of the parties or was fixed by the court. A statement

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on the Final Accounting (See Appendix C) that the fees were by agreement is adequate. Neb. Ct. R. § 6-1438.

viii. Upon the expiration of two (2) months from the date of the first publication of the notice to creditors, the personal representative shall pay the claims after making allowance for homestead, family and support allowances, appealed claims and unbarred claims which may yet to be presented. Neb. Rev. Stat.§ 30-2489(a). Payment of Claims; Order. Neb. Rev. Stat. § 30-2487:

(1) If the applicable assets of the estate are insufficient to pay all claims in full, the personal representative shall make payment in the following order:

(a) Costs and expenses of administration;

(b) Reasonable funeral expenses;

(c) Debts and taxes with preference under federal law;

(d) Reasonable and necessary medical and hospital expenses of the last illness of the decedent, including compensation of persons attending to the decedent and claims filed by the Department of Health and Human Services pursuant to Neb. Rev. Stat. § 68-919;

(e) Debts and taxes with preference under other laws of this state;

(f) All other claims.

(2) No preference shall be given in the payment of any claim over any other claim of the same class, and a claim due and payable shall not be entitled to a preference over claims not due.

ix. For purposes of Neb. Rev. Stat. § 30-2485, costs and expenses of administration includes expenses incurred in taking possession or control of estate assets and the management, protection, and preservation of the estate assets, expenses related to the sale of estate assets, and expenses in the day-to-day operation and continuation of business interests for the benefit of the estate. Neb. Rev. Stat.§30-2487.

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x. Under 31 U.S.C. § 3713(a) and (b) a personal representative may be personally liable for paying certain claims before a claim owed to the federal government.

xi. If the will expresses an order of abatement or if the testamentary plan or the express or implied purpose of the devise would be defeated by the order of abatement stated above, the share of the distributees abate as may be found necessary to give effect to the intention of the testator. Neb. Rev. § 30-24,100(b).

xii. One of the often overlooked provisions of the probate code is the requirement of filing claims within the two (2) month claim date. More often than not, the personal representative insists on paying the claims before claim date. As long as the estate is solvent and there are assets to satisfy all claims, the personal representative may pay claims as the liquid funds are available. If the estate is not solvent, wait to pay claims until all claims are identified.

(1) The personal representative at any time may pay any enforceable claim which has not been barred, with or without formal presentation, but he is personally liable to any other claimant whose claim is allowed and who is injured by such payment if the payment was made before the expiration of the time limit . . . and the personal representative failed to require adequate security for the refund or . . . the payment was made, due to the negligence or willful fault of the personal representative, in such manner as to deprive the injured claimant of his priority Neb. Rev. Stat. § 30-2489 .

(2) ...[A] distributee of property improperly distributed or paid, or a claimant who was improperly paid, is liable to return the property improperly received and its income since distribution if he has the property. If he does not have the property, then he is liable to return the value as of the date of disposition of the property improperly received and its income and gain received by him. Neb. Rev. Stat. § 30-24,107.

(3) The property liable for the payment of unsecured debts of a decedent includes all property transferred by him by any means which is in law void or voidable as against his creditors, and, subject to prior liens, the right to recover this property, so far as necessary for the payment of unsecured debts of the decedent, is exclusively in the personal representative. Neb. Rev. Stat. § 30-2471.

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xiii. If other assets of the estate are insufficient, a transfer resulting from a right of survivorship or POD designation under §§ 30-2716 to 30-2733 is not effective against the estate of a deceased party to the extent needed to pay claims against the estate, statutory allowances to the surviving spouse and children, taxes, and expenses of administration.

(1) A surviving party or beneficiary who receives payment from an account after death of a party is liable to account to the personal representative of the decedent for a proportionate share of the amount received to which the decedent, immediately before death, was beneficially entitled under § 30-2722, to the extent necessary to discharge the amounts.

xiv. An interesting question is whether a claimant paid before claim date must file a claim. It would appear that the personal representative can demand a refund and the prepaid claimant is out. If the estate is solvent, the creditor’s preference problem will be moot but all beneficiaries whose share of the estate may be diminished should consent to the payment of a barred claim.

xv. Remember that allowed claims bear interest at the legal rate for the period commencing sixty (60) days after the time of original presentation or the claim has expired, unless the claim is based on a contract with stated interest, Neb. Rev. Stat. § 30-2488(e) General pecuniary devises bear interest at the legal rate beginning one year after the personal representative is appointed, unless a contrary intent is indicated by will Neb. Rev. Stat. § 30-24,102.

25-15 Distribution of the Estate

a. The Nebraska Probate Code favors an in-kind distribution of the estate to the extent possible, see Neb. Rev. Stat. § 30-24,104. Remember that a personal representative may distribute the estate after the probable charges against the estate are known. The personal representative may mail a proposal for distribution (Schedule of Distribution) to all persons who have a right to object to the proposed distribution and the right to object terminates if not waived earlier in writing, by reason of failure to object in writing within thirty (30) days after mailing of the proposal. Neb. Rev. Stat. § 30-24,104(b). When circulating the proposed Schedule of Distribution, be sure to advise the distributees as a part of the Notice of their right to object and the consequences of failing to object within thirty (30) days.

b. Distributable net income (DNI), defined under I.R.C. 643(a), of an estate is allocated to the beneficiaries of the estate as follows:

i. Mandatory distribution of income is income taxable to the beneficiary whether or not it is paid.

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ii. Any amounts properly paid or credited or required to be distributed remaining after required income distributions are accounted for as income to the beneficiary receiving the distribution, (see Treasury Regs. 1.662(a)-1(2) and Regs. 1.661(a)-2(e)), regardless of the nature of the distribution (cash or in-kind) or even in satisfaction of widow’s or family allowance, Regs. 1.662(a)-3(b)), except for:

(1) A bequest of a specific sum of money or specific property is not a distribution of DNI; but beware, a distribution in-kind in satisfaction of a specific dollar amount may create gain or loss. Rev. Rul. 86-105, 1986-2 C.B. 82 I.R.C. 15.

(2) Real estate passing directly from the decedent to heirs or devises is not deductible by the estate under I.R.C. § 661 nor includable in the devisee’s income under I.R.C. § 662 when the personal representative releases possession of the real estate. Rev. Rul. 68-49, 1968-1 C.B. 304. See Reg. 1.661(a)-2(e), also see the following comment:

(3) Real estate distributions are excluded from distributions of income if local law passes title directly from the decedent to his heirs or devisees. Rev. Rul. 1.661(a)-(2)(e). Under the Nebraska Probate Code, title to a decedent’s property passes to his heirs and devisees at the time of his death. Neb. Rev. Stat. § 30-2401. Neb. Rev. Stat. § 30-2499 outlines how successors may establish record title in the absence of administration. The personal representative is given power over title, not title to property. The relationship of the personal representative to the estate is that of a trustee, Neb. Rev. Stat. § 30-2472. Neb. Rev. Stat. § 30-2470 deals with the personal representative’s duty and right to possess the assets of the estate.

iii. The beneficiary of an estate is taxed on the income of the estate to the extent cash or other property is distributed, or required to be distributed, to the beneficiary. The Personal Representative can affect this result under I.R.C. § 642(e) by electing to treat distributions of property appreciated after death as a sale to the beneficiary, who then recognizes income to the extent of the fair market value of the asset and also receives basis in the asset equal to fair market value.

iv. The taxability of the beneficiary is limited to the portion of the DNI of the estate apportioned to the beneficiary under the tier system of Treas. Reg. § 1.662(a). The first tier is the income required to be currently distributed, which includes the surviving spouse's allowance. All other distributions are second tier distributions and the remaining DNI is ratably apportioned among them.

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v. Interest paid a beneficiary for late payment of a bequest or inheritance, or allowed claims under Neb. Rev. Stat. §30-2488(e), is not a distribution of DNI. Rev. Rul. 73-322, 1973-2 C.B. 44.

vi. As a general rule capital gains are not DNI, I.R.C. § 643(a)(3), and are therefore trapped in the trust that only distributes income unless the gains are allocated to the fiduciary accounting income, allocated to principal and paid or required to be distributed to a beneficiary, or used for charitable purposes as specified in I.R.C. § 642(c).

vii. If the distribution exceeds the DNI, the beneficiary only reports the income to the extent of the DNI.

c. Private Agreements.

i. Subject to the rights of creditors and taxing authorities, competent successors may agree among themselves to alter the interests, shares, or amounts to which they are entitled under the will of the decedent, or under the laws of intestacy, in any way that they provide in a written contract executed by all who are affected by its provisions. Neb. Rev. Stat. § 30-24,110.

ii. The trap of a private agreement is the potential gift tax consequences.

iii. A qualified disclaimer by an heir or beneficiary under I.R.C. § 2518 is not a gift of disclaimed property as long as the disclaimer is filed within nine (9) months after death and the party disclaiming has accepted no benefits from the disclaimed property. If the disclaiming party directs where the benefits pass, the disclaimer is no longer qualified. Regs. 25.2518-2(e). Renunciation under Neb. Rev. Stat. § 30-2352 is often appropriate as long as the ultimate successor beneficiary follows the desire of the party renouncing.

25-16 Income Taxes

a. Form - 1041 Income Tax Return for Estates and Trusts is available online for no charge at www.irs.gov and by searching for “1041” in the site’s search engine.

You may fill in and print the form, but the form does not compute the math. This form has document rights attached to it. You may save the completed form to your computer. These rights allow anyone completing the form with the free Adobe Reader to save their filled-in form locally.

Form - 1041N Nebraska Fiduciary Income Tax Return is available online for no charge at http://www.revenue.nebraska.gov/. Click on “Forms” and then “Fiduciary Income Tax”. You may fill in and print the form, but the form does not compute the math. Now it can be saved.

http://www.irs.gov

http://www.irs.gov

http://www.revenue.nebraska.gov/

http://www.revenue.nebraska.gov/

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b. Tax Rates

i. In considering the respective tax rates of the fiduciary return for the estate, the personal representative must be mindful that he or she can control to some degree the income tax rates by timing:

(1) The distribution of income, remember, with few exceptions all distributions, even in-kind distributions may result in income to the beneficiary to the extent the estate has income.

(2) The payment of expenses, if the estate is on a cash basis accounting.

(3) The termination of the estate proceeding.

ii. The rate structure for the taxation of accumulated income of estates and trusts has been substantially compressed in order to reduce the benefits of trapping income inside an estate or trust. The tax rates from An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018, formerly known as the Tax Cuts and Jobs Act or TCJA are as follows.:

The 3.8% tax on Net Investment Income starts at adjusted gross fiduciary income of $12,500 for 2018. Use IRS Form 8960.

iii. Estate or trust income that is distributed currently will be taxed to the beneficiary at the beneficiary's marginal rate. The rate structure for individuals and trusts sharply reduces the income tax incentive to accumulate income in an estate by prolonging the period of estate administration.

Rate Fiduciary Single Married Joint

10% Not over $2,550 Not over $9,525 Not over $19,05012% Over $9,525 but

not over $38,700Over $19,050 but not over $77,400

22% Over $38,700 but not over $82,500

Over $77,400 but not over $165,000

24% Over $2,550 but not over $9,150



32% Over $157,500 but not over $200,000


35% Over $9,150 but not over $12,500



37% Over $12,500 Over $500,000 Over $600,000

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(1) Required distributions are taxable to the beneficiary in the tax year in which the distribution is required to be made regardless of the tax year the distribution is made.

(2) The taxable portion of discretionary distributions is included in the beneficiary’s income tax return for the estate’s fiscal year that ends in the beneficiaries tax year. A distribution in November 2017 from an estate with a fiscal year ending in January 2018 will be taxable to the beneficiary in their 2018 individual income tax return. Discretionary distributions are common with a complex trust but a simple trust does not have discretionary distributions.

(3) The estate or trust may elect to have all or a portion of distributions made within the first 65 days of the end of the estate tax year treated as a distribution having been made in the prior year. I.R.C. 663(b). The election is made on page 2 of Form 1041, “Other Information,” line 6.

(4) Caution: estates and trusts are subject to Alternative Minimum Tax, Form 1041, Schedule I. It appears the Alternative Minimum Tax thresholds for individuals changed but no threshold change for estates and trusts, in the 2017 Tax Cuts and Jobs Act, page 151 of the Joint Explanatory Statement of the Committee of Conference.

(5) A Form 1040 married filing joint income tax rate may be used in the year the spouse dies by the surviving spouse. The personal representative signs the joint return and attaches Letters of Personal Representative if there is a refund. If there is no personal representative, the surviving spouse signs the tax return on behalf of the decedent.

(6) If there is a refund due on the decedent’s last Form 1040 file Form 1310. Letters of Personal Representative must accompany Form 1310 when submitted to the IRS.

(7) For two years immediately following the year of death of a spouse, a widow or widower with dependent children may continue to file a form 1040 using joint rates if unmarried at year end, maintains a household for children, is entitled to dependency deduction for at least one child, and was entitled to file a joint return with the deceased spouse. C.F.R. 26 1.6013-1.

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(8) An estate is not required to make estimated income tax payments for the first two taxable years after the death of the decedent. An estate is not required to make estimated income tax payments in respect of the income earned prior to the decedent's death where such payments were due after death. Priv. Ltr. Rul. 91-02-010.

(a) Estate fiscal years ending two (2) or more years after date of death are required to pay estimated tax the same as trusts I.R.C. § 6654(l). The method of making estimated tax payments by estates and trusts under the provisions of I.R.C. 6654(d)(1)(A) is explained in I.R.B.87-51 and Notice 87-32, 1987-16 I.R.B. The vouchers provided by Form 1041-ES must be used.

(b) An estate may elect to treat its estimated tax payments made for its last taxable year as having been made by the beneficiaries. An amount that a trust has elected to treat as an estimated tax payment by a beneficiary is a deductible distribution. I.R.C. § 643(g)

c. PROBATE ADMINISTRATION

i. Fiscal Year

(1) The personal representative may select any accounting period for his first fiduciary return, beginning with the date of the decedent’s death and ending not more than twelve (12) months later. Treas. Regs. § 1.441-1(b)(3).

(a) The election for a short first fiscal year is made on a timely filed fiduciary income tax return, Form 1041. If a fiscal year is not designated, the return must be filed on the basis of a calendar year. Treas. Reg. 1.441-1(d).

(b) After 1986 all trusts are calendar year, I.R.C. 645. However, a trust may elect for the first two years to have a fiscal year the same as an estate. Use IRS Form 8855 “Election to Treat a Qualified Revocable Trust as Part of an Estate” to make election for a trust to have a fiscal year and file

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the Form 8855 with the first Form 1041 filed for the trust/estate.

(c) The first and final fiscal years may be less than twelve (12) months; otherwise, each fiscal year is twelve (12) months in duration.

(d) While an estate may elect a fiscal year, a revocable trust which becomes irrevocable may not, and must be on a calendar year, unless IRS Form 8855 “Election to Treat a Qualified Revocable Trust as Part of an Estate” is filed. I.R.C. § 645.

(i) A probate proceeding creating an estate is not necessary to make the election for a trust to be treated as an estate with a fiscal year.

(ii) If a Form 706 is required the permitted fiscal year term ends two years after date of death or six months after the final determination of estate tax liability.

(iii) If no Form 706 is required the fiscal year term ends two years after date of death.

(2) The selection of the fiscal year may be made with hindsight. The end of the first fiscal year need not be designated until the Form 1041 is due, which is three-and-one-half (3½) months after the close of the tax year. Treas. Reg. § 1.441- 1(b)(3). The determination of the ending date of the final year is likewise designated on the final return as long as the final fiscal year does not exceed twelve months.

(3) The estate should reflect taxable income of six hundred dollars ($600.00) in the first fiscal year to take full advantage of the six hundred dollar ($600.00) exemption permitted in every fiscal year of the estate. To claim the exemption, the estate must be open two (2) fiscal years, neither of which is required to be a full twelve (12) months. The exemption may not be claimed in the final year.

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(4) The estate income distribution is income to the beneficiary in the beneficiary’s tax year that includes the end of the estate’s fiscal tax year. I.R.C. 662(c). If the income is distributed in December 2016 and the estate fiscal year ends January 31, 2017, the beneficiary pays income tax in his 2017 calendar year personal income tax return.

(5) Taxes may be deferred by distributing the income to a trust which in turn would distribute the income to the beneficiary. A final fiscal year of the estate may end in the first month of the fiscal year of the trust. Income tax may be deferred for over one (1) year if it was earned in the first month of the fiscal year of the estate and thereafter distributed the first month of the trust fiscal year and at the close of the trust year distributed to the individual beneficiaries. With the trust forced into a calendar year the bloom is off the rose. When deferring income, always look to the income tax brackets of the beneficiaries and distribute into an advantageous calendar year for the beneficiaries.

(6) If the beneficiary wishes to receive an early distribution and there is going to be substantial income produced, a short fiscal year in which little to no income is produced will permit the distribution to be made in the first short year with a low taxable income to the beneficiary and with little to no income tax consequence.

(7) Pre-death operating loss or a capital loss is extinguished upon death. Rev. Rul. 54-207, 1954-1 C.B.147, Rev. Rul. 74- 175, 1974-1 C.B. 52. One of the avenues of saving a loss is to file a joint return producing income in the remaining term of the taxable year for the joint return with the surviving spouse prior to the end of the calendar year for the final joint individual tax return.

(8) An estate can be used to trap income in lower brackets. There is no throwback rule when there is a later distribution. Treas. Reg. § 1.665(a)-OA(d).

(9) The final fiscal year is a conduit of income and deductions. The six hundred dollar ($600.00) exemption is not available. The beneficiary must pay their proportionate share of tax against income earned in the final year. The beneficiary must pay tax in his taxable year in the final year in which the estate terminates. Treas. Reg. § 1.662 (c)-1.

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(10) Beneficiaries who succeed to property of a trust or estate on its termination can no longer deduct as a miscellaneous itemized deduction the unused fiduciary deductions in excess of gross income for the final tax year of a trust or estate, as reported on Form 1041 Schedule K-1 line 11, and then reported on Form 1040 line 23 Miscellaneous Deductions, Other Expenses that exceed 2% of adjusted gross income. This is effective for tax years beginning after December 31, 2017 and ending beginning after December 31, 2025. The itemized deductions by the beneficiary are allowed only for the tax year in which the trust or estate terminates. I.R.C §642(h): Treas. Reg. §1.642(h) - 2 (a). See §11045 of the Senate Amendment, 2017 Tax Cuts and Jobs Act.

(11) It is advisable to keep an estate open for at least two (2) fiscal years (of which both may be less than twelve months). The first (1st) year will receive the six hundred dollars ($600.00) exemption. If the estate has three (3) fiscal years one must be twelve (12) months. Caution, if the final fiscal year ends in the same calendar year as the prior fiscal year, two years income may be bunched into one individual taxpayer’s calendar year.

(12) If the final estate income tax return has a net operating loss, I.R.C. § 172, the estate NOL may be carried forward to the beneficiary’s tax return. Also an I.R.C. § 1212, capital loss carryover may be carried forward. I.R.C. § 642(h)(1) & Treas. Reg. § 1.642(h)-1.

(13) The passive activity loss rules apply to estates and trusts. I.R.B. § 469(a)(2)(A) except the rules don't apply to grantor trusts which apply to the income, deductions, and credits from a grantor trust's interest in an activity at the individual taxpayer level, not at the trust level. If the estate or trust has any passive losses it must also file Form 8582 to figure its allowable loss.

(14) In every estate in which the gross income is six hundred dollars ($600.00) or more you must file a fiduciary income tax return. I.R.C. § 6012(a)(3). When in doubt, file a tax return to start the statute of limitations running on a filed return.

(a) You must file a return marked final in order to stop the IRS computer requests for additional returns although there may have been less than six hundred dollars income produced.

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(b) If it is found that the administration of an estate has been unduly prolonged, the gross income, credits and deductions of the estate may be denied by the estate and treated as if the income and deductions had been distributed to the beneficiaries. Treas. Reg. § 1.641(b)-3.

(15) IRS ordinarily has three years after the filing of an income tax return in which to assess any additional tax determined to be due. The fiduciary representing a decedent's estate may request a prompt assessment of tax (other than estate taxes). File Form 4810—Request for Prompt Assessment under IRC. § 6501(d), with the IRS Service Center where the original return was filed. The Form 4810 must be filed separately from any other document. The election may be made at any time after the original return is filed.

Taxpayers who do not want to use Form 4810 are permitted to make a request via a separate letter request. The letter request must be filed by itself and must clearly show:

(a) Such letter is a request for prompt assessment under I.R.C. § 6501(d);

(b) The kind and tax periods involved;

(c) The name and social security number shown on the return.

Also, copies of the returns may be attached to help identify the return, but mark as “COPY – DO NOT PROCESS”

A sample letter follows:

Request by Estate for Prompt Assessment RE:

Estate of [Insert decedent's name]Date of death: [Insert decedent's date of death] Social Security No.: [Insert decedent's Social Security number]

Dear Sir or Madam:

I am the Personal Representative of the Estate of the above-named decedent, who died a resident of Nebraska.

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I hereby request that you make a prompt assessment with respect to the income tax liability of the decedent for the years [Insert open years], in accordance with Code Sec.6501(d). Income tax returns for the above years have been filed for the decedent with the [Insert appropriate location] on [dates].

Very truly yours,[Insert, below signature space, name(s) of personal representative(s)]

encl.

(16) The gain from sales of property not subject to administration made in order to pay debts of the estate is taxable to the estate under Rev. Rul. 59-375, 1959-2 C.B. 161.

25-17 Administration Expenses

a. The personal representative must elect to either deduct the administration expenses on the federal estate tax return or to waive the right to have such amounts allowed as deductions and deduct them on the fiduciary income tax return. I.R.C. § 642(g). The waiver must be filed with the fiduciary return in duplicate. Once the waiver is filed, it is irrevocable. Treas. Reg. § 1.642(g)-i.

b. If there is a question as to where to claim the administration expenses, do not file the waiver; rather claim the expense on both the fiduciary income tax return and the federal estate tax return. The waiver may be filed any time before the expiration of the statutory period of limitations of the fiduciary return. Claiming the deduction on the estate tax return will not preclude the allowance of the deduction in computing the fiduciary tax return so long as the estate tax deduction is not finally allowed and the waiver is filed. Treas. Reg.§ 1.642(g)-1. Note, the waiver and allocation between returns may be on all or any portion of any administration expenses. Be sure to amend tax returns as appropriate after the waiver is filed if expenses are claimed on both the fiduciary income tax return and the federal estate tax return.

(1) The rule against double deductions does not apply to deduction for taxes, interest, business expenses, and other items at date of death which may be deducted from federal estate tax return as a claim against the estate under I.R.C. § 2053(a)(3) and deducted from the income tax return as an expense in respect of a decedent under I.R.C. § 691(b).

(2) I.R.C. Sec. 213(c)(2) provides a similar rule for the decedent’s unreimbursed medical expenses paid by the estate within one year after death, which can be taken on the decedent’s Fiduciary income tax return for the year in which the medical expenses were incurred, but not if they are taken as an estate tax deduction under I.R.C. Sec. 2053.

895

(3) Selling expenses incurred after October 4, 1976 in disposition of estate property are subject to the limitation of the double deduction. The value of the estate asset cannot be diminished by the sale expense and thereafter such sale expense claimed as an income tax deduction unless a waiver is filed, relinquishing the right to deduct such expense on the federal estate tax return.

c. On January 16, 2008, the U.S. Supreme Court decided that trust expenses for investment advisory fees are subject to the floor of 2% of adjusted gross income. The legal issue in the case is whether investment advisory fees fit within an exception to the 2% floor for expenses that are “paid or incurred in connection with the administration of the estate or trust...which would not have been incurred if the property were not held in such estate or trust.”

(1) The Court’s test is whether the expense at issue is “commonly” or “customarily” incurred outside of a trust or an estate. The Court stated that “[i]n asking whether a particular type of cost ‘would not have been incurred’ if the property were held by an individual, IRC § 67(e)(1) excepts from the 2% floor only those costs that would be uncommon (or unusual, or unlikely) for such a hypothetical individual to incur.” If so, then the 2% floor applies and the exception does not. Since investment advisory fees are commonly incurred by individuals, not just trusts and estates, they are subject to the 2% floor rule. Knight v. Commissioner, 128 S. Ct. 782 (2008). For tax years beginning before January 1, 2008, IRS says that taxpayers won't be required to determine the part of a bundled fiduciary fee that is subject to the 2 percent floor under I.R.C. §. 67. See intrum, Notice 2008-32, 2008-11 I.R.B. 1. As a result, the IRS added C.F.R. 1.67-4 in 2014 to address this issue.

25-18 Distributable Net Income

a. Under Treas. Reg. § 1.1304-3 the income taxation of estates is based on the concept of distributable net income (DNI). DNI is defined by I.R.C. § 641 as essentially equivalent to the taxable income of the estate available for distribution, without regard to the exemption, and excluding capital gains or losses other than those occurring in the final year of the estate.

b. Distributions to beneficiaries are taxed as ordinary income up to the amount of the estate's DNI for the year in which distribution occurs.

c. Undistributed DNI and undistributed capital gain are taxed to the estate as an entity, and net operating losses or capital losses are carried forward to the final taxable year of the estate. Losses are only distributed to the beneficiaries in the final estate year. Administrative losses, such as those due to fees, are not carried forward. Payment of fees or other administrative expense in a year other than the final year of the estate that has not generated sufficient income against which to deduct them will result in the loss of the amounts paid as an income tax deduction.

896

d. The funding of the pecuniary devises with assets in kind results in the recognition of taxable gain upon the distribution of appreciated property. The distribution also carries out distributable net income to the distributee. The estate receives an income tax deduction equal to the lesser of the estate DNI or the value of the asset distributed. In many situations the problem can be minimized by quick distribution of potentially appreciating property after death.

e. Pecuniary marital deduction formulae are not specific bequests under I.R.C. § 663(a)(1) and do carryout DNI.

f. If income in respect of a decedent (IRD) property (such as an installment sales contract) is distributed in satisfaction of a pecuniary bequest, the distribution results in acceleration of the IRD, causing it to be treated as income in the year in which distribution occurs. In the very large estate the exposure to this problem may be minimized by marital arrangements which involve a pecuniary formula to the credit trust equal to the Unified Credit value equivalent with the surviving spouse receiving the residue. IRD items may, thus, be distributed to the spousal residue. In smaller estates a pecuniary formula to the spouse allows IRD to pass to the credit trust residue without income tax acceleration.

g. Although distributions of appreciated property in satisfaction of pecuniary obligations result in realization of gain, distributions of pro rata amounts of principal do not. The trustee in Priv. Ltr. Rul. 84-47-003 had discretion to make distributions of principal in cash or in kind in satisfaction of a fractional share requirement. The private letter ruling holds such distributions to be equivalent to pro rata fractional distributions. As a result it appears that the pick and choose fractional method of marital deduction funding may be used without realization of gain.

h. Losses incurred during the estate are classified as active or passive depending on the extent of activity by the executor. There is a two year grace period as to active participation with regard to rental real estate passive losses with a $25,000 limit provided decedent actively participated before his death. I.R.C. § 469(i)(4).

25-19 Basis

a. The basis of the property to the beneficiary is fair market value of the property to the extent its value was included in gross income. In the event fair market value exceeds the distributable net income, the usual rules for determining substituted basis apply. Treas. Reg. § 1.661(a)-2(f)(3).

b. The distribution of appreciated property will result in an income tax benefit because the recipient receives a step-up in basis without a corresponding taxable gain to the estate.

(1) Warning: distribution of depreciated property under the same circumstances produces a loss of basis or step-down basis without tax benefit.

897

c. Generally, no gain or loss is realized by the estate upon distribution of property.) CAUTION: if a pecuniary devise (including a pecuniary formula marital devise) is satisfied with an asset which is appreciated in value since date of death, it will be a taxable gain (conversely a decline in value will result in a taxable loss). Rev. Rule 60- 87 C.B. 1960-1 286. Regs. § 1.661(a)2(f). A pecuniary formula marital devise may not create a valid marital deduction unless the assets satisfying the devise share in the overall appreciation or depreciation of the assets of the estate. Rev. Rule 64-19, 1964-1 C.B.-1, 682.

d. After July 31, 2015 IRS Form 8971 is required with schedule A with a copy of the schedule A to the beneficiary to assure reporting a constant basis when a federal estate tax return is required to be filed.

25-20 TrustorTrusteeasBeneficiar of“Estate”

a. A testamentary trust or a trust into which a will directs estate property to be poured, or its trustee, is both a devisee Neb. Rev. Stat. § 30-2209 (8) and a distributee. Neb. Rev. Stat. § 30-2209 (8). A trust is also treated as a beneficiary of the estate for income tax purposes. Treas. Reg. § 1.643(c)-1.

b. State law governs the time of creation of a trust as a taxpayer. See United States v. Britten, 161 F.2d 921 (3d Cir. 1947). Nebraska has held that the life income beneficiary of a testamentary trust is entitled to the income accumulating on the trust assets from the date of the decedent's death, unless otherwise provided in the will. Folsom v. Strain, 138 Neb. 497, 293 N.W. 357 (1940), In re Johnson Trust Estate, 211 Neb. 750 (1982).

898


899

Letter of Authorization

To: ACME BANK

Re: Estate of _______________________, Deceased.

I hereby authorize and direct that ______________ and all _______________ Law Officemay:

Receive account information and printouts for all accounts, certificates of deposit and investments in person or by telephone.

1. Transfer funds between the subject accounts.

2. Make deposits in the subject accounts.

3. Open accounts and/or purchase certificates of deposit.

4. Receive information on all loans, including but not limited to the loan ledger and financial statements provided to the bank.

Until further notice the Bank named above is hereby authorized and directed to permit the above named or referenced parties to access information and transact business as designated above. A copy of the Letters of Personal Representative are attached.

Dated: ________________

___________________________________ Personal Representative of the Estate of ___________________, Deceased

900

Bank Letter

ACME BANK12345 Main StreetHawthorne, NE 68000

Dear Sir or Madam:

My firm represents ________________________, Personal Representative of the Estate of ________________________. As you may know, ___________________ died on _______________________, 20___.

Enclosed is an original Law Office Bank Authorization signed by ________________________, Personal Representative, along with a copy of Letters of Personal Representative and a copy of the Death Certificate for your records.

Please advise whether the above-mentioned decedent had checking accounts, savings accounts, certificates of deposit or other deposits with your institution. If so, please indicate the balance of the account or accounts as of date of death and the name or names in which the funds were held, (including all accounts which the decedent was a party to a joint account regardless of the order of the names). Also indicate all unpaid interest to date of death. Please provide copies of any signature cards.

If the account was solely in the name oft he decedent, not jointly held, all interest after date of death is income to the respective estate and not the deceased individual. The employer identification number for the Estate is _________________________ . If the account was held in joint tenancy, all interest earned after the decedent's date of death should be reported under the surviving joint tenant's social security number.

Do not hesitate contacting me if you have questions.

Yours Faithfully, ___________________________________ Attorney

901

Return To:[Firm Name][Firm Address][Firm City & State and Zip Code]

[NAME OF TRUST]DATED [DATE OF TRUST INCLUDING ANY AMENDMENTS]

AFFIDAVIT AND AGREEMENT CONFIRMING TITLE IN SUCCESSOR TRUSTEES

State of Nebraska, County of [Name of County where Affidavit is being signed], ss:

COMES NOW, the undersigned, being duly sworn, depose and state thathe/she/they knew the Decedent and that the following information is true and correct:

1. [Name of Decedent] created a revocable grantor trust known as the [Name of Trust]dated [Date of Trust including any amendments], appointing himself/herself as trustee.

2. The following described real estate was conveyed to [Name of Decedent] as Trusteeof the [Name of Trust] dated [Date of Trust including any amendments], to-wit:

LEGAL

3. [Name of Decedent] died on [Decedent’s date of death], a resident of [City, County,& State of Residence]. Upon his/her death the [Name of Trust] dated [Date of Trustincluding any amendments] became irrevocable.

4. [Article or Section Number of Trust that references Successor [Co]-Trustee(s)] onPage [Page Number of Trust that references Successor [Co]-Trustee(s)] of the [Name ofTrust] dated [Date of Trust including any amendments] provides:

[Quote language from Trust that references Successor [Co]-Trustee(s)]

5. [Name of Surviving Spouse, if any], surviving spouse of [Name of Decedent], herebyagrees that he/she will serve as [Co]-Trustee of the [Name of Trust] dated [Date of Trustincluding any amendments].

902

[NAME OF TRUST] PAGE 2AFFIDAVIT AND AGREEMENT CONFIRMING TITLE IN SUCCESSOR TRUSTEES

6. [Name of Successor [Co]-Trustee], [Relationship of Successor [Co]-Trustee toDecedent] of [Name of Decedent], hereby agrees that he/she will serve as [Co]-Trusteeof the [Name of Trust] dated [Date of Trust including any amendments].

7. Each of the undersigned hereby acknowledge that the Trust is in good standing andhe/she/they are authorized under the laws of the State of Nebraska to serve as [Co]-Trustee(s) and by this document accept the position as a Successor [Co]-Trustee of the[Name of Trust] dated [Date of Trust including any amendments], and the trusts containedtherein. [Name of Surviving Spouse, if any] and [Name of Successor [Co]-Trustee]acknowledge the principal place of administration of the trust is [Name of County whereTrust is being administered], in the State of Nebraska and hereby personally submit to thejurisdiction of the Courts of the State of Nebraska.

FURTHER Affiants saith not.

Dated: [Date Affidavit is signed]

[Name of Successor [Co]-Trustee]

[Name of Successor [Co]-Trustee]

Subscribed and sworn to before me on [Date Affidavit is signed].

Notary Public

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903

[NAME OF LAW FIRM]INVESTMENT AUTHORIZATION

To: [Name of Investment Company][Name of Financial Advisor, if known][Address of Investment Company or Financial Advisor][City, State, and Zip Code]

RE: [Name of Decedent]Estate of [Name of Decedent], Deceased.[Name of Trust] dated [Date of Trust including any amendments]

I hereby authorize and direct that [Name of Attorney and Staff to Authorize], all of[Name of Law Firm] may:

1. Receive account information and printouts for all accounts and investments inperson or by telephone.

2. Request paper statements of all accounts to be sent to [Name of Law Firm]and/or request online access to such accounts.

3. Transfer funds between the subject accounts.4. Make deposits in the subject accounts.5. Request liquidate investment accounts.

Until further notice [Name of Investment Company] is hereby authorized and directedto permit the above named or referenced parties to access information and transactbusiness as designated above.

Dated: [Date Signed] � [Name of Personal Representative], PersonalRepresentative of the Estate of [Name ofDecedent]

� [Name of Successor [Co]-Trustee], Successor Co-Trustee of the [Name of Trust] dated [Date ofTrust including any amendments]

� [Name of Successor [Co]-Trustee], Successor Co-Trustee of the [Name of Trust] dated [Date ofTrust including any amendments]

L:\Library\Probate Manual Update\authorization - investment.wpd

904

November 9, 2017

[Name of Investment Company][Name of Financial Advisor, if known][Address of Investment Company or Financial Advisor][City, State, and Zip Code]

RE: Estate of [Name of Decedent]Date of Death: [Date of Decedent’s Death]

Dear [Name of Financial Advisor, if known]:

We represent [Name of Personal Representative and/or Name of Successor [Co]Trustee(s)], Personal Representative of the Estate of [Name of Decedent], and Co-Trustee of the[Name of Trust] dated [Date of Trust including any amendments]. [Name of Decedent] died on[Date of Decedent’s Death], a resident of [Residence of Decedent].

Enclosed is the following:

1. An original [Name of Law Firm] Investment Authorization signed by [Name ofPersonal Representative and/or Name of Successor [Co] Trustee(s)], PersonalRepresentative of the Estate of [Name of Decedent], and Co-Trustee of the [Nameof Trust] dated [Date of Trust including any amendments].

2. A copy of the [Name of Trust] dated [Date of Trust including any amendments]Affidavit and Agreement Confirming Title in Successor Trustee

3. A copy of the Death Certificate for your records.

Please advise whether the above mentioned decedent had any investment accounts withyour company.

If so, indicate the balance of the account or accounts, the per share or unit price of eachfund, number of shares or units, and total value of each fund as of date of death, [Decedent’s Dateof Death], and the name or names in which the accounts were held, (including all accounts whichthe decedent was in a joint account regardless of the order of the names). Also indicate all unpaidinterest or dividends to date of death

If the account was solely in the name of the decedent, not jointly held, all interest after dateof death is income to the estate/trust and not the deceased individual. The employer identificationnumber for the [Name of Trust] is [EIN of Trust] and the employer identification number for theEstate of [Name of Decedent] is [EIN of Estate]. If the account was held in joint tenancy, all interestearned after the decedent's date of death should be reported under the surviving joint tenant'ssocial security number.


Yours very truly,

[Name of Attorney or Staff], Attorney/Staff[Name of Law Firm][email address]

[Attorney’s Initials]/[Staff initials]Enc. L:\Library\Probate Manual Update\ltr to investment company.wpd

905

November 9, 2017

Mailed to:

Nebraska Department of Health and Human Services Medical Assistance and Long-Term CareAttn: Estate RecoveryPO Box 95026Lincoln, NE 68509-5026

Or Via email: [email protected]

RE: Estate of [Name of Decedent]

Dear Sir/Madam:

[Name of Decedent] died on [Date of Death], a resident of [City, County, and

State of Residence]. No probate proceeding is contemplated. Nebraska Inheritance tax will be timely determined and paid. By reason of his/her death, the [Name of Trust] dated [Date of Trust including any amendments] became irrevocable. The Trustee(s) wish to distribute trust property at this time. A completed Nebraska Department of Health and Human Services Estate Recovery-Waiver of Restriction on Transfer Authorization for Disclosure of Protected Health Information is attached.

On behalf of [Name of Trustee], one of the successor Trustees, this letter is an application to NDHHS for a:

1. Waiver of the restriction on transfers to a related beneficiary from a revocable trust that became irrevocable by reason of death, pursuant to Neb. Rev. Stat. §§30-3880(c), 30-3881(b), and 30-3882(d), and

2. Certificate that there is no Medical Assistance reimbursement due pursuant to Neb. Rev. Stat. §68-919(4)(e).

[Name of Decedent]Decedent’s spouse:

[Name of Decedent’s Spouse]

Social Security Number [SS# of Decedent] [SS# of Decedent’s Spouse]

Date of Birth [Date of Birth of Decedent]

[Date of Birth of Decedent’s Spouse]

Date of Death [Date of Death of Decedent]

[Date of Death of Decedent’s Spouse]

906

Letter to NDHHSAttn: Estate Recovery

RE: [Name of Decedent] EstateNovember 9, 2017Page #2

Attached is a copy of both death certificates and the first and last pages of the [Name of Trust] dated [Date of Trust including amendments] identifying the Trust and Trustees of the Trust together with the relevant Trust provisions identifying how the successor trustee is selected [or alternative - a copy of the full Trust]. The trust has not been amended [delete this language if Trust has been amended and instead put dates

of amendment(s)] and the Trust is in good standing. [Use the following sentence if grantor resigned prior to death] [Name of Decedent] resigned as trustee on [Date of Resignation of Trustee] and his/her children [or relationship (if any) of successor trustee]: [Name of Successor Trustees] are now the successor trustees.


Yours very truly,

[Name of Attorney], # [Bar Number][Name of Law Firm]email address

FCH/chEnc.

I hereby affirm and ratify the above letter and authorize and direct on my behalf [Name of Attorney], attorney at law, to request and receive from DHHS the information and documents described in the above letter.

Dated: [Month] , 2017

[Name of Successor Trustee]

907

CERTIFICATION OF TRUST

STATE OF NEBRASKA, COUNTY OF )ss.

The undersigned, constituting all of the trustees of the [Name of Trust] dated [Dateof Trust including any amendments] being first duly sworn, depose and say:

1. EXISTENCE OF TRUST. The trust is in existence and consists of an inter vivos trust which wasexecuted on [Date of Trust including any amendments].

-OR-a testamentary trust, with the date of death of the decedent being[Decedent’s date of death].

2. IDENTITY OF GRANTOR, SETTLOR OR TESTATOR. The Grantor and Settlor, Testator of the Trust is [Name of Grantor, Settlor,Testator].

3. CURRENTLY ACTING TRUSTEE(S). [Name of Currently Acting Trustee or Co-Trustees] is/are the currently actingtrustee(s) of the trust.

4. POWER OF TRUSTEE. Unless otherwise indicated below, Trustee(s) possess any and all lawfulpowers, including but not limited to, all powers listed in the NebraskaTrustees Powers Act.

POWERS AND RESTRICTIONS OF TRUSTEE. The Trustee(s) hereby certify [certifies] that he/she/they will act inaccordance with all trust provisions

5. RESTRICTIONS IMPOSED UPON TRUSTEE. Following or attached to this CERTIFICATION OF TRUST is a list of therestrictions imposed upon the trustee of the trust in dealing with the assetsof the trust.

6. NAME OF SUCCESSOR TRUSTEE(S):[Name of Successor [Co]-Trustee] is/are the successor trustee(s) of the trust.

-OR-

METHOD OF CHOOSING SUCCESSOR TRUSTEE(S). Successor trustee(s) of the trust are chosen as follows:

7. REVOCABILITY / IRREVOCABILITY OF TRUST. The Trust is revocable/irrevocable and [Name of Individual] holds the powerto revoke said trust.

908

CERTIFICATE OF TRUST FOR THE [Name of Trust] PAGE 2

8. EXERCISE OF POWERS BY TRUSTEE(S). All of the currently acting trustees must act to exercise identified powers ofthe Trustee.

-OR-Less than all of the currently acting trustees may act to exercise identifiedpowers of the Trustee. Only [Name of Trustee for Specific Powers] isrequired to act. However if TRUSTEE #2 acts, [Name of Trustee for SpecificPowers] must also act.

9. IDENTIFYING NUMBER. The tax identification number of the trust is [EIN of Trust].

10. BENEFICIARIES.Following is a list of beneficiaries of the Trust and their relationship to theGrantor:[Name of Spouse (if living)] Spouse[Name of Children] Child

11. ESTABLISHMENT OF TRUST. The trust was established in the State of Nebraska.

12. TITLE TO TRUST ASSETS. Title to assets of the trust is to be taken in the following form:

[Name of Successor [Co]-Trustee], Trustee of the [Name ofTrust] dated [Date of Trust including any amendments].

13. ACKNOWLEDGMENT. The trust has not been revoked or amended to make any representations inthis CERTIFICATION OF TRUST incorrect and the trustee(s) signing thisdocument is/are all of the acting trustees. Each of the undersigned herebyrepresents and agrees that [Name of Bank requesting Trust Certification] willbe immediately notified if any of the above information is no longer accuratein any manner or respect. Said notice may only be provided by sendingproper documentation signed by all of the trustees to [Name and Address ofBank]. [Name of Bank] may continue to rely and act in accordance with theterms of this CERTIFICATION OF TRUST until it has verified the legitimacyof any notice changing the terms and provisions of this certificate. SeeN.R.S. §38,103.

[Name of Current or Successor [Co]-Trustee(s)],Trustee

[Name of Current or Successor [Co]-Trustee(s)],Trustee

909

CERTIFICATE OF TRUST FOR THE [Name of Trust] PAGE 3

SUBSCRIBED AND SWORN to before me on .

Notary Public

[Use if more than one Trustee and form not signed at the same time by both Trustees]

SUBSCRIBED AND SWORN to before me on .

Notary Public

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910


911

IN THE COUNTY COURT OF ______ COUNTY, NEBRASKA

IN THE MATTER OF THE ESTATE OF Case No. PR -------) ) ) ) )

FINAL ACCOUNTING

Deceased.

COMES NOW, ______________ , the duly appointed, qualified

and acting Personal Representative herein, and herewith submits the following accounting of

his/her acts and doings as such Personal Representative from the date of his/her appointment,

___________ to ____________ _

Receipts $ ________ _

Transfers to Estate Checking $ ________ _

Disbursements $ ---------

Ending Balance $ ________ _

The attorney fees and costs in the amount of $______ and the Personal

Representative fees and reimbursements in the amount of $ ______ were made by

agreement of the parties.

Respectfully submitted.

Personal Representative

- 1 -

912

STATE OF NEBRASKA ) ) ss:

COUNTY OF_~~~~~)

Personal Representative of the _ _________ Estate being first duly sworn upon oath, deposes states that the foregoing account is in all respects just and true, and that to the best of her knowledge and belief, she has therein accounted for all of the said estate that has come into her possession and knowledge or the possession of anyone for the Personal Representative ..

____________ ,Petitioner

SUBSCRJBED and sworn to before me on this ___ day of ______ _ 201

Notary Public

913

Quicken Example Wylie E. Coyote Estate Page 1 1/9/2018

Date Num Payee Memo Category Amount c Balance

4/6/2017 Opening Balance From Decede .. . (Wylie E. Co ... 21,432.29 R 21,432.29 4/6/2017 DEP Loony Toons Invoice Administratio ... 747.15 22, 179.44

4/10/2017 EFT Road Runner Healthcare Refund Medical Exp ... -3,733.00 18,446.44 4/16/2017 4119 Calamity Coyote Gifts & Dona ... -1,000.00 17,446.44 4/19/2017 EFT Bugs Bunny Wireless Bills & Utilitie ... -67.65 17,378.79 4/19/2017 4181 No Way Bank CD xxx8517 Bank Transfer -55.98 17,322.81 4/25/2017 EFT Goodcall Medical Exp ... -27.83 17,294.98 4/26/2017 4182 Desert Healthcare Medical Exp ... -146.97 17,148.01 5/1/2017 DEP Life Ins. Co Annuity 556.48 17,704.49 5/2/2017 4183 Tazmanian Ambulance S .. . Medical Exp ... -30.00 17,674.49 5/3/2017 DEP Social Security Administr ... Social Security 1,278.00 18,952.49 5/4/2017 DEP No Way Bank Interest lnco ... 1.45 18,953.94 5/5/2017 DEP Loony Toons Invoice Administratio ... 818.15 19,772.09 5/5/2017 EFT Toons Unite Healthcare Health & Fitn ... -353.85 19,418.24 5/8/2017 EFT Wellness Healthcare Refund Medical Exp ... -3,733.00 15,685.24

5/1 9/2017 DEP Loony Toons Investments Administratio ... 797.1 5 16,482.39 5/19/2017 EFT Bugs Bunny Wireless Bills & Utilitie ... -56.19 16,426.20 6/1/2017 DEP American Life Ins. Co Annuity 556.48 16,982.68 6/6/2017 DEP No Way Bank Interest lnco ... 1.51 16,984.19 7/3/2017 DEP American Life Ins. Co Annuity 556.48 17,540.67 7/7/2017 DEP No Way Bank Interest lnco ... 1.45 17,542.12

7/19/2017 DEP Wellness Healthcare Refund lnsuance Re ... 1,000.00 18,542.12 7/19/2017 DEP No Way Bank CD Redemption Bank Transfer 132,582.04 151 , 124.16 7/21/2017 4186 Tazmanian Ambulance S ... Medical Exp ... -30.00 151,094.16 7/24/2017 4184 Everything Legal Service ... Attorney's Fee ... Administratio ... -37.46 151,056.70 7/24/2017 4187 Desert Healthcare Medical Exp ... -73.50 150,983.20 8/1/2017 DEP My Life Ins. Co Administratio ... 556.48 151,539.68 8/4/2017 DEP No Way Bank Paper Stmt Re ... Bank Transfer 5.00 151,544.68 8/4/2017 EFT Broke One Service Fee Bank Transfer -5.00 151 ,539.68

8/22/2017 1001 ACME Memorial Co. Engraving Mar ... Funeral Exp ... -285.00 151,254.68 8/29/2017 DEP Valley Funeral Home Refund Funeral Exp ... 2,646.70 153,901.38 8/29/2017 DEP Cash Deposit Memorials Gifts & Dona ... 90.00 153,991 .38 8/31/2017 1002 Beep Beep Church Memorials Gifts & Dona ... -90.00 153,901 .38 8/31/2017 1004 Bugs Bunny Wireless Bills & Utilitie ... -42 .75 153,858.63 9/1/2017 DEP My Life Ins. Co Administratio ... 556.48 154,415.11 9/1/2017 DEP No Way Bank Paper Stmt Re ... Bank Transfer 5.00 154,420.1 1 9/7/2017 EFT No Way Bank Paper Stmt Re ... Bank Transfer -5.00 154,415.11

9/27/2017 DEP Brokerage Services Account Rede ... Administratio ... 286,954.47 441,369.58 9/27/2017 DEP Dept. Of Coyote Affairs Life Insurance Administratio ... 5,129.62 446,499.20 10/23/2017 DEP Brokerage Services Account Rede ... Administratio ... 2.22 446,501.42 10/31/2017 1026 My Life Ins. Co Refund Overp ... Administratio ... -2,225.92 444,275.50 12/7/2017 1027 Desert Valley Treasurer Nebraska lnhe ... Administratio ... -3,741.46 440,534.04

12/15/2017 1028 Gee Whiz Health Medical Expen ... Medical Exp ... -10.00 440,524.04 12/15/2017 1029 Betty Coyote PR Fee and R. .. Administratio ... -5,617.66 434,906.38 12/15/2017 1030 Everything Legal Service ... Attorney's fees ... Administratio ... -7,679.93 427,226.45 12/15/2017 1032 Calamity Coyote Distribution Partial Distri. .. -211 , 118.22 216,108.23 12/15/2017 1033 Betty Coyote Distribution Partial Distri... -211 , 118.23 4,990.00

914


915


IN THE MATTER OF THE ESTATE OF Case No. PR -------

SUPPLEMENTAL FINAL ACCOUNTING

Deceased.

) ) ) ) )

COMES NOW, ______________ , the duly appointed, qualified

and acting Personal Representative herein, and herewith submits the following accounting of

his/her acts and doings as such Personal Representative from the date of his/her appointment,

___________ to ____________ _

Receipts

Transfers to Estate Checking

Disbursements

Ending Balance

$ ________ _ $ _____ _ $ ________ _ $ ______ _

The attorney fees and costs in the amount of $______ and the Personal

Representative fees and reimbursements in the amount of $ ______ were made by

agreement of the parties.

Respectfully submitted.

Personal Representative

- 1 -

916

ST A TE OF NEBRASKA ) ) ss:

COUNTY OF~~~~~~)

Personal Representative of the __________ Estate being first duly sworn upon oath, deposes states that the foregoing account is in all respects just and true, and that to the best of her knowledge and belief, she has therein accounted for all of the said estate that has come into her possession and knowledge or the possession of anyone for the Personal Representative . .

SUBSCRJBED and sworn to before me on this _ __ day of ____ __ _ 201

Notary Public

917

Quicken Example Wylie E. Coyote Estate Page 1 1/9/2018

Date Num Payee Memo Category Amount c Balance

4/6/2017 Opening Balance From Decede ... [Wylie E. Co ... 21,432.29 R 21,432.29 4/6/2017 DEP Loony Toons Invoice Administrat io ... 747.1 5 22, 179.44

4/10/2017 EFT Road Runner Healthcare Refund Medical Exp ... -3,733.00 18,446.44 4/16/2017 4119 Calamity Coyote Gifts & Dona ... -1,000.00 17,446.44 4/19/2017 EFT Bugs Bunny Wireless Bills & Utilitie ... -67.65 17,378.79 4/19/2017 4181 No Way Bank CD xxx8517 Bank Transfer -55.98 17,322.81 4/25/2017 EFT Goodcall Medical Exp ... -27.83 17,294.98 4/26/2017 4182 Desert Healthcare Medical Exp ... -146.97 17, 148.01 5/1/2017 DEP Life Ins. Co Annuity 556.48 17,704.49 5/2/2017 4183 Tazmanian Ambulance S ... Medical Exp ... -30.00 17,674.49 5/3/2017 DEP Social Security Administr ... Social Security 1,278.00 18,952.49 5/4/2017 DEP No Way Bank Interest lnco ... 1.45 18,953.94 5/5/2017 DEP Loony Toons Invoice Administratio ... 818.15 19,772.09 5/5/2017 EFT Toons Unite Healthcare Health & Fitn ... -353.85 19,418.24 5/8/2017 EFT Wellness Healthcare Refund Medical Exp ... -3,733.00 15,685.24

5/19/2017 DEP Loony Toons Investments Administratio ... 797.15 16,482.39 5/19/2017 EFT Bugs Bunny Wireless Bills & Utilitie ... -56.19 16,426.20 6/1/2017 DEP American Life Ins. Co Annuity 556.48 16,982.68 6/6/2017 DEP No Way Bank Interest lnco ... 1.51 16,984.19 7/3/2017 DEP American Life Ins. Co Annuity 556.48 17,540.67 7/7/2017 DEP No Way Bank Interest lnco ... 1.45 17,542.12

7/19/2017 DEP Wellness Healthcare Refund lnsuance Re ... 1,000.00 18,542.12 7/19/2017 DEP No Way Bank CD Redemption Bank Transfer 132,582.04 151,124.16 7/21/2017 4186 Tazmanian Ambulance S ... Medical Exp ... -30.00 151,094.16 7/24/2017 4184 Everything Legal Service .. . Attorney's Fee ... Administratio ... -37.46 151 ,056.70 7/24/2017 4187 Desert Healthcare Medical Exp ... -73.50 150,983.20 8/1/2017 DEP My Life Ins. Co Administratio ... 556.48 151,539.68 8/4/2017 DEP No Way Bank Paper Stmt Re ... Bank Transfer 5.00 151,544.68 8/4/2017 EFT Broke One Service Fee Bank Transfer -5.00 151,539.68

8/22/2017 1001 ACME Memorial Co. Engraving Mar ... Funeral Exp ... -285.00 151,254.68 8/29/2017 DEP Valley Funeral Home Refund Funeral Exp ... 2,646.70 153,901.38 8/29/2017 DEP Cash Deposit Memorials Gifts & Dona ... 90.00 153,991.38 8/31/2017 1002 Beep Beep Church Memorials Gifts & Dona ... -90.00 153,901.38 8/31/2017 1004 Bugs Bunny Wireless Bills & Utilitie ... -42.75 153,858.63 9/1/2017 DEP My Life Ins. Co Administratio ... 556.48 154,415.11 9/1/2017 DEP No Way Bank Paper Stmt Re ... Bank Transfer 5.00 154,420.11 9/7/2017 EFT No Way Bank Paper Stmt Re ... Bank Transfer -5.00 154,415.11

9/27/2017 DEP Brokerage Services Account Rede ... Administratio ... 286,954.47 441,369.58 9/27/2017 DEP Dept. Of Coyote Affairs Life Insurance Administratio ... 5,129.62 446,499.20 10/23/2017 DEP Brokerage Services Account Rede ... Administratio ... 2.22 446,501.42 10/31/2017 1026 My Life Ins. Co Refund Overp ... Administratio ... -2,225.92 444,275.50 12/7/2017 1027 Desert Valley Treasurer Nebraska lnhe ... Administratio ... -3,741.46 440,534.04

12/15/2017 1028 Gee Whiz Health Medical Expen ... Medical Exp ... -10.00 440,524.04 12/15/2017 1029 Betty Coyote PR Fee and R ... Administratio ... -5,617.66 434,906.38 12/15/2017 1030 Everything Legal Service ... Attorney's fees ... Administratio ... -7,679.93 427,226.45 12/15/2017 1032 Calamity Coyote Distribution Partial Distri. .. -211 , 118.22 216,108.23 12/15/2017 1033 Betty Coyote Distribution Partial Distri. .. -21 1,118.23 4,990.00

1/9/2018 1034 It's Complicated Tax Co Preparation of ... Tax Preparat... -1,000.00 3,990.00 1/9/2018 1035 Everything Legal Service ... Attorney's Fee ... Administratio ... -100.00 3,890.00 1/9/2018 1036 Calamity Coyote Distribution Final Distrib ... -1,945.00 1,945.00 1/9/2018 1037 Betty Coyote Distribution Final Distrib ... -1 ,945.00 0.00

918


Creditors’ Claims Rick A. Damkroger & Benjamin J. Wischnowski

O’Neill, Heinrich, Damkroger, Bergmeyer & Shultz, P.C., L.L.O. Lincoln

March 23, 2018

UNO Thompson Center

Omaha, NE

354


1

M A R C H 2 3 , 2 0 1 8

P R E S E N T E D B Y R I C K A . D A M K R O G E R &

B E N J A M I N J . W I S C H N O W S K I

O ’ N E I L L , H E I N R I C H , D A M K R O G E R , B E R G M E Y E R & S H U L T Z , P . C . , L . L . O .

L I N C O L N , N E B R A S K A

( 4 0 2 ) 4 3 4 - 3 0 0 0

Creditors’ Claims

Notice to Creditors

General Rule: Publish notice once a week for 3 successive weeks

Creditors must present their claims within 2 months from the date of the first publication

2008 Amendment: Notice must be given to Department of Health & Human Services if the decedent was 55 years of age or older OR resided in a medical institution

Notice to Creditors

A copy of the published notice must be mailed to each party appearing to have a “direct legal interest” in the estate

NEB. REV. STAT. § 30-2485: If notice is not published and mailed properly, then the 2-month non-claim provision will not apply, and creditors will have 3 years from the date of death to present their claims

2

Limitation on Claims

Any statute of limitations measured from an event other than the decedent’s death and the publication of notice to creditors is suspended during the 2 months following the decedent’s death

Proper presentation of a claim under § 30-2486 is equivalent to commencing a proceeding on the claim for purposes of any statute of limitations

Claims Arising Before Death - Illustrations

Cushing v. Neb. Dep’t of Health & Human Servs. (810 N.W.2d 741 (2012))

Personal Representative published notice on July 2, 2010, but did not send notice to DHHS within 5 days of this date

Nebraska Supreme Court held that 3-year limitations period, rather than the 2-month limitations period, applied to DHHS’ claim

Claims Arising Before Death - Illustrations

Dawes v. Knickman (2014 Neb. App. LEXIS 93 (2014))

Mother timely filed a statement of claim seeking payment on a loan she had made to the decedent prior to his death

After 2-month claims period expired, mother filed an amended petition to expand her claim to include real estate taxes and insurance

Issue: Are the new claims time-barred, or do they “relate back” to the filing of the initial petition?

Court:• General Rule: Issues raised in an amended petition relate back

• However, a specific statute controls over a general rule, and the Nebraska Probate Code specifically establishes a 2-month deadline

3

Claims Arising At or After Death

Except for costs and expenses of administration, such claims are barred unless presented within 4 months after they arise

Methods of Making a Claim

Two alternative methods:

(1) File a written statement with the clerk of court, or

(2) Commence an action against the personal representative

Filing a Written Statement with Clerk -Illustration

Lenners v. St. Paul Fire & Marine Ins. Co. (793 N.W. 2d 357 (Neb. App. 2010))

Creditor of the estate (Lenners) filed a petition seeking to open an estate and to appoint herself as personal representative

Thereafter, Lenners filed a statement of claim with the clerk for damages she had sustained in an auto accident involving decedent

Court: Nothing improper about Lenners seeking appointment as personal representative and filing a statement of claim

• Key Consideration: No fiduciary obligation had yet been imposed on Lenners at the time of submitting her claim, since she did so prior to her appointment as personal representative

4

Commencing an Action Against Personal Representative

Presenting the claim requires filing it with the court, even where the personal representative has actual notice of the claim

Cannot commence an action against a personal representative who has been discharged unless there has been a breach of fiduciary duty

Commencing an Action Against Personal Representative – Illustration

Estate of Hansen v. Bergmeier (825 N.W.2d 224 (Neb. App. 2013))

§ 30-2485(c)(2): Claimant can initiate a proceeding to re-open estate in order to establish the liability of decedent or personal representative, but only to the extent of the limits of applicable liability insurance

Claimant filed a notice of claim in a closed estate seeking damages equal to available auto insurance coverage

Court rejected claim, noting that the estate must be re-opened, and a personal representative appointed, before suit can be filed, even when the claimant is only seeking liability insurance proceeds

Future, Contingent or Secured Claims

• If the claim is not yet due, claimant must provide date when it will become due

• If the claim is contingent/unliquidated, claimant must state the nature of any uncertainty in the claim

• If the claim is secured, the claimant must describe the security in the claim

5

Contingent or Unliquidated Claims –Illustration

Harring v. Gress (890 N.W.2d 502 (2017))

Decedent’s former spouse filed a claim on behalf of the decedent’s son, seeking one-half of son’s reasonable secondary educational expenses which had not yet been incurred

Estate disallowed claim

Court: Claim was ripe

• Acknowledged the existence of many “unknowns”

• However, a claim presented after resolution of the unknowns would be untimely and barred

Disallowed Claims

Within 60 days after the personal representative mails a notice of disallowance, claimant may commence a proceeding

For claims which are not yet due or are contingent or unliquidated, the personal representative can consent to, or the court may order, an extension of the 60-day period

Priority of Claims

Order of priority set forth in § 30-2487

Note: Homestead allowance, exempt property allowance and family allowance have priority over all claims against the estate with the following exceptions:

“Costs and expenses of administration” have priority over allowances

Medical assistance claims filed by DHHS have priority over exempt property allowance (see § 30-2323(2))

6

Allowance of Claims

Note: After claim disallowed, claimant must commence proceeding within 60 days after mailing of notice of disallowance

The 60-day requirement is strictly construed

Allowance of Claims - Illustration

Tri Valley Health Sys. v. Hockemeier (786 N.W.2d 680 (2010))

Creditor’s claim was disallowed, and creditor then commenced proceeding after 60-day period had expired

Issue: Is 60-day period a jurisdictional requirement, or is it “in the nature of a statute of limitations”?

Tri Valley Health Sys. - Continued

Significance:

• SOL does not operate by its own force as a bar; instead, it operates as a defense to be pled, and it is waived if not pled

• Personal representative had failed to plead SOL as a defense

• In contrast, if the 60-day period is jurisdictional, the Court “can and must” consider the creditor’s failure to timely file as fatal to creditor’s ability to assert claim

7

Tri Valley Health Sys. - Continued

Court: Commencing proceeding within 60-day period is a jurisdictional requirement

A typical SOL specifies only that an action must be commenced within a certain time period

Language in § 30-2488(a) is unlike a typical SOL, because it specifies a certain time period AND consequences for an untimely filing

Interest on Allowed Claims

All allowed claims bear interest at the legal rate, beginning 60 days after “the time for original presentation of the claim”

Cushing v. Neb. DHHS (810 N.W.2d 741 (2012))

The language fixing the 60-day period is specific to the claim of the creditor seeking interest

As applied to DHHS in this case, no interest could begin to accrue until 60 days after the date which was 3 years from the decedent’s death

Payment of Claims

Two months after date of first publication of notice to creditors, personal representative directed to pay claims in order of priority

§ 30-2726(a): If other assets of estate are insufficient to pay claims, statutory allowances, taxes and administrative expenses, there is a procedure for recovering certain nonprobate assets

§ 30-2726(b): Recovery from nonprobate assets requires written demand

8

Payment of Claims - Illustration

Lorenz v. Shea (873 N.W.2d 396 (2016))

Estate with insufficient probate assets

Former spouse filed claims for future and delinquent alimony and past due property settlement funds

Court: Filing of claims was insufficient to trigger personal representative’s duty; written demand to recover nonprobateassets was required

Liability of Personal Representative During Administration

PR is not individually liable for a contract entered into in his fiduciary capacity, unless:

PR fails to reveal the “representative capacity”, and PR fails to identify the estate in the contract

PR is individually liable for “obligations arising from ownership or control of the estate or for torts committed in the course of administration only if he is personally at fault”

Questions?

Thank you for attending!

For more information, please contact us at:Rick A. Damkroger or

Benjamin J. Wischnowski

O’Neill, Heinrich, Damkroger,

Bergmeyer & Shultz, P.C., L.L.O.

800 Lincoln Square

121 South 13th Street

Lincoln, NE 68508

(402) 434-3000

[email protected]

[email protected]

355

Rick A. Damkroger

Rick A. Damkroger leads the Estate and Business Planning Practice Group of O’Neill, Heinrich, Damkroger, Bergmeyer & Shultz, P.C., L.L.O. Mr. Damkroger assists business owners, professionals and other individuals with the design, drafting and administration of their estate plans, including sophisticated wealth transfer strategies, and with entity formation and succession planning, deferred compensation planning and the creation of tax exempt organizations.

Benjamin J. Wischnowski

Benjamin J. Wischnowski is an associate at the law firm of O’Neill, Heinrich, Damkroger, Bergmeyer & Shultz, P.C., L.L.O., practicing primarily in the areas of estate planning and administration, business and commercial transactions, business entity formation and real estate. Mr. Wischnowski is originally from Pennsylvania and is a graduate of the University of Iowa College of Law.

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Chapter 10 - Creditors' Claims

Table of Contents

10-1 Notice to Creditors ...................................................................................................35910-1(a) Publication by Court ....................................................................... 35910-1(b) Exception ........................................................................................ 361

10-2 Limitation on Claims ...............................................................................................36210-2(a) Statute of Limitations: § 30-2484 ................................................... 36210-2(b) Claims Arising Before Death: § 30-2485(a) ................................... 36310-2(c) Claims Arising At or After Death: § 30-2485(b) ............................ 364

10-3 Methods of Making Claim.......................................................................................36610-3(a) Filing a Written Statement With the Clerk of the Court: § 30-2486(1) ........................................................................................................ 36610-3(b) Commencing an Action Against Personal Representative:

§ 30-2486(2) ................................................................................... 36610-3(c) Future, Contingent or Secured Claims:

§ 30-2486(1) and 30-2486(3) ......................................................... 367

10-4 Priority of Claims .....................................................................................................368

10-5 Allowance of Claims ................................................................................................36910-5(a) By Personal Representative: § 30-2488(a) ..................................... 36910-5(b) By the Court: §§ 30-2488(b) and § 30-2488(c) .............................. 37110-5(c) By Judgment in a Court of Competent Jurisdiction: § 30-2488(d) ........................................................................................................ 37110-5(d) Interest on Allowed Claims: § 30-2488(e) ..................................... 371

10-6 Payment of Claims ...................................................................................................37210-6(a) Generally: § 30-2489(a), 30-2489(b) and 30-2726 ........................ 37210-6(b) Secured Claims: § 30-2491 ............................................................ 37310-6(c) Future or Contingent Claims: § 30-2492 ........................................ 374

10-7 Liability of Personal Representative During Administration ..............................37410-7(a) Generally: § 30-2490 ...................................................................... 37410-7(b) On Contract: § 30-2490(a) .............................................................. 37410-7(c) Arising Out of Control of Property and For Torts: § 30-2490(b) ... 375

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10-7(d) Procedure for Enforcement: § 30-2490(c) ...................................... 37510-7(e) Liability to Third Parties as Between Estate

and Personal Representatives: § 30-2490(d) .................................. 375

10-8 Counterclaims and Compromise ............................................................................37610-8(a) Counterclaims By Personal Representative: § 30-2493 ................. 37610-8(b) Compromise By Personal Representative: § 30-2495 .................... 376

10-9 Creditors' Remedies .................................................................................................37610-9(a) Execution and Levy Prohibited: § 30-2494 .................................... 37610-9(b) Encumbered Assets: § 30-2496 ...................................................... 376

10-10 Administration in Two or More States ...................................................................37710-10(a) Duty of Personal Representative: § 30-2497 .................................. 37710-10(b) Final Distribution: § 30-2498 ......................................................... 377

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Chapter 10 - Creditors' Claims1

Article 24, Part 8(§§ 30-2483 to 30-2498)

10-1 Notice to Creditors

10-1(a) Publication by Court

The clerk of the court is required to publish a notice once a week for three successive weeks, announcing the appointment and address of the Personal Representative, and notifying all creditors to present their claims within two months from the date of the firs publication. Nebraska Probate Code § 30-2483. The first publication date must be within 30 days after the appointment of the Personal Representative. The Personal Representative (or the attorney) is required to mail the published notice and give proof of notification in accordance with Nebraska Revised Statutes § 25-520.01.

A 2008 amendment to § 30-2483 requires the notice be given to the Department of Health and Human Services (“DHHS”), if the decedent was 55 years of age or older, or resided in a “medical institution”.2 The decedent’s social security number must be included, and (“if decedent was predeceased by a spouse”) the name and social security number of such spouse if deceased.3 A 2017 amendment to § 30-2483 provided further direction regarding the manner of delivery of notice to DHHS:

“The notice shall be provided to the Department in a delivery manner and at an address designated by the Department, which manner may include email. The Department shall post the acceptable manner of delivering notice on its web site. Any notice that fails to conform with such manner is void and constitutes neither

1 An earlier version of this chapter was prepared by Dennis W. Collins of Jewell & Collins. Creditors’ claims have been discussed in great detail in many prior NCLE sessions. See, e.g., Wallace Becker & David Rowe, “Creditors’ Claims Against Decedents”, NCLE 2009 Estate Planning and Probate Institute (March 13, 2009); Susan J. Spahn, “Creditor’s Issues: Claims and the Estate”, NCLE Annual 2003 Probate & Estate Planning Seminar (March 14, 2003); John McHenry, “If We Can Tax ‘Em, We Can Sue ‘Em”, NCLE 2001 Probate Seminar Manual (March 16, 2001); Gerald Friedrichsen, “Claims: From the Creditor’s Point of View”, NCLE Probate: Back to the Basics (March 5 and 6, 1998); Allen Fankhauser, “Claims (Filing and Objections) and Other Traps for the Unwary in Estate Administration”, NCLE Nebraska Probate (March 7 and 8, 1991); Bruce Smith, “Creditors Claims”, NCLE Nebraska Probate: Introduction, Review & Update (March 7, 1986).

2 Defined in § 68-919 to be “a nursing facility, an intermediate care facility for the mentally retarded, or an inpatient hospital”.3 Note § 68-919 says the Department’s claim needs no “additional evidence of foundation”, if it submits the “payment record”, so long as that

record “bears the seal of the department, is certified as a true copy, and bears the signature of an authorized representative of the department”.In a case handed down prior to the 2008 amendment to § 30-2483 (In re Estate of Reimers, 16 Neb. App. 610, 746 N.W.2d 724 (2008)), the Nebraska Court of Appeals said the Estate was not obliged to pay the Department for that portion of its claim entitled “Waiver Services”, where it couldn’t be determined from the face of the payment record that the items in the bill of exceptions (in the category of “Waiver Services” ) were reimbursable under § 68-919:

“To the extent that DHHS believes that because § 68-919(4) allows it to dispense with foundation for its listing of Medicaid payments, then its reimbursement claim is proved simply by the admission in evidence of [DHHS’s exhibit], we reject that notion. . . . What then becomes determinative is what is proved by the contents of the exhibit, considered in the context of the Act [specifically § 68- 911]. . . . [T]he statute does not create any presumption that the amounts shown on the payment record are reimbursable by the recipient’s estate–-such must still be proved, and if the exhibit does not do so, then additional evidence is needed.” 16 Neb. App. at 615-17.

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notice to the Department nor a waiver application for purposes of any statute or regulation that requires that a notice or waiver application be provided to the Department.”4

In the case of Tulsa Professional Collection Services v. Estate of Pope,5 the United States Supreme Court held that the Oklahoma non-claim statute could not be constitutionally utilized to bar the claim of a creditor that did not receive actual notice, if the creditor was known or reasonably ascertainable.6

For a discussion of the Nebraska statute and proper notice, see Charles E. Wright, “Adequate and Proper Notice in Administration of Trusts and Estates–Mullane Begat Pope”, NCLE Estate Planning and Probate Seminar Materials (March 22, 1990).

For other cases involving the constitutionality of such notice in Uniform Probate Code states, see In re Estate of Barnette, 549 So.2d 1166 (Fla. App. 1989); In re Estate of Kopely, 159 Ariz. 391, 767 P.2d 1181 (App. 1988); Ex Parte Estate of Evans, 299 S.C. 366, 384 S.E.2d 748 (1989).

For law review articles discussing the problem, see Gagliardi, Remembering the Creditor at Death: Aligning Probate and Nonprobate Transfers, 41 Real Prop. Prob. & Tr. J. 819 (Winter 2007); Love, Estate Creditors, The Constitution, and the Uniform Probate Code, 30 U. Rich. L. Rev. 411 (1995); Waterbury, Notice to Decedents’ Creditors, 73 Minn. L. Rev. 763 (1989); Falender, Notice to Creditors in Estate Proceedings, 63 N.C.L. Rev. 659 (1985).

In 1991, The Nebraska Legislature amended Nebraska Probate Code § 30-2485 to include specific reference to § 25-520.01, making it clear that if notice has not been published and mailed in compliance with §§ 25-520.01 and 30-2483, the two-month non-claim provision will not apply and creditors will have three years from the date of death to present their claims. Section 25-520.01 requires the mailing of the notice within five days after the first publication, plus proof by affidavit of the mailing.

Other Nebraska cases interpreting § 30-2483 include:

A. Mach v. Schmer,7 where the Court of Appeals said a plaintiff who brought suit against the P.R. after the deceased died, for injuries in an accident allegedly

4 See Neb. Rev. Stat. § 30-2483(b).5 485 U.S. 478, 108 S. Ct. 1340, 99 L. Ed.2d 565 (1988)6 Section 30-2483 is the pre-1989 version of § 3-801 in the UPC. The Comment to that UPC section questions whether the Pope decision applies

to the UPC. Is the safest bet to assume it does? Several UPC state cases appear to make that assumption. For example, in the case of Jones v. Sun Bank/Miami, N.A., 609 So. 2d 98 (Fla. App. 3 Dist. 1992), the Court said it was reasonable to conclude the purchaser of a gasoline station was not a “known or reasonably ascertainable creditor” of the seller’s estate, where the purchaser had not told the vendor of the alleged environmental contamination. Therefore the purchaser was not entitled to actual notice of the claims period. See also In re Estate of Elken, 735 N.W.2d 842 (N.D. 2007) (Repairman was a “reasonably ascertainable potential creditor”); In re Estate of Travers, 192 Ariz. 333, 965 P.2d 67 (1998) (Ex-husband was “reasonably ascertainable creditor”); In re Estate of Ortolano, 766 So. 2d 330 (Fla. App. 4 Dist. 2000) (“actual notice of administration is owed only to ascertainable creditors of the estate, not to contingent or conjectural claimants”).

7 4 Neb. App. 819, 550 N.W.2d 385 (1996)

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caused by the deceased during his lifetime, did not have a “direct legal interest” in the estate,8 and the P.R. had no duty to mail him the notice to creditors.9

B. National Bank of Commerce Trust & Savings Assoc. v. Otto,10 where the Supreme Court allowed one creditor (NBC) to appeal the allowance of another creditor’s claim (FCG), since FCG was a known creditor, and therefore had a “direct legal interest”. However, FCG was a known creditor, and the P.R. failed to mail notice to FCG as required by § 30-2483. Therefore, under § 30-2485, FCG had three years to file its claim. This was true even though FCG had actual notice the estate was pending.

C. In re Estate of Jackson,11 where a man and woman lived together for many years, and the Court of Appeals allowed a claim for “services” by the survivor of the two, in spite of the usual presumption against a “family relationship” claim.

D. In re Matteson12 shows the county court’s extensive jurisdiction in this area, when the Supreme Court held it was proper for a divorced woman to file a claim in the deceased ex-husband’s estate for the value of the life insurance he was supposed to maintain for her under the divorce decree.

The failure to publish or mail the published notice as required by Nebraska Probate Code § 30-2483 still results in barring the creditor by the general statute of limitations (which is suspended for two months after decedent’s death under § 30-2484) or by the time limit of three years after decedent’s death (§ 30-2408). Under § 30-24,117, when a P.R. closes an estate informally, a verified statement must be filed with the court showing that a copy of the statement has been sent to all creditors or other claimants of whom the P.R. is aware “whose claims are neither paid nor barred”.

10-1(b) Exception

Nebraska Probate Code § 30-2483 does not apply to small estates (Nebraska Probate Code § 30-24,127) where the inventory and appraisals indicate that the value of the entire estate, less liens and encumbrances, does not exceed the homestead allowance (Nebraska Probate Code § 30-2322); family allowance (Nebraska Probate Code § 30-2324); exempt property (Nebraska Probate Code § 30-2323); administration costs and expenses, reasonable funeral expenses, and the reasonable and necessary medical and hospital expenses of the last illness of the decedent (Nebraska Probate Code § 30-24,127).

8 Section 25-520.01 requires that the notice be given to “each and every party appearing to have a direct legal interest in such action”.9 Similarly, see In re Estate of Ortolano, 766 So. 2d 330 (Fla. App. 4 Dist. 2000) (“actual notice of administration is owed only to ascertainable

creditors of the estate, not to contingent or conjectural claimants”).10 258 Neb. 789, 606 N.W.2d 750 (2000)11 7 Neb. App. 427, 583 N.W.2d 82 (1998)12 267 Neb. 497, 675 N.W.2d 366 (2004

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10-2 Limitation on Claims

10-2(a) Statute of Limitations: Nebraska Probate Code § 30-2484

No claim barred by the applicable statute of limitations on the date of decedent’s death can be allowed or paid unless the limitations defense is properly waived. Unless the estate is insolvent, the P.R. has the power, with the consent of all successors, to waive a defense of limitations.

However, any statute of limitations measured from some event other than the decedent’s death and the publication of the notice to the creditors is suspended during the two months following the decedent’s death and then resumed as to claims not barred by other sections.

All creditors’ claims are barred three years after death if no notice to creditors has been published. Nebraska Probate Code §§ 30-2485(a)(2) and 30-2408. Where there has been publication of notice, claims are barred unless presented within the time limits of §§ 30-2485(a) and 30-2485(b).

The last sentence of § 30-2484 says,

“For purposes of any statute of limitations, the proper presentation of a claim under section 30-2486 is equivalent to commencement of a proceeding on the claim.” (Emphasis added).

In the case of In re Estate of Cooper,13 First Tennessee, a bank in Memphis, filed a claim in Richard Cooper’s estate, using the standard “Statement of Claim” form (Form 313). The claim was signed by Christopher D. Brown, “Manager of Special Assets” for First Tennessee. Brown is not an attorney, nor licensed to practice law in Nebraska. Another creditor of Cooper’s estate, W. G. Yates & Sons Construction Company, filed a Motion to Strike First Tennessee’s Statement of Claim, because (1) a corporation cannot appear pro se in litigation, and (2) the form wasn’t signed by a lawyer authorized to practice law in Nebraska.

The County Court agreed with Yates, and struck the claim. The Supreme Court disagreed, and held the filing of a claim in an estate is not an “action or proceeding” under § 7-101 of the Nebraska statutes, prohibiting the practice of law without a license. Specifically, the Court held the last sentence of § 30-2484 applies only to statutes of limitation questions.

Presumably, a claimant’s “petition for allowance” under § 30-2488, to allow the claim that’s been disallowed, would be the commencement of an “action or proceeding” under § 7-101, and a lawyer authorized to practice law in Nebraska would be required.

In the case of Mulinix v. Roberts,14 the Nebraska Supreme Court quoted this same language to allow a personal injury lawsuit against an estate. Charles Weber was killed in a car accident on April 17, 1993, involving Patricia Mulinix, the plaintiff. On April 16, 1997, Patricia filed a claim in Charles’

13 13275 Neb. 297, 746 N.W.2d 653 (2008)14 261 Neb. 800, 626 N.W.2d 220 (2001)

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estate for her damages, which was disallowed by the P.R. Within 60 days of this disallowance Patricia brought this district court lawsuit. Quoting § 30-2484, the Supreme Court said filing the claim against the estate commenced the “proceedings” on that claim for the purposes of the 4-year statute of limitations.

10-2(b) Claims Arising Before Death: Nebraska Probate Code § 30-2485(a)

Nebraska Probate Code § 30-2485(a) is the non-claim provision of the Probate Code. Claims against the estate which arose before the decedent’s death are barred against the estate, the Personal Representative and the heirs and devisees of the decedent, unless presented within two months after the date of the first publication of notice to creditors or within three years after the decedent’s death, if notice to creditors has not been published. If claims are barred for a nonresident by the non-claims statute at the decedent’s domicile before the first publication of the Nebraska notice to creditors, they are also barred in Nebraska.

Section 30-2485 was amended in 1991 to specifically refer to § 25-520.01, which requires the mailing of notice within five days of the first publication to every party appearing to have a direct legal interest, plus the filing of proof of such mailing by affidavit.

The case of Cushing v. Neb. Dep’t of Health & Human Servs.15 involved a decedent who had received Medicaid benefits through the Department of Health and Human Services (“DHHS”) during her life. The personal representative of the estate published the first notice of informal probate of the decedent’s will on July 2, 2010, but did not send notice to DHHS within five days of July 2, 2010. As a result of the personal representative’s failure to send notice to DHHS within the five-day time frame, the Nebraska Supreme Court held that the three-year limitations period of § 30-2485(a)(2), rather than the two-month limitations period of § 30-2485(a)(1), applied to DHHS’s claim.

The case of Dawes v. Knickman (In Re Estate of Knickman)16 involved a decedent’s mother (Knickman) who had loaned the decedent funds to purchase a bar under the terms of a promissory note. After the decedent’s death, Knickman timely filed a statement of claim seeking payment on the promissory note, plus interest, and, later, an amended petition for allowance which decreased the amount Knickman was requesting under the note. Subsequently, after the expiration of the two-month claims period, Knickman filed a second amended petition for allowance in which she expanded her claim to request payment of real estate taxes and insurance which had arisen prior to the decedent’s death. The Nebraska Court of Appeals addressed the issue of whether the new claims for real estate taxes and insurance were time-barred as not having been submitted within the two-month claims deadline. The court acknowledged the general rule that issues raised in an amended petition “relate back” to the date of the original petition. However, a specific statute controls over a general rule, and since § 30-2485 specifically establishes a two-month deadline, Knickman’s new claims for real estate taxes and insurance were time-barred.

15 283 Neb. 571, 810 N.W.2d 741 (2012)16 2014 Neb. App. LEXIS 93 (2014)

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The case of National Bank of Commerce Trust & Sav. Ass’n v. Otto17 involved a creditor, First Concord Group, Inc. (“FCG”), which had not been mailed the notice described in § 30-2483 and which filed a claim against the estate after the two-month claims deadline. Section 30-2485(a)(1) permits a creditor with a claim that arose before the death of the decedent that was not presented within two months to apply within 60 days after the expiration date for additional time to file a claim for good cause shown. FCG did not request an extension under § 30-2485(a)(1) before filing its claim. However, FCG’s failure to request an extension did not deprive the county court of jurisdiction over the claim, since FCG was also entitled to the three-year extension provided for in § 30-2485(a)(2).

10-2(c) Claims Arising At or After Death: Nebraska Probate Code § 30-2485(b)

All claims arising at or after death, except for “costs and expenses of administration”, are barred against the estate, the Personal Representative and the heirs and devisees of the decedent unless presented within four months after they arise.

Prior to 2009, § 30-2485(b) said that, for all claims arising at or after death (other than administration expenses), you must present the claim, “within four months after performance by the personal representative is due”. In the 2008 case of J.R. Simplot Company v. Jelinek,18 a dispute developed over a claim filed along the following time line:

1. 5/21/99. Edward Jelinek died May 21, 1999, owning 4500 acres of farmland.

2. 15 Years. Jelinek’s will directed the estate to stay open up to 15 years, and continue the farming operation.

3. 5/21/99 to 2/23/03. The P.R. doesn’t pay the farm expenses owed to the plaintiff Simplot for a number of years.

4. February 23, 2003. Ultimately a bill from Simplot arrives on February 26, 2003, for $161,053.78, with a due date of March 20, 2003, apparently for “goods and services” to the farm during the three years prior to February 26, 2003.

5. March 25, 2004. Simplot files suit against the P.R.

If Simplot’s goods and services were considered a “claim based on a contract with the personal representative”, they had to be presented “within four months after performance by the personal representative is due.”19

On the other hand, if the $161,053.78 was for “administration expenses”, no claim would need to be filed, and § 30-2485(b)(1) would have it paid, presumably, before the general statute of limitations ran on a contract for goods and services.20 The Supreme Court commented:

17 258 Neb. 789, 606 N.W.2d 750 (2000)18 275 Neb. 548, 748 N.W.2d 17 (2008)19 Section 30-2485(b)(1).20 Five years for a written contract (§ 25-205(1)) and four years on oral (§ 25-206).

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“Simplot’s contention that its claim constituted an administration expense under § 30-2485(b) suffers from a fatal flaw. If the crop services Simplot provided are properly considered administration expenses, such ignores altogether § 30-2485(b)(1), which provides for the 4-month claim period for “[a] claim based on a contract with the personal representative. . . .”

“If this court were to adopt Simplot’s reasoning–-that the services in question should be considered administration expenses - then § 30-2485(b)(1) would be rendered virtually meaningless. A personal representative’s duty is to act on behalf of the estate with the end goal of distributing and closing that estate. In general, each and every contract entered by the personal representative is intended to assist the personal representative in his or her administration of the estate. Under Simplot’s reasoning, all of those expenses could reasonably be construed as administration expenses, resulting in a situation in which it would rarely, if ever, be necessary for someone to actually file a claim with the probate court. We therefore reject Simplot’s contention and hold that the claim in this case was not for administration expenses.”21

The Court refused to define “administration expenses”, but simply said it relied on cases that preceded the Nebraska Uniform Probate Code adoption.In 2009, the Legislature amended § 30-2485(b), eliminating the words “administrative expenses”, so it now reads:

(b) All claims, other than for costs and expenses of administration as defined in section 30-2487, against a decedent’s estate which arise at or after the death of the decedent . . . are barred against the estate, the personal representative, and the heirs and devisees of the decedent, unless presented as follows . . . .” (Emphasis added).

Section 30-2487 then says “costs and expenses of administration” include:

“Expenses incurred in taking possession or control of estate assets and the management, protection, and preservation of the estate assets, expenses related to the sale of estate assets, and expenses in the day-to-day operation and continuation of business interests for the benefit of the estate.”

Presumably, Simplot would now get its farm expense bill paid as an “expense of administration” under § 30-2485(b).

Proceedings to enforce a mortgage, pledge, or other lien upon the property of the estate are not affected, nor is any proceeding to establish liability of the decedent or the Personal Representative if protected by liability insurance (to the limits of the insurance protection only).

A creditor is an “interested person” under Nebraska Probate Code § 30-2209(21) and therefore may

21 275 Neb. at 553-54 (footnotes omitted).

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file an application for informal proceedings under Nebraska Probate Code § 30-2414 or formal proceedings under Nebraska Probate Code § 30-2425. However, a creditor has no priority for appointment as Personal Representative until the passage of 45 days after the death of the decedent under Nebraska Probate Code § 30-2412. In commencing administration, the creditor would be subject to the same procedures as any interested person.

For additional cases interpreting § 30-2485, see Babbitt v. Hronik22 and Eggers v. Rittscher.23

10-3 Methods of Making Claim

There are two alternative methods of making a claim: filing a written statement with the clerk of the court and commencing an action against the personal representative.

10-3(a) Filing a Written Statement With the Clerk of the Court: Nebraska Probate Code § 30-2486(1)

Any claimant may file a written statement of the claim with the clerk of the court in the form prescribed by the court, within the time limit prescribed.24

As outlined above, in the case of In re Estate of Cooper,25 the Nebraska Supreme Court held it wasn’t the “practice of law” under § 7-101 for non-lawyer employee of a bank to file a claim in the county court.

In the case of Lenners v. St. Paul Fire & Marine Ins. Co.,26 Lenners, a creditor of the estate, filed a petition seeking formal adjudication of intestacy, determination of heirs and the appointment of herself as personal representative. Thereafter, Lenners filed a statement of claim in the estate for damages she sustained in an automobile accident involving the decedent. In determining that there was nothing improper about Lenners simultaneously filing a statement of claim and seeking appointment as personal representative, the Nebraska Court of Appeals noted that (1) the Nebraska Probate Code allows a creditor to be appointed as personal representative where others fail to act within a specified time, and (2) no fiduciary obligation had yet been imposed upon Lenners at the time she filed her statement of claim, since her filing was submitted prior to her appointment as personal representative.

10-3(b) Commencing an Action Against Personal Representative: Nebraska Probate Code § 30-2486(2)

Under § 30-2486(2), the claimant may commence a court proceeding against the Personal Representative in any court which has subject matter jurisdiction to obtain payment of the claim

22 261 Neb. 513, 623 N.W.2d 700 (2001) (Personal injury plaintiff’s lawsuit barred).23 247 Neb. 648, 529 N.W.2d 741 (1995) (allegation of an oral contract to convey death was not a claim barred by the nonclaim statute).24 For a case discussing attorney’s fees and the manner of presenting them as claims, see Kerrigan & Line v. Lange, 253 Neb. 498, 571 N.W.2d 76 (1997).25 275 Neb. 297, 746 N.W.2d 653 (2008)26 18 Neb. App. 772, 793 N.W.2d 357 (Neb. App. 2010)

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against the estate, but the proceedings must be commenced within the time limit for presenting the claim.

Section 30-2486(2) permits actions to be commenced in any court where the litigation would normally be tried for the death of the person involved. This also eliminates the need to first file the claim in the county court and then appeal the denied claim.27

“Presenting” the claim requires filing it with the court, even though the Personal Representative has actual notice of the claim. “Mere notice to a representative of an estate regarding a possible demand or claim against an estate does not constitute presenting or filing a claim under Section 30-2486.”28

This section doesn’t allow the “presentation” a claim against an estate by commencing an action against a former personal representative who’s been discharged, and the appointment terminated, unless there’s been a breach of fiduciary duty.29

In Estate of Hansen v. Bergmeier,30 the Nebraska Court of Appeals discussed the interplay between § 30-2485(c)(2) and the “presenting” of a claim against a discharged personal representative. Section 30-2485(c)(2) allows a claimant to initiate a proceeding to re-open an estate in order to establish liability of the decedent or the personal representative for which he or she is protected by liability insurance, to the limits of the insurance protection only. In Hansen, a claimant filed, among other items, a notice of claim in a closed estate “for an amount to be determined by a court of law to the extent of, and equal to available automobile insurance coverage.” In addition to noting that the lawsuit at issue failed to allege that the claims being asserted were limited to recovery of only liability insurance coverage, the Court commented that “the law is that a closed estate, with a discharged personal representative, must be reopened and a personal representative appointed (or reappointed) before suit can be filed, even when seeking only liability insurance proceeds” (emphasis added).

Filing a “demand for notice” under § 30-2413 doesn’t qualify as “presenting” the claim under § 30-2486.31

10-3(c) Future, Contingent or Secured Claims: Nebraska Probate Code §§ 30-2486(1) & 30-2486(3)

In filing the written statement on a claim not yet due, the claimant is required to give the date it will become due. In addition, if the claim is contingent or unliquidated, the claimant is required to state the nature of any uncertainty in the claim. If the claim is secured, the claimant is required

27 As outlined above, in the case of Mulinix v. Roberts, 261 Neb. 800, 626 N.W.2d 220 (2001), the plaintiff filed a claim in the estate, the day before the statute of limitations on the tort ran. The P.R. disallowed the claim, but within 60 days, the plaintiff filed her district court lawsuit against the P.R. The Nebraska Supreme Court said filing the claim against the estate commenced the “proceedings” on that claim for the purposes of the 4-year statute of limitations.

28 In re Estate of Feuerhelm, 215 Neb. 872, 875, 341 N.W.2d 342, 345 (1983).29 Mach v. Schmer, 4 Neb. App. 819, 550 N.W.2d 385 (1996)30 Hansen, 20 Neb. App. 458, 825 N.W.2d 224 (Neb. App. 2013)31 J.R. Simplot Company v. Jelinek, 275 Neb. 548, 748 N.W.2d 17 (2008).

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to describe the security. However, the failure to describe the security correctly, the nature of any uncertainty, and the due date of the claim not yet due does not invalidate the presentation of the claim.

In the case of Harring v. Gress,32 the decedent’s former spouse, Marcia, had filed a claim with the estate on behalf of the decedent’s son, Justin, seeking one-half of Justin’s reasonable secondary educational expenses and indicating that such claim was contingent and unliquidated. After the estate disallowed the claim, Marcia filed suit seeking, among other items, that the court allow the claim for secondary educational expenses not yet incurred. The Nebraska Supreme Court ultimately reversed the district court’s decision that Marcia’s claim was not yet ripe. The Court acknowledged the existence of many “unknowns” regarding Marcia’s claim, but ultimately determined that a claim made after resolution of the unknowns would be untimely and barred, given the limitations set forth in §§ 30-2485 and 30-2486.

Normally no proceedings can be commenced on a claim presented under Nebraska Probate Code § 30-2486(1) more than 60 days after the Personal Representative has mailed a notice of disallowance. However, in the case of a claim which is not presently due or which is contingent or unliquidated, the Personal Representative has the authority to consent to an extension of the 60 day period. In addition, “to avoid injustice,” the court may order an extension of the 60 day period but in no event may the extension run beyond the applicable statute of limitations. See also the discussion of secured claims under Nebraska Probate Code § 30-2491.

10-4 Priority of Claims: Nebraska Probate Code § 30-2487

Section 30-2487 classifies claims and the order in which payment is to be made where the assets of the estate are insufficient to pay all claims in full. The Personal Representative is required to make payment in the order set out in this section. Preference in the payment of any claim over other claims of the same class is prohibited, and a claim due and payable is not entitled to a preference over claims not yet due.

Note that under their particular statutes, the homestead allowance (Nebraska Probate Code § 30-2322), exempt property (Nebraska Probate Code § 30-2323) and family allowance (Nebraska Probate Code § 30-2324) have priority over all claims against the estate except for costs and expenses of administration, even though these three items are not mentioned in Nebraska Probate Code § 30-2487.

As outlined above, this section was amended in 2009 to define “costs and expenses of administration” as including:

“expenses incurred in taking possession or control of estate assets and the management, protection, and preservation of the estate assets, expenses related to the sale of estate assets, and expenses in the day-to-day operation and continuation of business interests for the benefit of the estate.”

32 Harring, 295 Neb. 852, 890 N.W.2d 502 (2017)

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10-5 Allowance of Claims

10-5(a) By Personal Representative: Nebraska Probate Code § 30-2488(a)

The Personal Representative may mail a notice to a claimant stating that the claim has been disallowed. After allowing or disallowing a claim, if the Personal Representative desires to change the decision, notice must be given to the claimant. However, the Personal Representative may not change the disallowance of a claim after the time has run for the claimant to file a petition for allowance or to commence a proceeding on the claim, thus barring the claim.

Yet, in the case of In re Estate of Dickie,33 the P.R. hadn’t disallowed the claim but, after the claims’ day ran, the P.R. elected to change his mind, and disallowed it. Quoting a prior Court of Appeals case, the Nebraska Supreme Court approved this procedure, relying on the following language from § 30-2488:

“If, after allowing or disallowing a claim, the personal representative changes his or her decision concerning the claim, he or she shall notify the claimant.”

The Supreme Court then blessed the following from the Court of Appeals decision:

“If the statute is interpreted to cause the personal representative to irrevocably allow the claim by not giving notice of disallowance within 60 days of its filing, personal representatives will be forced to deny all claims except those claims that are unquestionably good. If the personal representative can change his or her mind and disallow a claim that was once allowed, the worst that could happen is that the claimant would be in a state of uncertainty. If certainty is an important element to a claimant, that claimant can always petition the court to allow the claim.”34

The disallowed claim is barred unless, not later than 60 days after the mailing of the notice of disallowance or partial disallowance, the claimant files a petition for allowance of the claim in the county court or commences a proceeding against the Personal Representative. The notice of disallowance given by the Personal Representative must warn the claimant of the impending bar.

In the case of Holdrege Cooperative Association v. Wilson,35 the Nebraska Supreme Court held that if a claim has been properly presented and is disallowed by the Personal Representative, the claimant may, within 60 days of the mailing of notice of the disallowance, commence a proceeding against the Personal Representative in any court in which the deceased could have been sued when alive, which in this case was the district court.

This 60-day requirement has been strictly interpreted by the Nebraska Supreme Court. In the case of In re Estate of Lienemann,36 the claim was disallowed by the P.R., but the claimant filed her

33 261 Neb. 533, 623 N.W.2d 666 (2001)34 Quoting In re Estate of Krichau, 1 Neb. App. 398, 501 N.W.2d 722 (1992).35 236 Neb. 541,463 N.W.2d 312(1990)36 277 Neb. 286, 761 N.W.2d 560 (2009)

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petition for allowance 61 days after the “mailing of the disallowance”. On appeal, the P.R. claimed she was entitled to 63 days because of § 25-534:

“Whenever a party has the right or is required to do some act or take some proceedings within a prescribed period after the service of a notice or other paper upon him or her and the notice or paper is served upon him or her by mail, three days shall be added to the prescribed period.”

The Supreme Court disagreed, saying § 25-534 didn’t apply:

“We find it unwarranted and not sensible to add 3 days due to mailing to a statute which explicitly states an action is barred ‘sixty days after the mailing.’

“Taken as a whole, the plain language of § 30-2488(a) provides for the finality of the personal representative’s decision 60 days after the mailing of the notice of disallowance, whereupon the claim is barred. We believe the Legislature chose to use a date of mailing to denote the date from which to measure when an action on the claim would be barred, and we respect such choice.”37

The case of Tri Valley Health Sys. v. Hockemeier38 addressed the issue of whether the 60-day period in § 30-2488(a) is a jurisdictional requirement or “in the nature of a statute of limitations.” Tri Valley was a creditor of the estate which, after its claim was disallowed by the estate, filed a petition for allowance after the 60-day deadline had expired. The Nebraska Supreme Court explained the relevance of the issue at bar:

“If [the 60-day period set forth in § 30-2488(a) is in the nature of a statute of limitations,] Tri Valley’s failure to file its petition within the time period cannot be raised by the personal representatives for the first time to this court. This is so because a statute of limitations does not operate by its own force as a bar, but, rather, operates as a defense to be pled by the party relying upon it and is waived if not pled. But if filing within 60 days is a jurisdictional requirement, this court can and must consider Tri Valley’s failure to timely file.”

As support for its holding that the filing of a petition for allowance within the 60-day period is a jurisdictional requirement, the Court distinguished between “typical” statutes of limitations and the language in § 30-2488(a):

“A typical statute of limitations specifies only that an action must be commenced within a specified time period. The language in § 30-2488(a) is unlike a typical statute of limitations because it does not merely specify the time for filing a petition to allow a disallowed claim; it also specifies the consequences of an untimely filing.”

If the Personal Representative fails to mail notice to a claimant of action on the claim for 60 days after the time for original presentation of the claim has expired, the claim is allowed, subject to

37 277 Neb. at 291.38 280 Neb. 420, 786 N.W.2d 680 (2010)

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the right of a Personal Representative to change its mind, as addressed in the case of In re Estate of Dickie.39

10-5(b) By the Court: Nebraska Probate Code § 30-2488(b) and 30-2488(c)

At any time within 14 days of the filing of a petition for allowance, a Personal Representative may transfer the claim to the regular docket of the county court (for a claim not greater than the county court’s jurisdictional amount40) or to the district court (for a claim in excess of the county court’s jurisdiction). Additional pleadings may be ordered by either the county court or the district court. In the district court, a jury trial is allowed, unless waived under § 25-1104.

The court may allow in whole or in part a claim presented to the Personal Representative or filed with the court if the Personal Representative or the claimant requests it, as long as the presentation is timely and the claim has not been barred. Notice must be given to the claimant, the Personal Representative and other interested persons as the court may direct.

10-5(c) By Judgment in a Court of Competent Jurisdiction: Nebraska Probate Code § 30-2488(d)

Final judgment in any court having jurisdiction over the Personal Representative amounts to an allowance of the claim.

The case of Nebraska Bank of Commerce Trust & Sav. Ass’n v. Otto41 addressed, in part, the question of which types of orders constitute final, appealable orders in the context of the allowance of claims. NBC, as a creditor of the estate, objected to the allowance of a claim which had been filed by First Concord Group, Inc. (“FCG”), another creditor of the estate, after the expiration of the claims deadline. After a hearing on FCG’s motion to file the claim, the county court entered an order approving FCG’s filing. Thereafter, the special administrator of the estate filed a notice of allowance of part of FCG’s claim, to which NBC objected. The county court subsequently entered an order approving the allowance of the claim, and NBC appealed. Among other items, FCG argued that NBC’s appeal was not timely filed because NBC did not appeal the county court’s earlier order approving FCG’s filing of the claim. In rejecting FCG’s argument on the basis that NBC did not have a final order from which to appeal until FCG’s claim was allowed, the Nebraska Supreme Court cited to a prior case involving a creditor’s filing of a belated claim against an estate:

“[W]hile a peremptory denial of permission to file a claim is a final, appealable order, permission to file a claim after the time for filing has run is an interlocutory order.”

10-5(d) Interest on Allowed Claims: Nebraska Probate Code § 30-2488(e)

All allowed claims bear interest at the legal rate, beginning 60 days after the time for original presentation of the claim. Where the allowed claim is based on a contract which provides for

39 261 Neb. 533, 623 N.W.2d 666 (2001)40 Set by § 24-517(5) ($45,000 through June 30, 2005, and thereafter set by the Supreme Court). 41 258 Neb. 789, 606 N.W.2d 750 (2000)

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interest, the interest paid shall be as stated in the contract. Allowed claims resulting from a court judgment bear the rate of interest stated in the judgment.

In Cushing,42 the Nebraska Supreme Court concluded that with respect to interest on allowed claims, “the language in § 30-2488(e) which fixes the date at which interest begins to run as ‘sixty days after the time for original presentation of the claim’ is specific to the claim of the creditor seeking interest.” As applied to DHHS, the claim of which was at issue in Cushing, no interest could begin to accrue until 60 days after the date which was three years from the decedent’s death.

10-6 Payment of Claims

10-6(a) Generally: Nebraska Probate Code § 30-2489(a) 30-2489(b) and 30-2726

Upon the expiration of two months from the date of the first publication of notice to creditors, the Personal Representative is directed to pay claims in the order of priority. No court supervision is required to permit payment, unless the Personal Representative requests court assistance or judicial action is demanded by an interested party. The Personal Representative must make allowance for homestead, family and support allowance; for presented claims which have not yet been allowed, or whose allowance has been appealed; and for unbarred claims which may yet be presented, including costs and expenses of administration. The claimant may petition the court and secure an order directing the Personal Representative to pay the claim to the extent funds are available.43

The Personal Representative has the authority to pay a claim which is not barred even without formal presentation by the claimant. However, there may be personal liability to another claimant (who’s injured by the P.R.’s action) if the payment is made before the expiration of the two months from the date of the first publication of notice to the creditors; if the Personal Representative did not require the payee to give adequate security; or if the payment was negligently or willfully made in such a manner so as to deprive the other claimant of priority.

Nebraska Probate Code § 30-2726(a) provides:

If other assets of the estate are insufficient, a transfer resulting from a right of survivorship or POD designation under sections 30-2716 to 30-2733 is not effective against the estate of a deceased party to the extent needed to pay claims against the estate, statutory allowances to the surviving spouse and children, taxes, and expenses of administration.

Nebraska Probate Code § 30-2726(b), in part, provides that “a proceeding to assert the liability for claims against the estate and statutory allowances may not be commenced unless the personal representative has received a written demand by the surviving spouse, a creditor, a child, or a person acting for a child of the decedent.”

42 283 Neb. 571, 810 N.W.2d 741 (2012) 43 The county court’s jurisdiction in this respect is exclusive. Therefore, a lawsuit in district court was improper to enforce the payment of

attorney’s fees’ claim allowed in an estate. Kerrigan & Line v. Foote, 5 Neb. App. 397, 558 N.W.2d 837 (1997).

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The case of Lorenz v. Shea44 involved an estate with insufficient probate assets to meet the estate’s potential obligations to the decedent’s former spouse (Alice). Alice filed various claims in the estate, including claims for future alimony, delinquent alimony and past due property settlement funds. Alice asserted that the filing of such claims, as well as a petition to allow the claims, constituted a written demand to recover non-probate assets as required by § 30-2726(b). The Nebraska Supreme Court rejected this argument, stating that the statute requires more than mere notice to the personal representative: “The purpose of the statute is to alert the personal representative of the need to recover non-probate assets and to trigger the personal representative’s duty and authority to initiate proceedings to do so.”

10-6(b) Secured Claims: Nebraska Probate Code § 30-2491

Nebraska Probate Code § 30-2491 provides these rules for the payment of secured claims:

(a) If the creditor surrenders the security, payment is on the basis of the amount allowed.

(b) If the creditor exhausts the security before receiving payment, payment is on the amount of the claim allowed, less the “fair value” of the security.

(c) If the creditor does not have the right to exhaust the security or has not done so, payment is on the basis of the amount of the claim allowed, less the “value” of the security. The “value” is determined by converting the security into money according to the terms of “the agreement pursuant to which the security was delivered to the creditor” or by agreement, arbitration, compromise or litigation between the creditor and the Personal Representative.

If the creditor who holds a mortgage on real estate elects not to file a claim and seeks to rely on his or her security, the question arises as to whether the Personal Representative has an obligation to pay the mortgage in full. Under Nebraska Probate Code § 30-2347, the common law rule of exoneration of a specific devise is abolished. Therefore, the Personal Representative is under no duty to exonerate, and this changes prior Nebraska law:

“Nebraska formerly followed the common law rule of exoneration which is abolished by this section. Lienhart v. Conway, 146 Neb. 821, 21 N.W.2d 749 (1946).”45

If a creditor who holds a mortgage on the decedent’s real estate elects to file a claim on the mortgage note, the Personal Representative has the option under Nebraska Probate Code § 30-2496 to pay the encumbrance. However, payment of the encumbrance cannot increase the share of the distributee entitled to the encumbered assets, unless the distributee is somehow entitled to exoneration, such as under the decedent’s will. For example, if mortgaged real estate is devised to A, and the residue to B, and if a claim on the mortgage note is filed and paid, the Personal Representative may attempt to collect the payment of the mortgage note from A or refinance the mortgage and distribute the

44 292 Neb. 543, 873 N.W.2d 396 (2016)45 Nebraska Comment to Nebraska Probate Code § 30-2347.

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real estate to A, subject to the new mortgage and then distribute the proceeds to B as residue.

If a creditor holds an estate asset as security, the Personal Representative has the right to pay off the note whether a claim is filed under Nebraska Probate Code § 30-2496, or not.

10-6(c) Future or Contingent Claims: Nebraska Probate Code § 30-2492

If a future, contingent or unliquidated claim becomes due or certain before the estate is distributed, the claim is paid in the same manner as “presently due and absolute claims of the same class”, if it has been allowed or established by a proceeding. Nebraska Probate Code § 30-2492(a).

An alternative method is provided in Nebraska Probate Code § 30-2492(b) whereby the Personal Representative or the court, upon petition of the Personal Representative or claimant, may provide for payment. If the claimant consents, the present or agreed value of the claim may be paid; or the claimant may be paid through future payments by creating a trust, giving a mortgage, or obtaining a bond or security from a distributee.

10-7 Liability of Personal Representative During Administration

10-7(a) Generally: Nebraska Probate Code § 30-2490

Section 30-2490 says a P.R. is not individually liable for a contract “properly entered into in his fiduciary capacity in the course of administration of the estate”, unless the P.R. fails to reveal the “representative capacity” and fails to “identify the estate in the contract”.

As indicated by the Nebraska Comment, this section is similar to Nebraska Probate Code § 30-2658 on conservators. Compare § 30-3899 of the Nebraska Uniform Trust Code, which basically says a trustee isn’t personally liable on a contract, if the trustee “disclosed the fiduciary capacity”.

One question raised by § 30-2490 is what was intended by the words “individually” and “personally”. The Comment to Section 30-2817 would indicate the two words are meant to be synonymous. Under that interpretation, the phrase “in his fiduciary capacity” appears to mean that if the Personal Representative acts in other than a fiduciary capacity, there would be personal liability subjecting the P.R.’s own real or personal property to liability for such actions. The Comment compares the estate to a “quasi-corporation” for purposes of such liabilities, thus allowing the claimant to have a direct remedy against estate property by reason of the relationship between the estate and the claimant. As stated in the Comment, the Personal Representative becomes personally liable only if an agent for a corporation would be liable under the same circumstances.

10-7(b) On Contract: Nebraska Probate Code § 30-2490(a)

A Personal Representative is not personally liable on contracts entered into in a fiduciary capacity unless the contract so provides, or unless the Personal Representative fails to reveal the fiduciary

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capacity and identify the estate. In the case of Purbaugh v. Jurgensmeier,46 the P.R. sold real estate owned by the estate, but the contract only identified him as the P.R., and didn’t indicate the property belonged to any estate. The purchasers sued the P.R. individually, but lost on a summary judgment. The Supreme Court sent the case back, saying there was insufficient evidence to support a summary judgment as to whether the purchasers knew the identity of the estate from which they were purchasing. They knew he was a “P.R.”, but did they know the estate of which he was P.R.?

“The initials ‘P.R’ which Jurgensmeier added to his signature may have been sufficient to inform a layperson that he or she was dealing with a personal representative, but there was nothing in the documents or dealings set forth in the record which would indicate what or whom Jurgensmeier represented. . . . The mere addition of the initials ‘P.R.’ to Jurgensmeier’s signature would be, as a matter of law, insufficient to place the [purchasers] on notice.”47

Once again, compare the liability of a trustee under § 30-3899, mentioned above, where the trustee isn’t personally liable if the contract disclosed “the fiduciary capacity”.

10-7(c) Arising Out of Control of Property and For Torts: Nebraska Probate Code § 30-2490(b)

The Personal Representative may be held liable for obligations arising out of ownership or control of the estate and for torts committed in the management of the estate if the P.R. is personally at fault.

10-7(d) Procedure for Enforcement: Nebraska Probate Code § 30-2490(c)

Claims on contracts entered into as a fiduciary by the Personal Representative on obligations arising from the ownership or control of the estate or on torts committed during the course of administration may be asserted against the estate by proceeding against the P.R. in such fiduciary capacity. Subsection (c) of Nebraska Probate Code § 30-2490 is interpreted to mean that, in the enumerated circumstances, claims against the estate may be brought against the P.R. in a fiduciary capacity, regardless of whether the P.R. is individually liable.

10-7(e) Liability to Third Parties as Between Estate and Personal Representatives: Nebraska Probate Code § 30-2490(d)

Where there are issues of liability between the estate and the Personal Representative individually, and not in a fiduciary capacity, they may be determined in a proceeding for accounting, surcharge or indemnification or other appropriate proceedings, which may result in judgment against the Personal Representative. Subsection (d) of Nebraska Probate Code § 30-2490 would indicate that issues of liability between the estate and the Personal Representative can be determined in a separate proceeding for accounting, surcharge, indemnification or other appropriate action.48

46 240 Neb. 679, 483 N.W.2d 757 (1992)47 240 Neb. at 685-87.48 See § 30-2464 on surcharging the P.R., and the case of Snover v. Line, 4 Neb. App. 533, 546 N.W.2d 341 (1996), where the P.R. failed to file a

federal estate tax return, or get an extension.

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10-8 Counterclaims and Compromise

10-8(a) Counterclaims By Personal Representative: Nebraska Probate Code § 30-2493

The Personal Representative may deduct any amount considered to be a counterclaim which the estate has against the claimant. A court is required to reduce the amount allowed on a claim by the amount of any counterclaims, and if the counterclaims are greater than the claim, the court renders judgment against the claimant for the excess amount. A counterclaim may be liquidated or unliquidated, may arise from a different transaction and may give rise to greater or different relief than that upon which the claim is based.

10-8(b) Compromise By Personal Representative: Nebraska Probate Code § 30-2495

If it’s in the best interests of the estate, a P.R. may compromise any claim presented, whether it is due or not, absolute or contingent, liquidated or unliquidated.

10-9 Creditors' Remedies

10-9(a) Execution and Levy Prohibited: Nebraska Probate Code § 30-2494

Execution or levy against property of the estate is prohibited under any judgment against a decedent or P.R.; however, mortgages, pledges or other liens upon estate property may be enforced. In the case of McCook Nat. Bank v. Bennet,49 the Bank had judgment lien on real estate that was in an estate, but didn’t file a claim in the estate. The P.R. said the Bank was out because of that failure to file, but the Supreme Court didn’t agree:

“The Personal Representative argues that a lien is a claim as defined by § 30-2209(4). However, the Nebraska Probate Code exempts liens in § 30-2209 because a lien by definition is not a liability as that term is used in the definition of claims. . . . The judgment is not a liability as that term is used in § 30-2209(4). A lien is a ‘claim, encumbrance, or charge on property for payment of some debt, obligation or duty.’ Black's Law Dictionary 922 (6th ed. 1990). A liability is ‘all character of debts and obligations.’ Black's Law Dictionary 914 (6th ed. 1990). A lien is security for a liability. It is not the liability itself. The judgment lien in this case was not a liability of the estate.”

Therefore, the Bank had no duty to file a claim in the estate, and could levy execution on the estate’s real estate.

10-9(b) Encumbered Assets: Nebraska Probate Code § 30-2496

The Personal Representative is permitted to pay all or any part of an encumbrance on any of the assets of the estate and is permitted to renew or extend any obligation secured by the encumbrance,

49 248 Neb. 567, 537 N.W.2d 353 (1995)

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or may convey or transfer the assets to the creditor in full or partial satisfaction, whether or not a claim has been filed, if it appears to be for the best interest of the estate. Payment of an encumbrance does not increase the share of the distributee entitled to the encumbered assets unless the will indicates to the contrary or the distributee is otherwise entitled to exoneration.

10-10 Administration in Two or More States

10-10(a) Duty of Personal Representative: Nebraska Probate Code § 30-2497

All assets of Nebraska estate are subject to all “claims, allowances and charges” established against the P.R., both local and foreign. If the assets are insufficient to cover all exemptions, allowances and charges, each local or foreign claimant is entitled to receive a proportionate share of the entire estate. Family exemptions and allowances are determined by the law of the domicile of the decedent. If a creditor is given a preference of security that is recognized in a foreign jurisdiction, but not locally, the creditor recovers from local assets only after the preference or security is deducted.

Where exemptions, allowances, claims and charges exceed the value of the entire estate, the balance left after paying local claimants will be transferred to the domiciliary P.R.

If local assets are insufficient to pay local claims, the local assets are marshaled, and each claimant receives its proportionate share of the marshaled assets.50

10-10(b) Final Distribution: Nebraska Probate Code § 30-2498

Where the Nebraska property of a nonresident is administered in Nebraska, the NebraskaP.R. is to distribute the Nebraska property to the domiciliary P.R. (if willing to receive it) except as follows:

1. If, pursuant to the decedent’s will and any applicable choice of law rules, the decedent’s heirs are determined by Nebraska law without reference to the law of the domicile of the decedent (e.g., a Colorado decedent’s will provides that the property passes to heirs under Nebraska law);

2. If the Nebraska P.R., after reasonable inquiry, is unable to identify or determine that a domiciliary P.R. exists; or

3. If the court orders a different distribution under formal proceedings (Nebraska Probate Code § 30-24,115 et seq.) or supervised administration (Nebraska Probate Code § 30-2443).

50 “The doctrine of marshaling assets . . . is that, where a creditor has a lien on, or interest in, two funds or properties in the hands of the same debtor, and another creditor has a lien on one of them only, equity, on the application of the latter, will compel the former to make his debt out of that fund to which the latter cannot resort, and will permit the double creditor to resort to the single fund for the deficiency only.” 21 C.J.S., “Creditor and Debtor”, § 109 at 594 (1990).

378


Informal Probate and Appointment Proceedings

Robert D. Stowell & Jessica L. Piskorski

Stowell, Geweke & Piskorski, P.C., L.L.O., Ord

March 23, 2018

UNO Thompson Center

Omaha, NE

1

Informal Probate and Appointment ProceedingsRobert D. Stowell and Jessica L.V. Piskorski

Stowell, Geweke & Piskorski, P.C., L.L.O.

Ord, Nebraska

Proper Use of Informal Proceedings

No unrevoked testamentary documents being presented

Identity of all heirs or devisees is clear

The Will names a Personal Representative (P.R.) who will qualify for and accept the appointment, or the proposed P.R. has priority in his or her own right, or as a result of renunciation or nomination

A Will contest is not anticipated

An appointment contest is not anticipated

Interested parties will not desire formal procedures

Will construction is not desired

There is harmony among beneficiaries

If these situations are not present,

then formal proceedings should be pursued

Commencement of Informal Proceedings

Who: Commenced upon application of an “interested person” Heirs, devisees, children, spouse, creditor, beneficiary, any others having a property right in the estate, persons having priority for appointment as personal representative

Priority is determined pursuant to Neb. Rev. Stat. § 30‐2412

Timing: When to Commence No sooner than 120 hours after the death of the decedent

No later than 3 years after the death of the decedent

Exceptions to 3‐year rule:

Dismissal of previous proceeding because of doubt of death

If death is established for a missing person

If no formal or informal proceeding has occurred within the 3‐year period

However, if prior proceeding was commenced within the 3‐year period, this bars the exception. There is no requirement that the prior proceeding must be completed within the 3‐year time period.

In re Estate of Fuchs, 297 Neb. 667 (2017)

2

Informal OpeningChecklist

Contents ofthe Applicationfor InformalProbate orAppointment

Nebraska Probate Code § 30‐2414(1) Statement of Interest of the Applicant

Decedent’s information

Venue

Name and address of Personal Representative

Statement of whether applicant has received any notice of other probate or appointment proceedings

Other: Original of decedent’s last will

Statement of belief that the will was validly executed

Statement that after the exercise of reasonable diligence, the applicant is unaware of any instrument revoking the will

Form 220 or 230

Registrar’s Duties

Registrar determines if all requirements are met for informal probate and informal appointment of the personal representative Nebraska Probate Code § 30‐2416 and § 30‐2421

No hearing necessary

Form 221 or 231

3

Notice Requirements

Notice must be given to: Those demanding it pursuant to Nebraska Probate Code § 30‐2413

Any P.R. of the decedent whose appointment has not been terminated (for notice of informal probate)

Any person having a prior or equal right to appointment not waived in writing and filed with the court (for notice of informal appointment)

Notice must also be given to: Creditors

Registrar shall publish notice within 30 days

Creditors have 2 months to present claims

Interested Persons

Department of Health and Human Services

If decedent was 55 years of age or older OR

Resided in a medical institution Nebraska Probate Code § 30‐2483

Form 223 or 233

Waiver of Notice Nebraska Probate Code § 30‐2221

Publication Requirements

The party instituting or maintaining the proceeding, or his or her attorney, is required to mail the published notice and give proof thereof, in accordance with Neb. Rev. Stat. § 25‐520.01.

Nebraska Probate Code § § 30‐2215 and 30‐2483

Notice by publication required by Nebraska Probate Code requires publishing a copy of the notice

at least once a week

for three consecutive weeks

In a legal newspaper having general circulation in the county where the application for probate has been filed

The last publication must be at least three days before any time set for hearing.

Proof of publication must be filed with the court. Nebraska Probate Code § 30‐2220

Publication andNotice documents

4

Publication and Notice Continued(HHS)

Section 30‐2483 requires notice to be sent to the Department of Health and Human Services, under certain circumstances

Age 55+

OR resided in medical institution

Include Decedent’s SSN

Name and SSN of decedent’s deceased spouse (if any)

Delivery of Notice In manner and at address designated by DHHS, may include email –check website

Failure to give conforming notice is void

Robert D. Stowell and Jessica L.V. Piskorski


Ord, Nebraska

Formal Probate and Appointment Proceedings

Proper Use of Formal Proceedings

There are a series of testamentary instruments, the latest of which does not revoke the earlier

Supervised administration is desired

The content of a lost, destroyed, or otherwise unavailable Will must be established

The Personal Representative (PR) named in the Will is unsuitable and unwilling to step aside, and the appointment of another PR is desired

The person desired as PR does not have priority of appointment

The estate is partially intestate, and an adjudication of heirship is desired, or a finding of partial intestacy is desired

There is a desire to object to, stay, or preclude appointment of a PR in an informal proceeding

A PR has been appointed in another county in Nebraska

The Will, or another Will, has been the subject of a previous probate order

A Will contest is probable, or construction of a Will is necessary

An objection to a proposed PR in informal probate is probable

The registrar refuses to approve an informal application

5

Commencement of Formal Proceedings

“Formal Testacy Proceeding” is litigation to determine whether a decedent left a valid Will.

May be commenced by an “interested person”

Timing: No sooner than 120 hours and no later than 3 years after the death of the decedent

Nebraska Probate Code §§ 30‐2415(a) and 30‐2408

Without regard to whether the same or a different Will has already been informally probated

Nebraska Probate Code § 30‐2425

Within 12 months after informal probate or 3 years after the death of the decedent, whichever is later


Exception: The Will can be probated after the 3‐year period, if no formal or informal proceeding has occurred within the 3‐year period.

However, if a prior proceeding was commenced, this is still a bar to a later proceeding, as the statute doesn’t require completion of the previous proceeding.

Nebraska Probate Code § 30‐2408; In re Estate of Fuchs, 297 Neb. 667 (2017).

Effect of Formal Proceedings onInformal Proceedings

On existing PR: If appointment of different PR is sought, can request court to restrain acting PR from exercising powers

An acting informal PR may not make distributions during pendency of formal proceedings

If confirmation of previous appointment is requested, a formal proceeding doesn’t otherwise affect the appointed PR

On Informal Proceedings: During the pendency of a formal proceeding, the Registrar may not act on any applications for informal proceedings

A petition for formal probate may be filed even though the same or a conflicting Will has been informally probated

An existing informal PR appointment is not automatically terminated by a formal order of probate or intestacy

Nebraska Probate Code §§ 30‐2425 and 30‐2455

Formal Opening Checklist

6

Contents of Petition for Formal Probate(Will or Intestate)

Pursuant to Nebraska Probate Code § § 30‐2426(a), the Petition must contain statements required for informal applications, including:

Statement of interest of the applicant

Name and date of death of decedent

Decedent’s age at death

Decedent’s county and state of domicile at death

Names and addresses of decedent’s spouse, children, heirs and devisees, and ages of any who are minors

Statement showing venue (if the decedent was not domiciled in Nebraska at death)

The name and address of the PR of the decedent appointed

A statement indicating whether the applicant has received or is aware of any demand for notice of any probate or appointment proceeding that may have been filed in Nebraska or elsewhere




Contents for Petition forAdjudication of Intestacy

Pursuant to Nebraska Probate Code §§ 30‐2426(b) and 30‐2414:

Is directed to the court and requests a finding and order that a decedent left no will and a determination of the heirs

Same requirements for informal and formal petition

Statement that after the exercise of reasonable diligence, the applicant is unaware of any unrevoked testamentary instrument relating to property having a situs in Nebraska.

An indication of whether supervised administration is sought

The priority of the person whose appointment is sought, and the names of any other persons having a prior or equal right to the appointment

Notice and Publication Requirements

Upon commencement of a formal proceeding, the court sets a time and place of hearing. Nebraska Probate Code § 30‐2427

To Whom Notice is Given Surviving spouse, children, other heirs, devisees and executors in the Will, and any PR whose appointment has not been terminated

To all unknown persons, by publication

Any person who has demanded notice under Nebraska Probate Code § 30‐2413

Interested persons, pursuant to Nebraska Probate Code § 30‐2220, which includes creditors

Manner of Giving Notice Pursuant to Nebraska Probate Code § 30‐2220 and Neb. Rev. Stat. §25‐520.01 Mail notice 14 days before the time for hearing

Publish for 3 consecutive weeks, last publication at least 3 days before hearing, mail notice, and file proof of publication and proof of notice with the court.

Notice may be waived

7

Notice and Publication,continued

Uncontested Matters

Pursuant to Nebraska Probate Code § 30‐2429, if the formal petition is unopposed, the court may order probate or intestacy on the strength of the pleadings without a hearing, if the conditions of Nebraska Probate Code § 30‐2433 have been met:

Time required for notice has expired, proof of notice has been filed, decedent is found to be dead, and venue is proper.

If evidence concerning execution of the Will is necessary, the hearing may be held, and an affidavit or testimony of one of the attesting witnesses is sufficient.

If the affidavit or testimony of an attesting witness is not available, execution of the Will may be proved by other evidence or affidavit.

Contested Matters

Procedure Nebraska Probate Code § § 30‐2428 and 30‐2429.01

The party opposing the probate of the Will must state in his or her pleadings the reason for the objection.

If an objection is filed, the court must continue the hearing for at least 14 days.

The matter may be transferred to the district court for hearing, and a trial shall be held, and the district court may determine if the decedent left a valid Will. Upon judgment by the district court, the proceedings shall be certified to the county court to carry the final decision and judgment into execution.

Evidence Nebraska Probate Code § 30‐2430

If the Will is not self‐proved, the testimony of at least one of the attesting witnesses is required (if competent and within the state)

If the Will is self‐proved, compliance with requirements is presumed, unless there is proof of fraud or forgery

Burden of Proof Nebraska Probate Code § 30‐2431

Person seeking to establish intestacy must provide prima facie proof of death, venue, and heirship.

Proponent of a Will must establish prima facie proof of due execution, death, testamentary capacity, and venue Those contesting must prove undue influence, fraud, duress, mistake, or revocation

8

More than One Instrument Entitled to Probate

Prior to a final order, more than one instrument may be probated, as long as neither expressly revokes the other

If more than one instrument is probated, the order shall indicate: Which provisions control regarding nomination of PR and

How the provisions of one instrument are affected by the other


Foreign Wills

Final Order of Court of a Different State Nebraska Probate Code § 30‐2432

This order is determinative in Nebraska IF the proceeding in the other state:

Involved notice to interested persons

Involved an opportunity for contest by all interested persons,

If the order includes or is based on a finding that that decedent was domiciled at the time of death in such other state, AND

If the other state has applicable provision of law similar in reciprocal effect to this statute

This reciprocity requirement is not part of the Uniform Probate Code. Further, Nebraska has not included adoption of another state’s order in informal probate proceedings.

Will from a Place Not Providing for Probate Nebraska Probate Code § 30‐2433

A will from a place that does not provide for probate is admissible in Nebraska IF the petition for probate is accompanied by a certification that the Will is a true copy and is effective under the law in the other jurisdiction

165

Jessica L.V. Piskorski

The current version of Chapters 7 and 8 were edited and revised by Jessica L.V. Piskorski. Ms. Piskorski graduated from the University of Nebraska College of Law in 2009, with a concentration in Litigation Skills. During law school, Ms. Piskorski took part in the College of Law Civil Clinic, was a College of Law Student Ambassador, and was a student member of the Robert Van Pelt American Inn of Court.

Ms. Piskorski served for seven years as in-house counsel for a collection agency in Grand Island, where she handled matters regarding federal collection law, state law and civil procedure, and acted as a corporate departmental supervisor. Ms. Piskorski joined Stowell, Geweke & Piskorski, P.C., L.L.O. in 2016 and currently handles legal matters in estate planning, estate administration, entity formation, and transactional legal work. Ms. Piskorski is a member of both the Real Estate, Probate, and Trust Section of the NSBA and the Nebraska State Bar Association Leadership Academy class of 2017-2018.

Robert D. Stowell

Chapters 7 and 8 were revised in 2010 and currently reviewed by Robert D. Stowell. Mr. Stowell became the founding member of Stowell, Geweke & Piskorski, P.C., L.L.O. in Ord, Nebraska in 1972.

Mr. Stowell has actively participated in Nebraska State Bar Association activities over the years, including service on the House of Delegates, and on Bar Committees for Estate Planning, Banking, Law Practice and Management, Agricultural Law, Judicial Redistricting, and Real Estate. He is a Nebraska Bar Foundation Fellow, and he has presented at Estate Planning, Bankruptcy, Probate and Trust, Agricultural Law, and Real Estate seminars.

Prior to graduating from the University of Nebraska College of Law in 1972, Mr. Stowell received his Bachelor of Science Degree from the United States Military Academy at West Point, New York in 1965. Thereafter, he served as an Infantry officer at various posts in the U.S. and in the Republic of Vietnam. Decorations received were the Distinguished Service Cross, three air medals, Bronze Star, and Army Commendation Medal. He concluded his military service as an R.O.T.C. instructor at the University of Nebraska-Lincoln in 1971.

Melani J. Hagge

Melani J. Hagge provided vital assistance in the 2017 revision of these chapters while she served as a summer associate for Stowell, Geweke & Piskorski, P.C., L.L.O. during the summer of 2017. Ms. Hagge is from Ord, Nebraska, and is currently a second year law student at the University of Nebraska College of Law.

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167

Chapter 7 - Informal Probate and Appointment Proceedings

Table of Contents

7-1 General Provisions ...................................................................................................1697-1(a) Definition of Informal Proceedings ................................................ 1697-1(b) Who May Commence ..................................................................... 1697-1(c) Time of Commencement ................................................................ 1697-1(d) Effect of Formal Proceedings on Informal Proceedings ................. 170

7-2 Contents of Application for Informal Probate or Appointment Proceedings (§30-2414) ..................................................................................................................1717-2(a) Verification Required ...................................................................... 1717-2(b) Contents of Application for Informal Probate or Informal Appointment ................................................................ 1717-2(c) Additional Requirements in the Application for Informal Probate of a Will .......................................................................................... 1717-2(d) Suggested Additional Provisions in the Application for Informal Probate of a Will ......................................................... 1727-2(e) Additional Requirements for the Application for Informal Appointment – Testacy ........................... 1727-2(f) Additional Requirements for the Application for Informal Appointment – Intestacy ........................ 1727-2(g) Application for Appointment of Successor Personal Representative ............................................ 173

7-3 Notice Requirements ................................................................................................1737-3(a) Notice of Informal Probate ............................................................. 1737-3(b) Notice of Informal Appointment .................................................... 1737-3(c) Notice to Creditors ......................................................................... 1747-3(d) Type of Notice Pursuant to Demand for Notice ............................. 1747-3(e) Waiver of Notice ............................................................................. 1757-3(f) To Whom Notice is Given .............................................................. 1757-3(g) Caveat ............................................................................................. 175

7-4 Finality and Validity of Informal Probate Proceedings ........................................1767-4(a) Generally ........................................................................................ 1767-4(b) Finality as to Time .......................................................................... 176

168

7-5 Informal Probate – Duty of Registrar ....................................................................1767-5(a) Statement of Informal Probate ........................................................ 1767-5(b) Admission of Will to Informal Probate .......................................... 1767-5(c) Denial of Informal Probate ............................................................. 177

7-6 Informal Appointment – Duty of Registrar ...........................................................1777-6(a) Appointment ................................................................................... 1777-6(b) Authority ......................................................................................... 1787-6(c) Denial of Informal Appointment .................................................... 178

7-7 Constitutionality of Informal Probate and Appointment .....................................178

7-8 Summary ...................................................................................................................179

FormsInformal Opening Checklist ............................................................................. 181Demand for Notice ........................................................................................... 183Notice to Demandant of Application for Informal Proceedings ...................... 185Waiver of Notice .............................................................................................. 187Affidavit of Mailing Notice .............................................................................. 189Renunciation of Right to Appointment and Nomination of Personal Representative .................................................... 191Statement of Value and Income for Purposes of Bond .................................... 192Application for Informal Probate of Will and Informal Appointment of Personal Representative ................................... 193Registrar's Statement of Informal Probate ....................................................... 197Notice of Informal Probate and Appointment of Personal Representativeand Notice to Creditors .................................................................................... 198Notice of Informal Probate and Appointment of Personal Representative(Without Notice to Creditors) .......................................................................... 199Application for Informal Appointment of Personal Representative in Intestacy ........................................................... 201Registrar's Statement of Informal Appointment of Personal Representative in Intestacy ........................................................... 205Notice of Informal Administration of Personal Representative and Notice to Creditors .................................................................................... 206Notice of Informal Administration of Personal Representative (Without Notice to Creditors) .......................................................................... 207Acceptance of Appointment ............................................................................. 208Bond of Personal Representative ..................................................................... 209Letters of Personal Representative ................................................................... 210Notice to the Nebraska Department of Health and Human Services of the Filing of a Stand Alone Petition for Determination of Inheritance Tax ..................... 211Certificate of Mailing of the Notice to the Nebraska Department of Health and Human Services Pursuant to §77-2018.02 (6) ................................................. 213DHHS Estate Recovery - Waiver of Restriction on Transfer ........................... 215

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Chapter 7 - Informal Probate and Appointment Proceedings1

Article 24, Part 3(§§ 30-2414 to 30-2424)

7-1 General Provisions

7-1(a) Definition of Informal P oceedings

“Informal proceedings” mean those conducted without notice to interested persons by an officer of the court acting as a registrar for (1) probate of a will or (2) appointment of a personal representative. Nebraska Probate Code § 30-2209(20).

7-1(b) Who May Commence

Informal probate or appointment proceedings may be commenced by the application of an interested person. Nebraska Probate Code §§ 30-2414(1)(i) and 30-2416(a)(3).

“Interested Persons” include heirs, devisees, children, spouses, creditors, beneficiaries, and any others having a property right in or claim against a trust estate or the estate of a decedent, persons having priority for appointment as personal representative, and other fiduciaries representing interested persons. Nebraska Probate Code § 30-2209(21).

Priority is determined pursuant to Nebraska Probate Code § 30-2412. This section does not establish priority for selection of a special administrator. Nebraska Probate Code § 30-2412(h).

7-1(c) Time of Commencement

Generally, the proceeding for informal probate or appointment of a personal representative may be commenced no sooner than 120 hours after the death of the decedent, and no later than three years after death of the decedent. Nebraska Probate Code §§ 30-2415(a) and 30-2420(a) (as to the 120 hour period); Nebraska Probate Code § 30-2408 (as to the three-year limitation).

Exceptions to the three-year rule are as follows:

(1) Where a previous proceeding was dismissed because of doubt about the fact of the decedent’s death, the proceedings for probate or appointment may be maintained at any time thereafter, but only upon a finding that the decedent’s death occurred prior to the initiation of the previous proceeding, and only if untainted by undue delay. Nebraska Probate Code § 30-2408(1).

1 Randy D. Cullers provided revisions to the 2010 version of this content. Mr. Cullers is currently a partner at Crites, Shaffer, Connealy, Watson, Patras & Cullers P.C., L.L.O. in Chadron, Nebraska.

The reader is referred to Chapter 6 for a discussion of issues related to jurisdiction, venue and statutes of limitation.

170

(2) A proceeding may be commenced in relation to an absent, disappeared, or missing person for whom a conservator has been appointed at any time within three years after the conservator becomes able to establish the death of the protected person. Nebraska Probate Code § 30-2408(2).

(3) A proceeding may be commenced after the three year period if no formal or informal proceeding has occurred within the three-year period. Nebraska Probate Code § 30-2408(4); In re Estate of Nemetz, 273 Neb. 918, 735 N.W.2d 363 (2007). However, if a prior proceeding was commenced within the three-year period, this will act as a bar to the exception allowing a later probate; the statute does not require completion of the prior proceeding within the three-year period. In re Estate of Fuchs, 297 Neb. 667 (2017).

7-1(d) Effect of Formal P oceedings on Informal Proceedings

A formal testacy proceeding is litigation to determine whether a decedent left a valid will, and may be sought without regard as to whether the same or a conflicting will has been informally probated. Nebraska Probate Code § 30-2425.

A formal testacy proceeding may be commenced by an interested person filing a petition to set aside informal probate of a will, or to prevent informal probate of a will which is the subject of a pending application. Nebraska Probate Code § 30-2425.

During the pendency of a formal testacy proceeding, the registrar shall not act upon an application for informal proceeding regarding probate or appointment of a personal representative. Further, after receipt of notice of the commencement of a formal proceeding, a previously appointed personal representative must refrain from distribution of the estate during the pendency of the formal proceeding, unless the petition in the formal proceeding also requests confirmation of the previous informal appointment. Nebraska Probate Code § 30-2425.

In a formal proceeding where the petition seeks appointment of a different personal representative, the petitioner may also request an order restraining the acting personal representative from exercising any of the powers of his or her office and requesting appointment of a special administrator. Nebraska Probate Code § 30-2425; In re Estate of Odenreider, 286 Neb. 480, 837 N.W.2d 756 (2013). However, in the absence of such a request, or if the request is denied, the commencement of a formal proceeding has no effect on the powers and duties of a previously appointed personal representative, other than those relating to distribution. Nebraska Probate Code § 30-2425.

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7-2 Contents of Application for Informal Probate or Appointment Proceedings (§30-2414)

7-2(a) Verification Requi ed

All applications for informal proceedings must be directed to the registrar and verified by the applicant to be accurate and complete to the best of the applicant’s knowledge and belief. Nebraska Probate Code § 30-2414. This is an exception to the Nebraska Probate Code, which generally does not require documents filed with the court under the Code to be verified. Nebraska Probate Code § 30-2219.

7-2(b) Contents of Application for Informal Probate or Informal Appointment

An application for informal probate or informal appointment is required to contain the following information, pursuant to Nebraska Probate Code § 30-2414(1):

(1) A statement of the interest of the applicant (see Nebraska Probate Code § 30-2209(21) for the definition of “interested person.”)

(2) The name and date of death of the decedent; the decedent’s age at death; the decedent’s county and state of domicile at death; the names and addresses of the decedent’s spouse, children, heirs and devisees, and the ages of any who are minors so far as known or ascertainable with reasonable diligence by the applicant.

(3) A statement showing venue, only if the decedent was not domiciled in Nebraska at the date of death.

(4) The name and address of the personal representative of the decedent appointed in Nebraska or elsewhere whose appointment has not been terminated.

(5) A statement indicating whether the applicant has received or is aware of any demand for notice of any probate or appointment proceeding that may have been filed in Nebraska or elsewhere.

7-2(c) Additional Requirements in the Application for Informal Probate of a Will

In addition to the requirements set forth above for informal proceedings for both probate and appointment of personal representative, the following statements are also required for application for informal probate of a will, pursuant to Nebraska Probate Code § 30-2414(2):

(1) The original of the decedent’s last will is in the possession of the court, or accompanies the application, or that an authenticated copy of a will probated in another jurisdiction accompanies the application;

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(2) The applicant, to the best of the applicant’s knowledge, believes the will to have been validly executed, and;

(3) After the exercise of reasonable diligence, the applicant is unaware of any instrument revoking the will, and that the applicant believes that the instrument which is the subject of the application is the decedent’s last will.

7-2(d) Suggested Additional Provisions in the Application for Informal Probate of a Will

In order to clarify all property rights, it is helpful in an application for informal probate to include the following information:

(1) Whether the decedent had a divorce, dissolution, or annulment of marriage after execution of the will. See Nebraska Probate Code § 30-2333.

(2) Whether the decedent has a surviving spouse who married the decedent-testator after execution of the will. See Nebraska Probate Code § 30-2320(a).

(3) Whether any children were born to or adopted by the decedent after execution of the will. See Nebraska Probate Code § 30-2321.

7-2(e) Additional Requirements for the Application for Informal Appointment – Testacy

An application for informal appointment of a personal representative to administer an estate under a will must meet the requirements noted above in 7-2(b)(1)-(5), and should also contain the following, pursuant to Nebraska Probate Code § 30-2414(3):

(1) Describe the will by date of execution and state the time and place of probate or the pending application or petition for probate. Keep in mind that the “statement regarding probate” is only necessary in an application for appointment which is subsequent to an application or petition for probate.

(2) State the name, address, and priority for appointment of the person whose appointment is sought, and adopt the statements in the application or petition for probate. Again, keep in mind that “adoption of the statements in the application or petition for probate” is only necessary in an application for appointment which is subsequent to an application or petition for probate.

7-2(f) Additional Requirements for the Application for Informal Appointment – Intestacy

An application for informal appointment of an administrator (also known as a personal representative, see Nebraska Probate Code § 30-2209(33)) in intestacy must meet the requirements noted above in 7-2(b)(1)-(5), and must also contain the following information, pursuant to Nebraska Probate Code § 30-2414(4):

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(1) After the exercise of reasonable diligence, the applicant is unaware of any unrevoked testamentary instrument relating to property having a situs in Nebraska. If the applicant is aware of such an instrument, the application should explain why that instrument is not being probated. Nebraska Probate Code § 30-2414(4)(i).

(2) The priority of the person whose appointment is sought and the names of any other persons having a prior or equal right to the appointment, pursuant to Nebraska Probate Code § 30-2412. Nebraska Probate Code § 30-2414(4)(ii).

7-2(g) Application for Appointment of Successor Personal Representative

If an application to succeed a personal representative appointed under a different testacy status is made, it shall: (1) refer to the court order in the most recent testacy proceeding, (2) state the name and address of the person whose appointment is sought, (3) state the name and address of the person whose appointment will be terminated if the application is granted, and (4) describe the priority of the applicant. Nebraska Probate Code § 30-2414(5).

An application to succeed a personal representative who has tendered a resignation, or had an appointment terminated by death or removal, shall (1) adopt the statements in the application or petition which led to the appointment of the person being succeeded, except as specifically changed or corrected, (2) state the name and address of the person who seeks appointment as successor, and (3) describe the priority of the applicant. Nebraska Probate Code § 30-2414(6).

7-3 Notice Requirements

7-3(a) Notice of Informal Probate

Notice of application for informal probate must be given (1) to those demanding it pursuant to Nebraska Probate Code § 30-2413, and (2) to any personal representative of the decedent whose appointment has not been terminated. Nebraska Probate Code § 30-2419.

If a personal representative has not been appointed contemporaneously with an issuance of a written statement of informal probate, the clerk shall publish notice within 30 days of the filing of the written statement of informal probate. The applicant, or the applicant’s, attorney, shall mail the published notice to interested parties, and provide proof of mailing, pursuant to Neb. Rev. Stat. § 25-520.01. Nebraska Probate Code § 30-2415(b).

7-3(b) Notice of Informal Appointment

Notice of application for informal appointment of personal representative must be given (1) to any person demanding it pursuant to Nebraska Probate Code § 30-2413, and (2) to any person having a prior or equal right to appointment not waived in writing and filed with the court. Nebraska Probate Code § 30-2423.

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Within 30 days after appointment of a personal representative, the clerk shall cause notice of the appointment to be published. The applicant, or the applicant’s attorney, shall mail the published notice to interested parties, and provide proof of mailing, in accordance with Neb. Rev. Stat. § 25-520.01. Nebraska Probate Code § 30-2420(c).

7-3(c) Notice to Creditors

Within 30 days of the appointment of a personal representative, the clerk of the court shall publish notice (1) announcing the appointment and the address of the personal representative, and (2) notifying the creditors of the estate to present their claims within two months after the date of the first publication of the notice, or forever be barred. The applicant, or the applicant’s attorney, must mail the published notice to interested parties, and provide proof of mailing, pursuant to Neb. Rev. Stat. § 25-520.01. Nebraska Probate Code § 30-2483.

Nebraska’s claims statutes bar the claim of a creditor failing to present the claim within the applicable time period. See Chapter 10 in this manual: Creditors’ Claims.

If the decedent (1) was fifty-five years of age or older at date of death, or (2) resided in a medical institution as defined in Neb. Rev. Stat. § 68-919(1), the notice shall also be provided to the Department of Health and Human Services. This notice must include (1) the decedent’s social security number, and (2) the name and social security number of the decedent’s spouse, if such spouse is deceased and if such information is available upon reasonable investigation. Nebraska Probate Code § 30-2483. See also In re Estate of Cushing, 283 Neb. 571, 810 N.W.2d 741 (2012).

7-3(d) Type of Notice Pursuant to Demand for Notice

Any person desiring notice of any order or filing pertaining to a decedent’s estate, in which that person has a financial or property interest, may file a demand for notice with the court at any time after the death of the decedent. This demand for notice must state (1) the name of the decedent, (2) the nature of the demandant’s interest in the estate, and (3) the demandant’s address or that of the demandant’s attorney. The clerk shall mail a copy of the demand to the personal representative, if one has been appointed. After the filing of a demand, no order shall be made or filing acted upon to which the demand relates without notice to the demandant or his or her attorney, as prescribed in Nebraska Probate Code § 30-2220. Nebraska Probate Code § 30-2413.

The notice required by Nebraska Probate Code § 30-2220 includes (1) mailing a copy of a notice of hearing at least fourteen days before the time set for the hearing, by certified, registered, or ordinary first-class mail, addressed to the person being notified; or (2) by delivering a copy to the person being notified personally, at least fourteen days before the time set for hearing; and (3) by publishing at least once a week for three consecutive weeks a copy of the notice in a newspaper in the county where the hearing is to be held, the last publication of which is to be at least three days before the time set for hearing. Proof of giving the notice shall be made on or before the hearing and filed with the court. Nebraska Probate Code § 30-2220(a)(1), (a)(2), and (c).

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However, if the demand for notice form under Nebraska Probate Code § 30-2413, limits the demand to notice prescribed in § 30-2220(a)(1) only, and waives the publication prescribed by § 30-2220(a)(2), then no publication of notice will be required in response to the demand for notice.

If the demand for notice does not waive publication, the court can, for good cause shown, eliminate the publication required, pursuant to § 30-2220(b). Further, even if publication is not waived and the court fails to eliminate it for good cause, the validity of any order issued is not affected, and when the fourteen day notice was mailed or delivered, it is difficult to conceive of liability for damages caused by an absence of publication. See Nebraska Probate Code § 30-2413 and Neb. Rev. Stat. § 25-520.01.

7-3(e) Waiver of Notice

Notice may be waived by a writing, signed by the person waiving notice or that person’s attorney, and filed in the proceeding. Nebraska Probate Code § 30-2221.

Further, the requirement of notice arising from a demand under Nebraska Probate Code § 30-2413 may be waived, in writing, by the demandant. Nebraska Probate Code § 24-2413.

7-3(f) To Whom Notice is Given

When notice is required, it should be given in the manner set forth in Neb. Rev. Stat. § 25-520.01 et. seq. Notice should additionally be given to all interested persons, as defined by Nebraska Probate Code § 30-2209(21).

7-3(g) Caveat

Caution must be exercised with regard to mailing and proof requirements for published notice. The pre-hearing notices required under Nebraska Probate Code § 30-2220 provide for mailing at least fourteen days prior to the time set for hearing, and proof of mailing on or before the hearing. Nebraska Probate Code § 30-2220(a) and (c).

The post-publication requirements under Neb. Rev. Stat. § 25-520.01 require mailing notice of publication within five days of publication, and proof of mailing to be filed within ten days of mailing. Neb Rev. Stat. § 25-520.01

Because demand for notice does not foreclose the necessity of pre-hearing publication, the demandant should be requested to execute a document waiving publication, thereby only requesting fourteen days’ notice by mail or personal delivery, pursuant to Nebraska Probate Code § 30-2220(a)(1)(ii). See also Nebraska Probate Code § 30-2413. This also complies with the last statement in Neb. Rev. Stat. § 25-520.01 (stating it is not necessary to serve notice on anyone who has waived notice in writing or has been personally served with notice in such proceeding).

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7-4 Finality and Validity of Informal Probate Proceedings

7-4(a) Generally

Informal probate is conclusive as to all persons until superseded by an order in a formal testacy proceeding. No defect in the application or procedure relating thereto which leads to informal probate of a will, or in connection with published notice given after informal probate, renders the probate void. Nebraska Probate Code § 30-2415(a).

7-4(b) Finality as to Time

Under Nebraska Probate Code § 30-2408, informal probate or appointment proceedings are generally required to be commenced within three years of the decedent’s death. See 7-1(c), above.

Under Nebraska Probate Code § 30-2408(3), a proceeding to contest an informally probated will, and to secure appointment of a personal representative with legal priority, may be commenced within the later of twelve months from the closing of informal probate or three years from the decedent’s death. Therefore, this section has the effect of making the informal probate conclusive after three years from the decedent's death, or within twelve months from the closing of informal probate (if later). Nebraska Probate Code § 30-2408(3).

7-5 Informal Probate – Duty of Registrar

7-5(a) Statement of Informal Probate

The registrar shall issue a written statement of informal probate upon (1) application requesting such, (2) finding the requirements of Nebraska Probate Code § 30-2416 have been met, and (3) at least 120 hours having elapsed since the decedent’s death. Nebraska Probate Code § 30-2415(a).

To determine if the requirements are met, the registrar must determine whether (1) the application is complete; (2) the applicant has made oath or affirmation that the statements in the application are true; (3) the applicant appears to be an interested person, pursuant to § 30-2209(21); (4) venue is proper based upon the statements in the application; (5) an original, executed, and apparently unrevoked will is in the registrar’s possession; (6) notice required by § 30-2413 has been given; and (7) the application is not within § 30-2417 (See 7-5(c) below). Nebraska Probate Code § 30-2416(a).

7-5(b) Admission of Will to Informal Probate

A will which appears to have the required signatures and which contains an attestation clause showing that requirements of execution have been met shall be probated without further proof. In other cases, the registrar may assume execution if the will appears to have been properly executed. Also, the registrar may accept a sworn statement or affidavit of any person having knowledge of

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the circumstances of the execution, whether or not the person was a witness to the will. Nebraska Probate Code § 30-2416(c).

A will from a place which does not provide for probate of a will after death, and which is not eligible for probate under § 30-2416(a) (See 7-5(a), above), may be probated in this state upon (1) receipt by the registrar of a duly authenticated copy of the will, and (2) a duly authenticated certificate of its legal custodian that the copy filed is a true copy and that the will has become operative under the law of the other place. Nebraska Probate Code § 30-2416(e).

7-5(c) Denial of Informal Probate

An application for informal probate shall be denied if it indicates a personal representative has been appointed in another county of this state. Further, the application for informal probate shall be denied if it appears that this or another will of the decedent has been the subject of a previous probate order. Nebraska Probate Code § 30-2416(b).

However, a previously probated will may be informally probated upon written application by any interested person, together with deposit of an authenticated copy of the will and of the statement probating it from the office or court where it was first probated. Nebraska Probate Code § 30-2416(d).

An application for informal probate shall be declined if it relates to one or more of a known series of testamentary instruments, the latest of which does not expressly revoke the earlier, except that a series consisting of a will with its codicils may be informally probated. Nebraska Probate Code § 30-2417.

If the registrar is not satisfied that the requirements for informal probate have been met, the application may be declined, or may be declined for any reason. Declination of the application is not an adjudication and does not preclude formal probate proceedings. Nebraska Probate Code § 30-2418.

7-6 Informal Appointment – Duty of Registrar

7-6(a) Appointment

The registrar shall appoint the applicant (1) upon receipt of an application for informal appointment of a personal representative, (2) if at least 120 hours have elapsed since the decedent’s death, and (3) after making the findings required by § 30-2421 (see below). However, if the decedent was a nonresident, the registrar shall delay the order of appointment until 30 days have elapsed since the decedent’s death, unless the personal representative appointed at the decedent’s domicile is the applicant, or unless the decedent’s will directs that his estate be subject to the laws of Nebraska. Nebraska Probate Code § 30-2420(a).

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To determine if the requirements are met, the registrar must determine whether (1) the application for informal appointment is complete; (2) the applicant has made oath or affirmation that the statements contained in the application are true; (3) the applicant appears to be an interested person as defined in § 30-2209(21); (4) venue is proper, based on statements in the application; (5) any will to which the requested appointment relates has been formally or informally probated; (6) notice required by § 30-2413 has been given; and (7) the applicant has priority. Nebraska Probate Code § 30-2421(a).

7-6(b) Authority

The status of personal representative and the powers and duties pertaining to the office are fully established by informal appointment. Nebraska Probate Code § 30-2420(b).

Appointment as personal representative is subject to termination, as provided in Nebraska Probate Code §§ 30-2451 to 30-2455, but is not subject to retroactive vacation. Nebraska Probate Code § 30-2420(b).

7-6(c) Denial of Informal Appointment

The application for informal appointment must be denied if (1) it indicates that a personal representative who has not filed a written statement of resignation has been appointed in this or another county in Nebraska (unless the applicant is the domiciliary personal representative or his or her nominee), (2) that the decedent was not domiciled in Nebraska and that a personal representative whose appointment has not been terminated has been appointed by a court in the state of domicile, or (3) that other requirements of this section (See 7-6(a), above) have not been met. An exception is if Nebraska Probate Code § 30-2455 controls (regarding vacation of a will previously informally probated, where a personal representative was previously appointed). Nebraska Probate Code § 30-2421(b).

If the registrar is not satisfied that the requirements for informal appointment have been met, the application may be declined, or may be declined for any reason. Declination of the application is not an adjudication and does not preclude appointment in formal proceedings. Nebraska Probate Code § 30-2422.

7-7 Constitutionality of Informal Probate and Appointment

Nebraska’s procedures for informal probate and appointment of personal representative are constitutional, as long as actual notice is given to known or reasonably ascertainable persons having an interest in the estate. See Tulsa Professional Collection Services v. Pope, 485 U.S. 478, 109 S.Ct. 1340, 99 L.Ed.2d 765 (1988).

According to Pope, to the extent the Probate Code contains what can be characterized as self-executing statutes of limitations, constitutional due process of law does not require that persons

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having an interest in the estate be given actual notice of the impending expiration of a period of limitations. Where, however, a probate court becomes “intimately involved” in the proceedings, the statute of limitations is no longer considered self-executing, and actual notice must be given to persons whose interests may be adversely affected.

The importance of this discussion here, in Nebraska’s informal probate and appointment proceedings, is the focus on the self-executing nature of the statutes and the provision of proper notice. The Legislature enacted Neb. Rev. Stat. § 25-520.01 in 1957 to codify the constitutional requirements stemming from the Supreme Court’s decision in Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed 865 (1950) (holding that notice by publication is not sufficien under the Fourteenth Amendment when depriving substantial property rights to known persons, whose whereabouts are also known). The statute requires copies of published notices to also be mailed to “each and every party appearing to have a direct legal interest in such action or proceeding whose name and post office address are known,” together with an affidavit that “such party [required to give the notice] and his or her attorney, after diligent investigation and inquiry, were unable to ascertain and do not know the post office address of any other party appearing to have a direct legal interest in such action or proceeding.” Neb. Rev. Stat. § 25-520.01. Further, the statute applies to “any action or proceeding of any kind or nature.” Neb. Rev. Stat. § 25-520.01.

Nebraska has modified provisions of the Uniform Probate Code by references to Neb. Rev. Stat. § 25-520.01. Published notice, mailing, and an affidavit are required in informal appointment proceedings (see Nebraska Probate Code § 30-2420(c)) and informal probate in the absence of appointment of a personal representative (see Nebraska Probate Code § 30-2415(b)). Thus, Nebraska’s Probate Code requirements comply with federal constitutional standards, as long as statutory notices are given.

7-8 Summary of Informal Probate and Appointment Proceedings

Probate and/or appointment of personal representative proceedings may be commenced informally when the following conditions exist:

(1) There are no unrevoked testamentary instruments being presented to the court;

(2) Identity of all heirs or devisees is clear;

(3) If there is a Will, the named personal representative will qualify for and accept the appointment, or the proposed personal representative has priority of appointment in his or her own right as a result of renunciation or nomination by those having a higher or equal priority of appointment;

(4) A Will contest is not anticipated;

(5) An appointment contest is not anticipated;

180

(6) Interested parties will not desire formal procedures or supervised administration;

(7) Will construction is not desired; (although there can be formal construction of an informally probated Will, but if one is seeking Will construction, it would be desirable to have an adjudicated Will rather than one informally probated which could be superseded by another Will within the time limits of Nebraska Probate Code § 30-2408(3)).

(8) There is harmony among the beneficiaries.

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INFORMAL OPENING CHECKLIST

Decedent's Name File No.

./ ## Tasl-. Date Completed Asst/Lawyer Mon

I.DRAFT PLEADINGS D 1. Aoolication. Form 220 or 230 Assistant D 2. Renunciation of Right to be Personal Representative, Assistant

Form 130 D 3. Statement of Value and Income for Purposes of Bond, Assistant

Form 136 (may be part of Petition or omitted if no bond is required)

D 4. Registrar's Statement oflnformal Probate. Form 221 Assistant or 231

D 5. Prepare bond, if necessary, Form 302, § 30 2449, and Assistant obtain necessary signatures (see § 30 2446 when required)

D 6. Acceptance of Appointment. Form 300 Assistant D 7. Letters of Personal Representative. Form 303 Assistant D 8. Notice of Informal Probate, Appointment of Personal Assistant

Representative and Notice to Creditors. Form 223 D 9. Affidavit of Mailing Notice. Form 109 Assistant

II.PRIOR TO APPEARANCE BEFORE REGISTRAR D 1. Proof pleadings prepared by Assistant Lawyer D 2. Have Applicant sign Application, if necessary; if Assistant

Applicant is the proposed Personal Representative, Applicant may sign Acceptance now (see Step 111.2. below)

D 3. Review Personal Representative priority(§ 30 2412) Lawyer and any Demands for Notice filed, and indicate necessity of Notice to Demandant for Informal Appointment of Personal Representative, Form 10 l , if notice required; consider formal probate

III.INFORMAL APPOINTMENT PROCEEDING D 1. File Application with Registrar at least 120 hours after Lawyer

death,§ 30 2420. If more than three (3) years from date of death has passed, see § 30 2408

D 2. Procure Personal Representative's signature and file Assistant Acceptance. Form 300

182

Decedent's Name File No .

../ ## Task Date Completed Asst/Lawyer Mon

0 3. Deliver to Court with Application, Registrar's Lawyer Statement, Form 221 or 231, which may be signed by Registrar appointing the Personal Representative based upon the Application. It is not necessary to have a Personal Representative present. There is no hearing before the Court. The Registrar may delay appointment of Personal Representative until thirty (30) days after death, if Decedent is a non-resident. § 30 2420(a)

0 4. Place probate number on all office filed documents Assistant and in the Master Information List

D 5. File with the Clerk the notice to be published that Assistant combines both the Notice of the Informal Appointment of the Personal Representative and the Notice to Creditors. Form 223 or 233, §§ 30 2420 & 30 2483

D 6. Deliver Notice to publisher and direct that Notice run Assistant once a week for three (3) weeks. Be sure that the first publication is within thirty (30) days after appointment. § 30 2420

0 7. Prepare letter to accompany Notice. Form 223 or 233 Assistant D 8. Review Master Information List for complete list of Lawyer

all interested parties D 9. Mail Notices for Forms 223 and 233 within five (5) Assistant

days after first publication, to all interested parties. § 25 520.01

D 10. File with Registrar, within ten (10) days after mailing Assistant

Notice, an Affidavit of Mailing. Form 109, § 25 520.01

D 11. File with Registrar, within ten ( 10) days after mailing Assistant Notice, an Affidavit of Mailing. Form 109, § 25 520.01

D 12. File bond with Registrar, if required Assistant D 13. Prepare and mail letter notifying bonding company of Assistant

amount of bond immediately after hearing. Monitor renewal premium due dates

D 14. File Form 136, if bond is not waived, and Bond, Form Assistant 302

183

IN THE COUNTY COURT OF COUNTY, NEBRASKA ~--------'

IN THE MATTER OF THE ESTATE OF , , Deceased.

~--------'

Date of Death: .__ _ __ _,

No. [ ]

DEMAND FOR NOTICE

1. Pursuant to Nebraska Probate Code Section 30-2413, the undersigned hereby demands

mailed notice pursuant to Nebraska Probate Code Section 30-2220(a)(l) of any of the

following Orders or filings pertaining to the estate of the deceased:

[ ] Application for Informal Probate of Will

[ ] Application for Informal Appointment of Personal Representative

[ Inventory and any Supplementary Inventory

Copy of published Notice to Creditors mailed within five days of publication

[ ] Other (specify)

2. Demandant has the following financial or property interest in the estate of the deceased:

3. Demandant waives any publication of any notice pursuant to Nebraska Probate Code

Section 30-2220(a)(2) with respect to each of the items for which notice is above

demanded.

4. Notice should be mailed to the following-named Demandant, or Demandant's attorney, at

the address and telephone number set forth below:

Dated: '----------'

Name: Demandant

184

CERTIFICATE OF MAILING

I certify that I have mailed a copy of this Demand for Notice, in accordance with the

requirements of Nebraska Probate Code Section 30-2413, to, the Personal Representative of the

deceased, at the above address on ***DOC Date TE***.

Signature

185

IN THE COUNTY COURT OF COUNTY, NEBRASKA -------~

IN THE MATTER OF THE ESTATE OF , Deceased.

-------~

No. -------~

NOTICE TO DEMANDANT OF APPLICATION FOR INFORMAL

PROCEEDINGS Date of Death: -----·

TO:

Notice is hereby given that an application for:

] Informal probate of the Will of the above-named Decedent;

] The informal appointment of as Personal

Representative to administer the above-named estate;

[ The informal appointment of .___ _________ ___, as Personal

Representative in intestacy of the above-named estate;

was filed by the undersigned in this Court on ----------~

You are notified that the Registrar will consider the application on or after

.__ _____ _ _____. (a date fifteen (15) days after mailing this notice).

PROOF OF GIVING NOTICE

I certify that a copy of the above notice was delivered personally or was mailed in

accordance with the requirements of Nebraska Probate Code Section 30-2220 to

at the above address on -------------' .__ _________ ___,

186

INSTRUCTIONS TO PUBLISHER

Please publish this notice one (1) time on the following days:

Immediately following the last publication, please file proof of publication with the County

Court. Please send ***DOC PUB Copies NU*** copies of the published notice to the

above-named attorney immediately following the first publication.

187

IN THE COUNTY COURT OF . COUNTY, NEBRASKA .._ _____ _.

IN THE MATTER OF THE ESTATE OF , Deceased. .._ _____ _.

Date of Death: 1----~

No. '-------~

W AIYER OF NOTICE

The undersigned hereby waives notice of all matters at every stage in these proceedings,

except (if none, so state):

Signature Typed Name Address Nature of Waiver

188


189

Affidavit of Mailing Noti

190

\amc of Law l'i1m

l\:kphonc

I mail

SUBSCRIBED and sworn to before me on -------(SEAL)

NOTARY PUBLIC

191


IN THE MATTER OF THE ESTATE OF ) ) )

----------~ Deceased. ) )

Date of Death: )

No. ___ _

RENUNCIATION OF RIGHT TO APPOINTMENT AND NOMINATION OF

PERSONAL REPRESENTATIVE

The undersigned, having a prior or equal priority to appointment as Personal

Representative pursuant to Nebraska Probate Code Section 30-2412, hereby renounces that right

and nominates and requests the appointment of ____________ as Personal

Representative( s ),

Dated: ----------

Name:

192



__________ __,. Deceased. )

STATE OF NEBRASKA ) )

COUNTY OF ) ss:

No. _ __ _

STATEMENT OF VALUE AND INCOME FOR PURPOSES OF BOND

1. The undersigned being duly sworn on oath states that:

2. The undersigned's best estimate of the value of the personal estate of the

above-named Decedent is ------- -3. The income expected during the next year from the personal and real estate owned

by the above-named Decedent is _______ _

4. The total of said value and income is --------

SUBSCRIBED and sworn to before me on the --------------

193

IN THE COUNTY COURT OF .._ ____ ___, COUNTY, NEBRASKA

IN THE MATTER OF THE ESTATE OF No . .__ ______ _.

.___ _ _ ___ _.. ,Deceased. APPLICATION FOR INFORMAL

PROBATE OF WILL AND INFORMAL APPOINTMENT OF PERSONAL

REPRESENTATIVE

Date of Death: .__ ___ ____,

APPLICANT STATES:

1. Applicant, as , [is/are] an interested person(s)

as defined by the Nebraska Probate Code Section 30-2209(21 ).

2 . Name of Decedent: '---------'

Date of Death: '--------~

Age at Date of Death: ·-------' Years.

Domicile at Date of Death:

3. Venue for this proceeding is proper in this county because

the Decedent was a domiciliary of this county at the date of death.

[ the Decedent was not domiciled in Nebraska, but property of Decedent was located

in this county at the date of death.

4. No Personal Representative has been appointed in this state or elsewhere.

5. Applicant has not received a Demand for Notice and is unaware of any demand for notice

of any probate or appointment proceeding concerning the Decedent that may have been

filed in this state or elsewhere.

6. The Decedent's Will, dated [with the following Codicils] '-----------~

if not presently in the possession of this Court, accompanies this Petition and is hereby

filed with this Court and offered for probate.

7. The Applicant, to the best of Applicant's knowledge, believes the Will dated

[with the following Codicils] to have been validly

executed, and after the exercise of reasonable diligence, the Applicant is unaware of any

instrument revoking the Will [and Codicil(s)] , and believes that said Will [with Codicil(s)],

constitutes Decedent's last Will .

8. Applicant nominates '-----------~

194

9.

[ ] Other individual(s) having prior or equal right to appointment are:

] The nominated Personal Representative is neither indebted to the estate nor

a creditor of the estate.

] The nominated Personal Representative is either indebted to the estate or a

creditor of the estate as set forth on an attachment hereto.

A bond is required.

No bond is required because '------------~

10. The name, relationship, and address of Decedent's spouse, children (all of whom are

Name

children of any surviving spouse unless otherwise stated), heirs, devisees, and other

interested parties, and ages of those who are minors, and those who are incompetent so far

as known or ascertainable by reasonable diligence by Applicant, are: 1 Relationship A_ddress I Minor's Age ' Incompetent? l --~-~--L 11. Decedent had no change of marital status or the birth or adoption of any children after

execution of the Will; no child of the Decedent has been born since Decedent's death; and

no birth of a child of the Decedent is anticipated.

WHEREFORE, Applicant requests that the Registrar issue a written Statement of Informal

Probate; that the above nominee be informally appointed the Personal Representative

[with/without] bond; that the administration of the estate be unsupervised; and that letters of

appointment be issued to said Personal Representative.

Dated: [, ______ _.

Name: Address: Tel: Fax: Personal Representative

195

I J'ff 11 l

Nante o l' L l\·\ l frrn

;\ cldrc:ss

f'dcphnnc

Fax

lmc1il

196

STATE OF NEBRASKA

COUNTY OF ,__ ______ _,

) ) SS: )

~---------~ , the undersigned, being first duly sworn on oath, deposes

and says that the undersigned is the Applicant named in the foregoing Application, that the

undersigned has read it, knows the contents therein, and that the facts therein contained are

accurate and complete to the best of the undersigned's knowledge and belief.


STATE OF NEBRASKA ) ) SS:

COUNTY OF .____ ____ _, )

The foregoing instrument was acknowledged before me this ~~~~-by[,~~~~~

NOTARY PUBLIC

(SEAL)

197

IN THE COUNTY COURT OF ._[ _ ____ _.] COUNTY, NEBRASKA

IN THE MATTER OF THE ESTATE OF [ ], Deceased.

Date of Death: ._ ___ _,

No . .__ ______ ~

REGISTRAR'S STATEMENT OF INFORMAL PRO BA TE

Upon consideration of the Application for Informal Probate of Will and Informal

Appointment of Personal Representative, the undersigned Registrar finds that:

1. The Application is complete.

2. The Applicant has made oath or affirmation that the statements contained m the

Application are true to the best of the Applicant's knowledge and belief.

3. The Applicant appears to be an interested person as defined in Nebraska Probate Code

Section 30-2209(21).

4. On the basis of statements in the Application, venue is proper.

5. An original, duly executed and apparently umevoked Will

dated[ [, with the following Codicils] [is/are] in this

Registrar's possession.

6. Any Notice required by Nebraska Probate Code Section 30-2413 has been given, and the

Application is not within Nebraska Probate Code Section 30-2417 relating to a series of

umevoked wills.

7. At least 120 hours have expired since the Decedent's death.

WHEREFORE, the undersigned Registrar does hereby:

A. Issue a Statement of Informal Probate of the foregoing instrument, which is hereby

declared to be valid by this Statement of Informal Probate.

B. Appoint as Personal Representative(s) of the Decedent's

estate in unsupervised administration, and Letters shall be issued to the Personal

Representative to serve:

[ ] without bond.

[ ] with bond in the amount of '-----------~

Dated: ._[ _ _ _ _ __.].

Signature of Registrar

198

Notice of Informal Probate and Appointment of Personal Representativeand Notice to Creditors

199

Notice of Informal Probate and Appointment of Personal Representative(Without Notice to Creditors)

200


201

IN THE COUNTY COURT OF ,_ ____ _.. COUNTY, NEBRASKA


~--------'

Date of Death: ~-----'

APPLICANT STATES :

No. ,__ ______ _,

APPLICATION FOR INFORMAL APPOINTMENT OF PERSONAL

REPRESENTATIVE IN INTESTACY

1. Applicant, as , [is/are] an

interested person(s) as defined by the Nebraska Probate Code Section 30-2209(21).

2. Name of Decedent:

Date of Death:

Age at Date of Death: .___ _ _ ____ _, years.

Domicile at Date of Death: .___ ______ _,


[ ] the Decedent was a domiciliary of this county at the date of death.

[ ] the Decedent was not domiciled in Nebraska, but property of Decedent was located



5. Applicant has not received a Demand for Notice and is unaware of any demand for notice

of any probate or appointment proceeding concerning the Decedent that may have been

filed in this state or elsewhere.

6. After the exercise of reasonable diligence, Applicant is unaware of any unrevoked

testamentary instrument relating to property having a situs in this state.

7. Applicant nominates, as Personal Representative, ~---------~

] Other individual(s) having prior or equal right to appointment are:

] The nominated Personal Representative is neither indebted to the estate nor a

creditor of the estate.

The nominated Personal Representative is either indebted to the estate or a creditor

of the estate as set forth on an attachment hereto.

8. ] A bond is required.

202

] No bond is required because '------------~


children of any surviving spouse unless otherwise stated), heirs and other interested

parties, and ages of those who are minors, and those who are incompetent so far as known

or ascertainable by reasonable diligence by Applicant, are:

~N~-a~m~e~---- __ I Re!~~hip : A!Idress

-~ _ _J_ __ __,

10. No child of the Decedent has been born since the death of the Decedent, and no birth of a

child of the Decedent is anticipated.

WHEREFORE, Applicant request the appointment of the above nominee as Personal

Representative to administer this estate as an intestate estate [with/without] bond; that the

administration of the estate be unsupervised; and that letters of appointment be issued to said

Personal Representative.

Dated: ***DOC Date TE***.


[fa1 Ji)

\amc of l .<n,- 1-'inn

;\Jd1c.,,

kkphon~

hnail

203

STATE OF NEBRASKA

COUNTY OF[ _____ _,

) ) SS: )

~------------' , the undersigned, being first duly sworn on oath, deposes

and says that the undersigned is the Applicant named in the foregoing Application, that the

undersigned has read it, knows the contents therein, and that the facts therein contained are

accurate and complete to the best of the undersigned's knowledge and belief.


STATE OF NEBRASKA ) ) SS:

COUNTY OF[~----~] )

The foregoing instrument was acknowledged before me this _ ______ by~------~

NOTARY PUBLIC

(SEAL)

204


205


IN THE MATTER OF THE ESTATE OF

, Deceased.

) ) ) ) ) )

No. ----

REGISTRAR'S STATEMENT OF INFORMAL APPOINTMENT

OF PERSONAL REPRESENTATIVE IN INTESTACY

Upon consideration of the Application for Informal Appointment of Personal

Representative in Intestacy filed herein, the undersigned Registrar finds that:

A. The Application is complete.

B. The Applicant has made oath or affirmation that the statements contained in the

Application are true to the best of the Applicant's knowledge and belief.

C. The Applicant appears to be an interested person as defined in Nebraska Probate

Code Section 30-2209(21).

D. On the basis of statements in the Application, venue is proper.

E. Any notice required by Nebraska Probate Code Section 30-2413 has been given.

F. From the statements in the Application, the person whose appointment is sought

has priority entitling such person to appointment.

G. It appears from the Application that all other requirements of the Nebraska Probate

Code have been satisfied.

WHEREFORE, the undersigned Registrar hereby informally appoints

as Personal Representative of the estate in unsupervised

administration, to administer the same as an intestate estate, and Letters shall be issued to the

Personal Representative to serve:

-~] without bond

[_~] with bond in the amount of$ -----

Dated: ---------

Signature of Registrar

206

Notice of Informal Administration of Personal Representativeand Notice to Creditors

207

Notice of Informal Administration of Personal Representative(Without Notice to Creditors)

208

IN THE COUNTY COURT OF . COUNTY, NEBRASKA ~------~


~------~

Date of Death: ~----

No. ~--------'

ACCEPTANCE OF APPOINTMENT

The undersigned hereby accepts appointment as Personal Representative of this estate,

accepts the duties of said office, and submits personally to the jurisdiction of this Court in any

proceeding relating to the estate that may be instituted by any interested person, as defined by the

Nebraska Probate Code.

Dated: -~------~


Name of Attorney

Bar ID

Name of Law Firm

Address

Telephone

Fax

Email

209

IN THE COUNTY COURT OF ***MIL CRT County MC*** COUNTY, NEBRASKA

IN THE MATTER OF THE ESTATE OF ) ) ) )

No. - ---

BOND OF PERSONAL REPRESENTATIVE

__________ __, as principal, and

------------- and ____________ ~ as surety, are held

and firmly bound unto the County Court of County, Nebraska, as obligees

for the benefit of the persons interested in this estate in the penal sum of $ ______ for the

payment of which, well and truly to be made, we do jointly and severally bind ourselves and our

lawful representatives.

This bond is conditioned upon the faithful discharge by the Personal Representative of all

duties according to law.

Dated: ---------

Signature of Principal

BY: -----------Its Attorney-in-fact

Typed Name and Address of Surety

BY: ---- -------Its Attorney-in-fact


The above Bond is approved on ___________ _

County Judge (Formal Proceedings Only)

Signature of Registrar (Informal Proceedings Only)

210

IN THE COUNTY COURT OF _______ COUNTY, NEBRASKA

IN THE MATTER OF THE ESTATE OF ) No. _ _ __ _ ) )

___ ______ _ ___, Deceased. ) LETTERS OF


THE STATE OF NEBRASKA

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, on ------------~

was appointed and qualified as

Personal Representative of the above-named Decedent by this Court or its Registrar, with all the

authority granted to a Personal Representative by law;

NOW, THEREFORE, these Letters are issued as evidence of such appointment and

qualifications and authority of ---------- --- to do and perform all acts

which may be authorized by law.

WITNESS, the signature of a Judge or the Registrar of this Court, and the seal of this Court

on ____________ _



211



***FILE Decedent TE***, Deceased.

CASE# PR 16 - ***MIL CRT CaseNum TE***

Date of Death ____ _

NOTICE TO THE NEBRASKA DEPARTMENT OF HEAL TH AND

HUMAN SERVICES OF THE FILING OF A STAND ALONE PETITION

FOR DETERMINATION OF INHERITANCE TAX

TO: Nebraska Department of Health and Human Services Attn: Estate Recovery P.O. Box 95026 Lincoln, NE 68509

You are hereby notified that a Petition for Determination of Inheritance Tax in the above-captioned estate was filed in the County Court in the above-captioned case on ***Petition Filing Date DT*** when there has not been a filing of a formal probate proceeding, an informal probate proceeding, a formal determination of heirs in intestacy, an informal determination of heirs in intestacy, a special administration, an ancillary probate proceeding or any other proceeding under Chapter 30, Articles 24 or 25 of the Nebraska Statutes.

You are further notified that an Order has been entered by the ***MIL CRT County MC*** County Court giving the Co-Trustees through the Trustees' attorney authority to ask for and receive from the Nebraska Department of Health and Human Services the Medicaid waiver of lien and/or statement of Medicaid lien as required under Neb. Rev. Stat. §77-2018.02(6), a copy of which Order is being served on you along with this Notice.

Under the Nebraska Supreme Court Rules §6-1464 a social security number is not able to be filed and thus the decedent's social security number and that of the decedent's spouse, if any, are sent in a separate cover letter which is not being filed with this Court.

of the ***Trust Name TE*** dated ***Trust Date***:

By:

'.'<ame of Attorney

Bar [0

0iarnc or Law Fi1 ·111

Address

212

Telephone

Fax

Email

Attorney for the Petitioner

213





Date of Death:----~

CERTIFICATE OF MAILING OF THE NOTICE TO THE NEBRASKA DEPARTMENT OF HEALTH AND

HUMAN SERVICES PURSUANT TO §77-2018.02 (6)

I hereby certify that on ***Notice Mail Date***, a true and correct copy of:

1. The Order of the ***MIL CRT County MC*** County Court giving the Co-Trustees through the Co-Trustee's attorney authority to ask for and receive from the Nebraska Department of Health and Human Services the Medicaid waiver of lien and/or statement of Medicaid lien as required under Neb. Rev. Stat. §77-2018.02(6);

2. The Notice to the Nebraska Department of Health and Human Services pursuant to §77-2018.02(6) of the filing of a Petition for Determination of Inheritance Tax in the above-captioned estate

was mailed by regular United States first class mail to the Department addressed as follows:

Nebraska Department of Health and Human Services Attn: Estate Recovery P.O. Box 95026 Lincoln, NE 68509

In addition I hereby certify that a separate cover letter containing the decedent's Social Security number, and if available upon reasonable investigation, the decedent's spouse's Social Security number, was sent to the department at the above address and that the Social Security number or Social Security numbers were not included in the notice filed with the court under Nebraska Supreme Court rule §6-1464.

By:

:-.Jame of Attorney

Bar ID

'.\iame of Lav. r'inn

Address

J'elepllone

Fax

214


215

Nebraska Department of Health and Human Services Estate Recovery -- Waiver of Restriction on Transfer Authorization for Disclosure of Protected Health Information

This authorization is submitted to find out if any Medicaid reimbursement is due. On behalf of the trustor, I freely and voluntarily give permission for DHHS to release this information about the trustor to me. I understand that I am not required to disclose the trustor's social security number, though disclosure may make It easier or quicker for information to be provided.

Please attach a copy of the legal authority to act for the trustor, such as court-issued letters of appointment.

Trustor Name (Last, First, Middle ln(tlal)

Trustor's Date of Birth Trustor's Date of Death

My Name (Last, First, Middle Initial)

Address

City state Zip Code

Trustor's Social Security Numbor

The Information to be released pursuant to this authorization Is limited to records or Information from or in the ossesslon or control of DHHS.

Dlscloso to: (I f lo someone other than me)

Address:

City State Zip Code

This authorization (unless revoked earlier in writing) shall terminate on ------------------(must have date or event fllled In)

Sy signing this authorization, I acknowledge thatthe information to be released may include material that is protected by federal or state law, including benefit or enrollment information. My signature authorizes release of this information. I also understand that this authorization may be revoked at any time by submitting a written request In accordance with the then current DHHS Notice of Privacy Practices, and it will be honored with the exception of information that has already been released.

Federal law requires us to inform you that DHHS will not condition payment or eligibility for benefits on whether this authorization is signed. Information used or disclosed pursuant to the authorization may be subject to disclosure by the recipient and may no longer be protected by law.

l9n11ture of Authorlz:od Ropresontatlve rlnted Name ate

Authorized Representative: O ersonal RepresentallveOpeclal AdmlnlslratorOlher (be specific) -----------

Please have your signature notarized if this form is being submitted by someone else for you.

Subscribed and sworn to before me on this ___ day of _ ___ __ __, 20 __ .

Notary Public

216

THIS NOTICE DESCRIBES HOW MEDICAL INFORMATION ABOUT YOU MAY BE USED AND DISCLOSED AND HOW YOU MAY ACCESS THIS INFORMATION. PLEASE REVIEW IT CAREFULLY.

The Nebraska Department of Health and Human Services "DHHS" and those Agencies inclusive of health care facilities and medical assistance programs that are affiliated under the common control of the Health and Human Services Act, are required by federal law to maintain the privacy of Protected Health Information and to provide notice of its legal duties and privacy practices with respect to Protected Health Information. PRACTICES AND USES: DHHS may access, use and share medical information without your consent for purposes of: O Treatment: We may use your medical information to provide you with medical treatment or services. We may share your information with a nurse, medical professional or other personnel who are giving you treatment or services. For example, a doctor treating you for a broken leg may need to know if you have diabetes because diabetes may slow the hearing process. Different agencies within DHHS may share your medical information in order to coordinate the different things you need, or to support and maintain your continuum of care. o Payment: We may use and disclose your medical information so that the treatment and services you receive can be billed. For example, we may use your medical information from a surgery you received at the hospital so the hospital can be reimbursed. o Operations: We may use and disclose medical information about you for health care operations. For example, we may use medical information to review your treatment and services and to evaluate the performance of the staff. OTHER PERMITIED USES AND DISCLOSURES THAT MAY BE MADE WITHOUT CONSENT/AUTHORIZATION: o Required By Law: We may use or disclose your Protected Health Information to the extent that the use or disclosure ls required by law. You will be notified, if required by law, of any such uses or disclosures. D Public Health: We may disclose your Protected Health Information for public health activities and purposes to a public health authority that is permitted by law to collect or receive the information. o Communicable Diseases: We may disclose your Protected Health Information, if authorized by law, to a person who may have been exposed to a communicable disease or may otherwise be at risk of contracting or spreading the disease or condition. n Health Oversight: We may disclose Protected Health Information to a health oversight agency for activities authorized by law, or other activities necessary for appropriate oversight of the health care system, government benefit programs, other government regulatory programs, and civil rights laws. o Abuse or Neglect: We may disclose your Protected Health Information to a public health authority that is authorized by law to receive reports of abuse or neglect. The disclosure wlll be made consistent with the requirements of applicable federal and state laws. o Legal Proceedings: We may disclose Protected Health Information in the course of any judicial or administrative proceeding in response to an order of a court or administrative tribunal (to the extent such disclosure is expressly authorized), and in certain conditions in response to a subpoena, discovery request, or other lawful process. o Law Enforcement: We may also disclose Protected Health Information, so long as applicable legal requirements are met, for law enforcement purposes. o Food and Drug Administration: We may disclose your Protected Health Information as required by the Food and Drug Administration. o Coroners, Funeral Directors, and Organ Donation: We may disclose Protected Health Information to a coroner or medical examiner for identification purposes, cause of death determinations, or for the coroner or medical examiner to perform other duties authorized by law. D Research: We may disclose your Protected Health Information to researchers when their research has been approved by an institutional review board to ensure the privacy of your Protected Health Information. o Criminal Activity: We may disclose your Protected Health Information if we believe that the use or disclosure is necessary to prevent or lessen a serious and imminent threat to the health or safety of a person or the public. o Specialized Government Functions: When the appropriate conditions apply, we may use or disclose Protected Health Information of individuals who are Armed Forces personnel for military, national security, and intelligence activities. Protected Health Information may be disclosed for the administration of public benefits purposes. o Workers' Compensation: We may disclose your Protected Health Information as authorized to comply with workers' compensation laws and other similar legally established programs. n Inmates: We may use or disclose your Protected Health Information if you are an inmate of a correctional facility in the course of providing care to you. O Required Uses and Disclosures: We must make disclosures when required by the Secretary of the U.S. Department of Health and Human Services to investigate or determine our compliance with the requirements of 45 CFR, Tille II, Section 164, et seq. USES AND DISCLOSURES REQUIRING AUTHORIZATION: There are certain uses and disclosures of Protected Health Information that require your authorization. Among them are: most uses and disclosures of psychotherapy notes; uses and disclosures of protected health information for marketing purposes; and disclosure of protected health information that constitutes a sale. Other uses and disclosures not described in this notice will be made only WITH authorization from you. You may revoke this authorization at any time as provided by 45 CFR 164.508(b)(5).

217

YOUR RIGHTS TO PRIVACY: D Right to Inspect and Copy. You have the right to inspect and copy your medical information. Usually, this includes medical and billing records but does not include psychotherapy notes. To inspect and copy your medical information, you must submit a written request at the Site of Seivice or to the DHHS HlPM Privacy & Security Office. If you request a copy, we may charge a fee for the cost of copying, mailing, and other supplies associated with your request. We may deny your request to inspect and copy in certain circumstances. lf you are denied access to medical information, you may request the denial be reviewed. O Right to Amend. If you feel that medical information about you is incorrect or incomplete, you may ask us to amend (correct) the information. You have the right to request an amendment as long as the information is kept by or for DHHS. To request an Amendment, your request must be made in writing and submitted at the Site of Service, or to the DHHS HIPM Privacy & Security Office. In addition you must provide a reason which supports your request. We may deny your request for an amendment if it is not in writing or does not include a reason to support the request. In addition, we may deny your request if you ask us to amend information that:

o was not created by us, unless the person or entity that created the information is no longer available to make the amendment; D is not part of the medical information kept by or for DHHS; D is not part of the information which you would be permitted to inspect and copy; or, n is accurate and complete.

D Right to an Accounting of Disclosures. You have the right to request a list of the disclosures we made of medical information about you. You must submit your request in writing at the Site of Service, or to the DHHS HIPM Privacy & Security Office. Your request must state a time period for the disclosures, which may not be longer than six {6) years and may not include dates before April 14, 2003. Your request should indicate in what form you want the list to be provided to you. D Right to Request Restrictions. You have the right to request a restriction or limitation on the medical information we use or disclose about you for treatment, payment, health care operations, and to someone who is involved in your care or the payment of your care, like a family member or friend. We are not required to agree to your request for restrictions unless it is for payment or health care operations and you use your own funds to pay, in full, for a health care item or service. If we do agree, we will comply with your request unless the information is needed to provide· you emergency treatment. To request restrictions, you must make your request in writing at the Site of Service, or to the DHHS HIPAA Privacy & Security Office. In your request you must tell us: (1) what information you want to limit, (2) whether you want to limit our use, disclosure, or both; and (3) to whom you want the limits to apply. o Right to Request Confidential Communications. You have the right to request that we communicate with you about medical matters in a certain way or at a certain location. To request confidential communications, you must make your request in writing at the Site of Service, or to the DHHS HIPM Privacy & Security Office. Your request must specify how or where you wish to be contacted. D Right to a Paper Copy of this Notice. You have a right to a paper copy of this notice. You may ask us to give you a copy of this notice at any time. Even if you have agreed to receive this notice electronically, you are still entitled to a paper copy of this notice. You may obtain a copy of this notice at our website, http://dhhs.ne.gov/Pages/hipaa hp-1-p-notlce.aspx or by contacting us. D Opt out of fundralsing communications. If DHHS should conduct fundraising activities, you have a right to opt out of this communication. o Breach notification. In the event DHHS breaches your unsecured protected health information as defined by HIPM,

·you will receive notification of the breach. COMPLAINTS: If you believe your privacy rights have been violated, you may file a complaint with DHHS or with the Secretary of the U.S. Department of Health and Human Services. To file a complaint with DHHS, you may contact the DHHS HIPAA Privacy & Security Office. To file a complaint with HHS, contact: Secretary, Health and Human Services, Office of Civil Rights, U.S. Department of Health and Human Services, 200 Independence Avenue, SW Room 509F, HHH Building Washington, D.C. 20201, 1-866-0CR-PRIV (627-7748), 1-866-778 4989-TTY. You will not be penalized for filing a complaint. CHANGES TO THE NOTICE OF INFORMATION PRACTICES: The State of Nebraska Department of Health and Human Services reserves the right to amend this Notice at any time in the future. Until such amendment is made, DHHS is required by law to abide by the terms of this Notice. DHHS will provide notice of any material change in revision of these policies either electronically or in paper format. CONTACT INFORMATION: This notice fulfills the "Notice" requirements of the Health Insurance Portability and Accountability Act of 1996 (HIPM) Final Privacy Rule. If you have questions about any part of this Notice of Information Privacy practices or desire to have further information concerning information practices at DHHS please direct them to: HIPM Privacy and Security Office, 301 Centennial Mall South 3rd Floor, Lincoln, NE 68509-5026, by phone at 402-471-8417, or by email to [email protected]. If you have question about your benefits call 800-383-4278.

Effective: 9/23/2013

218


219

J~e>J'mc11I d '";x1h & :-i11111(111 Serv1rn:

DHHS~ N E B R. - p.,· .. ·5· - k" .. ~A Division of Medicaid and Long-Term Care State of Nebraska

Pete Ricketts. Governor . .. _ ........... ___ .__ ... __ ... . ________ ___ .... _ - ·- · ------ - --------- .. ----· -· ---· -· -

***Letter Date DT***

Re: ***Letter RE TE***

Dear ***Letter Salutation TE***:

This letter is the response of the Nebraska Department of Health and Human Services (DHHS) to your recent notice of the death of the above-named truster.

DHHS has determined that there is no Medicaid Estate Recovery claim due respecting the abovenamed truster. Accordingly, pursuant to Neb. Rev. Stat. §30-3880(c), DHHS hereby waives the statutory restriction at Neb. Rev. Stat. §30-3880(c) on transfer of trust property.

Thank you for your cooperation respecting this matter

Sincerely,

Jon Sterns, NE Medicaid Estate Recovery (402) 471-9126

220


Formal Testacy and Appointment Proceedings

Robert D. Stowell & Jessica L. PiskorskiStowell, Geweke & Piskorski, P.C., L.L.O.,

Ord

March 23, 2018

UNO Thompson Center

Omaha, NE

1

Informal Probate and Appointment ProceedingsRobert D. Stowell and Jessica L.V. Piskorski


Ord, Nebraska

Proper Use of Informal Proceedings

No unrevoked testamentary documents being presented

Identity of all heirs or devisees is clear

The Will names a Personal Representative (P.R.) who will qualify for and accept the appointment, or the proposed P.R. has priority in his or her own right, or as a result of renunciation or nomination

A Will contest is not anticipated

An appointment contest is not anticipated

Interested parties will not desire formal procedures

Will construction is not desired

There is harmony among beneficiaries

If these situations are not present,

then formal proceedings should be pursued

Commencement of Informal Proceedings

Who: Commenced upon application of an “interested person” Heirs, devisees, children, spouse, creditor, beneficiary, any others having a property right in the estate, persons having priority for appointment as personal representative

Priority is determined pursuant to Neb. Rev. Stat. § 30‐2412

Timing: When to Commence No sooner than 120 hours after the death of the decedent

No later than 3 years after the death of the decedent

Exceptions to 3‐year rule:

Dismissal of previous proceeding because of doubt of death

If death is established for a missing person

If no formal or informal proceeding has occurred within the 3‐year period

However, if prior proceeding was commenced within the 3‐year period, this bars the exception. There is no requirement that the prior proceeding must be completed within the 3‐year time period.

In re Estate of Fuchs, 297 Neb. 667 (2017)

2

Informal OpeningChecklist

Contents ofthe Applicationfor InformalProbate orAppointment

Nebraska Probate Code § 30‐2414(1) Statement of Interest of the Applicant

Decedent’s information

Venue

Name and address of Personal Representative

Statement of whether applicant has received any notice of other probate or appointment proceedings




Form 220 or 230

Registrar’s Duties

Registrar determines if all requirements are met for informal probate and informal appointment of the personal representative Nebraska Probate Code § 30‐2416 and § 30‐2421

No hearing necessary

Form 221 or 231

3

Notice Requirements

Notice must be given to: Those demanding it pursuant to Nebraska Probate Code § 30‐2413

Any P.R. of the decedent whose appointment has not been terminated (for notice of informal probate)

Any person having a prior or equal right to appointment not waived in writing and filed with the court (for notice of informal appointment)

Notice must also be given to: Creditors

Registrar shall publish notice within 30 days

Creditors have 2 months to present claims

Interested Persons

Department of Health and Human Services

If decedent was 55 years of age or older OR

Resided in a medical institution Nebraska Probate Code § 30‐2483

Form 223 or 233

Waiver of Notice Nebraska Probate Code § 30‐2221

Publication Requirements

The party instituting or maintaining the proceeding, or his or her attorney, is required to mail the published notice and give proof thereof, in accordance with Neb. Rev. Stat. § 25‐520.01.

Nebraska Probate Code § § 30‐2215 and 30‐2483

Notice by publication required by Nebraska Probate Code requires publishing a copy of the notice

at least once a week

for three consecutive weeks

In a legal newspaper having general circulation in the county where the application for probate has been filed

The last publication must be at least three days before any time set for hearing.

Proof of publication must be filed with the court. Nebraska Probate Code § 30‐2220

Publication andNotice documents

4

Publication and Notice Continued(HHS)

Section 30‐2483 requires notice to be sent to the Department of Health and Human Services, under certain circumstances

Age 55+

OR resided in medical institution

Include Decedent’s SSN

Name and SSN of decedent’s deceased spouse (if any)

Delivery of Notice In manner and at address designated by DHHS, may include email –check website

Failure to give conforming notice is void

Robert D. Stowell and Jessica L.V. Piskorski


Ord, Nebraska

Formal Probate and Appointment Proceedings

Proper Use of Formal Proceedings

There are a series of testamentary instruments, the latest of which does not revoke the earlier

Supervised administration is desired

The content of a lost, destroyed, or otherwise unavailable Will must be established

The Personal Representative (PR) named in the Will is unsuitable and unwilling to step aside, and the appointment of another PR is desired

The person desired as PR does not have priority of appointment

The estate is partially intestate, and an adjudication of heirship is desired, or a finding of partial intestacy is desired

There is a desire to object to, stay, or preclude appointment of a PR in an informal proceeding

A PR has been appointed in another county in Nebraska

The Will, or another Will, has been the subject of a previous probate order

A Will contest is probable, or construction of a Will is necessary

An objection to a proposed PR in informal probate is probable

The registrar refuses to approve an informal application

5

Commencement of Formal Proceedings

“Formal Testacy Proceeding” is litigation to determine whether a decedent left a valid Will.

May be commenced by an “interested person”

Timing: No sooner than 120 hours and no later than 3 years after the death of the decedent

Nebraska Probate Code §§ 30‐2415(a) and 30‐2408

Without regard to whether the same or a different Will has already been informally probated


Within 12 months after informal probate or 3 years after the death of the decedent, whichever is later


Exception: The Will can be probated after the 3‐year period, if no formal or informal proceeding has occurred within the 3‐year period.

However, if a prior proceeding was commenced, this is still a bar to a later proceeding, as the statute doesn’t require completion of the previous proceeding.

Nebraska Probate Code § 30‐2408; In re Estate of Fuchs, 297 Neb. 667 (2017).

Effect of Formal Proceedings onInformal Proceedings

On existing PR: If appointment of different PR is sought, can request court to restrain acting PR from exercising powers

An acting informal PR may not make distributions during pendency of formal proceedings

If confirmation of previous appointment is requested, a formal proceeding doesn’t otherwise affect the appointed PR

On Informal Proceedings: During the pendency of a formal proceeding, the Registrar may not act on any applications for informal proceedings

A petition for formal probate may be filed even though the same or a conflicting Will has been informally probated

An existing informal PR appointment is not automatically terminated by a formal order of probate or intestacy

Nebraska Probate Code §§ 30‐2425 and 30‐2455

Formal Opening Checklist

6

Contents of Petition for Formal Probate(Will or Intestate)

Pursuant to Nebraska Probate Code § § 30‐2426(a), the Petition must contain statements required for informal applications, including:

Statement of interest of the applicant

Name and date of death of decedent

Decedent’s age at death

Decedent’s county and state of domicile at death

Names and addresses of decedent’s spouse, children, heirs and devisees, and ages of any who are minors

Statement showing venue (if the decedent was not domiciled in Nebraska at death)

The name and address of the PR of the decedent appointed

A statement indicating whether the applicant has received or is aware of any demand for notice of any probate or appointment proceeding that may have been filed in Nebraska or elsewhere




Contents for Petition forAdjudication of Intestacy

Pursuant to Nebraska Probate Code §§ 30‐2426(b) and 30‐2414:

Is directed to the court and requests a finding and order that a decedent left no will and a determination of the heirs

Same requirements for informal and formal petition

Statement that after the exercise of reasonable diligence, the applicant is unaware of any unrevoked testamentary instrument relating to property having a situs in Nebraska.

An indication of whether supervised administration is sought

The priority of the person whose appointment is sought, and the names of any other persons having a prior or equal right to the appointment

Notice and Publication Requirements

Upon commencement of a formal proceeding, the court sets a time and place of hearing. Nebraska Probate Code § 30‐2427

To Whom Notice is Given Surviving spouse, children, other heirs, devisees and executors in the Will, and any PR whose appointment has not been terminated

To all unknown persons, by publication

Any person who has demanded notice under Nebraska Probate Code § 30‐2413

Interested persons, pursuant to Nebraska Probate Code § 30‐2220, which includes creditors

Manner of Giving Notice Pursuant to Nebraska Probate Code § 30‐2220 and Neb. Rev. Stat. §25‐520.01 Mail notice 14 days before the time for hearing

Publish for 3 consecutive weeks, last publication at least 3 days before hearing, mail notice, and file proof of publication and proof of notice with the court.

Notice may be waived

7

Notice and Publication,continued

Uncontested Matters

Pursuant to Nebraska Probate Code § 30‐2429, if the formal petition is unopposed, the court may order probate or intestacy on the strength of the pleadings without a hearing, if the conditions of Nebraska Probate Code § 30‐2433 have been met:

Time required for notice has expired, proof of notice has been filed, decedent is found to be dead, and venue is proper.

If evidence concerning execution of the Will is necessary, the hearing may be held, and an affidavit or testimony of one of the attesting witnesses is sufficient.

If the affidavit or testimony of an attesting witness is not available, execution of the Will may be proved by other evidence or affidavit.

Contested Matters

Procedure Nebraska Probate Code § § 30‐2428 and 30‐2429.01

The party opposing the probate of the Will must state in his or her pleadings the reason for the objection.

If an objection is filed, the court must continue the hearing for at least 14 days.

The matter may be transferred to the district court for hearing, and a trial shall be held, and the district court may determine if the decedent left a valid Will. Upon judgment by the district court, the proceedings shall be certified to the county court to carry the final decision and judgment into execution.

Evidence Nebraska Probate Code § 30‐2430

If the Will is not self‐proved, the testimony of at least one of the attesting witnesses is required (if competent and within the state)

If the Will is self‐proved, compliance with requirements is presumed, unless there is proof of fraud or forgery

Burden of Proof Nebraska Probate Code § 30‐2431

Person seeking to establish intestacy must provide prima facie proof of death, venue, and heirship.

Proponent of a Will must establish prima facie proof of due execution, death, testamentary capacity, and venue Those contesting must prove undue influence, fraud, duress, mistake, or revocation

8

More than One Instrument Entitled to Probate

Prior to a final order, more than one instrument may be probated, as long as neither expressly revokes the other

If more than one instrument is probated, the order shall indicate: Which provisions control regarding nomination of PR and

How the provisions of one instrument are affected by the other


Foreign Wills

Final Order of Court of a Different State Nebraska Probate Code § 30‐2432

This order is determinative in Nebraska IF the proceeding in the other state:

Involved notice to interested persons

Involved an opportunity for contest by all interested persons,

If the order includes or is based on a finding that that decedent was domiciled at the time of death in such other state, AND

If the other state has applicable provision of law similar in reciprocal effect to this statute

This reciprocity requirement is not part of the Uniform Probate Code. Further, Nebraska has not included adoption of another state’s order in informal probate proceedings.

Will from a Place Not Providing for Probate Nebraska Probate Code § 30‐2433

A will from a place that does not provide for probate is admissible in Nebraska IF the petition for probate is accompanied by a certification that the Will is a true copy and is effective under the law in the other jurisdiction

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Jessica L.V. Piskorski

The current version of Chapters 7 and 8 were edited and revised by Jessica L.V. Piskorski. Ms. Piskorski graduated from the University of Nebraska College of Law in 2009, with a concentration in Litigation Skills. During law school, Ms. Piskorski took part in the College of Law Civil Clinic, was a College of Law Student Ambassador, and was a student member of the Robert Van Pelt American Inn of Court.

Ms. Piskorski served for seven years as in-house counsel for a collection agency in Grand Island, where she handled matters regarding federal collection law, state law and civil procedure, and acted as a corporate departmental supervisor. Ms. Piskorski joined Stowell, Geweke & Piskorski, P.C., L.L.O. in 2016 and currently handles legal matters in estate planning, estate administration, entity formation, and transactional legal work. Ms. Piskorski is a member of both the Real Estate, Probate, and Trust Section of the NSBA and the Nebraska State Bar Association Leadership Academy class of 2017-2018.

Robert D. Stowell

Chapters 7 and 8 were revised in 2010 and currently reviewed by Robert D. Stowell. Mr. Stowell became the founding member of Stowell, Geweke & Piskorski, P.C., L.L.O. in Ord, Nebraska in 1972.

Mr. Stowell has actively participated in Nebraska State Bar Association activities over the years, including service on the House of Delegates, and on Bar Committees for Estate Planning, Banking, Law Practice and Management, Agricultural Law, Judicial Redistricting, and Real Estate. He is a Nebraska Bar Foundation Fellow, and he has presented at Estate Planning, Bankruptcy, Probate and Trust, Agricultural Law, and Real Estate seminars.

Prior to graduating from the University of Nebraska College of Law in 1972, Mr. Stowell received his Bachelor of Science Degree from the United States Military Academy at West Point, New York in 1965. Thereafter, he served as an Infantry officer at various posts in the U.S. and in the Republic of Vietnam. Decorations received were the Distinguished Service Cross, three air medals, Bronze Star, and Army Commendation Medal. He concluded his military service as an R.O.T.C. instructor at the University of Nebraska-Lincoln in 1971.

Melani J. Hagge

Melani J. Hagge provided vital assistance in the 2017 revision of these chapters while she served as a summer associate for Stowell, Geweke & Piskorski, P.C., L.L.O. during the summer of 2017. Ms. Hagge is from Ord, Nebraska, and is currently a second year law student at the University of Nebraska College of Law.

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Chapter 8 - Formal Probate and Appointment Proceedings

Table of Contents

8-1 General Provisions ...................................................................................................2298-1(a) Definition of Formal Proceedings .................................................. 2298-1(b) Who May Commence ..................................................................... 2308-1(c) Time of Commencement ................................................................ 2308-1(d) Effect of Formal Testacy Proceedings on Personal Representative .. 2318-1(e) Effect of Formal Testacy Proceedings on Informal Proceedings .... 231

8-2 Contents of Petition for Formal Probate or for Adjudication of Intestacy ....................................................................................................................................2328-2(a) Petition for Formal Probate (§ 30-2426(a)) .................................... 2328-2(b) Petition for Adjudication of Intestacy and Appointment of an Administrator (§ 30-2426(b)) ................... 2338-2(c) Verification Requirement ................................................................ 234

8-3 Notice Requirements for Hearing on Formal Petition .........................................2348-3(a) Manner of Giving Notice ................................................................ 2348-3(b) Waiver of Notice ............................................................................. 2358-3(c) To Whom Notice is Given .............................................................. 235

8-4 Uncontested Matters (§ 30-2429) ............................................................................2368-4(a) Hearing Not Required ..................................................................... 2368-4(b) Hearing Required ............................................................................ 236

8-5 Contested Matters ....................................................................................................2368-5(a) Procedure ........................................................................................ 2368-5(b) Evidence of Execution of Will ....................................................... 2378-5(c) Burden of Proof in Contested Cases (§ 30-2431) ........................... 237

8-6 More Than One Instrument Entitled to Probate (§ 30-2434) ..............................2378-6(a) Offer of Two or More Instruments.................................................. 2378-6(b) Effect of Final Order ....................................................................... 238

8-7 Foreign Wills and Order of Foreign Court ............................................................2388-7(a) Final Order of Court of Different State (§ 30-2432) ...................... 2388-7(b) Will From Place Not Providing for Probate (§ 30-2433) ............... 238

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8-8 Fact of Death in Doubt ............................................................................................2388-8(a) Need for Diligent Search ................................................................ 2388-8(b) Insufficient Evidence of Death of Decedent ................................... 239

8-9 Order in Formal Proceedings .................................................................................2398-9(a) Nature of Order ............................................................................... 2398-9(b) Effect of Order ................................................................................ 2398-9(c) Vacation or Modification of Order ................................................. 240

8-10 Erroneous Finding of Death ....................................................................................2408-10(a) Recovery of Assets ......................................................................... 2408-10(b) Protection of Bona Fide Purchasers and Lenders ........................... 241

8-11 Formal Proceedings Concerning Appointment of Personal Representative ......2418-11(a) Where Testacy Involved ................................................................. 2418-11(b) All Other Cases ............................................................................... 2418-11(c) Effect of Pendency of Appointment Proceedings ........................... 2418-11(d) Notice Requirements ...................................................................... 2428-11(e) Determination By Court ................................................................. 242

8-12 Summary ...................................................................................................................2428-12(a) When Formal Proceedings in a Testate Estate Must Be Commenced ..................................................................... 2428-12(b) When Formal Proceedings in an Intestate Estate Must Be Commenced ..................................................................... 243

FormsFormal Opening Checklist ............................................................................... 245Demand for Notice ........................................................................................... 247Waiver of Notice .............................................................................................. 249Order Setting Date For Hearing and For Notice .............................................. 250Affidavit of Mailing Notice .............................................................................. 251Renunciation of Right to Appointment and Nomination of Personal Representative .................................................... 253Waiver of Bond ................................................................................................ 254Statement of Value and Income for Purposes of Bond .................................... 255Petition for Formal Probate of Will, Determination of Heirs, and Appointment.......................................................................................................................... 257Order Admitting Will to Formal Probate, Determination of Heirs and Appointment of Personal Representative ............................................................................... 261Notice of Hearing on Probate and Appointment of Personal Representative .. 263Petition for Formal Adjudication of Intestacy, Determination of Heirs, and Appointment of Personal Representative .................................................. 265Order of Intestacy, Determination of Heirs, and Appointment of Personal Representative .................................................................................................. 269

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Notice of Hearing on Administration ............................................................... 271Acceptance of Appointment ............................................................................. 272Bond of Personal Representative ..................................................................... 273Letters of Personal Representative ................................................................... 274Notice to the Nebraska Department of Health and Human Services of the Filing of a Stand Alone Petition for Determination of Inheritance Tax ..................... 275Certificate of Mailing of the Notice to the Nebraska Department of Health and Human Services Pursuant to §77-2018.02 (6) ................................................. 277DHHS Estate Recovery - Waiver of Restriction on Transfer ........................... 279

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229

Chapter 8 - Formal Probate and Appointment Proceedings1

Article 24, Part 4(§§ 30-2425 to 30-2438)

8-1 General Provisions

8-1(a) Definition of Formal P oceedings

A “testacy proceeding” is a proceeding to establish a will or determine intestacy. Nebraska Probate Code § 30-2209(48).

“Formal proceedings” mean those conducted before a judge with notice to interested persons. Nebraska Probate Code § 30-2209(16). See Nebraska Probate Code § 30-2209(21) for the definition of “interested persons.”

A “formal testacy proceeding” is litigation to determine whether a decedent left a valid will. Nebraska Probate Code § 30-2425. The formal testacy proceeding may be used for this purpose without any administration of the estate. It embraces the possibility that the decedent left no will, determines any question of which of several instruments is the valid will, and determines the possibility that the decedent died intestate as to part of the estate and testate as to the balance. See comment to Uniform Probate Code § 3-401.

The petition in a formal testacy proceeding requests an order, after notice and hearing:

(1) Probating a will, either in original proceeding or confirming informal probate (Nebraska Probate Code § 30-2425);

(2) Setting aside informal probate (Nebraska Probate Code § 30-2425);

(3) Preventing informal probate of a will, which is the subject of a pending application (Nebraska Probate Code § 30-2425. See Nebraska Probate Code § 30-2429.01);

(4) Stating that the decedent died intestate (Nebraska Probate Code § 30-2425; see Nebraska Probate Code § 30-2426(b));

(5) Requesting supervised administration (See Nebraska Probate Code § 30-2440);

1 Randy D. Cullers provided revisions to the 2010 version of this content. Mr. Cullers is currently a partner at Crites, Shaffer, Connealy, Watson, Patras & Cullers P.C., L.L.O. in Chadron, Nebraska.

The reader is referred to Chapter 6 for a discussion of issues related to jurisdiction, venue and statutes of limitation.

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(6) Objecting to the proposed appointment of a personal representative in an informal proceeding (Nebraska Probate Code § 30-2425; see Nebraska Probate Code §§ 30-2412(b) and 30-2438(a));

(7) Objecting to the qualification or priority of an acting or proposed personal representative, even if there is no dispute concerning testacy (Nebraska Probate Code §§ 30-2438(a) and 30-2426).

8-1(b) Who May Commence

Formal testacy proceedings may be commenced by the petition of an interested person. Nebraska Probate Code § 30-2425. “Interested person” includes heirs, devisees, children, spouses, creditors, beneficiaries, and any others having a property right in or claim against a trust estate or the estate of a decedent, persons having priority for appointment as personal representative, and other fiduciaries representing interested persons. Nebraska Probate Code § 30-2209(21).

8-1(c) Time of Commencement

The proceeding may be commenced:

(1) No sooner than 120 hours and no later than three years after the death of the decedent. (See Nebraska Probate Code § 30-2415(a) and Nebraska Probate Code § 30-2408);

(2) Without regard to whether the same or a different will has already been informally probated (Nebraska Probate Code § 30-2425); or

(3) Within twelve months after informal probate, or three years after the death of the decedent, whichever is later (Nebraska Probate Code § 30-2408).

However, where a previous proceeding was dismissed because of doubt about the fact of decedent’s death, a proceeding may be maintained at any time after the dismissal, if the proceeding is not unduly delayed, and if it is found that decedent’s death occurred prior to the initiation of the previous proceeding. Nebraska Probate Code § 30-2408.

Nebraska added an exception which allows a will to be probated after the three-year statute of limitations, if no formal or informal proceeding has occurred within the three-year period. Nebraska Probate Code § 30-2408. In re Estate of Nemetz, 273 Neb. 918, 735 N.W.2d 363 (2007). However, if a prior proceeding was commenced within the three-year period, this will act as a bar to the exception allowing a later probate; the statute does not require completion of the prior proceeding within the three-year period. In re Estate of Fuchs, 297 Neb. 667 (2017).

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8-1(d) Effect of Formal Testacy Proceedings on Personal Representative

A formal testacy proceeding may, but need not, involve a request for appointment of a personal representative. Nebraska Probate Code § 30-2425.

Effect of request for formal testacy proceeding on an existing personal representative:

(1) If appointment of a diffe ent personal representative is sought, the court may be requested to restrain the acting personal representative from exercising any powers and appoint a special administrator. Nebraska Probate Code § 30-2425.

(2) Unless a previous informal appointment is sought to be confirmed, after receipt of notice of commencement of formal proceedings, an acting personal representative may not make distribution of an estate during pendency of formal proceedings. Nebraska Probate Code § 30-2425.

(3) In the absence of a request for confirmation of previous appointment or request that the court restrain an acting personal representative, a formal proceeding has no effect on the powers and duties of a personal representative, except the power to distribute. Nebraska Probate Code § 30-2425.

(4) If confirmation of previous appointment is requested, a formal proceeding effects no diminution of powers during the pendency of the proceeding. Nebraska Probate Code § 30-2425.

8-1(e) Effect of Formal Testacy Proceedings on Informal Proceedings

During the pendency of a formal proceeding, the Registrar may not act on any application for informal probate of any will of the decedent or for informal appointment of a personal representative. Nebraska Probate Code § 30-2425.

A petition for formal probate may be filed even though the same will or a conflicting will has been informally probated. Nebraska Probate Code § 30-2425.

Unless otherwise ordered, an existing informal appointment of a personal representative is not automatically terminated by a formal order of probate or intestacy. Nebraska Probate Code § 30-2455.

If, as a result of the formal proceeding, there is no change in the probate or testacy status, and no new appointment of a personal representative is made, all powers of the personal representative are restored, including the power to distribute the estate. Nebraska Probate Code § 30-2425; also see comment to Uniform Probate Code § 3-401.

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8-2 Contents of Petition for Formal Probate or For Adjudication of Intestacy

8-2(a) Petition for Formal Probate (Nebraska Probate Code § 30-2426(a))

A petition for formal probate is directed to the court and requests a judicial order, after notice and hearing, as to testacy in regard to a particular instrument or instruments, and a determination of decedent’s heirs. Nebraska Probate Code § 30-2426(a)(1).

The petition for formal probate must contain the statements required for informal applications, as set out in Nebraska Probate Code §§ 30-2414(1), 30-2414(2)(ii), and 30-2414(2)(iii). Nebraska Probate Code § 30-2426(a)(2). Pursuant to Nebraska Probate Code § 30-2414(1), this includes:

(1) A statement of the interest of the applicant (see Nebraska Probate Code § 30-2209(21) for the definition of “interested person”);

(2) The name and date of death of the decedent; the decedent’s age at death; the decedent’s county and state of domicile at death; the names and addresses of the decedent’s spouse, children, heirs and devisees, and the ages of any who are minors so far as known or ascertainable with reasonable diligence by the applicant;

(3) A statement showing venue, only if the decedent was not domiciled in Nebraska at the date of death;

(4) The name and address of the personal representative of the decedent appointed in Nebraska or elsewhere whose appointment has not been terminated;

(5) A statement indicating whether the applicant has received or is aware of any demand for notice of any probate or appointment proceeding that may have been filed in Nebraska or elsewhere.

The petition should also show why venue is proper in the county of filing, pursuant to Nebraska Probate Code § 30-2410. Nebraska Probate Code §§ 30-2414(2)(ii) & 30-2424(2)(iii) require the petitioner to state that, to the best of the petitioner's knowledge, the petitioner believes the will to have been validly executed, is unaware of any instrument revoking the will and that the petitioner believes that the instrument which is the subject of the petition is the decedent's last will.

In addition, the petition must also state whether the original of the will is in possession of the court or accompanies the petition. If an original or authenticated will is neither in the possession of the court nor accompanies the petition, the petition must also state the contents of the will and indicate that the will is lost, destroyed, or otherwise unavailable. Nebraska Probate Code § 30- 2426(a)(3).

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Suggested additional provisions to the petition include:

(1) Whether the decedent had a divorce, dissolution, or annulment of marriage after execution of the will. See Nebraska Probate Code §§ 30-2333 and 30-2353

(2) Whether the decedent has a surviving spouse who married the decedent-testator after execution of the will. See Nebraska Probate Code § 30-2320.

(3) Whether any children were born to or adopted by the decedent after execution of the will. See Nebraska Probate Code § 30-2321.

(4) If appointment of a Personal Representative is sought, the petition should state the names and relationship of those with priority under Nebraska Probate Code § 30-2412. See Nebraska Probate Code § 30-2438.

(5) That a bond is required or explain why no bond is required. See Nebraska Probate Code § 30-2446.

(6) Whether the nominated petitioner is indebted to the estate or a creditor of the estate. See Neb. Ct. R. § 6-1435.

8-2(b) Petition for Adjudication of Intestacy and Appointment of an Administrator (Nebraska Probate Code § 30-2426(b))

The petition for adjudication of intestacy and appointment of an administrator is directed to the court and requests a finding and order that the decedent left no will and a determination of the heirs. Nebraska Probate Code § 30-2426(b).

Pursuant to Nebraska Probate Code § 30-2426(b), the petition must contain:

(1) The statements required for an informal application in Nebraska Probate Code § 30-2414(1) (outlined above in Section 8-2(a)(1) – (5)).

(2) The statements that after the exercise of reasonable diligence, the applicant is unaware of any unrevoked testamentary instrument relating to property having a situs in Nebraska. If the applicant is aware of such an instrument, the application should explain why that instrument is not being probated. (Nebraska Probate Code § 30-2414(4)(i));

(3) An indication of whether supervised administration is sought; and

(4) The priority of the person whose appointment is sought and the names of any other persons having a prior or equal right to the appointment, pursuant to Nebraska Probate Code § 30-2412. (Nebraska Probate Code § 30-2414(4)(ii)).

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Appointment of one who does not have priority may be made only in a formal proceeding, except that appointment of one having priority by renunciation or nomination may be made in an informal proceeding. Nebraska Probate Code § 30-2412(e). If two or more persons have equal priority, one may renounce. Nebraska Probate Code § 30-2412(c).

It is not necessary to request appointment of a personal representative together with a request for determination of intestacy and heirs, and therefore, the statement regarding priority may be omitted where no such appointment is being requested. Nebraska Probate Code § 30-2426(b).

8-2(c) Verification Requi ement

The Nebraska Probate Code generally does not require documents filed with the court under the Code to be verified, as they are deemed to include an oath, affirmation, or statement to the effect that its representations are true. Nebraska Probate Code § 30-2219. Therefore, the petitions described above are not required to be verified. Nebraska Probate Code § 30-2426(a).

8-3 Notice Requirements for Hearing on Formal Petition

8-3(a) Manner of Giving Notice

In formal proceedings, the notice requirements of § 30-2220 are applicable to any person listed in the statute, and to persons who have filed a demand for notice. Nebraska Probate Code § 30-2427(a). Any person desiring notice of any order or filing pertaining to a decedent’s estate, in which that person has a financial or property interest, may file a demand for notice with the court at any time after the death of the decedent. Nebraska Probate Code § 30-2413. Therefore, notice is required to be mailed or delivered to any interested party, or the party’s attorney, if the party appeared by attorney or requested that notice be sent to the party’s attorney. In addition, notice must be published. Nebraska Probate Code § 30-2220(a).

Notice shall be given by mailing at least fourteen days before the time set for the hearing by certified, registered, or first-class mail to the person being notified, at the post office address given in any demand for notice, or to the person’s office or place of residence, if known. However, notice may also be given by delivering a copy to the person being notified personally at least fourteen days before the time set for the hearing. Nebraska Probate Code § 30-2220(a)(1).

Notice by publication is accomplished by publishing notice of hearing at least once a week, for three consecutive weeks, in a legal newspaper having general circulation in the county where the hearing is to be held, with the last publication taking place at least three days prior to the hearing. Nebraska Probate Code § 30-2220(a)(2).

The petitioner must mail the published notice and give proof thereof in accordance with the provisions of both Nebraska Revised Statutes § 25-520.01 and Nebraska Probate Code § 30-2220(c). Nebraska Probate Code § 30-2427(a).

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If the demand for notice form under Nebraska Probate Code § 30-2413 limits the demand to notice prescribed in § 30-2220(a)(1) only, and waives the publication prescribed by § 30-2220(a)(2), then no publication of notice will be required in response to the demand for notice.

If the demand for notice does not waive publication, the court can, for good cause shown, eliminate the publication requirement, pursuant to § 30-2220(b). Further, even if publication is not waived and the court fails to eliminate it for good cause, the validity of any order issued is not affected, and when the fourteen day notice was mailed or delivered, it is difficult to conceive liability for damages caused by an absence of publication. See Nebraska Probate Code § 30-2413 and Neb. Rev. Stat. § 25-520.01. However, the court may not change the method of time of giving notice for formal testacy proceedings. Nebraska Probate Code § 30-2222(3)(i).

8-3(b) Waiver of Notice

A person, including a guardian ad litem, conservator, or other fiduciary, may waive notice by a writing signed by the person or the person's attorney, and filed in the proceeding. Nebraska Probate Code § 30-2221.

Further, the requirement of notice arising from a demand under Nebraska Probate Code § 30-2413 may be waived, in writing, by the demandant. Nebraska Probate Code § 24-2413.

8-3(c) To Whom Notice is Given

Notice shall be given by the petitioner to the surviving spouse, children, and other heirs of the decedent; the devisees and personal representatives named in any will that is being, or has been, probated, or offered for informal or formal probate in the county, or that is known by the petitioner to have been probated, or offered for informal or formal probate elsewhere; any existing personal representative of the decedent; and any person who has filed a demand for notice under Nebraska Probate Code § 30-2413. Nebraska Probate Code § 30-2427(a).

Further, the clerk shall publish notice to all unknown persons, and to all known persons whose addresses are unknown, who have any interest in the matters being litigated, in accordance with Nebraska Probate Code § 30-2220(a)(2). Nebraska Probate Code § 30-2427(a).

Notice shall be given to an attorney if an interested person has appeared by an attorney or has so requested. Nebraska Probate Code § 30-2220(a).

A final order after a formal testacy proceeding is binding on all those given notice, even though less than all interested persons are notified. Nebraska Probate Code § 30-2406.

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8-4 Uncontested Matters (Nebraska Probate Code § 30-2429)

8-4(a) Hearing Not Required

If a petition in a testacy hearing is unopposed, the court may order probate or intestacy on the strength of the pleadings without a hearing if the conditions of Nebraska Probate Code § 30-2433 have been met, which are (1) that the decedent is dead, (2) that venue is proper, (3) that the time required for any notice must have expired, and (4) proof of notice must have been given as required by Neb. Rev. Stat. § 25-520.01. Nebraska Probate Code § 30-2429.

8-4(b) Hearing Required

Where proof of matters is necessary to support a probate order, the court may require a hearing. Where evidence of execution of the will is necessary, an affidavit or testimony of at least one attesting witness is sufficient. If such affidavit or testimony is unavailable, execution of the will may be proven by other evidence or affidavit. Nebraska Probate Code § 30-2429.

8-5 Contested Matters

8-5(a) Procedure

The party opposing the probate of a will for any reason shall state in the pleadings the objections to the probate of the will. Nebraska Probate Code § 30-2428.

Upon filing of an objection to probate, the county court must continue the hearing for at least fourteen days. Nebraska Probate Code § 30-2429.01(1). At any time prior to the continued hearing date, any party may transfer the proceeding to the district court in order to determine whether the decedent left a valid will by filing with the county court (1) a notice of transfer, (2) a docket fee in the amount of the filing fee in district court cases, and (3) a fee of required by Neb. Rev. Stat. § 33-125 for proceedings under the Nebraska Probate Code. Nebraska Probate Code § 30-2429.01(1).

Within ten days of the completion of the above requirements, the county clerk shall transmit to the clerk of the district court a certified transcript of the matter and the docket fee. Nebraska Probate Code § 30-2429.01(2). Filing the transcript in the district court gives the district court jurisdiction over the proceeding and the parties have thirty days to file additional objections in the district court. Nebraska Probate Code § 30-2429.01(3). An appeal from a will contest removed to District Court must be accompanied by a supersedeas bond. Nebraska Probate Code § 30-1601, In re Estate of Sehi, 17 Neb. App. 697, 772 N.W.2d 103 (2009).

The district court may order additional pleadings as necessary, and then shall determine whether the decedent left a valid will. Trial on the matter shall be by jury, unless all parties who have filed pleadings have waived a trial by jury. Nebraska Probate Code § 30-2429.01(4).

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The judgment of the district court on the contested matter is then certified to the county court, which shall have any proceedings necessary to carry the final decision and judgment into execution. Nebraska Probate Code § 30-2429.01(5).

8-5(b) Evidence of Execution of Will

If the will is not self-proved, testimony of at least one attesting witness is required if the witness is within the state and is competent and able to testify. Nebraska Probate Code § 30-2430(a). However, due execution of an attested or unattested will may be proved by other evidence. Nebraska Probate Code § 30-2430(a). See In re Estate of Flicker, 215 Neb. 495, 339 N.W.2d 914 (1983).

If the will is self-proved, as provided in Nebraska Probate Code § 30-2329, compliance with signature requirements for execution is conclusively presumed, and other requirements of execution are presumed (but subject to rebuttal) without the testimony of any witness. This presumption arises upon the filing of the will and the acknowledgement and affidavits annexed or attached thereto, unless there is proof of fraud or forgery affecting the acknowledgment or affidavit. Nebraska Probate Code § 30-2430(b), In re Estate of Flider, 213 Neb. 153, 328 N.W.2d 197 (1982). The proponent of a self-proved will need not call any attesting witness to make a prima facie case of testamentary capacity. In re Estate of Camin, 212 Neb. 490, 323 N.W.2d 827 (1982).

8-5(c) Burden of Proof in Contested Cases (Nebraska Probate Code § 30-2431)

The petitioner who seeks to establish intestacy has the burden of establishing prima facie proof of (1) death, (2) venue, and (3) heirship. The proponent of a will has the burden of establishing prima facie proof of (1) due execution, (2) death, (3) testamentary capacity, and (4) venue. Contestants of a will have the burden of establishing undue influence, fraud, duress, mistake, or revocation. Nebraska Probate Code § 30-2431.

The party with the initial burden of proof has the ultimate burden of persuasion as to the same matters. Nebraska Probate Code § 30-2431.

If a will is opposed by the petition for probate of a later will revoking the former, it shall be determined first whether the later will is entitled to probate. And if a will is opposed by a petition for declaration of intestacy, it shall be determined first whether the will is entitled to probate. Nebraska Probate Code § 30-2431.

8-6 More Than One Instrument Entitled to Probate (Nebraska Probate Code § 30-2434)

8-6(a) Offe of Two or More Instruments

Prior to a final order in a formal testacy proceeding, more than one instrument may be probated, if neither expressly revokes the other or contains provisions affecting total revocation by implication. Nebraska Probate Code § 30-2434.

238

If more than one instrument is probated, the order shall indicate which provisions, if any, control in regarding nomination of the personal representative, and the order may indicate how provisions of one instrument are affected by the other. Nebraska Probate Code § 30-2434.

8-6(b) Effect of Final Orde

After a final order in a testacy proceeding has been entered, no petition for probate of any other instrument of the decedent may be entertained, except as incident to a petition to vacate or modify a previous probate order. Nebraska Probate Code § 30-2434.

8-7 Foreign Wills and Order of Foreign Court

8-7(a) Final Order of Court of Diffe ent State (Nebraska Probate Code § 30-2432)

A final order of a court of a different state regarding testacy, validity, or construction of a will is determinative in Nebraska if the proceeding in the other state (1) involved notice to interested persons, (2) involved an opportunity for contest by all interested persons, and (3) if the order includes or is based on a finding that the decedent was domiciled at death in such other state. However, the final order of a court in another state is only determinative in Nebraska if the other state has an applicable provision of law similar in reciprocal effect to Nebraska Probate Code § 30-2432. Nebraska Probate Code § 30-2432, In re Estate of Hannan, 2 Neb. App. 636, 512 N.W.2d 339 (1994)(overruled on other grounds).

The reciprocity requirement for recognition of an order of a court of another state was added by the Nebraska Legislature and is not part of the Uniform Probate Code. Also, Nebraska has not included adoption of another state’s order in informal proceedings for probate or appointment of a personal representative in the probate code.

8-7(b) Will From Place Not Providing for Probate (Nebraska Probate Code § 30-2433)

A will from a place which does not provide for probate is admissible in Nebraska if the petition for probate is accompanied by a duly authenticated certificate from the will’s legal custodian, certifying that the copy provided is a true copy, and that the will is effective under the law in the other jurisdiction. Nebraska Probate Code § 30-2433.

8-8 Fact of Death in Doubt

8-8(a) Need for Diligent Search

If it appears that the death of the decedent is in doubt, either from the petition or upon written demand of any interested person, the alleged decedent should be served with notice of hearing by registered or certified mail at his or her last known address. Nebraska Probate Code § 30-2427(b).

239

In addition, the court shall direct the petitioner to report results of, or actions constituting, a "reasonably diligent" search for the alleged decedent. The search may include (1) advertising in suitable periodicals requesting information about the whereabouts of the alleged decedent, (2) notifying law enforcement and public welfare agencies in appropriate areas about the disappearance of the alleged decedent, or (3) by engaging the services of an investigator. Nebraska Probate Code § 30-2427(b).

8-8(b) Insufficient Evidence of Death of Decede

If the court finds the testator is dead and venue is proper, and after proper notice and proceedings, the court may enter a final order. However, if the court is not satisfied that the alleged decedent is dead, it shall dismiss the petition or may allow an appropriate amendment to the petition. Nebraska Probate Code § 30-2433. An amendment so allowed would convert the proceeding into one for the protection of the estate of a missing person and therefore a person under disability. See Comment to Uniform Probate Code § 3-409.

8-9 Order in Formal Proceedings

8-9(a) Nature of Order

The court shall enter an order formally probating a will, determining the decedent’s domicile at death and the heirs and state of testacy of the decedent, if (1) the time required for any notice has expired, (2) proof of notice has been filed, (3) any necessary hearing has been held, (4) the court finds the testator is dead, and (5) the court finds that venue is proper. Nebraska Probate Code § 30-2433.

Further, the court shall determine who is entitled to appointment as personal representative under § 30-2412, make a proper appointment and, if appropriate, terminate any prior appointment found to have been improper. Nebraska Probate Code § 30-2438(b); see also Nebraska Probate Code §§ 30-2412 (priority among persons seeking appointment as personal representative), 30-2454 (termination of appointment by removal), and 30-2444 (prior to receiving letters, personal representative must file bond and acceptance).

8-9(b) Effect of Orde

Subject to appeal, vacation, or modification, an order in a formal testacy proceeding is final as to all persons, with respect to all issues the court considered or might have considered, relevant to (1) whether the decedent left a valid will, and (2) the determination of heirs. Nebraska Probate Code § 30-2436.

Exceptions to the finality of the court’s order are listed in Section 8-9(c), below.

240

8-9(c) Vacation or Modification of Orde

A court shall entertain a petition for modification or vacation of its order and probate of another will of the decedent if it is shown that (1) the proponents of the other will were unaware of its existence at the time of the earlier proceeding or (2) were unaware of the earlier proceeding and were given no notice thereof, except by publication. Nebraska Probate Code § 30-2436(1).

Further, the determination of heirs of the decedent may be reconsidered upon petition if it is shown that (1) one or more persons were omitted from the determination and (2) the persons were unaware of their relationship to the decedent, were unaware of the decedent’s death, or were given no notice of the proceedings, except by publication. Nebraska Probate Code § 30-2436(2).

Pursuant to Nebraska Probate Code § 30-2436(3), such petition for vacation or modification must be filed prior to the earliest of:

(1) Where a personal representative has been appointed, at the time of entry of any order approving final distribution;

(2) Where the estate was closed by statement, six months after the filing of the closing statement;

(3) The time provided in Nebraska Probate Code § 30-2408(1), (2), or (3) for initiating an original proceeding for probate has expired; or

(4) Twelve months after the entry of the order sought to be vacated.

Keep in mind that the order originally rendered in the testacy proceeding may be modified or vacated, if appropriate under the circumstances, by the order of probate of the later-offered will or the order re-determining heirs. Nebraska Probate Code § 30-2436(4).

For good cause shown, an order may be modified or vacated within the time allowed for appeal, which is thirty days from the entry of the order. Nebraska Probate Code § 30-2437. See also Nebraska Probate Code § 30-1601 (appeal procedure in Nebraska Probate Code), referencing Neb. Rev. Stat. § 25-2729(1) (appeal procedure in district court).

8-10 Erroneous Finding of Death

8-10(a) Recovery of Assets

In the event of an erroneous finding of death, even if the required notice was given and investigation was made, the alleged decedent may recover estate assets in the hands of the personal representative, or from the heirs and distributees (if distribution has been made), to the extent that any recovery is equitable in view of all the circumstances. Nebraska Probate Code § 30-2436(5). If the estate or

241

estate proceeds cannot be identified through the normal process of tracing assets, liability of heirs and distributees depends upon the circumstances. See comment to Uniform Probate Code § 3-412. See also Nebraska Probate Code § 30-24,107 (improper distribution, liability of distributee).

An alleged decedent, erroneously determined to be dead, may also have remedies available for fraud or intentional wrongdoing. Nebraska Probate Code § 30-2436(5).

8-10(b) Protection of Bona Fide Purchasers and Lenders

Parties dealing with a personal representative or a distributee in good faith, for value, are protected by statute. See Nebraska Probate Code §§ 30-2475 (persons dealing with personal representative) and 30-24,108 (purchases from distributees protected).

8-11 Formal Proceedings Concerning Appointment of Personal Representative

8-11(a) Where Testacy Involved

Where testacy is or may be involved in a formal proceeding to appoint a personal representative, the requirements of Nebraska Probate Code § 30-2436 apply, which means the petition for appointment of a personal representative must comply with the requirements for a petition for formal testacy. Further, additional requirements of Nebraska Probate Code § 30-2438 apply. Nebraska Probate Code § 30-2438(a); see also section 8-2(a) and (b), above.

8-11(b) All Other Cases

In all other cases, a petition in formal proceedings concerning the appointment of a personal representative must contain the statements of Nebraska Probate Code § 30-2414(1) as in an informal probate proceeding. Also, the petition must describe any question to be resolved relating to priority or qualification of the personal representative. Nebraska Probate Code § 30-2438(a).

8-11(c) Effect of Pendency ofAppointment Proceedings

Initiation of formal proceedings concerning appointment of a personal representative results in a stay of any pending or subsequently filed in informal appointment proceedings. Nebraska Probate Code § 30-2438(a).

If a proceeding for formal appointment is commenced after the appointment of a personal representative, such personal representative, after notice, shall refrain from exercising any power of administration, except as necessary to preserve the estate, or unless the court orders otherwise. Nebraska Probate Code § 30-2438(a).

242

8-11(d) Notice Requirements

Notice must be given to all interested persons, including persons interested in the administration of the estate as successors, any previously appointed personal representative, and any person having or claiming a priority as to appointment. Nebraska Probate Code § 30-2438(b).

8-11(e) Determination by Court

After notice, the court shall (1) determine who is entitled to appointment under Nebraska Probate Code § 30-2412 (priority among persons seeking appointment as personal representative), (2) make a proper appointment, and (3) if appropriate, terminate any prior appointment found to have been improper, using the procedure in Nebraska Probate Code § 30-2454 (termination of appointment by removal). Nebraska Probate Code § 30-2438(b).

Keep in mind, it is not necessary to petition formally for the appointment of a personal representative as a part of a formal testacy proceeding. A formal order relating to appointment may be desired when there is a dispute concerning priority or qualification to serve but no dispute concerning testacy, therefore formal appointment may be followed by informal probate. See comment to Uniform Probate Code § 3-414.

8-12 Summary

8-12(a) Formal Proceedings in a Testate Estate Must be Commenced When:

(1) There are a series of testamentary instruments, the latest of which does not revoke the earlier (except codicils may be informally probated). Nebraska Probate Code § 30-2417.

(2) Supervised administration is desired. Nebraska Probate Code § 30-2440.

(3) The content of a lost, destroyed, or otherwise unavailable will must be established. Nebraska Probate Code § 30-2426(a).

(4) The personal representative named in the will is unsuitable and unwilling to step aside and appointment of another personal representative is desired. Nebraska Probate Code § 30-2412(e) and (f)(2).

(5) The person desired as personal representative does not have priority of appointment. Nebraska Probate Code § 30-2412(e).

(6) The estate is partially intestate, and an adjudication of heirship is desired, or a finding of partial intestacy is desired. Nebraska Probate Code §§ 30-2426(a)(1) and 30-2435.

243

(7) There is a desire to object to, stay, or preclude appointment or proposed appointment of a personal representative in an informal probate proceeding. Nebraska Probate Code § 30-2412(b).

(8) The will, or another will of the decedent, has been the subject of a previous probate order. Nebraska Probate Code § 30-2416(b) (see exception listed in subsection (d) of § 30-2416).

(9) A personal representative has been appointed in another county in Nebraska. Nebraska Probate Code § 30-2416(b) (see exception listed in subsection (d) of § 30-2416).

(10) A will contest is probable or construction of a will is necessary, and an early adjudication of the will is desired prior to construction. Nebraska Probate Code § 30-2436.

(11) An objection to a proposed personal representative in informal probate is probable, and an adjudicated appointment is desired. Nebraska Probate Code § 30-2438.

(12) The registrar refuses to approve an informal application. Nebraska Probate Code § 30-2418.

8-12(b) Formal Proceedings in an Intestate Estate Must be Commenced When:

(1) An adjudication of heirship is desired. Nebraska Probate Code § 30-2436.

(2) Supervised administration is desired. Nebraska Probate Code § 30-2440.

(3) The proposed personal representative does not have priority for appointment. Nebraska Probate Code § 30-2412(e).

(4) There is an unrevoked will which may relate to Nebraska property and which is not being presented for probate. Nebraska Probate Code §§ 30-2424 and 30-2414(4)(i).

(5) There is an objection to a proposed or previous appointment of Personal Representative in an informal appointment proceeding. Nebraska Probate Code §§ 30-2412(b) and 30-2425.

(6) A personal representative appointed in Nebraska has not resigned and the appointment has not been terminated. Nebraska Probate Code §§ 30-2421(b) and 30-2455.

244


245

FORMAL OPENING CHECKLIST

Decedent's Name File No.

./ ## Task Date Completed Asst/Lawyer Mon.

I.DRAFT PLEADINGS D 1. Petition. Form 200 or 210 Assistant D 2. Order for Hearing. Form 106 Assistant D 3. Notice. Form 202 or 212 Assistant D 4. Affidavit of Mai ling. Form 109 Assistant D 5. Renunciation of Right to be Personal Representative. Assistant

Form 130 D 6. Waiver of Bond. Form 135 Assistant D 7. Statement of Value and Income for Purposes of Bond. Assistant

Form 136 (may be part of Petition or omitted if no bond is required)

D 8. Order Form 201 or 211 Assistant D 9. Bond of Personal Representative. Form 302 Assistant D 10. Acceptance of Anoointment. Form 300 Assistant D 11. Letters of Personal Representative. Form 303 Assistant

II.BEFORE HEARING 0 1. Proof pleadings drafted by Assistant Lawyer D 2. Have Petitioner sign Petition Assistant D 3. File Petition, Form 200 or 210, anytime, § 30-2425 and Assistant

file original Will with Court D 4. Request from Court, time and place of hearing, Assistant

§ 30-2427, and have Order, Form 106, entered D 5. Place probate number on all office filed documents and Assistant

in the Master Information List D 6. File with Court Notice to be published. Form 200 or Assistant

210 & § 30-427 D 7. Deliver Notice to publisher and direct that the Notice Assistant

run once a week for three (3) weeks, last publication to be at least three (3) days before the hearing, § 30-2220

D 8. Review Master Information List for complete mailing Lawyer list

D 9. Prepare general letter, if desired, to accompany Notice Assistant to surviving spouse, children, or other heirs of Decedent, devisees, and Personal Representative named in the Will

246

Decedent's Name File No .

./ ## ' Task Date Completed Asst/Lawyer Mon.

D 10. Mail letter, if desired, and Notice, Form 202 or 212, Assistant within five (5) days after first publication of Notice, § 25-520.01

D 11. File Affidavit of Mailing Notice, Form 109, within ten Assistant (1 0) days after mailing such Notice, § 25-520.01

D 12. File Affidavit of Publishing Notice, provided by printer, Assistant or confirm filing if printer files Affidavit directly with Court

D 13. If possible contest to the Will, or testimony otherwise Assistant required, contact witnesses and arrange for appearance at hearing. Advise witness of hearing date

D 14. Remind witnesses five (5) days before hearing date Assistant

III.HEARING D 1. Be sure the following are at the hearing: Assistant

D a. Attorney D b. Personal Representative D c. Original Will, should be previously filed with

court D d. Witnesses D e. Statement of Value. Form 136

D 1. Renunciation of Right to be Personal Representative. Form 130

D 2. Waiver of Bond. Form 135 D 3. Statement of Value and Income for Purposes

of Bond. Form 136 (may be part of Petition or omitted if no bond is required)

D f. Order for Judge to execute. Form 201 or 211 D g. Bond, if necessary. Form 302 D h. Letters of Personal Representative. Form 303 D 1. Acceptance of Appointment. Form 300

IV .AFTER HEARING D 1. If necessary, prepare and mail letter notifying bonding Assistant

company of amount of bond immediately after hearing. Monitor premium renewal date

D 2. Send thank you letter to witnesses and see that witness Assistant fees and costs are paid

247

IN THE COUNTY COURT OF [ _ ____ ~ COUNTY, NEBRASKA

IN THE MATTER OF THE ESTATE OF No. ~[-----~] ~------~

, Deceased. DEMAND FOR NOTICE

Date of Death: ~---~

I. Pursuant to Nebraska Probate Code Section 30-2413, the undersigned hereby demands

mailed notice pursuant to Nebraska Probate Code Section 30-2220(a)(l) of any of the

following Orders or filings pertaining to the estate of the deceased:

[ ] Application for Informal Probate of Will

L J [

[

[

]

]

Application for Informal Appointment of Personal Representative

Inventory and any Supplementary Inventory

Copy of published Notice to Creditors mailed within five days of publication

Other (specify)

2. Demandant has the following financial or property interest in the estate of the deceased:

3. Demandant waives any publication of any notice pursuant to Nebraska Probate Code

Section 30-2220(a)(2) with respect to each of the items for which notice is above

demanded.

4. Notice should be mailed to the following-named Demandant, or Demandant's attorney, at

the address and telephone number set forth below:

Dated: ,__ ______ __.

Name: Demandant

248

CERTIFICATE OF MAILING

I certify that I have mailed a copy of this Demand for Notice, in accordance with the

requirements of Nebraska Probate Code Section 30-2413, to, the Personal Representative of the

deceased, at the above address on ***DOC Date TE***.

Signature

249

IN THE COUNTY COURT OF .._ ____ ______. COUNTY, NEBRASKA


~------~

Date of Death: l _____ I l

No. ~------~

W AIYER OF NOTICE

The undersigned hereby waives notice of all matters at every stage in these proceedings,

except (if none, so state):

Signature Typed Name Address Nature of Waiver

250

INTHECOUNTYCOURTOF~~~~~~-COUNTY,NEBRASKA


__________ __, Deceased. )

No. ------

ORDER SETTING DATE FOR HEARING AND FOR NOTICE

IT IS ORDERED that the hearing requested m the Petition for

be held on at

__________ in this Court, and that notice of such hearing be given to all

interested persons in the manner provided by law.

Dated: ---------~

BY THE COURT:

251

Affidavit of Mailing Noti

252

\amc of Law I 'i1m

ickphonc

I mail

SUBSCRIBED and sworn to before me on -------(SEAL)

NOTARY PUBLIC

253


IN THE MATTER OF THE ESTATE OF )

----------~

) )

Deceased. ) )

Date of Death: )

No. --- -

RENUNCIATION OF RIGHT TO APPOINTMENT AND NOMINATION OF


The undersigned, having a pnor or equal priority to appointment as Personal

Representative pursuant to Nebraska Probate Code Section 30-2412, hereby renounces that right

and nominates and requests the appointment of ____ ________ as Personal

Representative( s ),

Dated: ----------

Name:

254

IN THE COUNTY COURT OF VALLEY COUNTY, NEBRASKA


______ ___ _ __. Deceased. )

The undersigned being:

[ l All of the heirs of the Decedent;

No. - - --

W AIYER OF BOND

[_~] All of the devisees under the Will of the Decedent;

hereby waive the requirement of a bond for the Personal Representative in this estate.

255



__________ _, Deceased. )

STATE OF NEBRASKA ) )

COUNTY OF ) ss:

No. _ __ _


1. The undersigned being duly sworn on oath states that:

2. The undersigned's best estimate of the value of the personal estate of the

above-named Decedent is - ------ -3. The income expected during the next year from the personal and real estate owned

by the above-named Decedent is _______ _

4. The total of said value and income is --------

SUBSCRIBED and sworn to before me on the --------------

257

IN THE COUNTY COURT OF .._ ____ _, COUNTY, NEBRASKA

IN THE MATTER OF THE ESTATE OF ~--------'' Deceased.

No. ~-------'

PETITION FOR FORMAL PROBATE OF WILL, DETERMINATION OF HEIRS,

AND APPOINTMENT Date of Death: ._ ___ ____,

PETITIONER STATES:

1. [is/are] interested person(s) as defined by the Nebraska

Probate Code Section 30-2209(21 ).

2. Name of Decedent: ~-------'

Date of Death: ~-------'

Age at Date of Death: Years. ~-------'

Domicile at Date of Death: ~------~

3. Venue for this proceeding is proper in this county because:

] the Decedent was a domiciliary of this county at the date of death.

[ ] the Decedent was not domiciled in Nebraska, but property of Decedent was located



5. Petitioner/shave/has» not received a Demand for Notice and is unaware of any Demand

for Notice of any probate or appointment proceeding concerning the Decedent that may

have been filed in this state or elsewhere.

The Decedent's Will, dated [, with the following Codicils: ~---------~

6.

] if not presently in the possession of this Court,

accompanies this Petition and is hereby filed with this Court and offered for probate.

7. The Petitioner[s], to the best of Petitioncr['s] knowledge, believes the Will dated

[, with the following Codicils:

~---------~ ] to have been validly executed, and after the exercise of

reasonable diligence, Petitioner is unaware of any instrument revoking the Will, with

Codicil(s), and believes that said Will, with Codicil(s), constitutes Decedent's last Will.

8. Petitioner nominates [Name of Personal Representative and Priority].

[ ] Other individual(s) having prior or equal right to appointment are:

258

[ The nominated Personal Representative is neither indebted to the estate nor a


[ The nominated Personal Representative is either indebted to the estate or a creditor


9. ] A bond is required.

[ No bond is required because ~[ ------~]


children of any surviving spouse unless otherwise stated), heirs, devisees, and other

interested parties, and ages of those who are minors, and those who are incompetent so far

as known or ascertainable by reasonable diligence by Petitioner, are:

-1 ~~latio_nshjp Address_ Minor's Ag• . !11compete.11t~ J

11. Decedent had no change of marital status or the birth or adoption of any children after

execution of the Will; no child of the Decedent has been born since death; and no birth of a


WHEREFORE, Petitioner requests that the Court fix a time and place of hearing; that

notice be given to all interested persons as provided by law; that after notice and hearing the Court

order that said Will be admitted to formal probate; that the above nominee be formally appointed

Personal Representative [with/without] bond; that the heirs of Decedent be determined; that the

administration of the estate be unsupervised; and that Letters of Appointment be issued to said

Personal Representative.

Dated: ~------~


259

Name' 1f \lll•fll<:\

lim ID

Id\

260


261

IN THE COUNTY COURT OF COUNTY, NEBRASKA ~-----~


~-----~

No. ~-----~

ORDER ADMITTING WILL TO FORMAL PROBATE, DETERMlNATlON OF HEIRS

AND APPOINTMENT OF PERSONAL REPRESENTATIVE

Date of Death : ~---~

Upon consideration of the Petition for Formal Probate of Will and Appointment of

Personal Representative, the Court finds and determines that:

1. The required Notices have been given or waived and that venue is proper.

2. Decedent died on ._ _____ _.

3. Decedent was domiciled at death in ~-----~

4. Decedent died testate, leaving a Will dated ~---------~• with the

following Codicils: .__ ____ _ _ _ __ _..

5. Said Will[, with Codicil(s),] is valid, unrevoked, and the last Will of Decedent.

6. is entitled to appointment as Personal Representative(s).

7. The heirs of Decedent at the time of death are determined by the Court to be:

Name Relationship..__ Address -- ------- Minor's Ag!__

1----------------~-1

- - -- --------~-----·

IT IS THEREFORE ORDERED, ADJUDGED AND DECREED by the Court that:

A. The findings hereinabove made should be and they are hereby made a part of the Decree of

this Court as fully as if set out at length herein.

B. The last Will of the Decedent dated ._ ___ ____ __ _.. , and the following

Codicils: ] [is/are] hereby declared to be valid and

admitted to formal probate.

C. The heirs of the Decedent are those listed above.

262

D. ~---------~ is formally appointed as Personal Representative(s) of the

Decedent's estate in unsupervised administration, and Letters shall be issued to the


[ ] without bond.

[ ] with bond in the amount of [. _________ ______.

Dated: ~~~~~~~~

BY THE COURT:

BY THE COURT:

Prepared and submitted py:

Name of Atiomcy

Bar TD

Name nf Lf1w Firm

Address

Telephone

Fax

Email

263

Notice of Hearing on Probate and Appointment of Personal Representative

264


265

IN THE COUNTY COURT OF COUNTY, NEBRASKA .___ _ ____ __.

IN THE MATTER OF THE ESTATE OF , Deceased. .._ _____ __.

No . .___ ____ __ ~

PETITION FOR FORMAL

Date of Death: '------~

AD JUD I CATION OF INTESTACY, DETERMINATION OF HEIRS, AND

APPOINTMENT OF PERSONAL REPRESENTATIVE

PETITIONER STATES:

1. .._ _________ _. [is/are] interested person(s) as defined by the Nebraska

Probate Code Section 30-2209(21).

2. Name of Decedent: .._ _____ __.

Date of Death:

Age at Date of Death: ..__ _____ _. years

Domicile at Date of Death:


] the Decedent was a domiciliary of this county at the date of death.

] the Decedent was not domiciled in Nebraska, but property of Decedent was located



5. Petitioner(s) have/has not received a Demand for Notice and Petitioner is/Petitioners are

unaware of any Demand for Notice of any probate or appointment proceeding concerning

the Decedent that may have been filed in this state or elsewhere.

6. After the exercise of reasonable diligence, Petitioner is unaware of any unrevoked

testamentary instrument relating to property having a situs in this state.

7. Petitioner nominates [('Name of Personal Representative and Priority')]

Other individual(s) having prior or equal right to appointment are:

The nominated Personal Representative is neither indebted to the estate nor a


266

[ ] The nominated Personal Representative is either indebted to the estate or a creditor


8. [ ] A bond is required.

[ ] No bond is required because ~---------~


children of any surviving spouse unless otherwise stated), heirs and other interested

parties, and ages of those who are minors, and those who are incompetent so far as known

or ascertainable by reasonable diligence by Petitioner, are:

Name Relationship Address I Minor's Age

-t-IncompetOnt? I

I 0. No child of the Decedent has been born since the death of the Decedent, and no birth of a


WHEREFORE, Petitioner requests that the Court fix a time and place of hearing; that

notice be given to all interested persons as provided by law; that after notice and hearing the Court

make a judicial finding and enter an order formally declaring that Decedent left no Will and

determining the heirs of Decedent; that the above above nominee be formally appointed Personal

Representative [with/without] bond; that administration of the estate be unsupervised; and that

letters of appointment be issued to said Personal Representative.

Dated .._[ ------~].


Name of Allo1 ncy

fktr ID

Name ni I aw r: i1111

267

I ax

l'rnail

268


269

IN THE COUNTY COURT OF COUNTY, NEBRASKA ~------~

IN THE MATTER OF THE ESTA TE OF , Deceased.

~-------'

No. ~------~

ORDER OF INTESTACY, DETERMINATION OF HEIRS, AND

APPOINTMENT OF PERSONAL REPRESENTATIVE

Date of Death: ~----

Upon consideration of the Petition for Adjudication of Intestacy, Determination of Heirs,

and Appointment of Personal Representative, the Court finds and determines that:

1. The required Notices have been given or waived and that venue is proper.

2. Decedent died on ~------~

3. Decedent was domiciled at death in ~------~

4. Decedent died intestate.

5. [is/are] entitled to appointment as Personal

Representative( s).

6. The heirs of Decedent at the time of death are determined by the Court to be: (if minors,

state ages)

[ Name Relationshi Address Minor's Ag!]

------------------------------~----~~


A. The findings hereinabove made should be and they are hereby made a part of the Decree of

this Court as fully as if set out at length herein.

B. The heirs of the Decedent are those listed above.

c. [ __________ ~ is formally appointed as Personal Representative(s) of the

Decedent's estate in unsupervised administration, and Letters shall be issued to the


without bond.

with bond in the amount of '----------------' Dated:

~------~

BY THE COURT:

County Judge

270

Prepared and submitted by:

Name ol"Attorne)

Bar ID

Name of Law Finn

Address

Telephone

Fax

Email

271

Notice of Hearing on Administration

272

IN THE COUNTY COURT OF .____ _ ___ ____, COUNTY, NEBRASKA


~------~

Date of Death: ~----1 l

No. ~------~


The undersigned hereby accepts appointment as Personal Representative of this estate,

accepts the duties of said office, and submits personally to the jurisdiction of this Court in any

proceeding relating to the estate that may be instituted by any interested person, as defined by the

Nebraska Probate Code.

Dated: -~------~


Name of Attorney

Bar ID

Name of Law Firm

Address

Telephone

Fax

Email

273


IN THE MATTER OF THE ESTATE OF ) ) ) )

No. - ---


----------~ as principal, and

and as surety, are held ------------~ -------------~

and firmly bound unto the County Court of County, Nebraska, as obligees

for the benefit of the persons interested in this estate in the penal sum of $ ______ for the

payment of which, well and truly to be made, we do jointly and severally bind ourselves and our

lawful representatives.

This bond is conditioned upon the faithful discharge by the Personal Representative of all

duties according to law.

Dated: ---------

Signature of Principal





The above Bond is approved on ___________ _



274

IN THE COUNTY COURT OF COUNTY, NEBRASKA --------

IN THE MATTER OF THE ESTATE OF ) No. ____ _ ) )

__________ ___, Deceased. ) LETTERS OF


THE STATE OF NEBRASKA

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, on was appointed and qualified as


authority granted to a Personal Representative by law;

NOW, THEREFORE, these Letters are issued as evidence of such appointment and

qualifications and authority of ____________ to do and perform all acts

which may be authorized by law.

WITNESS, the signature of a Judge or the Registrar of this Court, and the seal of this Court

on ------------



275




CASE # PR 16 - ***MIL CRT CaseNum TE***

Date of Death -----·

NOTICE TO THE NEBRASKA DEPARTMENT OF HEAL TH AND

HUMAN SERVICES OF THE FILING OF A STAND ALONE PETITION

FOR DETERMINATION OF INHERITANCE TAX

TO: Nebraska Department of Health and Human Services Attn: Estate Recovery P.O. Box 95026 Lincoln, NE 68509

You are hereby notified that a Petition for Determination of Inheritance Tax in the above-captioned estate was filed in the County Court in the above-captioned case on ***Petition Filing Date DT*** when there has not been a filing of a formal probate proceeding, an informal probate proceeding, a formal determination of heirs in intestacy, an informal determination of heirs in intestacy, a special administration, an ancillary probate proceeding or any other proceeding under Chapter 30, Articles 24 or 25 of the Nebraska Statutes.

You are further notified that an Order has been entered by the ***MIL CRT County MC*** County Court giving the Co-Trustees through the Trustees' attorney authority to ask for and receive from the Nebraska Department of Health and Human Services the Medicaid waiver of lien and/or statement of Medicaid lien as required under Neb. Rev. Stat. §77-2018.02(6), a copy of which Order is being served on you along with this Notice.

Under the Nebraska Supreme Court Rules §6-1464 a social security number is not able to be filed and thus the decedent's social security number and that of the decedent's spouse, if any, are sent in a separate cover letter which is not being filed with this Court.

of the ***Trust Name TE*** dated ***Trust Date***:

By:

'-'ame of Attorney

Bar rD

0iamc or Law Finn

Address

276

Telephone

Fax

Email

Attorney for the Petitioner

277





Date of Death -----·

CERTIFICATE OF MAILING OF THE NOTICE TO THE NEBRASKA DEPARTMENT OF HEAL TH AND

HUMAN SERVICES PURSUANT TO §77-2018.02 (6)

I hereby certify that on ***Notice Mail Date***, a true and correct copy of:

1. The Order of the ***MIL CRT County MC*** County Court giving the Co-Trustees through the Co-Trustee's attorney authority to ask for and receive from the Nebraska Department of Health and Human Services the Medicaid waiver of lien and/or statement of Medicaid lien as required under Neb. Rev. Stat. §77-2018.02(6);

2. The Notice to the Nebraska Department of Health and Human Services pursuant to §77-2018.02(6) of the filing of a Petition for Determination of Inheritance Tax in the above-captioned estate

was mailed by regular United States first class mail to the Department addressed as follows:

Nebraska Department of Health and Human Services Attn : Estate Recovery P.O. Box 95026 Lincoln, NE 68509

In addition I hereby certify that a separate cover letter containing the decedent's Social Security number, and if available upon reasonable investigation, the decedent's spouse's Social Security number, was sent to the department at the above address and that the Social Security number or Social Security numbers were not included in the notice filed with the court under Nebraska Supreme Court rule §6-1464.

By:

:--Jame of Attorney

Rar Ill

'.\iamc of La1; cirm

,\ddress

l"t:lephone

Fax

278


279

Nebraska Department of Health and Human Services Estate Recovery -- Waiver of Restriction on Transfer Authorization for Disclosure of Protected Health Information

This authorization is submitted to find out If any Medicaid reimbursement is due. on behalf of the trustor, I freely ancl voluntarily give permission for DHHS to release this information about the trustor to me. I understand that I am not required to disclose the trustor's social security number, though disclosure may make It easier or quicker for information to be provided.

Please attach a copy of the legal authority to act for the truster, such as court-issued letters of appointment.

Trustor Name (last, First, Middle Initial)

Trustor's Dato of Birth Trustor's Date of Death

My Namo (Last, First, Middle Initial)

Address

City State Zip Code

Trustor's Social Security Numbor

The Information to be released pursuant to this authorization is limited to records or Information from or in the ossesslon or control of DHHS.

Olscloso to: (If to someone other than me)

Address:

City State Zip Code

This authorization (unless revoked earlier In writing) shall terminate on--------------------' (must have date or event fllled In)

Sy signing this authorization, I acknowledge that the information to be released may include material that is protected by federal or state law, including benefit or enrollment information. My signature authorizes release of this information. I also understand that this authorization may be revoked at any time by submitting a written request in accordance with the then current DHHS Notice of Privacy Practices, and it will be honored with the exception of information that has already been released.

Federal law requires us to inform you that DHHS will not condition payment or eligibility for benefits on whether this authorization is signed. Information used or disclosed pursuant to the authorization may be subject to disclosure by the recip ient and may no longer be protected by law.

lgnature of Authorlzod Roprosontatlve rlnted Namo ato

Authoriz:ed Representative: Oersonel RepresentallveOpeclal AdmlnlslratorOther (be specific) -----------

Please have your signature notarized if this form is being submitted by someone else for you.

Subscribed and sworn to before me on this ___ day of ______ ~ 20 __ .

Notary Public

280

THIS NOTICE DESCRIBES HOW MEDICAL INFORMATION ABOUT YOU MAY BE USED AND DISCLOSED AND HOW YOU MAY ACCESS THIS INFORMATION. PLEASE REVIEW IT CAREFULLY.

The Nebraska Department of Health and Human Services "DHHS" and those Agencies inclusive of health care facilities and medical assistance programs that are affiliated under the common control of the Health and Human Services Act, are required by federal law to maintain the privacy of Protected Health Information and to provide notice of its legal duties and privacy practices with respect to Protected Health Information. PRACTICES AND USES: DHHS may access, use and share medical information without your consent for purposes of: O Treatment: We may use your medical information to provide you with medical treatment or services. We may share your information with a nurse, medical professional or other personnel who are giving you treatment or services. For example, a doctor treating you for a broken leg may need to know if you have diabetes because diabetes may slow the hearing process. Different agencies within DHHS may share your medical information in order to coordinate the different things you need, or to support and maintain your continuum of care. o Payment: We may use and disclose your medical information so that the treatment and services you receive can be billed. For example, we may use your medical information from a surgery you received at the hospital so the hospital can be reimbursed. o Operations: We may use and disclose medical information about you for health care operations. For example, we may use medical information to review your treatment and services and to evaluate the performance of the staff. OTHER PERMITTED USES AND DISCLOSURES THAT MAY BE MADE WITHOUT CONSENT/AUTHORIZA TlON: o Required By Law: We may use or disclose your Protected Health Information to the extent that the use or disclosure is required by law. You will be notified, if required by law, of any such uses or disclosures. o Public Health: We may disclose your Protected Health Information for public health activities and purposes to a public health authority that is permitted by law to collect or receive the information. o Communicable Diseases: We may disclose your Protected Health Information, if authorized by law, to a person who may have been exposed to a communicable disease or may otherwise be at risk of contracting or spreading the disease or condition. n Health Oversight: We may disclose Protected Health Information to a health oversight agency for activities authorized by law, or other activities necessary for appropriate oversight of the health care system, government benefit programs, other government regulatory programs, and civil rights laws. D Abuse or Neglect: We may disclose your Protected Health Information to a public health authority that is authorized by law to receive reports of abuse or neglect. The disclosure will be made consistent with the requirements of applicable federal and state laws. n Legal Proceedings: We may disclose Protected Health Information in the course of any judicial or administrative proceeding in response to an order of a court or administrative tribunal (to the extent such disclosure is expressly authorized), and in certain conditions in response to a subpoena, discovery request, or other lawful process. o Law Enforcement: We may also disclose Protected Health Information, so long as applicable legal requirements are met, for law enforcement purposes. D Food and Drug Administration: We may disclose your Protected Health Information as required by the Food and Drug Administration. D Coroners, Funeral Directors, and Organ Donation: We may disclose Protected Health Information to a coroner or medical examiner for identification purposes, cause of death determinations, or for the coroner or medical examiner to perform other duties authorized by law. D Research: We may disclose your Protected Health Information to researchers when their research has been approved by an institutional review board to ensure the privacy of your Protected Health Information. o Criminal Activity: We may disclose your Protected Health Information if we believe that the use or disclosure is necessary to prevent or lessen a serious and imminent threat to the health or safety of a person or the public. D Specialized Government Functions: When the appropriate conditions apply, we may use or disclose Protected Health Information of individuals who are Armed Forces personnel for military, national security, and intelligence activities. Protected Health Information may be disclosed for the administration of public benefits purposes. D Workers' Compensation: We may disclose your Protected Health Information as authorized to comply with workers' compensation laws and other similar legally established programs. D Inmates: We may use or disclose your Protected Health Information if you are an inmate of a correctional facility in the course of providing care to you . O Required Uses and Disclosures: We must make disclosures when required by the Secretary of the U.S. Department of Health and Human Services to investigate or determine our compliance with the requirements of 45 CFR, Tille II, Section 164, et seq. USES AND DISCLOSURES REQUIRING AUTHORIZATION: There are certain uses and disclosures of Protected Health Information that require your authorization. Among them are: most uses and disclosures of psychotherapy notes; uses and disclosures of protected health information for marketing purposes; and disclosure of protected health information that constitutes a sale. Other uses and disclosures not described in this notice will be made only WITH authorization from you. You may revoke this authorization at any time as provided by 45 CFR 164.508(b)(5).

281

YOUR RIGHTS TO PRIVACY: o Right to Inspect and Copy. You have the right to inspect and copy your medical information. Usually, this includes medical and billing records but does not include psychotherapy notes. To inspect and copy your medical information, you must submit a written request at the Site of Service or to the DHHS HlPAA Privacy & Security Office. If you request a copy, we may charge a fee for the cost of copying, mailing, and other supplies associated with your request. We may deny your request to inspect and copy in certain circumstances. If you are denied access to medical information, you may request the denial be reviewed. O Right to Amend. If you feel that medical information about you is incorrect or incomplete, you may ask us to amend (correct) the infonnation. You have the right to request an amendment as long as the information is kept by or for DHHS. To request an Amendment, your request must be made in writing and submitted at the Site of Service, or to the DHHS HIPAA Privacy & Security Office. In addition you must provide a reason which supports your request. We may deny your request for an amendment if it is not in writing or does not include a reason to support the request. In addition, we may deny your request if you ask us to amend information that:

o was not created by us, unless the person or entity that created the information is no longer available to make the amendment; o is not part of the medical information kept by or for DHHS; D is not part of the information which you would be permitted to inspect and copy; or, n is accurate and complete.

o Right to an Accounting of Disclosures. You have the right to request a list of the disclosures we made of medical information about you. You must submit your request in writing at the Site of Service, or to the DHHS HIPM Privacy & Security Office. Your request must state a time period for the disclosures, which may not be longer than six (6) years and may not include dates before April 14, 2003. Your request should indicate in what form you want the list to be provided to you. o Right to Request Restrictions. You have the right to request a restriction or limitation on the medical information we use or disclose about you for treatment, payment, health care operations, and to someone who is involved in your care or the payment of your care, like a family member or friend. We are not required to agree to your request for restrictions unless it is for payment or health care operations and you use your own funds to pay, in fu 11, for a health care item or service. If we do agree, we will comply with your request unless the information is needed to provide· you emergency treatment. To request restrictions, you must make your request in writing at the Site of Service, or to the DHHS HIPM Privacy & Security Office. In your request you must tell us: (1) what information you want to limit, (2} whether you want to limit our use, disclosure, or both; and (3) to whom you want the limits to apply. o Right to Request Confidential Communications. You have the right to request that we communicate with you about medical matters in a certain way or at a certain location. To request confidential communications, you must make your request in writing at the Site of Service, or to the DHHS HIPM Privacy & Security Office. Your request must specify how or where you wish to be contacted. o Right to a Paper Copy of this Notice. You have a right to a paper copy of this notice. You may ask us to give you a copy of this notice at any time. Even if you have agreed to receive this notice electronically, you are still entitled to a paper copy of this notice. You may obtain a copy of this notice at our website, http://dhhs.ne.gov/Paqes/hipaa hp-1-p-notlce.aspx or by contacting us. o Opt out of fundralsing communications. If DHHS should conduct fundraising activities, you have a right to opt out of this communication. o Breach notification. In the event DHHS breaches your unsecured protected health information as defined by HIPM,

·you will receive notification of the breach. COMPLAINTS: If you believe your privacy rights have been violated, you may file a complaint with DHHS or with the Secretary of the U.S. Department of Health and Human Services. To file a complaint with DHHS, you may contact the DHHS HIPM Privacy & Security Office. To file a complaint with HHS, contact: Secretary, Health and Human Services, Office of Civil Rights, U.S. Department of Health and Human Services, 200 Independence Avenue, SW Room 509F, HHH Building Washington, D.C. 20201, 1-866-0CR-PRIV (627-7748), 1-866-778 4989-TTY. You will not be penalized for filing a complaint. CHANGES TO THE NOTICE OF INFORMATION PRACTICES: The State of Nebraska Department of Health and Human Services reserves the right to amend this Notice at any time in the future. Until such amendment is made, DHHS is required by law to abide by the terms of this Notice. DHHS will provide notice of any material change in revision of these policies either electronically or in paper format. CONTACT INFORMATION: This notice fulfills the "Notice" requirements of the Health Insurance Portability and Accountability Act of 1996 (HI PAA) Final Privacy Rule. If you have questions about any part of this Notice of Information Privacy practices or desire to have further information concerning information practices at DHHS please direct them to: HIPAA Privacy and Security Office, 301 Centennial Mall South 3rd Floor, Lincoln, NE 68509-5026, by phone at 402-471-8417, or by email to [email protected]. If you have question about your benefits call 800-383-4278.

Effective: 9/23/2013

282


283


Nebraska Department of Health and Human Services Medicaid and Long-Term Care Attn: Estate Recovery P.O. Box 95026 Lincoln, NE 68509-5026

RE: The Estate of

Dear Sir/Madam:

Pursuant to Nebraska Stat. § 77-2018.02, enclosed is a copy of the Notice to the Nebraska Department of Health and Human Services of the filing of a Petition for Determination of Inheritance Tax in the Estate of _outside of any proceeding under Chapter 30, Article 24 or 25 of the Nebraska Statutes. I am further providing a copy of the Order entered by the County Court granting the Trustee(s) through the undersigned as their attorney of record to ask for and receive from the Nebraska Department of Health and Human Services the Medicaid waiver of lien and/or statement of Medicaid lien as required under Neb. Rev. Stat. §77-2018.02(6).

The inheritance tax proceeding was filed in the County Court of ***MIL CRT County MC*** County, Nebraska as Case Number PR ***MIL CRT CaseNum TE***. The following information is supplied pursuant to the statute.

Social Security number for is ***MIL DECO SSN TE***. 's date of birth was . The date of death for was

~~~~~~~~~ ~~~~~~~-

A complete Nebraska Department of Health and Human Services Authorization of Disclosure Form per Chapter 42 Code of Federal Regulations is also attached with this mailing. ·

Yours very truly,

284

Division of Medicaid and Long-Term Care State of Nebraska Pete Ricketts. Governor ···- -·-· ... -- - ·~ ···-·" . ____ _______ .... _ -·-·------ - _________ .. ____ ._. ___ ._._


Re: ***Letter RE TE***

Dear ***Letter Salutation TE***:

This letter is the response of the Nebraska Department of Health and Human Services (DHHS) to your recent notice of the death of the above-named truster.

DHHS has determined that there is no Medicaid Estate Recovery claim due respecting the abovenamed truster. Accordingly, pursuant to Neb. Rev. Stat. §30-3880(c), DHHS hereby waives the statutory restriction at Neb. Rev. Stat. §30-3880(c) on transfer of trust property.

Thank you for your cooperation respecting this matter

Sincerely,

Jon Sterns, NE Medicaid Estate Recovery (402) 471-9126

Foreign Representatives and Ancillary Administration

Kara E. Brostrom

Baylor Enven Curtiss Grimm & Witt LLP Lincoln

March 23, 2018

UNO Thompson Center

Omaha, NE

562


Chapter 16-Foreign Representatives:

Ancillary Administration

1.

2.

Process

3.

Process • 60 days after death.

• Affidavit & Proof of Appointment.

• Affidavit must state: • (1) date of death ; • (2) no local administration,

application, or petition is pending in Nebraska; and

• (3) domiciliary foreign personal representative is entitled to payment/delivery.

4.

5.

-· \At.oo • .,. __ ,........ ............

_,..,.. ___ _ I .,._,..,.,_,..._,_.,.,

I ·••-••_ .... _, ___ .. __ ...,..,_....,.. ___ .... _~ ' ..... _ ........ -....... - .... ..__ .

...,.. ....... -_. __ .,,_ . ~------,......,#·---.. -..... __ ,. .. __ .. .._..._, .... ,._ ... ~· -~---·-·~""""""',,..__ .. . "" ..... ~ _ ..... ,......" ...... ----

"'-·-·-l-·~---. -.... ____ .... ,,_. _____ .. _._ ..... ,._ .... ,.__ .... ___ . _____ _

• f'oo_..,... ___ .. ___ ....., __ _ __ ..._.........._. ... "" ___ ...,.. ................ ,.__,.. .. _____ ,., .. ___ _

6.

7.

Procedure

If no local administration or application or petition is pending in Nebraska ...

· What: File authenticated copies of appointment & any official bond given.

· Where: With county court of any county where property belonging to the decedent is located.

8.

9.

10.

-o....--... ·~· ... __.. ...... __ ,........,.,_ ... ___ .... _ ..,._ .... ..._,, ... __

'""'"'"""-4~~-... -"'~"' ..... l ·• l•t ..... _ ... __.,. .. _....., __ ... , h .. ~-~·· .. -·-.. _ ... ~ ...................... -.. ...... ~---_,......._~ ... _ ...... _...._, ...... !: ...

11.

12.

"--.. ,_,... ·--·

13.

15.

16.

17.

19.

21 .

22.

23.

25.

Claims against Domiciliary Estat e

• Assets in Nebraska are subject to claims and allowances established against the domiciliary personal representatives- provides for the marshalling of assets where creditors present claims in both states. Neb. Rev. Stat. § 30-2497.

• Objective is for all creditors to receive equitable treatment and for the estate to be admnistered as a unit.

26.

27.

28.

563

Christina L. Ball

Christina L. Ball is a partner with Baylor Evnen Curtiss Grimit & Witt, LLP, in the firm’s Business & Commercial and Trusts & Estates practice groups. Ms. Ball graduated from Kansas State University with a Bachelors in 1994 and a Masters of Science degree in 1996 and Juris Doctor from Washburn University School of Law in 1999. Ms. Ball is a fellow in the American College of Trust and Estates Council and the Nebraska State Bar Foundation and belongs to many groups, both professional and charitable.

Andrew M. Loudon

Andrew M. Loudon is a partner with Baylor Evnen Curtiss Grimit & Witt, LLP, and works out of all three of the firm’s offices in Lincoln, Omaha and Syracuse, NE. He is a member of the Trusts & Estates practice group where he specializes exclusively in estate planning and estate administration. Mr. Loudon graduated from the University of Nebraska-Lincoln with a Political Science degree in 1995 and the Nebraska College of Law in 1998. He is active in numerous community organizations and consistently plays bogey golf.

Kara E. Brostrom

Kara E. Brostrom is an Associate Attorney in the Trust & Estates practice group at Baylor Evnen Curtiss Grimit & Witt, LLP. Ms. Brostrom graduated from the University of Nebraska-Lincoln in 2013 earning her B.A. with Highest Distinction and was awarded her Juris Doctor with High Distinction in 2016 from the UNL College of Law. During law school, she served as Reviewing Editor of the Nebraska Law Review. Ms. Brostrom has been active in various professional groups focusing on estate planning and administration of estates and trusts, and in several community organizations.

564


565

Chapter 16 - Foreign Representatives: Ancillary Administration

Table of Contents

16-1 Introduction ..............................................................................................................567

16-2 Powers of Foreign Personal Representatives in Nebraska ...................................56816-2(a) Definitions: § 30-2209, § 30-2501 .................................................. 56816-2(b) Affidavit Procedure: §§ 30-2502 to 30-2504 .................................. 56816-2(c) Proof of Authority Procedure: §§ 30-2505 to 30-2506 .................. 56916-2(d) Limitations to the Affidavit and the Proof of Authority Procedures: §§ 30-2507 ..................................... 57016-2(e) Full Ancillary Administration in Nebraska: § 30-2508 .................. 570

16-3 Jurisdiction Over Personal Representatives: § 30-2509 to 30-2511 ....................57116-3(a) In General ....................................................................................... 57116-3(b) Code Provisions Extending Jurisdiction Over a Foreign Personal

Representative ................................................................................. 57116-3(c) Procedural Details .......................................................................... 571

16-4 Judgments and Personal Representatives: § 30-2512 ...........................................57216-4(a) In General ....................................................................................... 57216-4(b) Uniform Probate Code Provisions .................................................. 572

16-5 Powers of Nebraska Personal Representatives in Other States ...........................572

16-6 Rights of Creditors ...................................................................................................57216-6(a) Claims Established Against the Domiciliary Estate ....................... 57216-6(b) Representing Local Creditors ......................................................... 57316-6(c) Jurisdiction of the Foreign Personal Representative ...................... 573

16-7 Distribution ...............................................................................................................574

AppendixAppendix A: Additional Statutes Applying to Multi-State Transactions ......... 575Appendix B: Affidavit of Foreign Personal Representative ............................. 577Appendix C: Proof of Authority of Domiciliary Foreign Personal Representative.......................................................................................................................... 579

566


567

Chapter 16 - Foreign Representatives: Ancillary Administration1

Article 25, Parts 1 to 4(§§ 30-2501 to 30-2512)

16-1 Introduction

American law would be less complicated if state boundaries ceased to exist. This is true for many matters covered by the rules in the Nebraska Probate Code. This observation is not to argue that the states should be abolished, but instead to point out the legal issues created by the fact that states exist, that persons move their domiciles, that creditors and survivors of a decedent are scattered, that assets belonging to a decedent are often found in several states and that Personal Representatives may be required to perform acts in more than one state.

The existing rules governing these “interstate” issues in administration and probate matters have been thus characterized: “confusing theories or ideas have led to confusing results which to a large extent have had their roots in historical background, interstate jealousy and exaggerated ideas of jurisdiction, or its absence.” Stumberg, Principles of Conflict of Law 400, n.6 (3rd ed. 1963).

The purposes of the Nebraska Probate Code - simplification and clarification of the law, carrying out the intent of the decedent, providing a speedy and efficient system of handling a decedent’s estate, facilitating use and enforcement of certain trusts - are promoted by the Probate Code’s answers to many interstate matters that arise when a person dies. See Neb. Rev. Stat. § 30-2202.

Not all of the Probate Code’s rules applicable to interstate matters are contained in Article 25. Scattered throughout the other articles of the code are important provisions addressing particular questions on “interstate” matters. For example, the provision regarding choice of law as to execution of will and therefore validity of a will appears in section 30-2331. It is a matter of convenience whether the rules in the code pertaining to interstate matters are collected in a single article or dispersed. Article 25 collects some matters relevant to interstate issues. Rules on other interstate matters are located elsewhere.

This Probate Manual is structured as the Nebraska Probate Code is structured, and this Chapter addresses the interstate rules collected in Article 25 of the Nebraska Probate Code. The primary discussion of the other rules pertaining to interstate matters in this Probate Manual may be found in the chapters addressing those other articles of the code. Only essential cross-references to those articles are made in this Chapter. A list of other sections in the Nebraska Probate Code concerning multiple state items not located in Article 25 is set out at the end of this Chapter.

1 Original materials were prepared in March, 1993 by William E. Mooney. Review and revisions were made in 2010 by Andrew M. Loudon, Christina L. Ball and Tiffany N. Lee. Review and revisions were made in 2017 by Andrew M. Loudon, Christina L. Ball, and Kara E. Brostrom. Credit for initial material preparation remains with William E. Mooney.

568

16-2 Powers of Foreign Personal Representatives in Nebraska

16-2(a) Definition

(a) Nebraska Probate Code § 30-2209(33) defines the term “personal representative” to include executor, administrator, successor personal representative, special administrator, and persons who perform substantially the same function under the law governing their status.

(b) Nebraska Probate Code § 30-2209(15) defines the term “foreign personal representative” as a personal representative of another jurisdiction.

(c) Nebraska Probate Code § 30-2209(14) defines the term “fiduciar ” to include a personal representative.

(d) Nebraska Probate Code § 30-2209(28) defines the term “nonresident decedent” as a decedent who was domiciled in another jurisdiction at the time of his or her death.

(e) Nebraska Probate Code § 30-2501(1) defines the term “local administration” as administration by a personal representative appointed in this state pursuant to appointment proceedings as described in Article 24; section 30-2501(2) defines the term “local personal representative” to include any personal representative appointed in this state pursuant to appointment proceedings as described in Article 24, and excludes foreign personal representatives who acquire the power of a local personal representative pursuant to section 30-2506.

The simplified and flexible procedure allowed by the Nebraska Probate Code is clearly illustrated by the Probate Code’s provisions for the personal representatives who have power as such under the law of another state, but who must perform acts in Nebraska. There is no requirement under the Nebraska Probate Code that the foreign personal representative be appointed local personal representative before he or she may perform acts in Nebraska with binding legal consequences. See Sections 2-2, 2-3, and 2-4 of Part 2 of this Chapter 11. On the other hand, the foreign personal representative may become a local personal representative and the administration will then become a local administration. In this case, the consequences are discussed in Section 2-5 of Part 2 of this Chapter 11.

16-2(b) Affidavit ocedure: §§ 30-2502 to 30-2504

The affidavit procedure is the simplest method provided by the Nebraska Probate Code for a foreign personal representative to gain possession of assets belonging to the estate of a nonresident decedent.

(a) The affidavit procedure may be used to collect debts, personal property, or instruments evidencing debts, obligations, stocks, or choses in action of the nonresident decedent.

569

(b) The affidavit procedure may be used only by the domiciliary foreign personal representative; the personal representative obtaining its initial authority from the state that was the decedent’s domicile on the date of death.

(c) The domiciliary foreign personal representative must take specified actions in order to utilize the affidavit procedure in Nebraska. As provided by section 30-2502, any time after the expiration of sixty days from the death of the nonresident decedent, any person indebted to the estate of the nonresident decedent or having possession or control of personal property, or of an instrument evidencing a debt, obligation, stock, or chose in action belonging to the estate of the nonresident decedent may pay the debt, deliver the personal property, or the instrument evidencing the debt, obligation, stock, or chose in action to the domiciliary foreign personal representative of the nonresident decedent upon being provided with proof of his or her appointment and an affidavit made by or on behalf of the representative stating the following:

(1) the date of the death of the nonresident decedent;

(2) that no local administration, or application or petition for such is pending in Nebraska; and

(3) that the domiciliary foreign personal representative is entitled to payment or delivery.

(d) Effect of Affidavit Procedure

(1) Payment or delivery made in good faith on the basis of the proof of authority and affidavit releases the debtor or person in possession of the personal property to the same extent as if payment or delivery had been made to a local personal representative. Nebraska Probate Code § 30-2503.

(2) Persons in control or possession may not pay or deliver property to the foreign personal representative if a resident creditor of the decedent has notified the debtor or possessor that the debt should not be paid, or the property surrendered, to the foreign personal representative. Nebraska Probate Code § 30-2504. A resident creditor of the decedent is a person domiciled or doing business in Nebraska who is or could be a claimant against the nonresident decedent’s estate. Nebraska Probate Code § 30-2501(3). Person is defined broadly to include all legal entities. Nebraska Probate Code § 30-2209(32).

16-2(c) Proof of Authority Procedure: §§ 30-2505 and 30-2506

The proof of authority procedure is the second way a domiciliary foreign personal representative may gain authority to act as to assets of the nonresident decedent in Nebraska.

570

(a) Procedure. If no local administration or application or petition therefor is pending in Nebraska, then a domiciliary foreign personal representative may file with the county court of any county where property belonging to the decedent is located, authenticated copies of his or her appointment and of any official bond he or she has given. Nebraska Probate Code § 30-2505.

(b) Significance of the Proof of Authority. Upon complying with the proof of authority requirements set forth in section 30-2505, the domiciliary foreign personal representative may exercise as to assets in Nebraska all powers of a local personal representative and may maintain actions and proceedings in Nebraska subject to any conditions imposed upon nonresident parties generally. Nebraska Probate Code § 30-2506.

(c) Real Estate. If real estate is involved one should consider, in addition to the statutory requirements, filing an authenticated copy of the will and proof of final determination and discharge of all federal and state death taxes which may be liens against the real estate. See Nebraska Title Examination Standards 90 and 95. See also Neb. Rev. Stat. § 77-2037.

16-2(d) Limitations to the Affidavit and the oof of Authority Procedure: § 30-2507

(a) Neither the affidavit procedure nor the proof of authority procedure may be used if there is a local administration or an application or petition therefor pending in Nebraska.

(b) An application for local administration terminates the power of a foreign personal representative received by filing their proof of authority, except to the extent that a Nebraska court allows the foreign personal representative to exercise limited powers to preserve the estate.

(c) Persons who deal with the foreign personal representative are protected to the extent they have relied on the powers of the foreign personal representative prior to receiving actual notice of a pending local administration.

(d) Any local personal representative subsequently appointed may be substituted in any Nebraska action or proceeding, and is subject to all the duties and obligations accrued by virtue of the powers of the foreign personal representative.

16-2(e) Full Ancillary Administration in Nebraska: § 30-2508

The third alternative of a domiciliary foreign representative to exercise authority in Nebraska is to use the procedures for full ancillary administration set forth in Article 24 of the Nebraska Probate Code.

(a) In general, foreign personal representatives would be subject to the provisions of Article 24 regarding the probate of a will; the appointment, removal, supervision, and discharge of the personal representative; the status, duties, powers, and liabilities of personal representatives; and the rights of claimants, purchasers, distributors, and others. The estate administration becomes a local administration. Some Nebraska counties require the foreign personal representative to file an appointment of designated registered agent upon whom process may be served.

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(b) The rules applicable to a local administration are discussed more fully elsewhere in this Probate Manual. Note the domiciliary foreign personal representative has a superior right to be appointed, or to have their nominees appointed, as local personal representatives except where the decedent’s will nominates different persons to be the personal representative in Nebraska and in the domiciliary state. Nebraska Probate Code § 30-2412(g).

16-3 Jurisdiction Over Personal Representatives: §§ 30-2509 to 30-2511

16-3(a) In General

Local personal representatives have long been subject to the jurisdiction of the appointment state, and this remains true under the Nebraska Probate Code. See Nebraska Probate Code § 30-2445. Pursuant to section 30-2445, any foreign personal representative who accepts appointment as local personal representative would be subject to the jurisdiction of the Nebraska court in any proceeding relating to the estate.

16-3(b) Code Provisions Extending Jurisdiction Over a Foreign Personal Representative

(a) Nebraska Probate Code § 30-2509 allows Nebraska to exercise personal jurisdiction over foreign personal representatives who are not appointed local personal representatives.

(b) If the foreign personal representative has used the affidavit procedure to receive payment of money or receive the delivery of property, Nebraska may exercise jurisdiction over the foreign personal representatives to the extent of the value of the property or the money received.

(c) If the foreign personal representative has used the proof of authority procedure, they are subject to Nebraska jurisdiction for any proceeding relating to the estate.

(d) In addition, foreign personal representatives are subject to Nebraska jurisdiction if they perform acts as personal representatives in Nebraska that would be sufficient to give Nebraska jurisdiction over them as individuals. Neb. Rev. Stat. §§ 25-535 to 25-541.

(e) Finally, Nebraska Probate Code § 30-2510 allows Nebraska to exercise jurisdiction over the foreign personal representative to the same extent as Nebraska would have jurisdiction over the decedent immediately prior to his or her death.

16-3(c) Procedural Details

(a) Nebraska Probate Code § 30-2511 provides that service of process may be made upon the foreign personal representative who has submitted himself or herself to the jurisdiction of the court under section 30-2509 or is subject to jurisdiction under section 30-2510 in the manner provided for service of a summons in a civil action.

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16-4 Judgment and Personal Representatives: §§ 30-2512

16-4(a) In General

Theoretically, because foreign personal representatives and local personal representatives were thought of as separate legal entities (often even if they were the same human being or corporation) because they received their authority from different states, judgments in favor of one or against one (either foreign or local representatives) were not binding on the other.

16-4(b) Uniform Probate Code Provisions

Nebraska Probate Code § 30-2512 provides that a judgment for, or against, any personal representative is binding on the Nebraska local personal representative as if he were a party to the adjudication, if the state rendering the judgment has a law that extends a reciprocal effect to a Nebraska adjudication. This reciprocal effect would be present for all states that enact a probate code with a provision similar to Nebraska Probate Code § 30-2512.

16-5 Powers of Nebraska Personal Representatives in Other States

Personal representatives appointed by a Nebraska court have only such powers in another jurisdiction as the law of that jurisdiction may accord them. The restriction on the power of Nebraska personal representatives arises from inherent limits on the power of Nebraska to legislate regarding property in another jurisdiction.

Whether personal representatives appointed in Nebraska as the state of domicile of the decedent can collect assets in another state or whether ancillary administration with appointment of personal representatives by the court of the other state is necessary depends on the law of that state. If the Uniform Probate Code or similar provisions are in effect in that state, the Nebraska personal representative may collect assets by utilizing similar procedures as discussed above. In a state not having such provisions, a full ancillary administration may be necessary.

16-6 Rights of Creditors

16-6(a) Claims Established Against the Domiciliary Estate

The Nebraska Probate Code specifically provides that assets in Nebraska are subject to claims and allowances established against the domiciliary personal representatives and provides for the marshalling of assets where creditors have presented claims in both states. Nebraska Probate Code § 30-2497. The objective is for all creditors to receive equitable treatment and for the estate to be administered as a unit regardless of the states in which its various assets are located.

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16-6(b) Representing Local Creditors

(a) Nebraska creditors should be advised to immediately file claims in the domiciliary jurisdiction if administration has been commenced there. Creditors cannot rely on local assets for payment because claims barred by the nonclaim statute of the decedent’s domicile before the first publication for claims in Nebraska are barred here in Nebraska as well. Nebraska Probate Code § 30-2485(1).

(b) Foreign personal representatives subject themselves to the jurisdiction of Nebraska courts either by using the affidavit procedure to collect assets or by filing authenticated copies of his or her appointment pursuant to Nebraska Probate Code § 30-2509. An unpaid creditor would thus have resort to the procedure under Nebraska Probate Code § 30-2489 to compel payment by the foreign personal representative and could initiate this procedure in the Nebraska courts.

16-6(c) Jurisdiction of the Foreign Personal Representative

(a) Jurisdiction over ancillary and foreign representatives coming into Nebraska from other states is obtained by the Nebraska courts in the following ways:

(1) Acceptance of appointment under Nebraska Probate Code § 30-2445;

(2) Filing of documents by the foreign personal representative under Nebraska Probate Code § 30-2505 (see also Nebraska Probate Code § 30-2509);

(3) Collecting money or property under Nebraska Probate Code § 30-2502 (see also Nebraska Probate Code § 30-2509);

(4) An act within the State of Nebraska by the foreign personal representative under Nebraska Probate Code § 30-2509; and

(5) The foreign personal representative is subject to jurisdiction in the same manner as was the decedent immediately prior to decedent’s death, under Nebraska Probate Code § 30-2510.

(b) Service of process may be made upon foreign personal representative in the manner specified by Nebraska Probate Code § 30-2511, which shall be in the manner provided for service of a summons in a civil action. The foreign personal representative’s right to defend an action is defined in Nebraska Probate Code § 30-2476(22), and he or she has the same standing to sue and be sued as the decedent had immediately prior to the decedent’s death, pursuant to Nebraska Probate Code § 30-2464(c) if he or she has complied with Nebraska Probate Code § 30-2505. See Nebraska Probate Code § 30-2506.

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16-7 Distribution

In general, the local personal representative is directed to distribute assets of a nonresident decedent’s estate to the domiciliary personal representative for the benefit of the successors of the decedent. Nebraska Probate Code § 30-2498.

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Appendix AAdditional Statutes Applying to Multi-State Transactions

The following are selections of the Nebraska Probate Code containing provisions applicable to multi-state issues:

30-2209(15) Definition of foreign personal representative30-2209(28) Definition of nonresident decedent30-2210 Territorial application of the Nebraska Probate Code30-2313(b) Elective share in estate of non-domiciliary30-2322 Homestead allowance 30-2323 Exempt property 30-2324 Family allowance 30-2331 Choice of law as to will execution30-2340 Choice of law as to meaning and effect of wills30-2353 Effect of divorce, annulment, and decree of separation30-2408 Limitation on probate of will previously probated at domicile30-2410 Venue for non-domiciliary estates30-2411 Conflicting claims regarding domicile30-2412(g) Priority of appointment of domiciliary personal representative30-2414 Contents of application, non-domiciliary decedent30-2416(d) Informal probate of foreign will30-2420(a) Delay in appointing personal representative of nonresident decedent30-2421(b) Informal appointment; proof required; non-domiciliary decedent30-2426 Formal proceedings; petition contents; copy of will probated

elsewhere30-2432 Will construction; effect of final order in another jurisdiction30-2433 Foreign testacy proceedings; order; foreign will30-2445 Jurisdiction over personal representative who accepts appointment30-2454 Domiciliary personal representative power to remove other

representative 30-2464(c) Power of personal representative to sue in other states30-2476 Power of personal representative over property in another state30-2485 Limitation of claims barred in another state30-2497 Administration in more than one state; duty of personal representative30-2498 Final distribution to domiciliary representative30-24,114 Apportionment of estate taxes (See also § 77-2108)30-2605 Guardianship, movement of guardian and minor ward30-2606 and 30-2617(c) Appointment of testamentary guardians for minor and incapacitated

person by other states recognized30-2609 and 30-2618 Venue for appointing a guardian of nonresident minor or incapacitated

person

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30-2612, 30-2621, 30-2642 Jurisdiction over guardians and conservators who accept appointment 30-2615 and 30-2629 Venue and jurisdiction for proceedings over guardians subsequent to

appointment30-2632 Venue for protective proceedings when ward is a nonresident30-2639 Priorities in appointing a conservator30-2641(2) Jurisdiction over surety of a conservator’s bond30-2653(c)(1), 30-2653(c)(1), 30-2653(c)(24) Power of a conservator regarding out-of-state property and actions30-2660 Payment of debt of delivery of property to foreign conservator30-2661 Power of domiciliary foreign conservator in Nebraska 77-2037 Inheritance tax; lien; expiration

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Appendix BAffidavit of F eign Personal Representative

State of _______________ )

)ss County of _____________ )

I, , residing at , upon being first duly sworn do

hereby depose or affirm and state:

1. As shown in the Letters Testamentary issued by the ____________ Court of

____________ County, ____________, attached to this affidavit, I am the Personal

Representative of the Estate of ____________, who passed away on ____________.

2. As shown in the copy of the Decedent’s death certificate attached to this affidavit,

sixty days have elapsed since the death of the non-resident Decedent.

3. That at the time of death the domicile and legal residence of the Decedent was at

_____________.

4. No application or petition for the appointment of a personal representative is

pending or has been granted in the State of Nebraska.

5. Affiant is entitled to payment and delivery of all property held by others in the

sole name of the Decedent pursuant to Nebraska Probate Code § 30-2502 and Affiant’s

entitlement is based upon Affiant’s status as domiciliary foreign personal representative.

6. This affidavit is made for the purpose of having securities, bonds, funds, and

monies transferred.

7. Pursuant to Nebraska Probate Code § 30-2503, payment or delivery made in good

faith on the basis of the proof of authority and affidavit releases the debtor or person having

possession of the personal property to the same extent as if payment or delivery had been made

to a local personal representative.

8. The undersigned swears or affirms all statements in this affidavit are true and

material and further acknowledges that any false statement may subject the undersigned to

penalties relating to perjury under section 28-915 of the Nebraska Revised Statutes.

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____________________, Affiant

___________________________

___________________________

___________________________

Subscribed and sworn to me before this ___ day of ____________, 20__, by

____________ who is either personally known to me or identified by me through satisfactory

evidence as required by law.

___________________________ Notary Public

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Appendix C

IN THE COUNTY COURT OF ____________ COUNTY, NEBRASKA

IN THE MATTER OF THE ESTATE OF ____________________, Deceased

) ) ) ) )

Case No. PR __ - _____

PROOF OF AUTHORITY OF DOMICILIARY FOREIGN PERSONAL

REPRESENTATIVE

1. ____________ died on ____________ while a resident of ____________ County,

____________.

2. Said Decedent owned property in ____________ County, Nebraska.

3. On ____________, the undersigned was appointed Personal Representative of

Decedent’s estate in ____________ County, ____________, [optional: and gave bond in the

amount of $____________ as a condition of acting as Personal Representative]. Authenticated

copies of the appointment [optional: and bond] is/are attached hereto.

4. There is no administration, or application or petition therefor, pending in

Nebraska for administration of Decedent’s estate.

5. This Proof of Authority is filed pursuant to Nebraska Probate Code § 30-2505 to

enable the undersigned to exercise the powers of a local Personal Representative in Nebraska and

to maintain action and proceedings in Nebraska subject to any condition imposed upon

nonresident parties generally, all as provided in Nebraska Probate Code § 30-2506.

Dated: _____________________

______________________________ Domiciliary Foreign Personal Representative ______________________________ ______________________________ ______________________________

Name, Bar Id. # Firm Address City, State Telephone # Email

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Personal Representatives Appointment, Control, and

Termination of Authority, Duties and Power

Matthew D. Baack

Skalka & Baack Law Firm Hastings

March 23, 2018

UNO Thompson Center

Omaha, NE

286


287

Matthew D. Baack

Matt is an attorney with Skalka & Baack Law Firm, LLC, in Hastings Nebraska. Skalka & Baack Law Firm was founded in 2013, by Matt Baack and Amy Skalka. Matt’s practice is primarily focused on estate planning, real estate, business transactions, and estate and trust administration. Matt has had the opportunity to speak a various seminars in the areas of estate planning, estate and trust administration and real estate.

Matt attended the University of Nebraska – Lincoln for his undergraduate degree where he obtained his Bachelor’s Degree in Business Administration, while majoring in finance. He then continued his education at the University of Nebraska College of Law – Lincoln where he obtained my Juris Doctor in 2007.

Matt is also very involved with the local community. • United Way of South Central Nebraska

- Attorney Professional Committee (2010,2011)- Campaign Chair (2013-2014 Campaign Year)- Board Member (2014 – Present)

• Hastings Kiwanis (2008 – 2017)• Hastings Chamber Ambassador (2010 – 2017)• Hastings Literacy Program

- Board (2009 – 2014)- Board President (2012, 2013)

• Stars Come Out – Mary Lanning Foundation (2013)• Hawthorne Elementary School PTO (2016 – Present)• Board of Public Works (2017)• Nebraska State Bar Association

- Member (2008 – Present)- Chair, Real Estate, Probate and Trust Section (2014)

Outside of work, Matt enjoys spending time with his wife, Heather, and three children, Bennett, Griffin and Hadley – who occupy most of his free time. Matt also enjoys attending Husker sporting events, reading, playing basketball, golf and most other competitive sports.

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Chapter 9 - Personal Representatives and Special Administrators: Appointment, Duties and Powers, and Termination

Table of Contents

9-1 Personal Representatives .........................................................................................2919-1(a) Bond ............................................................................................... 291

9-1(a)(1) Demand for Bond .......................................................2929-1(a)(2) Amount of Bond ........................................................2939-1(a)(3) Terms and Conditions of Bonds .................................293

9-1(b) Duties and Powers .......................................................................... 2949-1(b)(1) Source and Duration ..................................................2949-1(b)(2) Action Prior to Appointment ......................................2959-1(b)(3) Authority to Act .........................................................2969-1(b)(4) Duties .........................................................................2979-1(b)(5) Powers ........................................................................3019-1(b)(6) Restraint of Powers ....................................................3099-1(b)(7) Conflicts of Interest ....................................................3099-1(b)(8) Liability of Personal Representative ..........................3109-1(b)(9) 3rd Parties ..................................................................312

9-1(c) Termination of Authority ................................................................ 3139-1(c)(1) Death or Disability .....................................................3139-1(c)(2) Voluntary ....................................................................3149-1(c)(3) For Cause ...................................................................3149-1(c)(4) Change of Testacy Status ...........................................315

9-2 Special Administrators ............................................................................................3169-2(a) Appointment ................................................................................... 3169-2(b) Who May Be Appointed ................................................................. 3179-2(c) Powers and Duties .......................................................................... 3179-2(d) Termination of Appointment .......................................................... 318

Appendix9-1 Bond of Personal Representative ............................................................... 3199-2 Acceptance of Appointment ....................................................................... 3209-3 Waiver of Bond .......................................................................................... 3219-4 Demand for Bond ...................................................................................... 3229-5 Statement of Value and Income for Purposes of Bond .............................. 3239-6 Letters of Personal Representative ............................................................ 3249-7 Deed of Distribution by Personal Representative's Deed .......................... 325

290

9-8 Assignment ................................................................................................ 3269-9 Inventory .................................................................................................... 3279-10 Wavier of Personal Representative Fees .................................................. 3389-11 Consent to Sale by Personal Representative ............................................ 3399-12 Petition for Authority to Sell Real Property ............................................ 3409-13 Order Authorizing Sale of Real Property ................................................ 3419-14 Application for Appointment of Special Administrator

in Informal Proceedings ........................................................................... 3439-15 Registrar’s Appointment of Special Administrator

in Informal Proceedings ........................................................................... 3459-16 Petition for Appointment of Special Administrator

in Formal Proceedings ............................................................................. 3479-17 Notice ....................................................................................................... 3499-18 Order Appointing Special Administrator in Formal Proceedings ............ 3519-19 Letters of Special Administrator .............................................................. 352

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Chapter 9 - Personal Representatives and Special Administrators: Appointment, Duties and Powers, and Termination1

9-1 Personal Representatives

The Personal Representative must be appointed and qualify before letters are issued. Neb. Rev. Stat. §30-2403. A Personal Representative shall qualify by:

(1) filing with the appointing court any required bond, see Appendix 9-1, Form 302 (Bond of Personal Representative); and

(2) filing a statement of acceptance of the duties of the office. Neb. Rev. Stat. §30-2444. See also Appendix 9-2, Form 300 (Acceptance of Appointment).

When a Personal Representative has been informally or formally appointed and fails to qualify within 60 days of appointment, the court may set aside the appointment unless something of record excuses the delay. Neb. Sup. Ct. R. 6-1446. Therefore, a Personal Representative would fail to qualify if there was no acceptance filed or, if a bond was required, and there was no bond on file.

By accepting appointment, a Personal Representative submits personally to the jurisdiction of the court in any proceeding relating to the estate that may be instituted by any interested person. Neb. Rev. Stat. §30-2445.

After appointment and qualification, a successor Personal Representative may be substituted in all actions and proceedings to which the former Personal Representative was a party. Neb. Rev. Stat. §30-2456. No notice, process or claim which was given or served upon the former Personal Representative need be given to or served upon the successor to preserve any position or right the person giving the notice or filing the claim may thereby have obtained or preserved regarding the former Personal Representative. Neb. Rev. Stat. §30-2456.

9-1(a) Bond

Pursuant to Neb. Rev. Stat. §30-2446, A bond shall be required of the Personal Representative unless:

(1) the will expressly waives the bond, expressly requests that there be no bond, or waives the requirement of a surety thereon other than the personal representative; SAMPLE: No Personal Representative is required to furnish any bond for the faithful performance of the Personal Representative’s duties, unless required by a court of competent jurisdiction and only if the court finds that a bond is needed to protect the interests of the beneficiaries. No surety is required on any bond

1 The author acknowledges with appreciation the prior author of this chapter, David H. Fisher; Dunmire, Fisher, Hastings & Pauley; Hastings.

292

required by any law or rule of court, unless the court specifies that a surety is necessary.

(2) all of the heirs, if no will has been probated, or all of the devisees under a will which does not provide for relieving the personal representative of bond, file with the court a written waiver of the bond requirement, see Appendix 9-3, Form 135 (Waiver of Bond);

(3) the personal representative is a national banking association, a holder of a banking permit under the laws of this state, or a trust company holding a certificate to engage in trust business from the Department of Banking and Finance; or

(4) the petition for formal or informal appointment alleges that the probable value of the entire estate will permit summary procedures under section 30-24,127. However, if it later appears from the inventory and appraisal that the value of the estate will not permit such procedures, then the Personal Representative shall promptly file a bond unless one is not required for some other reason. Neb. Rev. Stat. §30-2446(3).

Moreover, the court may waive, in either formal or informal proceeding, the requirement of a bond. Neb. Rev. Stat. §30-2447(b).

9-1(a)(1) Demand for Bond

Upon petition of any interested person, and upon reasonable proof that the interest of the petitioning person is in danger of being lost because of the administration of the estate, the court may require a bond in such amount as the court may direct in order to protect the interest of the petitioner or of the petitioner and others. An heir or devisee who initially waived bond may petition for bond. Neb. Rev. Stat. §30-2446(2), see also Appendix 9-4, Form 301b (Demand for Bond). DEFINITION: Interested person includes heirs, devisees, children, spouses, creditors, beneficiaries, and any others having a property right in or claim against a trust estate or the estate of the decedent, ward, or protected person which may be affected by the proceeding. It also includes persons having a priority for appointment as personal representative, and other fiduciaries representing interested persons. Neb. Rev. Stat. §30-2209(21)

Any person having an interest in an estate or a claim against an estate more than $1,000 may make a demand that the Personal Representative post bond. The demand must be in writing and must be filed with the registrar. If appointment and qualification have occurred, a copy of the demand must be mailed to the Personal Representative. After receipt of notice and until the filing of the bond, or cessation of the requirement of the bond, the Personal Representative shall not exercise any power or authority except as necessary to preserve the estate. Neb. Rev. Stat. §30-2448.

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The requirement of a bond ceases if the person demanding the bond ceases to be an interested party or the bond is excused as provided in Neb. Rev. Stat. §§30-2446 or 30- 2447. Neb. Rev. Stat. §30-2448.

9-1(a)(2) Amount of Bond

If a bond is required and the provisions of the will or court order do not specify the amount, unless the Personal Representative states the amount in the application, the Personal Representative shall file a statement under oath with the registrar indicating his or her best estimate of the value of the personal estate of the decedent and of the income expected from the personal and real estate during the next year, and shall execute and file a bond with the registrar in an amount not less than the estimate. Neb. Rev. Stat. §30-2447(a); see Appendix 9-5, Form 135 (Statement of Value and Income for Purposes of Bond).

The registrar shall ascertain that the bond is duly executed by a corporate surety, or with such individual sureties as the court shall direct or approve. Neb. Rev. Stat. §30-2447(a).

If there is a material increase in the assets, or such an increase is anticipated, after a bond in a lower amount has already been fixed, the Personal Representative shall inform the court. NEB. SUP. CT. R. 6-1439.

9-1(a)(3) Terms and Conditions of Bonds

The court shall be named as obligee of the bond for the benefit of the persons interested in the estate. The bond shall be conditioned upon the faithful discharge by the fiduciary of all fiduciary duties. The bond in informal proceedings shall be approved by the registrar and in formal proceedings shall be approved by the court. Neb. Rev. Stat. §30- 2449(a)(1).

Unless the bond provides otherwise, the sureties and the Personal Representative are jointly and severally liable. The bond must indicate the address of the sureties. Neb. Rev. Stat. §30-2449(a)(2).

By executing a bond, a surety consents to the jurisdiction of the probate court which issued letters to the primary obligor, but only in proceedings pertaining to the fiduciary duties of the Personal Representative and naming the surety as a party. The surety must be given notice of any proceedings by delivery of the notice to the surety or by mailing the same by registered or certified mail to the surety's address. Neb. Rev. Stat. §30-2449(a)(3).

294

Proceedings against a surety may be initiated in the court where the bond is posted by any interested person, a successor Personal Representative, or any other Personal Representative of the same decedent. Neb. Rev. Stat. §30-2449(a)(4).

Multiple actions may be maintained against the bond until the entire penalty amount is exhausted. Neb. Rev. Stat. §30-2449(a)(5). However, a cause of action against the Personal Representative barred by the statute of limitations is barred as to the surety. Neb. Rev. Stat. §30-2449(b).

Where a personal bond is tendered by a fiduciary, it shall be accompanied by a justification of surety, which shall include the description (exact, if possible) of the property of the surety, the names of joint owners if any, its value above encumbrances and exemptions, and whether a homestead or not, and if signed by a married woman, the bond must include a "married woman" clause. Whenever any individual is offered as surety on any bond, the court may in its discretion require that the surety make justification in compliance with Neb. Rev. Stat. § 25-2223. NEB. SUP. CT. R. 6-1440.

9-1(b) Duties and Powers

Article 24, Part 7 of the Nebraska Probate Code identifies general duties and powers of Personal Representatives. Other specific duties and powers are contained throughout the probate code, such as duties to provide notice to creditors or other interested persons, duties toward spouses, heirs and beneficiaries, powers of distribution, and powers to close administration in various ways. Some powers and duties, such as those related to tax matters, are derived primarily from other state and federal statutes. The statutory powers and duties may be restricted or expanded by court orders, provisions of the decedent's will and other instruments.

A duty relates to an action which the Personal Representative is required to take. A power relates to an action which the Personal Representative is authorized, but not required, to take. Normally a power is discretionary. Mandatory powers exist only in the sense that if the Personal Representative has a duty to do a certain thing, then he or she has the power to do the acts necessary to satisfy that duty. A Personal Representative may have a duty to exercise a power, but may have discretion as to the time, manner and extent of its exercise. A breach of duty or an improper use of power may give rise to liability of the Personal Representative. Remedies for Personal Representative breaches and abuses include surcharge, removal, modification of authority, and other equitable relief.

9-1(b)(1) Source and Duration of Powers

The duties, and powers of a Personal Representative arise at the time of appointment. Neb. Rev. Stat. §30-2462. The Personal Representative, if qualified, is appointed in either formal or informal proceedings, through the issuance of Letters of Personal Representative. See Appendix 9-6, Form 303 (Letters of Personal Representative).

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These letters document the general authority of the Personal Representative. The authority of the Personal Representative to take specific action is derived from the probate code, the terms of the will, and any court order to which the Personal Representative is a party. Neb. Rev. Stat. §30-2464(a).

Except as ordered by the court, the successor Personal Representative has the powers and duties in respect to the continued administration which the former Personal Representative would have had if his appointment had not been terminated. Neb. Rev. Stat. §30-2456.

The authority of the Personal Representative continues until the Personal Representative's appointment is terminated by court order or is automatically terminated following the expiration of one year from the filing of a closing statement. Neb. Rev. Stat. §§30-2451 to 30-2455.

9-1(b)(2) Action Prior to Appointment

The powers of a personal representative relate back in time to give acts by the person appointed which are beneficial to the estate occurring prior to appointment the same effect as those occurring thereafter. Neb. Rev. Stat. §30-2462.

Prior to appointment, a person named Personal Representative may carry out written instructions of the decedent relating to his or her body, funeral, and burial arrangements. Neb. Rev. Stat. §30-2462.

(1) The Revised Uniform Anatomical Gift Act (Neb. Rev. Stat. §§71-4824 to 71-4845) allows the gift by the decedent of all or part of decedent's body to become effective upon death. The gift can be made in a will, by another signed and witnessed document, or by designation on a motor vehicle operator's license. In addition, absent contrary indications by the decedent, other persons standing in a certain relationship to the decedent may donate all or a part of the decedent's body at the time of death. See also Neb. Rev. Stat. §§38-1425 and 38-1426 (regarding disposition of a decedent's body) and Neb. Rev. Stat. § 71-4827 (regarding anatomical gifts before death).

(2) Liability for burial expenses falls jointly and severally on the decedent's heirs and estate. Neb. Rev. Stat. §38-4125. The probate code acknowledges a potential claim against the estate for reasonable funeral expenses. Neb. Rev. Stat. §30-2487.

A Personal Representative may ratify and accept acts on behalf of the estate by others where the acts would have been proper for a personal representative. Neb. Rev. Stat. §30-2462.

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9-1(b)(3) Authority to Act

A person to whom general letters are issued first has exclusive authority under the Letters until said Letters are terminated or modified. Neb. Rev. Stat. §30-2463. Modification of the powers of the original Personal Representative may include subsequent issuance of letters to a co-representative or a special administrator. If by error, general letters of personal representative are subsequently issued to another person, the first appointed Personal Representative may recover any property of the estate in the hands of the Personal Representative subsequently appointed. But, the acts of the subsequently appointed Personal Representative which were performed in good faith and before notice of the previously issued letters, are not void for want of validity of appointment. Neb. Rev. Stat. §30- 2463

A successor Personal Representative has the same powers and duties as the original Personal Representative with respect to completion of the administration of the estate, except that the successor may not exercise any power which the decedent expressly made personal to the executor named in the will. Neb. Rev. Stat. §30-2477.

Unless the decedent's will provides otherwise, when two or more persons are appointed as Personal Co-Representatives, all of them must concur in acts connected with the administration and distribution of the estate. Exceptions to this general rule are provided for the following circumstances:

(a) when a Personal Co-Representative receives and receipts for property due the estate;

(b) when the concurrence of all cannot readily be obtained in the time reasonably available for emergency action necessary to preserve the estate; or

(c) when a Personal Co-Representative has been appropriately delegated the authority to act for the others.

SAMPLE: Any Personal Co-Representative may, by an instrument in writing, delegate to any other Personal Co-Representative the right to exercise any power, including a discretionary power, granted the Personal Co-Representatives in my Will. During the time a delegation under this Section is in effect, the Personal Co-Representative to whom the delegation was made may exercise the power to the same extent as if the delegating Personal Co-Representative had personally joined in the exercise of the power. The delegating Personal Co-Representative may revoke the delegation at any time by giving written notice to the Personal Co-Representative to whom the power was delegated.

Neb. Rev. Stat. §30-2478.

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Unless the terms of the will provide otherwise, when the appointment of one or more Personal Co-Representatives is terminated, every power collectively exercisable by the Personal Co-Representatives before the termination may be exercised by the one or more Personal Representatives remaining after the termination, unless the terms of the will provide otherwise. If a person nominated as a Personal Co-Representative is not appointed, those who are appointed are fully authorized to exercise all of the powers of a Personal Representative. Neb. Rev. Stat. §30-2479.

9-1(b)(4) Duties

1. Prudent Investor

The Personal Representative is a fiduciary who shall comply with the prudent investor rule under Uniform Trust Code §§30-3883 to 30-3889. Neb. Rev. Stat. §30-2464(a). Accordingly, a Personal Representative shall invest and manage estate assets as a prudent investor would, by considering the purposes, terms, distribution requirements and other circumstances of the estate, exercising reasonable care, skill and caution. Uniform Trust Code §30-3884(a).

2. Settle and Distribute Estate

The Personal Representative is under a duty to settle and distribute the estate of the decedent:

(a) in accordance with the terms of any probated and effective will and the Nebraska Probate Code;

(b) as expeditiously and efficiently as is consistent with the best interests of the estate;

(c) in accordance with the rights of claimants, the surviving spouse, any minor and dependent children, and any pretermitted child of the decedent; and

(d) generally for the best interests of the successors to the property in the estate.

Neb. Rev. Stat. §30-2464(a). The Personal Representative is given the power to distribute assets. Neb. Rev. Stat. §30-2476(27). Further, the Personal Representative shall proceed expeditiously with the settlement and distribution of the decedent's estate, without adjudication, order or direction of the court, except:

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(a) as otherwise specified or ordered with respect to a supervised Personal Representative; or

(b) when the Personal Representative exercises his or her discretion to invoke the jurisdiction of the court to resolve questions concerning the estate or its administration. Neb. Rev. Stat. §30-2465.

Similarly, the Personal Representative has authority to distribute apparently intestate assets to the heirs of the decedent if, at the time of distribution, the Personal Representative is not aware of a pending testacy proceeding, a proceeding to vacate an order entered in an earlier testacy proceeding, a formal proceeding questioning the appointment or fitness of the Personal Representative to continue, or a supervised administration proceeding. Neb. Rev. Stat. §30-2464(b).

The Personal Representative is authorized and generally instructed to distribute estate property in kind. Neb. Rev. Stat. §30-24,104. For more detail regarding the Personal Representative's distribution authority, see Neb. Rev. Stat. §§30-2499 to 30-24,114.

The Personal Representative has authority to sell estate assets, including land, for cash or credit, at a public or private sale under §30-2476(6) and (23). The Personal Representative or the distributees may petition the county court for partition of real estate. In In re Estate of Failla, a Personal Representative desired a private sale, but the interested parties wanted a public sale in partition. 278 Neb. 770, 773 N.W.2d 793 (2009). The county court ordered a partition sale. The Supreme Court reversed, finding that the Personal Representative had established by competent evidence that a private sale was the most commercially reasonable manner in which to sell the real estate.

3. Notice

The party initiating an estate proceeding or his attorney must mail the first published notice of the appointment of a personal representative within five days to those with a direct legal interest in the proceedings. Neb. Rev. Stat. §30- 2420(c) and Neb. Rev. Stat. §25-520.01. In addition, a person seeking informal appointment of a Personal Representative must give prior notice to any person having an equal or prior right to appointment. Neb. Rev. Stat. §30-2423. Formal testacy proceedings require additional specific notice to interested persons. Neb. Rev. Stat. §30-2427(a). A Personal Representative must also honor a filed request for specific notice (Demand for Notice). Neb. Rev. Stat. §30-2413.

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4. Inventory

The Personal Representative must prepare and file an inventory of property owned by the decedent at the time of death within three months after appointment. Neb. Rev. Stat. §30-2467, see also Appendix 9-7, Form 330 (Inventory). Trust property, joint tenancy property, insurance proceeds, and other non-testamentary transfers (see Neb. Rev. Stat. §30-2714) are not technically subject to probate but may be included on the inventory as these assets may be subject to Nebraska inheritance tax.

The following requirements must be observed in regards to the inventory:

(a) the property must be listed in reasonable detail;

(b) each item shall include an indication of its fair market value at the date of the decedent's death;

(c) the type and amount of any encumbrances shall be listed;

(d) if an appraiser was used, the appraiser's name and address shall be indicated with the item or items appraised. Neb. Rev. Stat. §30-2468.

The original of the inventory shall be filed with the court. A copy of the inventory shall be sent to interested persons who request copies, specifically including those persons who have formally requested notice of filings in compliance with Neb. Rev. Stat. §30-2413. Neb. Rev. Stat. §30-2467.

The Personal Representative shall prepare a supplementary inventory or appraisement:

(a) if the Personal Representative becomes aware of any property of the estate which was not included in the original inventory; or

(b) if the Personal Representative learns that the value or description of any item in the original inventory is erroneous or misleading.


The supplementary inventory or appraisement shall show the fair market value at decedent's date of death of any new item, or the revised market value or description of a previously inventoried item, along with the names and addresses of the appraisers or other data relied thereon. The supplementary inventory or appraisement shall be filed with the court. Copies of the supplementary inventory or similar information shall be furnished to persons interested in the new information. Neb. Rev. Stat. §30-2469.

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5. Possession

The Personal Representative has a right to and shall take possession or control of the decedent’s property, including real and personal property. The following are exceptions to this rule:

(a) when the decedent's will provides otherwise; or

(b) when the Personal Representative determines that possession of any specific item of real property or tangible personal property is not necessary for the purposes of administration, such property may be left with, or surrendered to, the person presumptively entitled thereto.


Under the probate code, title to real and personal property devolves to the decedent's successors in interest upon the decedent's death, subject to administration and other specific probate code provisions. Neb. Rev. Stat. §30-2401.

The mere request by a Personal Representative for the delivery of any property possessed by an heir or devisee is conclusive evidence, in any action against the heir or devisee for possession of the property, that the property is necessary for the administration of the estate. Neb. Rev. Stat. §30-2470.

The Personal Representative shall take all steps reasonably necessary for the management, protection and preservation of the estate in the Personal Representative’s possession. Neb. Rev. Stat. §30-2470. While these duties are limited to property in the Personal Representative's possession, in view of the relative ease with which property may be possessed by the Personal Representative, agreements with distributees may be desirable to eliminate any doubts regarding the shifting of these duties. If property is distributed in kind, the Personal Representative shall execute an instrument or deed of distribution assigning, transferring or releasing the assets to the distributee as evidence of the distributee's title to the property. Neb. Rev. Stat. §30-24,105.

6. Taxes, Expenses and Claims

The Personal Representative shall pay taxes on the estate in the Personal Representative’s possession. Neb. Rev. Stat. §30-2470.

The Personal Representative has a general duty to determine and pay legitimate claims against the estate. The probate code also requires that notice be given to the decedent's creditors. Neb. Rev. Stat. §30-2483.

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7. Will Provisions

The Will may also impose duties on the Personal Representative. For example, the will may provide that the Personal Representative must sell land to a particular party, or elect portability.

The applicable exclusion amount is defined in Internal Revenue Code Section 2010(c)(2). SAMPLE: If my spouse survives me and my applicable exclusion amount cannot be fully used, then my Personal Representative, acting as executor or administrator of my estate for purposes of Internal Revenue Code Section 2203, shall make a timely election under Internal Revenue Code Section 2010(c)(5)(A) so that my spouse may take my deceased spousal unused exclusion amount (“DSUE”) as defined in Internal Revenue Code Section 2010(c)(4), if any, into account in calculating her applicable exclusion amount.

9-1(b)(5) Powers

1. General

The Personal Representative is given the same power as an absolute owner with respect to property of the estate, for the benefit of creditors and others interested in the estate. Neb. Rev. Stat. §30- 2472. Unless otherwise specifically ordered by the court, this power may be exercised without notice, hearing or order of court.

The phrase "power over title" is merely a general term for a conglomeration of specific Personal Representative powers and does not in itself constitute an additional power. The phrase attempts to clarify the Personal Representative's position with regard to title to property. While actual title to property does not vest in the Personal Representative, the Personal Representative does have the broadest "power over title." If this power over title is unexercised prior to the termination of the Personal Representative's appointment, its lapse clears the title of the devisees or heirs. The "power over title" concept can be better understood by reading together Neb. Rev. Stat. §§30-2401, 30-2470, 30-2472, 30-2499, 30-24,105, and the corresponding Uniform Probate Code Comments thereto.

2. Employment of Appraisers

The Personal Representative is responsible for determining fair market value. The Personal Representative has the discretionary power to employ a qualified and disinterested appraiser to assist in determining the fair market value of any asset, the value of which may be subject to reasonable doubt. Neb. Rev. Stat. §30-2468. Different persons may be employed to appraise different kinds of assets. While the Personal Representative has no duty to employ appraisers, under the inheritance tax

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statutes the county court is also provided with the power to appoint appraisers. The propriety of employment and the reasonableness of compensation of an appraiser may be reviewed by the court. Neb. Rev. Stat. §30-2482.

Fair market value is not specifically defined in the probate code or in the inheritance tax statutes. For inheritance tax purposes, the Nebraska Supreme Court has defined fair market value as the value which the property would bring if offered and sold for cash upon the open market at the time of the death of the decedent. In re Estate of Krotter, 136 Neb. 783, 287 N.W. 613 (1939). The Federal Estate and Gift Tax Regulations define fair market value as "the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts." TREAS. REG. §20.2031-1(b).

3. Avoid Transfers

The property liable for the payment of unsecured debts of the decedent includes all property transferred by the decedent by any means which is in law void or voidable as against the decedent's creditors. Neb. Rev. Stat. §30-2471.

The right to recover such property in order to pay unsecured creditors rests exclusively with the Personal Representative. Consequently, unsecured creditors of the decedent may not maintain an action to recover property transferred by the decedent. Neb. Rev. Stat. §30-2471. The Personal Representative's power to recover property transferred by the decedent is literally limited to the extent such property is necessary for the payment of unsecured debts. If such recovery is necessary for the payment of unsecured debts, the Personal Representative would have a duty to take the appropriate action.

4. Specific P ovisions

The probate code at Neb. Rev. Stat. § 30-2476 provides a comprehensive list of specific powers which the Personal Representative may exercise. This list, containing 27 subsections, gives the Personal Representative the ability to fully manage and preserve the estate property. Many of the subsections merely restate common law or supplement other statutory provisions. Below is a list of the 27 subsection.

Except as restricted or otherwise provided by the will or by an order in a formal proceeding, without limiting the authority conferred by section 30-2472, and subject to the priorities stated in section 30-24,100, a Personal Representative, acting reasonably for the benefit of the interested persons, may properly:

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(1) retain assets owned by the decedent pending distribution or liquidation including those in which the representative is personally interested or which are otherwise improper for trust investment;

(2) receive assets from fiduciaries or other sources;

(3) perform, compromise, or refuse performance of the decedent's contracts that continue as obligations of the estate, as he or she may determine under the circumstances. In performing enforceable contracts by the decedent to convey or lease land, the personal representative, among other possible courses of action, may:

i. execute and deliver a deed of conveyance for cash payment of all sums remaining due or the purchaser's note for the sum remaining due secured by a mortgage or deed of trust on the land; or

ii. deliver a deed in escrow with directions that the proceeds, when paid in accordance with the escrow agreement, be paid to the successors of the decedent, as designated in the escrow agreement;

(4) satisfy written charitable pledges of the decedent irrespective of whether the pledges constituted binding obligations of the decedent or were properly presented as claims, if in the judgment of the personal representative the decedent would have wanted the pledges completed under the circumstances;

(5) if funds are not needed to meet debts and expenses currently payable and are not immediately distributable, deposit or invest liquid assets of the estate, including money received from the sale of other assets, in federally insured interest-bearing accounts, readily marketable secured loan arrangements, or other prudent investments which would be reasonable for use by trustees generally;

(6) acquire or dispose of an asset, including land in this or another state, for cash or on credit, at public or private sale; and manage, develop, improve, exchange, partition, change the character of, or abandon an estate asset;

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(7) make ordinary or extraordinary repairs or alterations in buildings or other structures, demolish any improvements, and raze existing or erect new party walls or buildings;

(8) subdivide, develop, or dedicate land to public use; make or obtain the vacation of plats and adjust boundaries; or adjust differences in valuation on exchange or partition by giving or receiving considerations; or dedicate easements to public use without consideration;

(9) enter for any purpose into a lease as lessor or lessee, with or without option to purchase or renew, for a term within or extending beyond the period of administration;

(10) enter into a lease or arrangement for exploration and removal of minerals or other natural resources or enter into a pooling or unitization agreement;

(11) abandon property when, in the opinion of the personal representative, it is valueless, or is so encumbered, or is in condition that it is of no benefit to the estate;

(12) vote stocks or other securities in person or by general or limited proxy;

(13) pay calls, assessments, and other sums chargeable or accruing against or on account of securities, unless barred by the provisions relating to claims;

(14) hold a security in the name of a nominee or in other form without disclosure of the interest of the estate but the personal representative is liable for any act of the nominee in connection with the security so held;

(15) insure the assets of the estate against damage, loss, and liability and himself or herself against liability as to third persons;

(16) borrow money with or without security to be repaid from the estate assets or otherwise; and advance money for the protection of the estate;

(17) effect a fair and reasonable compromise with any debtor or obligor, or extend, renew, or in any manner modify the terms of any obligation owing to the estate. If the personal representative

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holds a mortgage, pledge, or other lien upon property of another person, he or she may, in lieu of foreclosure, accept a conveyance or transfer of encumbered assets from the owner thereof in satisfaction of the indebtedness secured by lien;

(18) pay taxes, assessments, compensation of the personal representative, and other expenses incident to the administration of the estate;

AMOUNT OF COMPENSATION: A Personal Representative is entitled to reasonable compensation for services. Neb. Rev. Stat. §30-2480. The probate code does not specifically address whether or not separate compensation is allowed for legal services provided by an attorney serving as the Personal Representative. Prior Nebraska cases held that a Personal Representative performing legal services for the estate is entitled to additional compensation. See, e.g., Anderson v. Lamme, 174 Neb. 398, 118 N.W.2d 339 (1962). The Personal Representative is specifically given the power to pay his or her own compensation.

RENUNCIATION OF FEES: Absent a contract with the decedent concerning compensation, if a will provides for compensation of the Personal Representative, the Personal Representative, before qualifying, may renounce the provision and be entitled to reasonable compensation. A Personal Representative may also renounce the right to all or any part of compensation otherwise due, whether or not such fee is specifically provided in the instrument. A written renunciation may be filed with the court. If a will provision concerning a fee is framed as a condition of the nomination as Personal Representative, the fee may not be renounced. Neb. Rev. Stat. §30-2480, see also Appendix 9-10, Form 307 (Waiver of PR Fee).

TAX CONSEQUENCES: For a Personal Representative to avoid incurring any federal income or gift tax liability for the compensation which is to be waived, it is desirable to make a clear waiver of compensation rights. See Rev. Rul. 66-167, 1966-1 C.B. 20. This ruling indicates that no income tax will be imposed if the fiduciary evidences intent to waive fees early in the proceedings. Under the ruling, this can be accomplished through execution of a formal waiver within six months of the Personal Representative's appointment or through implied waiver from a failure to claim fees on usual accountings.

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REVIEW OF COMPENSATION: The court may review the reasonableness of compensation of any person employed by the Personal Representative and the propriety of the employment of any person by the Personal Representative. This is applicable to the employment of any attorney, auditor, investment advisor or other specialized agent or assistant, as well as to the reasonableness of the compensation determined by the Personal Representative for services rendered by the Personal Representative. Neb. Rev. Stat. §30-2482.

PROCEDURE: Such review shall take place after notice to all interested persons, following a petition of an interested person, or upon an appropriate motion if the administration is supervised. Any person who has received excessive compensation may be ordered to make appropriate refunds.

STANDARDS: Factors to be considered as guides in determining the reasonableness of a fee include the following:

(a) The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the service properly;

(b) The likelihood, if apparent to the personal representative, that the acceptance of the particular employment will preclude the person employed from other employment;

(c) The fee customarily charged in the locality for similar services;

(d) The amount involved and the results obtained;

(e) The time limitations imposed by the personal representative or by the circumstances;

(f) The nature and length of the relationship between the personal representative and the person performing the services; and

(g) The experience, reputation, and ability of the person performing the services.

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(19) sell or exercise stock subscription or conversion rights; consent, directly or through a committee or other agent, to the reorganization, consolidation, merger, dissolution, or liquidation of a corporation or other business enterprise;

(20) allocate items of income or expense to either estate income or principal, as permitted or provided by law;

(21) employ persons, including attorneys, auditors, investment advisors, or agents, even if they are associated with the personal representative, to advise or assist the personal representative in the performance of his or her administrative duties; act without independent investigation upon their recommendations; and instead of acting personally, employ one or more agents to perform any act of administration, whether or not discretionary;

ATTORNEY FEES: With respect to fees paid to an attorney employed by an executor, the Nebraska Supreme Court has stated that "in determining what is a reasonable fee, we should take into account the amount of the property involved; the responsibility involved; the questions of law raised; whether intricate and difficult; the time and labor required for performing the services; the result thereof; together with the testimony of experts as to value." In re Estate of Thiede, 102 Neb. 747,750, 169 N.W. 435, 436 (1918).

Attention is also directed to §3-501.5 of the Nebraska Rules of Professional Conduct which provides a list of factors to be considered as guides in determining reasonableness of fees.Attorney fees may also be reviewed upon petition of an interested party.

(22) prosecute or defend claims or proceedings in any jurisdiction for the protection of the estate and of the personal representative in the performance of his or her duties;

STANDING: In general, the Personal Representative of a decedent who was domiciled in Nebraska at the time of death has the same standing to sue and be sued in the courts in Nebraska and the courts in any other jurisdiction as the decedent had immediately prior to death. This rule does not apply to actions and proceedings which do not survive the death of the decedent. Neb. Rev. Stat. §30-2464(c); see Neb. Rev. Stat. §25-322 (governing the survival of causes of action and the substitution of parties). Neb. Rev. Stat. §30-2409 provides

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a possible extension of statutes of limitation with respect to decedents' causes of action. Neb. Rev. Stat. §30-809 and Neb. Rev. Stat. §30- 810 govern wrongful death actions which are instituted in the name of the Personal Representative for the benefit of the surviving spouse or next of kin.

EXPENSES: A Personal Representative may defend or prosecute on behalf of the estate. If such action is in good faith, whether successful or not, the estate shall pay necessary expenses and disbursements including reasonable attorneys’ fees incurred. Neb. Rev. Stat. §30-2481.

RECOVERY OF PROPERTY: The Personal Representative may maintain an action to recover possession of property or to determine title. Even if a deed or other distribution document has been given, the Personal Representative may recover the assets or their value if the distribution was improper. Nebraska Probate Code §30-24,106; see also Neb. Rev. Stat. §25-21,112 et seq. (regarding quiet title actions).

(23) sell, mortgage, or lease any real or personal property of the estate or any interest therein for cash, for credit, or for part cash and part credit, and with or without security for unpaid balances;

(24) continue any unincorporated business or venture in which the decedent was engaged at the time of death;

PARTNERSHIPS: The probate code does not contain any provision dealing specifically with the administration of decedents' interests in partnerships. The Uniform Partnership Act of 1998, Neb. Rev. Stat. §§67- 401 et seq., governs the disposition of the decedent's partnership interests. Thus, the Personal Representative’s only apparent duty regarding partnership property is the inclusion in the inventory of the decedent's proportionate share of any partnership. A Personal Representative does have the power to continue an unincorporated business or venture of the decedent. Neb. Rev. Stat. §30-2476(24).

(25) form a business entity that has limited liability, including a limited partnership, limited liability partnership, limited liability company, or corporation, for any business or venture in which the decedent was engaged at the time of death;

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(26) provide for exoneration of the personal representative from personal liability in any contract entered into on behalf of the estate;

(27) satisfy and settle claims and distribute the estate as provided in the Nebraska Probate Code.


9-1(b)(6) Restraint of Powers

An interested person may petition the court to enter a temporary order restraining the Personal Representative from performing specified acts of administration, disbursement, or distribution, or from exercising powers of the office, or to make such order as may appear necessary to secure proper performance of the Personal Representative's duty, if it appears to the court that the Personal Representative may take action which would unreasonably jeopardize the interest of the applicant or other interested persons. Neb. Rev. Stat. §30-2450(a). To add to the control over Personal Representatives, persons with whom the Personal Representative may transact business may be made parties.

The hearing shall be held within 10 days unless the parties otherwise agree. Notice shall be given pursuant to court order to either the Personal Representative or the Personal Representative's attorney of record and to any other parties named. Neb. Rev. Stat. §30- 2450(b).

9-1(b)(7) Conflicts of Inte est

In general, transactions which are affected by a conflict of interest on the part of the Personal Representative may be voidable by any person interested in the estate. This specifically includes any sale or encumbrance of estate property to:

(a) the Personal Representative;

(b) the spouse of the Personal Representative;

(c) the attorney or agent of the Personal Representative; or

(d) any corporation or trust in which the Personal Representative has a beneficial interest.


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Interested persons who consent to a conflict of interest transaction after fair disclosure cannot later void that transaction. See Appendix 9-11 (Consent to Sale), Appendix 9-12, Form 340 (Petition for Authority to Sell Real Estate), and Appendix 9-13, Form 341 (Order to Sell Real Estate). In addition, conflict transactions are not voidable if the transaction is expressly authorized by the decedent's will or a contract entered into by the decedent. Conflict transactions also cannot be voided if the court has approved the transaction following notice to interested persons. Neb. Rev. Stat. §30-2474(1)–(2).

If a Personal Representative violates the duty against self-dealing described by §30-2474, the result is voidable title to assets. However, the principles of bona fide purchase should protect a purchaser for value without notice of a defect in the seller's title arising from the conflict of interest.

9-1(b)(8) Liability of Personal Representative

If the exercise of power concerning the estate is improper, the Personal Representative is liable to interested persons for damage or loss resulting from breach of fiduciary duty to the same extent as a trustee of an express trust. Neb. Rev. Stat. §30-2473. Restatement (Second) of Trusts §201 defines a breach of trust as a violation by the trustee of any duty which the trustee owes to the beneficiary. Restatement (Second) of Trusts §199 defines the equitable remedies of a beneficiary of a trust to include maintaining suits: "(a) to compel the trustee to perform his duties as trustee; (b) to enjoin the trustee from committing a breach of trust; (c) to compel the trustee to redress a breach of trust; . . . (e) to remove the trustee."

The common law provisions cited above are supplemented by specific probate code sections authorizing proceedings to restrain a Personal Representative from taking a particular action or to remove a Personal Representative. See Neb. Rev. Stat. §§30-2450 and 30-2454. Other sections related to supervision or restriction of a Personal Representative's actions include: demand for notice (Neb. Rev. Stat. §30-2413); supervised administration (Neb. Rev. Stat. §§30-2439 to 30-2443); restrictions endorsed on letters (Neb. Rev. Stat. §30-2442); bond requirements (Neb. Rev. Stat. §§30-2446 to 30-2449); and the court's general jurisdiction over all aspects of estate administration (Neb. Rev. Stat. §30-2405). Questions of individual liability of the Personal Representative, including tort and contract actions arising out of estate administration, are governed by Neb. Rev. Stat. §30-2490.

In the context of administration of express trusts, in order to determine whether a trustee is guilty of abuse of discretion in exercising or failing to exercise a power, Scully v. Scully, 162 Neb. 368, 76 N.W.2d 239 (1956) held that the following circumstances may be relevant:

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(a) the extent of the discretion intended to be conferred upon the trustee by the terms of the trust;

(b) the purpose of the trust;

(c) the nature of the power;

(d) the existence or nonexistence, the definiteness or indefiniteness, of an external standard by which the reasonableness of the trustee's conduct can be judged;

(e) the motives of the trustee in exercising or refraining from exercising the power;

(f) the existence or non-existence of an interest in the trustee conflicting with that of the beneficiaries.

Under Neb. Rev. Stat. §30-3890, a violation by a trustee of a duty the trustee owes to a beneficiary is a breach of the trust. To remedy a breach of trust that has occurred or may occur, the court may:

(a) compel the trustee to perform the duties;

(b) enjoin the trustee from committing a breach;

(c) compel the trustee to redress a breach by paying money, restoring property or other means;

(d) order a trustee to account;

(e) appoint a special fiduciary to take possession of the trust property and administer the trust;

(f) suspend the trustee;

(g) remove the trustee;

(h) reduce or deny compensation to the trustee;

(i) order any other appropriate relief.

Similar standards should apply to discretionary actions taken by a Personal Representative, and if a breach of duty occurred, similar relief should be available.

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The probate code provides that a Personal Representative shall not be surcharged for acts of administration or distribution if the conduct in question was authorized at the time. Neb. Rev. Stat. §30-2464(b).

9-1(b)(9) 3rd Parties

A person, who in good faith, either assists a Personal Representative or deals with the Personal Representative for value is protected as if the Personal Representative properly exercised the power. The fact that a person knowingly deals with a Personal Representative does not in itself require the person to inquire into the existence of a power or the propriety of its exercise. Neb. Rev. Stat. §30-2475.

No provision in any will or court order purporting to limit the power of a Personal Representative is effective against a person dealing with the Personal Representative, unless:

(a) the person has actual knowledge of the limitations; or

(b) the restrictions on the power are endorsed on the letters as provided in Neb. Rev. Stat. §30-2442.

A person dealing with a Personal Representative is not bound to see to the proper application of estate assets paid or delivered to a Personal Representative. The protection of Nebraska Probate Code §30-2475 extends to instances where there was procedural irregularity or jurisdictional defect leading to issuance of letters of personal representative, including a case where the alleged decedent is later found to be alive.

A third party dealing with a Personal Co-Representative is protected to the same extent as if dealing with a sole Personal Representative if the third party is unaware that there are Personal Co-Representatives, or when the third party is specifically advised by the Personal Co-Representative that he or she has the authority to act alone for any of the reasons mentioned above. Neb. Rev. Stat. §30-2478.

The protection of §30-2475 is supplemented by other statutes including the Nebraska Uniform Commercial Code. See, e.g., UCC §§8-304, 8-401 and 8-403.

Neb. Rev. Stat. §30-2475 does not control whether a purchaser takes free of the lien of unpaid federal estate taxes. See I.R.C. §6324. Therefore, purchasers from Personal Representatives will have to satisfy themselves concerning whether estate taxes are paid and, if not paid, whether the tax lien follows the property they are acquiring. Liens on estate assets for Nebraska inheritance tax is governed by Neb. Rev. Stat. §77-2037.

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Deeds or instruments of distribution are the usual monuments of title under the Nebraska Probate Code. Attention is directed to Neb. Rev. Stat. §§30-24,105, 30-24,106 and 30-24,108, which provide for such deeds and instruments of distribution. With regard to real property, Neb. Rev. Stat. §25-2708 also requires that in connection with certain Probate Code proceedings in which real estate is an estate asset, the county judge must sign a certificate for filing with the Register of Deeds indicating the pendency of such proceedings. The form for the certificate which is usually prepared by the attorney for the personal representative and submitted to the court is set out at Neb. Rev. Stat. § 25-2708.

9-1(c) Termination of Authority

Termination of appointment ends the right and power of the Personal Representative as to any pending or future proceeding. Neb. Rev. Stat. §30-2451. However, a Personal Representative may perform acts necessary to protect the estate and may deliver assets to a successor Personal Representative. Neb. Rev. Stat. §30-2451.

Note however, that termination terminates the Personal Representative's authority to represent the estate in any pending or future proceeding but does not:

(1) affect the jurisdiction of the court over the Personal Representative;

(2) discharge a Personal Representative from liability from transactions or omissions occurring before termination; or

(3) relieve the Personal Representative of the duty to preserve assets subject to the Personal Representative's control, account therefor and to deliver assets.

Neb. Rev. Stat. §30- 2451.

If proceedings have been initiated prior to termination, the court retains jurisdiction over the estate but the plaintiff or claimant should have a successor or special administrator appointed in order to maintain the action against the estate. See Comment to Neb. Rev. Stat. §30- 2451.

9-1(c)(1) Death or Disability

The appointment of a Personal Representative is terminated on the death of the Personal Representative or on the appointment of a guardian or a conservator for the Personal Representative. Neb. Rev. Stat. §30-2452.

Until the appointment and qualification of a successor Personal Representative or Special Administrator, the Personal Representative, guardian or conservator, as the case may be, of the deceased or protected Personal Representative has the duty to protect the estate being administered by the fiduciary's decedent or ward, has

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the power to perform acts necessary to protect the estate, and must account for and deliver the estate's assets to the successor Personal Representative or special administrator. Neb. Rev. Stat. §30-2452.

Unless the will provides otherwise, every power exercisable by Personal Co-Representatives may be exercised by the one or more remaining Personal Co-Representative(s) remaining after the appointment of one or more is terminated. Neb. Rev. Stat. §30-2479. Therefore, the representative of the deceased or disabled Personal Representative does not have the duties or authority to power to perform acts necessary to protect the estate, and must account for and deliver the estate's assets to the successor Personal Representative or special administrator.

9-1(c)(2) Voluntary

The appointment of the Personal Representative terminates one year after the filing of an Informal Closing of Estate by Verified Statement. Neb. Rev. Stat. §§30-2453(a) and 30-24,117.

The appointment of a Personal Representative terminates by an order formally closing the estate. Neb. Rev. Stat. §§30-2453(b), 30-24,115 and 30-24,116.

The appointment of a Personal Representative terminates by filing a written resignation with the registrar after 15 days written notice to all persons interested in the estate. Neb. Rev. Stat. §30-2453(c). However, the resignation is not effective until the appointment and qualification of a successor Personal Representative and the delivery of the assets to the successor. Neb. Rev. Stat. §30-2453(c).

9-1(c)(3) For Cause

An interested party may petition for the removal of a Personal Representative for cause at any time. Neb. Rev. Stat. §30-2454(a). The petitioner shall give notice to the Personal Representative and to other persons as ordered by the court. Neb. Rev. Stat. §30-2454(a). Upon receipt, the Personal Representative shall not exercise powers of a Personal Representative except to account, to correct maladministration, or to preserve the assets of the estate. Neb. Rev. Stat. §30-2454(a).

If the Personal Representative is removed, the court directs the disposition of the remaining assets of the estate. Neb. Rev. Stat. §30-2454(a). Cause for removal exists when:

(a) it would be in the best interest of the estate;

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(b) a Personal Representative (or the person seeking the appointment) intentionally misrepresented material facts in the proceedings pertaining to the appointment;

(c) the Personal Representative has disregarded an order of the court;

(d) the Personal Representative has become incapable of discharging the duties of the office;

(e) the Personal Representative has mismanaged the estate; or

(f) the Personal Representative has failed to perform any duty pertaining to the office.

Neb. Rev. Stat. §30-2454(b). Unless the decedent's will directs otherwise, a domiciliary Personal Representative may obtain the removal of an ancillary Personal Representative who may have been appointed in the foreign state if it is incident to securing his or her appointment or their nominee in the ancillary proceedings. Neb. Rev. Stat. §30-2454(b).

In re Estate of Snover, 233 Neb. 198, 443 N.W.2d 894 (1989), involved a Personal Representative being removed for cause under Nebraska Probate Code §30-2454 by reason of the Personal Representative's failure to file a federal estate tax return and to provide a proposed plan for distribution in violation of the county court's progression order. See also In re Estate of Seidler, 241 Neb. 402, 490 N.W.2d 453 (1992), where the court did not remove a Personal Representative when she failed to file an inventory within the time required by Nebraska Probate Code §30-2467, and also failed to have a determination of inheritance tax within twelve months of decedent's death. The Personal Representative argued that she had no funds to pay for an appraisal or to pay inheritance tax. The court found that the petitioner had frustrated the Personal Representative's efforts to obtain funds. In addition, the Estate of Seidler court relied on In re Estate of Fuller, 124 Neb. 591, 247 N.W.2d 415 (1933), where there was no finding of cause for removal for failure to pay claims within the time limited by the court when there were no funds to pay said claims, unless the lack of funds resulted from neglect of the Personal Representative.

9-1(c)(4) Change of Testacy Status

Except as the court may otherwise order in a formal proceeding, the probate of a will subsequent to the appointment of a Personal Representative in an intestate proceeding or under a prior will does not terminate the appointment of the Personal Representative. Neb. Rev. Stat. §30-2455.

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Termination does occur upon the appointment of a Personal Representative under the subsequent will. A previously appointed Personal Representative continues to serve in spite of formal or informal proceedings that may give another person a prior right to serve as Personal Representative.

If no request for a new appointment is made within 30 days after the expiration of time for appeal from the order changing the proceedings, the Personal Representative originally appointed may, upon request, be appointed Personal Representative under the subsequent proceedings.

The testacy status cannot be changed without notice to a previously appointed Personal Representative.

9-2 Special Administrators

A Special Administrator means a Personal Representative as described by Neb. Rev. Stat. §30-2457 to 30-2461. Neb. Rev. Stat. §30-2209(43). A Personal Representative includes executor, administrator, successor personal representative, special administrator, and persons who perform substantially the same function under the law governing their status. Neb. Rev. Stat. §30-2209(33).

9-2(a) Appointment

In informal proceedings, on the application of any interested person, a Special Administrator may be appointed by the registrar

(1) when necessary to protect the estate of decedent prior to the appointment of a Personal Representative; or

(2) if a prior appointment has been terminated because of death or disability. Neb. Rev. Stat. §30-2457(1), see also Appendix 9-14, Form 242 (Application for Appointment of Special Administrator in Informal Proceedings), and Appendix 9-15, Form 243 (Registrar’s Appointment of Special Administrator in Informal Proceedings).

In formal proceedings, a Special Administrator may be appointed by order of the court, on the petition of any interested person, after notice, hearing, and a finding that appointment is necessary

(1) to preserve the estate; or

(2) to secure proper administration, including circumstances where a Personal Representative cannot or should not act (for example, a conflict of interest).

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Neb. Rev. Stat. §30-2457(2), see also Appendix 9-16, Form 240 (Petition for Appointment of Special Administrator in Formal Proceedings), and Appendix 9-17, Form 240a (Notice), and Appendix 9-18 (Order Appointing Special Administrator in Formal Proceedings).

EMERGENCY CLAUSE: If it appears to the court that an emergency exists, the appointment may be made without notice. Neb. Rev. Stat. §30-2457(2). An emergency is an event which calls for immediate action or remedy, pressing necessity, exigency, sudden or unexpected happening, or an unforeseen occurrence or condition. See In Re Estate of Wilson, 594 N.W.2d 695, 8 Neb. App. 467 (1999) (imminent running of statute of limitations by creditors against decedent’s estate constitutes and emergency purpose). An example of where an emergency might exist is the deceased owns livestock that require immediate care.

Once appointed, the Special Administrator is given Letters of Special Administrator, giving the Special Administrator his or her powers. See Appendix 9-19 (Letters of Special Administrator). Note that a Special Administrator should not be appointed every time a potential beneficiary disagrees with the Personal Representative’s administration decisions, absent some showing that the Personal Representative is not lawfully fulfilling his or her duties. See In re Estate of Muncillo, 789 N.W.2d 37, 280 Neb. 669 (2010).

9-2(b) Who May Be Appointed

If an application or petition is pending for probate, the person named Personal Representative in the will shall be appointed special administrator, if available and qualified. Neb. Rev. Stat. §30-2458(a). In all other cases, any proper person may be appointed Special Administrator. Neb. Rev. Stat. §30-2458(b).

9-2(c) Powers and Duties

A special administrator appointed in informal proceedings has the duty to:

(1) collect, preserve and manage the assets of the estate,

(2) to account therefore, and

(3) to deliver the assets to the Personal Representative upon qualification, or to such other person as shall be legally entitled to receive the same.

Neb. Rev. Stat. §30-2459. Moreover, the Special Administrator has the same powers as a Personal Representative as may be necessary to perform the duties of the special administrator. Neb. Rev. Stat. §30-2459.

A special Administrator appointed by the court in formal proceedings has the same power as a Personal Representative unless the court directs otherwise. Neb. Rev. Stat. §30-2460. The order

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appointing the special administrator shall set forth the duties to be performed. Neb. Rev. Stat. §30-2460. The appointment of the special administrator may be for a specified time to perform particular acts, or as the court may otherwise direct. Neb. Rev. Stat. §30-2460.

9-2(d) Termination of Appointment

The appointment of a special administrator terminates:

(1) in accordance with the provisions of the order of appointment;

(2) in accordance with another order of the court; or

(3) on the appointment of a Personal Representative.

Neb. Rev. Stat. §30-2461. The appointment of a special administrator is subject to termination in the same manner as the termination of a Personal Representative, as provide hereinabove. Neb. Rev. Stat. §30-2461.

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9-1

IN THE COUNTY COURT OF COUNTY NAME COUNTY, NEBRASKA

IN THE MATTER OF THE ESTATE OF NAME OF DECEDENT, Deceased

) ) ) ) )

Case No. PR ________


NAME OF PERSONAL REPRESENTATIVE(S) as principal(s) and NAME(S), Address, as

surety(ies) are held and firmly bound unto the County Court of County Name County, Nebraska,

as obliges for the benefit of the persons interested in this estate in the penal sum of AMOUNT

($$$) for the payment of which, well and truly to be made, we do jointly and severally bind

ourselves and our lawful representatives.

This bond is conditioned upon the faithful discharge by the Personal Representative of all duties

according to law.

Dated ______________________ _______________________________________ Name, Bar Number FIRM NAME Address Phone # Fax # Email Address

_____________________________ Name, Petitioner Address Phone # The above bond is approved on this _____ day of _____________, 20___. ______________________________ County Judge/Registrar

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9-2



) ) ) ) )



Pursuant to NEB. REV. STAT. §§30-2444 and 30-2445, the undersigned hereby accepts appointment

as Personal Representative of this estate, accepts the duties of said office, and submits personally

to the jurisdiction of this Court in any proceeding relating to the estate that may be instituted by

any interested party, as defined by the Nebraska Probate Code.

DATED: ______________________ ___________________________________ NAME ADDRESS PHONE

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9-3



) ) ) ) )


WAIVER OF BOND

Pursuant to NEB. REV. STAT. § 30-2446(1)(b), the undersigned(s) hereby waive(s) the requirement

of bond for the Personal Representative in this Estate.

Name & Address Signature NAME ADDRESS

____________________________________________________________

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9-4

IN THE COUNTY COURT OF COUNTY NAME COUNTY, NEBRASKA IN THE MATTER OF THE ESTATE OF NAME OF DECEDENT, Deceased

) ) ) ) )


DEMAND FOR BOND

TO: REGISTRAR Pursuant to NEB. REV. STAT. § 30-2448, notice is hereby given that the undersigned Demandant, a

person having an interest in the estate of the Decedent worth in excess of One Thousand Dollars

($1,000.00), hereby demands that the Personal Representative give Bond.

_______________________________________ Demandant

PROOF OF SERVICE I certify that a copy of the above Notice was mailed in accordance with the requirements of NEB.

REV. STAT. § 30-2448, on this _____ day of ____________, 20___, to:

NAME, Personal Representative

Address

_______________________________________ Demandant

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9-5



) ) ) ) )



State of Nebraska ) ) ss. County of _________ )

The undersigned being duly sworn on oath states that:

1. The undersigned’s best estimate of the value of the personal estate of the above-named

Decedent is Amount ($$$).

2. The income expected during the next year from the personal and real estate owned by

the above-named decedent is Amount ($$$).

3. The total of said estate value and income is Amount ($$$).

________________________________ NAME, Personal Representative

Subscribed and sworn to before me on the _____ day of ______________, 20___. ________________________________ Notary Public

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9-6



) ) ) ) )

Case No. PR ___________

LETTERS OF PERSONAL REPRESENTATIVE

THE STATE OF NEBRASKA KNOW ALL MEN BY THESE PRESENTS: WHEREAS, on ________________, 20____, NAME OF PR was appointed and qualified as


authority granted to a personal representative by law;

NOW, THEREFORE, these Letters are issued as evidence of such appointment and qualification

and authority of NAME OF PR to do and perform all acts which may be authorized by law.

WITNESS, the signature of a Judge or Registrar of this Court, and the Seal of this Court, on

____________________________, 20___.

___________________________________ Signature of Registrar/County Judge (Seal of Court)

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9-7

(3 Inch Margin) Return to: Insert Address

DEED OF DISTRIBUTION BY

PERSONAL REPRESENTATIVE'S DEED NAME, Personal Representative of the Estate of NAME OF DECEDENT, Deceased, Case No PR ###, County Name County Court, Nebraska, GRANTOR, pursuant to authority given by the Will of the Deceased, in consideration of Distribution of Assets, conveys to NAME, Title, GRANTEE the following described real estate (as defined in NEB. REV. STAT. 76-201): INSET LEGAL subject to easements, reservations, covenants and restrictions of record. GRANTOR covenants with GRANTEE that GRANTOR has legal power and lawful authority to convey the same. Executed: ___________________, 20___. ___________________________________ NAME, Personal Representative, GRANTOR State of ____________ ) ) ss. County of __________ ) The foregoing instrument was acknowledged before me on this ____ day of _______________, 20___, by NAME, Personal Representative of the Estate NAME OF DECEDENT, Deceased, GRANTOR. ___________________________________ Notary Public

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9-8

ASSIGNMENT KNOW ALL MEN BY THESE PRESENTS: NAME, Personal Representative of the Estate of Name, does hereby effective this _____ day of _____________, 20___, assign Decedent’s membership interest in NAME, LLC OR LLP OR FLP OR general partnership, a Nebraska Type of Entity, to NAME(S). Said membership OR partnership interest constitutes ____% of the membership OR partnership interest in NAME, Type of Entity. NAME OF ESTATE

NAME, Personal Representative State of ____________ ) ) ss. County of _________ ) The foregoing instrument was acknowledged before me on this _____ day of ______________, 20___, by NAME, Title. Notary Public

327

9-9


IN THE MATTER OF THE ESTATE OF NAME OF DECEDENT, Deceased.

) ) ) ) )

Case No. PR ___________

INVENTORY

The undersigned Personal Representative hereby certifies that the schedules attached hereto are a true and complete inventory of the property owned by the Decedent at the time of death, together with the type and amount of any encumbrance existing with reference to any item. Where applicable, the name and address of appraisers who have appraised items on the inventory are listed. Attached hereto are the following schedules:

x Total Value at

Date of Death Schedule A – Real Estate $0.00 Schedule B – Stocks and Bonds $0.00 Schedule C – Mortgages, Notes and Cash $0.00 Schedule D – Insurance Payable to the Estate $0.00 Schedule E – Jointly Owned Property * $0.00 Schedule F – Other Miscellaneous Property $0.00 Schedule G – Transfers During Decedent’s life $0.00 Schedule H – General Powers of Appointment * $0.00 Schedule I – Annuities* $0.00 Gross Value of Estate

$0.00

Schedule K – Mortgages, Liens and Other Encumbrances $0.00 Net Value of Estate $0.00

Dated: ______________ _____________________________________ NAME, Personal Representative * Non-Probate Property subject to Nebraska Inheritance Tax.

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Schedule A Real Estate

Item No.

Description Value at Date of Death

A-1 $0.00 Total Schedule A $0.00

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Schedule B Stocks and Bonds

Item No.


B-1 $0.00 Total Schedule B $0.00

330

Schedule C Mortgages, Notes and Cash

Item No.


C-1 $0.00 Total Schedule C $0.00

331

Schedule D Insurance on Decedent’s Life

Item No.


D-1 $0.00 Total Schedule D $0.00

332

Schedule E

Jointly Owned Property

Item No.


E-1 $0.00 Total Schedule E $0.00

333

Schedule F Other Miscellaneous Property

Item No.


F-1 $0.00 Total Schedule F $0.00

334

Schedule G Transfers During Decedent’s Life

Item No.


G-1 $0.00 Total Schedule G $0.00

335

Schedule H General Powers of Appointment

Item No.


H-1 $0.00 Total Schedule H $0.00

336

Schedule I Annuities

Item No.


I-1 $0.00 Total Schedule I $0.00

337

Schedule K Mortgages, Liens and Other Encumbrances

Item No.


K-1 $0.00 Total Schedule K $0.00

338

9-10



) ) ) ) )


WAIVER OF PERSONAL REPRESENTATIVE FEES

Pursuant to NEB. REV. STAT. §30-2480, NAME, Personal Representative(s) of this estate,

renounce(s) and waive(s) any fee for services in the administration of this estate, either under the

statutes of the State of Nebraska or by order of this Court.

Dated ______________________

_____________________________

NAME, Personal Representative ADDRESS

339

9-11

CONSENT TO SALE BY PERSONAL REPRESENTATIVE

The undersigned(s), having been informed of the following:

1. NAME OF DECEDENT died on Date.

2. NAME OF PERSONAL REPRESENTATIVE was qualified and appointed as Personal

Representative of the Estate of Name of Decedent, in the County Court of County Name

County, Nebraska, Case No. PR #####.

3. NAME(s) are interested persons in the Estate of Name of Decedent.

4. NAME OF DECEDENT owned the following real estate:

LEGAL DESCRIPTION, the “Property”

which was appraised at $$$$$ by Name of Appraiser, Address.

5. NAME OF PERSONAL REPRESENTATIVE wishes to sell said Property to NAME.

6. NAME OF PERSONAL REPRESENTATIVE has a conflict of interest in said transaction.

hereby consent(s) to the sale of the Property to NAME.

EXECUTED on the dates referenced below.

INSERT SIGNATURE AND NOTARY LINES

340

9-12



) ) ) ) )


PETITION FOR AUTHORITY TO SELL REAL PROPERTY

PETITIONER STATES:

1. [ ] Decedent’s Will does not authorize sale of real property.

[ ] Decedent died intestate owning real property.

2. It is necessary or desirable to sell real property of the Decedent’s estate because: INSERT

REASONS.

3. The real property of Decedent’s estate which Petitioner desires to sell is described as

follows: INSERT LEGAL.

4. IF CONSENT OBTAINED – Petitioner obtained consent from the interested parties to said

sale, which sale, without consent and approval constitutes a voidable conflict of interest.

WHEREFORE, Petitioner requests the Court fix a time and place of hearing; that notice be given

to all interested persons as provided by law; and that after notice and hearing the Court authorize

the Petitioner to sell by private or public sale the above described real property.

Dated: __________________, 20____. _____________________________ NAME, Petitioner Address PREPARED BY: Insert Attorney/Firm Info

341

9-13



) ) ) ) )


ORDER AUTHORIZING SALE OF REAL PROPERTY

Upon consideration of the Petition for Authority to Sell Real Property, the Court finds and

determines that:

a. The required notices have been given.

b. For the reasons stated in the Petition it is necessary or desirable to sell real property of the

Decedent’s estate.

c. The Personal Representative of Decedent’s estate is hereby authorized to sell by private

or public sale the real property described in the Petition.

WHEREFORE, it is ordered that the Personal Representative is authorized to sell by private or

public sale the real property described in the Petition.

Dated: _______________________ BY THE COURT: _____________________________ County Judge

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343

9-14



) ) ) ) )


APPLICATION FOR APPOINTMENT OF SPECIAL ADMINISTRATOR IN

INFORMAL PROCEEDINGS APPLICANT STATES:

1. Applicant, NAME, as ***role of applicant***, is/are an interested person(s) as defined by

Nebraska Probate Code § 30-2209(21).

2. Name of Decedent: Name

Date of Death: Date

Age at Date of Death: Age

Domicile at Death: Domicile

3. Venue for this proceeding is proper in this county because the Decedent was a domiciliary

of this county at the date of death / OR / the Decedent was not domiciled in Nebraska, but

property of Decedent was located in this county at the date of death.

4. The Applicant requests the appointment of a Special Administrator because it is necessary

to protect the estate of the Decedent prior to the appointment of a Personal Representative

/ OR / the prior appointment of the Personal Representative has been terminated as

provided in Nebraska Probate Code § 30-2452.

5. Applicant nominates NAME, who is named as Personal Representative in the Will or who

is otherwise a proper person to serve as Special Administrator.

6. The nominated Special Administrator is neither indebted to the estate nor a creditor of the

estate / OR / either indebted to the estate or a creditor of the estate as set forth on the

attachment hereto.

344

WHEREFORE, the Applicant requests the Registrar to appoint the above nominee as Special

Administrator without notice and hearing and requests further that the Special Administrator be

permitted to serve without bond / OR / with bond in the amount of $$$.

Dated: __________________, 20____. _____________________________ NAME, Applicant Address PREPARED BY: _______________________________________ Attorney Name, Bar # Firm Name Address Phone # Fax # Email Address State of ____________ ) ) ss. County of __________ ) NAME, the undersigned, being first duly sworn on oath, deposes and says that the undersigned is the Applicant named in the foregoing Application, that the undersigned has read it, knows the contents therein, and that the facts contained therein are accurate and complete to the best of the undersigned’s knowledge and belief. _____________________________ NAME Address SUBSCRIBED and sworn to before me on ________________________, 20____. _____________________________ Notary Public

345

9-15



) ) ) ) )


REGISTRAR’S APPOINTMENT OF SPECIAL ADMINISTRATOR IN

INFORMAL PROCEEDING Upon examination of the Application for Appointment of Special Administrator filed herein, the

undersigned Registrar finds that:

1. The Application is complete.

2. The Applicant has made oath or affirmation that the statements contained in the

Application are true to the best of the Applicant’s knowledge and belief.

3. The Applicant is an interested person as defined by Nebraska Probate Code Section § 30-

2209(21).

4. On basis of statements in the Application, venue is proper.

5. Any Notice required by Nebraska Probate Code § 30-2413 has been given.

6. Applicant is either the Personal Representative named in the Will and available and

qualified, or is otherwise a proper person to be appointed.

7. It appears from the Application that all other requirements of the Nebraska Probate Code

have been satisfied.

8. Appointment is necessary to protect the estate of the Decedent prior to appointment of a

Personal Representative / OR / A prior appointment has been terminated as provided in

Nebraska Probate Code Section § 30-2452.

9. A Special Administrator should be appointed; and NAME is a proper person to be

appointed Special Administrator.

WHEREFORE, the undersigned Registrar does hereby appoint NAME as Special Administrator

of the estate of the above-named Decedent to collect and manage the assets of the estate, to

preserve them, to account therefor, and to deliver them to the Personal Representative upon the

346

Personal Representative’s qualification, or to such other person as shall be legally entitled to

receive the same, with the power of a Personal Representative under the Nebraska Probate Code

necessary to perform such duties, and Letters shall be issued to said Special Administrator to

serve without bond / OR / with bond in the amount of $$$.

DATED: __________________

_____________________________ Signature of Registrar

347

9-16



) ) ) ) )


PETITION FOR APPOINTMENT OF SPECIAL ADMINISTRATOR IN

FORMAL PROCEEDINGS PETITIONER STATES:

1. Petitioner, NAME, as role of applicant, is/are an interested person(s) as defined by

Nebraska Probate Code § 30-2209(21).

2. Name of Decedent: Name

Date of Death: Date

Age at Date of Death: Age

Domicile at Death: Domicile

3. Venue for this proceeding is proper in this county because the Decedent was a domiciliary

of this county at the date of death OR the Decedent was not domiciled in Nebraska, but

property of Decedent was located in this county at the date of death.


5. The Petitioner requests the appointment of a Special Administrator because appointment

of a Special Administrator is necessary to preserve the estate / OR / appointment of a

Special Administrator is necessary to secure the property administration of the estate /

OR / specify other reason.

348

6. Notice shall be given / OR / An emergency exists requiring appointment without notice

because: *state reason*].

7. The nominated Special Administrator is either indebted to the estate or a creditor of the

estate as set forth on the attachment hereto.

8. Petitioner nominates NAME who is named as Personal Representative in the Will or who

is otherwise a proper person to serve as Special Administrator with the power of a

Personal Representative, except as may be limited in the appointment and duties

prescribed by Order of this Court.

WHEREFORE, Petitioner requests the Court to appoint the above nominee as Special

Administrator with(out) notice and hearing and requests further that the Special Administrator

be permitted to serve with(out) bond.

Dated: __________________, 20____. _____________________________ NAME, Petitioner Address PREPARED BY: _______________________________________ Attorney Name, Bar # Firm Name Address Phone # Fax # Email Address

349

9-17

NOTICE IN THE COUNTY COURT OF COUNTY NAME COUNTY, NEBRASKA

ESTATE OF NAME Case No. PR ________

Notice is hereby given that a Petition for appointment of NAME as Special Administrator has been filed and is set for hearing in the County Court of County Name County, Nebraska, on the ____ day of _________________, 20____, at ____:____ a/p.m. _____________________________ NAME, Petitioner Address PREPARED BY: _______________________________________ Attorney Name Law Firm Address Phone # Fax # Email Address

350

INSTRUCTIONS TO PUBLISHER

Please publish this notice on the following days:

___________________ ___________________ ___________________

Immediately following the last publication, please file proof of publication with the County Court. Please send one (1) copy of the published notice to the above-named attorney immediately following the first publication.

351

9-18



) ) ) ) )


ORDER APPOINTING SPECIAL ADMINISTRATOR IN FORMAL

PROCEEDINGS Upon consideration of the Petition for Appointment of Special Administrator filed herein, the

Court finds:

1) The required notices have been given or waived and venue is proper.

2) Decedent died on DATE and was domiciled in Insert.

3) A Special Administrator should be appointed because appointment of a Special

Administrator is necessary to preserve the estate / OR / appointment of a Special

Administrator is necessary to secure the proper administration of the estate / OR / Insert.


a. The findings stated above should be and are hereby made a part of the Decree of this

Court as fully as if stated in this sentence.

b. NAME is appointed as Special Administrator of the estate with the power and duty of a

Personal Representative except as limited herein until such time as the Special

Administrator’s duties have been completed, and Letters shall be issued to the Special

Administrator to serve.

c. Special Administrator shall serve with the following limitations (specify): INSERT

d. Special Administrator shall serve without bond / OR / with bond in the amount of $$$.

until appointment is terminated by law or further order of this Court.

Dated: _______________________ BY THE COURT: _____________________________ County Judge

352

9-19



) ) ) ) )


LETTERS OF SPECIAL ADMINISTRATOR

THE STATE OF NEBRASKA KNOW ALL MEN BY THESE PRESENTS: WHEREAS, on ________________, 20____, NAME was appointed in a formal/informal

proceeding and qualified as Special Administrator of the above-named Decedent by this Court

or its Registrar, with all the authority granted by law;

NOW, THEREFORE, these Letters are issued as evidence of such appointment and qualification

and authority of NAME to do and perform all acts which may be required by law with the

following limitations: DESCRIPTION.

WITNESS, the signature of a Judge or Registrar of this Court, and the Seal of this Court, on

___________________________, 20____.

___________________________________ Signature of Registrar/County Judge (Seal of Court)

Engagement Agreements Jeffery T. Peetz

Endacott Peetz & Timmer, PC, LLO Lincoln

March 23, 2018

UNO Thompson Center, Omaha, NE

42


43

Janet L. Krotter Chvala

Jan Krotter Chvala is the senior partner of Krotter Law Group, PC, LLO. Jan is a native of Spencer, Nebraska, where her family has operated a lumber, hardware and automotive business for over 125 years. Jan attended the University of Nebraska in Lincoln and received her bachelor’s degree with distinction with a major in Accounting in 1981 and her J.D. in 1984. Jan’s firm has offices in O’Neill, Norfolk, Atkinson and Stuart, Nebraska, and she is licensed to practice in both Nebraska and South Dakota. Jan served on the Board of Directors of the Nebraska Community Foundation, Inc. for several years, and now is an Honorary Board Member and chairman of several Donor Advised Funds associated with the Foundation. Jan received the Meritorious Service Award from the Nebraska Partnership for Philanthropic Planning, for work as a charitable advisor, in 2014. Jan is a Fellow with the Nebraska State Bar Foundation and a member of the Nebraska Society of Certified Public Accountants. Jan was honored for exceptional service by the Foundation in 2012 for her contributions as a Nebraska High School Mock Trial Coach for multiple schools for 28 consecutive years of coaching (2004 State Champions and 2005 State Runner-Up). Jan’s passion lies in teaching and mentoring. Besides her mock trial coaching, she teaches classes for citizens and high school students about the law, at the local high school, Northeast Nebraska Community College and the UNL Extension Offices, and is a frequent lecturer at local and bar-related estate and business planning seminars.

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Jeffery T. Peetz

Jeff Peetz's practice with Endacott Peetz & Timmer, PC LLO is focused on estate and trust planning and administration, including litigation matters and business and wealth succession planning. In addition to these areas of practice, he also works with all types of clients, from individuals and small business owners to larger sized agricultural operators and community bank owners, advising them on contractual matters related to the operation of a successful business including business succession planning.

Jeff is a frequent lecturer on estate planning topics, charitable giving as a component of one’s overall estate plan and real estate law matters for the Nebraska Continuing Legal Education Committee of the NSBA. He formerly served as a Law Clerk for the Honorable William C. Hastings of the Nebraska Supreme Court form 1983 to 1984.

In 2008, Jeff was recognized by the Nebraska Planned Giving council as a recipient of its Sowers Award for outstanding contributions to planned giving in Nebraska. He has served in various leadership roles in many state-wide charitable organizations and is the past chairperson of the Lincoln Community Foundation. In 2012, Jeff was elected as a fellow to the American College of Trust & Estate Counsel (ACTEC). Jeff currently is a member of the Fiduciary Litigation Committee and Charitable Planning Committees of ACTEC and is the State Chair Elect in 2017 for the State of Nebraska. Recognized as an AV Rated Attorney by Martindale-Hubbell, Jeff was selected as a 2013 Top Rated Lawyer in Trusts & Estates. He was also selected by his peers for inclusion in The Best Lawyers in America©2015 in the field of Real Estate Law (Copyright 2015 by Woodward/White, Inc., of Aiken, SC) and has been named a Best Lawyer since 2014.

Areas of Practice:Estate Planning; Estate, Trust and Probate Administration; Banking & Financial Institutions; Business Entity & Tax Law; Estate & Trust Litigation and Resolution; Real Estate; Agricultural Law

Admitted:Nebraska

Professional AffiliationAmerican College of Trust & Estate Counsel (ACTEC), Fellow; American Bar Association; Nebraska State Bar Association; Lincoln Bar Association; Lincoln Probate Group; National Committee on Planned Giving, Member; Planned Giving Council of Nebraska, Member; Nebraska State Bar Foundation, Fellow

Education:University of Nebraska, Bachelor of Science Business Administration; Creighton University School of Law, J.D.

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Chapter 1 - Engagement Agreements

Table of Contents

1-1 Introduction ................................................................................................................471-1(a) Purpose of Engagement Letters ........................................................ 47

1-2 General Engagement Letters in Trust and Estate Representation ........................471-2(a) Representation of Spouses ................................................................ 471-2(b) Representation of Multiple Generations of the Same Family .......... 481-2(c) Representation of Multiple Parties in a Business Context ............... 491-2(d) Estate Planning Lawyer Serving as Fiduciary .................................. 491-2(e) Representation of Executors and Trustees ........................................ 501-2(f) Fiduciary Litigation .......................................................................... 511-2(g) Dealing With the Potential for Diminished Capacity ....................... 511-2(h) Withdrawing or Termination of Representation ............................... 521-2(i) Limitation Regarding the Use of Engagement Letters and Checklists ................................................................................... 52

AppendixChecklist for Use of Engagement Letters .......................................................... 53

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47

Chapter 1 - Engagement Agreements

1-1 Introduction

1-1(a) Purpose of Engagement Letters

Engagement letters establish the scope and objectives of an engagement, set forth the basis upon which fees will be determined, and explain how conflicts of interest and confidentiality will be handled. It is strongly encouraged that engagement letters be used to avoid a misunderstanding as to the scope or duration of a representation, a dispute as to fees to be charged, or problems when a conflict of interest arises. Without a written engagement letter, specifically agreeing to the fee to be charged, the fee charged may be challenged in a subsequent proceeding before the County Court.

Notable rules from the Nebraska Rules of Professional Conduct addressing these issues are set forth below:

§3-501.2 - Scope of representation and allocation of authority between client and lawyer;

§3-501.4 - Communication;

§3-501.5 - Fees;

§3-501.6 - Confidentiality of information;

§3-501.7 - Conflict of interest; current clients;

§3-501.8 - Conflict of interest; current clients; specific rules;

§3-501.16 - Declining or terminating representation.

1-2 General Engagement Letters in Trust and Estate Representation

1-2(a) Representation of Spouses

Representation of spouses present potential problems regarding confidential information and conflicts of interest in the estate planning context. There are three basic approaches to representation of spouses:

1. Joint arrangement where lawyer shares all information in his or her possession with both spouses, unless and until an event occurs which affects that representation;

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2. Concurrent separate representation, where the lawyer holds all information he or she receives from either spouse in confidence. This approach is full of potential pitfalls and there is significant controversy whether this approach is viable in the estate planning context. Extreme caution is advised in proceeding with this approach and written documentation for use of this approach is recommended; and

3 Independent and separate representation of spouses, where different lawyers represent the respective spouses.

1-2(b) Representation of Multiple Generations of the Same Family

In connection with representing multiple generations of the same family in the estate planning context, potential problems regarding confidential information and conflicts of interest exist. It is important that if representation of multiple generations of the same family will take place, that an engagement letter defines the scope of that representation. For example, a lawyer might be representing members of the first generation jointly as to each other in connection of the disposition of the family business, concurrently and separately as to each other in connection with other estate planning matters.

First, it is necessary to identify the client. Are the clients first generation, husband and/or wife; second generation, husband and/or wife; both generations, all spouses or selected parties; or other? In which of each party’s capacity will the lawyer provide representation (e. g., individually, as a corporate officer or director, as a fiduciary, as general partner of the family partnership, etc.)? How many “hats” does each party wear, and in how many of those roles does the lawyer expect to represent each party? What duties, if any, does each party owe to other family members, and how does that affect the lawyer’s ability to represent each party and to carry out each party’s instructions?

Secondly, the attorney must consider any conflicts of interest. What conflicts of interest exist or may exist among multiple clients, and how do these conflicts affect the multiple representation? In answering this question, the following items should be considered:

(a) Are there any past, present or likely future events that might indicate a conflict of interest between or among the parties (e. g., previous marriages, divorces, prenuptial agreements, property settlements, domicile issues, non-marriage relationships, special needs children or other family members, charitable motives, asset distribution plans)? How do the parties want the lawyer to respond if the lawyer acquires knowledge that the plan of one client would adversely affect the interests of another client; knowledge that one client’s expectations or understanding of another client’s intentions are not correct; or knowledge that possible future actions by one client would adversely affect the interests of another client?

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(b) An attorney should differentiate the distinction between an “active” client and a “dormant” client and communicate the distinction with the fiduciary.

(c) Should a conflict arise in the administration of the probate or trust estate, the conflict should be identified with the parties conflicted and reduced to writing. If a waiver is required, it should also be reduced to writing. It is imperative to identify conflicts of interest at the earliest possible date and obtain written waivers of conflict where and when necessary after proper identification of the issues. In addition, facts presented may lead to the conclusion that the conflict is irreconcilable and disclosure and consent may not remove it. Haynes v. First National State Bank of New Jersey, 432A.2d 890 (N.J. 1981).

1-2(c) Representation of Multiple Parties in a Business Context

New clients or existing clients, often engage counsel for the creation of a new entity. If that entity is created for existing clients, this poses an immediate conflict of interest with the organizers as individuals, because the entity itself is a new client. It is important for the lawyer to constantly be aware of who the client is, and in this respect, to be careful to document the relationship as it may change from time to time.

In each case, the engagement letter should define and limit the scope of representation. As change occurs, amendments to the initial engagement letter should be delivered to all of the parties in interest and consents to the continued representation must be obtained. It is important again to identify the client and make it clear if the lawyer will be representing the business entity, or the individual constituents of the business, or both. An engagement letter should describe the potential conflicts of interest resulting from the lawyer’s representation of the entity or the lawyer’s representation of the constituents individually. Further, the letter should describe the possibility of a future prohibition on the lawyer’s representation of either the entity or the constituents, if a conflict arises, depending upon the identity of the initial client.

1-2(d) Estate Planning Lawyer Serving as Fiduciary

There are a number of ethical issues in a lawyer serving as a fiduciary for his client, including full disclosure to and discussing with the client of the alternative possibilities for fiduciary appointment, the relative cost effectiveness of each of the alternatives, the possible elimination of normal bonding requirements, and the possible exclusion of exculpatory language in the documents, which could have an effect on the standard of care to which the fiduciary will be held for liability purposes. Care should be taken with these subjects since the fiduciary will have been the drafter of the document. All of these ethical issues should be disclosed and discussed with the client and if possible, the lawyer should avoid serving as the client’s fiduciary.

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Issues a Lawyer Should Consider Before Accepting the Representation are the following:

(a) Does the lawyer’s professional liability policy include or exclude lawyers serving as personal representative? trustee? guardian or conservator? attorney-in-fact?

(b) Does the lawyer have adequate staff to permit the lawyer to perform the fiduciary services efficiently and cost effectively?

(c) Does the lawyer or his or her law firm have a policy regarding lawyers serving as fiduciary? (encourage, discourage, prohibit)?

An engagement letter in this situation should include the following:

(a) Fact that the client independently selected lawyer as fiduciary;

(b) Disclosure of all possible conflicts of interest;

(c) Advantages and disadvantages of the attorney serving as the fiduciary;

(d) Fees to be paid to lawyer as fiduciary and attorney’s law firm for legal services;

(e) Explanation of language and options available with respect to standard of care exculpatory language; and

(f) Explanation of bonding requirements, including cost of bond and relationship to professional liability insurance.

Consideration should also be given to co-fiduciaries, if such a selection is cost effective.

1-2(e) Representation of Executors and Trustees

When a lawyer is about to undertake representation of a personal representative, or trustee, an engagement letter should be prepared setting forth the representation of the personal representative or a trustee.

Prior to that representation, the attorney should consider whether he or she has an impermissible conflict of interest, such as a client relationship with a party who is expected to have a claim against the estate. Further, if the attorney has, or has had, a client relationship with a beneficiary, heir or creditor of the estate that the lawyer believes will not adversely affect the intended representation, the lawyer must make disclosure and seek the informed consent of the former, present and proposed clients in accordance with the ethical rules.

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The engagement letter should define the proposed client relationship, which is as the personal representative or trustee in a fiduciary capacity, and not representation of the heirs or beneficiaries. The engagement letter should set forth the scope of the engagement, the identification of the client, when the engagement will be terminated, the procedure for fees and billing, and the procedure for retention, delivery, retrieval and destruction of the files. The engagement letter should also include specifics regarding the administration of the estate or trust, including the various filing deadlines and other specific requirements of the estate or trust administration and should further explain who will be responsible for preparation of the estate and inheritance tax returns and the fiduciary income tax returns for the estate.

In some engagements, the information provided in the preceding paragraph are provided for in a subsequent “duties and responsibilities” letter and “closing” letter to the client, should the attorney desire to keep the initial engagement letter in a more concise form. Regardless, written documentation for the file is recommended.

1-2(f) Fiduciary Litigation

The engagement letter should be prepared when a lawyer is about to undertake general representation of a personal representative, or trustee in connection with litigation involving the estate or trust. This letter is appropriate when the lawyer is representing the fiduciary in the fiduciary’s representative capacity or when the lawyer is representing the fiduciary personally. The lawyer should make clear which form of representation is being undertaken, specifying the conditions of the representation, including the extent, if any, to which reimbursement of the lawyer’s fees might be sought from assets of the estate or trust.

1-2(g) Dealing with the Potential for Diminished Capacity

It is increasingly common, with longer life expectancy, for clients to experience a period of diminished capacity due to physical or mental disabilities. Nebraska Rules of Professional Conduct §3-501.14 addresses a client with diminished capacity. That rule provides that when a client’s capacity to make adequately considered decisions in connection with a representation is diminished, whether because of minority, mental impairment or for some other reason, the lawyer shall, as far as reasonably possible, maintain a normal client/lawyer relationship with the client. However, under §3-501.14 (b), when the lawyer reasonably believes that the client has diminished capacity, is at risk of substantial physical, financial or other harm unless action is taken and cannot adequately act in the clients own interest, the lawyer may take reasonably necessary protective action, including consulting with individuals or entities that have the ability to take action to protect the client and, in appropriate cases, seeking the appointment of a guardian ad litem, conservator or guardian. Under §3-501.14 (c), information relating to the representation of a client with diminished capacity is protected by Rule of Professional Conduct §3-501.6. Under that provision, the lawyer is impliedly authorized to reveal information about the client, but only to the extent necessary to protect the client’s interests.

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A properly drafted engagement letter might contemplate the possibility of future diminished capacity and express the manner in which the lawyer might provide legal services in that eventuality. It might also address steps that the client might want taken to protect the client’s interests and assure the client’s intentions are honored. Finally, the engagement letter might authorize the lawyer to communicate with others if the lawyer becomes concerned regarding the client’s capacity.

1-2(h) Withdrawing or Termination of Representation

Nebraska Rules of Professional Conduct §3-501.16 addresses how an attorney may withdraw or terminate his representation of a client.

Upon completion of the particular estate planning project that a lawyer may be working on for a particular client, the lawyer should consider writing a termination letter to the client. If no termination letter is written, the client may think that the lawyer is still engaged and has a duty to inform him of various tax law changes, and how those changes might affect that individual’s estate plan. A sample termination letter used to terminate the representation is attached. That letter advises the client that the representation is terminated and the client has the duty to inform the attorney if the client’s circumstances have changed and if further services are needed.

1-2(i) Limitation Regarding the Use of Engagement Letters and Checklists

It is important to remember that engagement letters do not replace an attorney’s own independent judgment. Engagement letters are designed to address issues that affect all attorneys and no single letter, form or checklist will cover all situations. The attorneys using materials with a general checklist should certainly understand its limitations in regard to the specific services that are to be provided for each attorney-client situation. Each attorney is challenged to address the situations of the specific attorney-client relationship and modify the engagement letter to meet the situation, in order to provide requested service competently and ethically. In each engagement and the letters provided for such engagement should be modified as necessary to reflect the individual attorney’s, and his or her firm’s, style and practice for the law of the jurisdiction, in addition to understanding the client’s capacity.

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Checklist for Use of Engagement Letters

l. Issues a Lawyer Should Consider Before Accepting the Representation

(a) Is there any previous or existing client or advisory relationship between/among the lawyer (or his or her firm) and any of the parties, their families or their business or domestic partners? If so, does the lawyer have a conflict in representing any of the parties?

(b) If the lawyer (or the lawyer's firm) has represented any of the parties, their families or their business or domestic partners, in what capacity (e.g., individually, as an officer director or man-ager of an organization, or as a fiduciary or beneficiary of an estate or trust)? What connections do the parties have with each other (e.g., familial, business or personal relationships, fiduciaries or beneficiaries of an estate or trust)?

(c) How well does the lawyer know the parties?

(d) Are the parties U.S. citizens? Are the parties U.S. residents? What are the domiciles of the parties? If any entity is involved, is the entity duly organized and in good standing in all ap-propriate jurisdictions? In which jurisdiction or jurisdictions will the entity be organized or authorized to do business? If a trust or estate is involved, in what jurisdiction is it being or will it be administered?

(e) Under guidelines issued by the Financial Action Task Force on Money Laundering, before agreeing to represent a person or entity, the best practice consists of:

1. Confirming the prospective client's identity by examining a government issued identification containing his or her photograph, unless previously known and represented and identity is not an issue.

2. Identifying the persons managing and the persons having beneficial interests in business entities and trusts.

3. Making sure the client's circumstances and businesses are understood.

4. At a minimum, doing an internet search for suspicious circumstances or activi-ties in which the prospective client is or may be involved. The Task Force also recommends checking the website for the Treasury Department's Office of For-eign Assets Control to see if the prospective client's name appears on its list of individuals with whom U.S. persons are prohibited from dealing.

(f) Do all parties appear to have adequate capacity to enter into the engagement?

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(g) What other professionals are involved (e.g., accountants, appraisers, brokers, financial advi-sors)? Are they known to be competent? What referral relationships exist?

(h) Are the expectations of the parties as to the outcome and timing of the lawyer's work reason-

able and obtainable? Do the parties have a common goal and agree on the way to go about achieving it?

(i) What are the fee arrangements and is there an understanding they will be reduced to writing?

2. Define the Scope of Rep esentation

(a) Describe with appropriate specificity the objectives of the representation and the means by which those objectives are to be pursued. Define the scope as narrowly as possible (to avoid having clients expect more than you can deliver or that it is cost effective to deliver).

(b) Make it clear that the lawyer (or the firm) will not be obligated to provide services beyond the scope of the engagement described in the original letter absent an updated or separate engage-ment letter by which the lawyer (or the firm) agrees to render other services.

(c) Describe the nature and consequences of any limitations on the scope of the representation, and obtain the clients' consent to those limitations. For example, if the laws of another jurisdiction come into play in the legal services to be performed and the lawyer is not licensed to practice in that jurisdiction, point out to the client that he or she may have to retain legal counsel in that jurisdiction. Similarly, if due to the nature of estate or trust assets (e.g., intellectual property) or a client's personal circumstances (e.g., a child custody dispute) the lawyer or firm lacks the expertise to attend to all of the client's legal needs, consider pointing out what issues must be addressed by lawyers of different disciplines.

(d) What do the parties expect the "style" of the representation to be (e.g., separate meetings with each party or some parties or are meetings to be attended by all interested parties)? Is one party to be placed in charge of making certain types of decisions?

(e) Consider describing the time frame within which the various phases of the engagement will be completed and mentioning any foreseeable delays or periods during which the lawyer may not be available during the engagement. Also consider identifying other attorneys, legal assistants, and support personnel in the lawyer's office who may or should be consulted in the event of the lawyer's absence or unavailability. In addition, if the written fee agreement provides for an hourly rate, it is recommended the rate for each person working on the file be identified.

(f) Describe the extent to which the lawyer will rely upon information furnished by the parties and the extent, if any, to which the lawyer will attempt to verify this information. Describe the circumstances under which the lawyer may be required to verify some or all of the informa-tion furnished by the parties in order to comply with the applicable standards of practice (e.g., Circular 230).

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3. Identify the Client or Clients

(a) If a prospective client is married, will the lawyer (or firm) represent one spouse or both spouses?

(b) If two or more prospective clients are related (personally or professionally) but not married, will the lawyer (or firm) represent one, some or all of the parties affected by the subject matter of the engagement?

(c) Are there any doubts about a prospective client’s capacity? If so, how will they be resolved? If the doubts cannot be resolved, will the lawyer (or firm) represent the prospective client's legal representative instead?

(d) Identify all clients who can sign on behalf of an entity (someone other than the represented principal). Consider having the clients represent that their interests are not adversarial.

(e) Consider describing how the diminished capacity or death of a client will affect the representa-tion, including those persons who may be given copies of an estate planning client's documents.

4. Explain the Lawyer's Duty to Avoid Conflicts of Interest and How Potential or Actual Con-flicts of Inte est Will Be Resolved

(a) Describe the effect and consequences of any simultaneous representation of multiple clients, including potential conflicts of interest. Note that some jurisdictions may require the lawyer to give examples of conflicts of interest that can arise under the circumstances.

(b) Describe how an actual conflict of interest will be resolved, the fact that the firm may have to withdraw from representing some or all parties if an actual conflict arises and the adverse consequences that may result from the firm's withdrawal. (If the lawyer plans to continue to represent some but not all parties if an actual conflict arises, presumably this is because the lawyer has a pre-existing. long-standing relationship with the party or parties whom the lawyer will continue to represent.)

(c) Obtain the informed consent of all clients to the specific type of a simultaneous representation of multiple clients (joint or separate). Confirm in the engagement letter that the lawyer dis-cussed the implications of joint versus separate representation with the clients.

(d) If appropriate, describe how a prior representation may give rise to a conflict of interest. (See Model Rule of Professional Conduct 1.8 concerning conflicts of interest among current clients and Model Rule 1.9 concerning duties to former clients.)

(e) Consider requesting authorization from all of the clients to disclose to all interested parties the

actions of any one of the clients constituting fraud, a breach of trust, a violation of the govern-ing documents of any entity involved, or in contravention of a mutual estate plan.

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(f) If appropriate, describe the possible conflict of interest if the lawyer is to receive an interest in any business as a part of the lawyer's fee.

(g) Consider whether each party should be advised to consult independent counsel before consent-ing to the joint representation.

5. Explain the Lawyer's Duty of Confidentiality and How Confidential Information Will Be Handled

(a) Describe the lawyer's duty of confidentiality and whether and to what extent confidential in-formation will be shared with the various clients. Obtain the clients' consent to the sharing of information (or refusal to share) in this manner.

(b) Describe how electronic communications and the inclusion of non-clients in meetings can compromise confidentiality and the attorney-client privilege.

(c) Consider describing how the diminished capacity or death of a client will affect the dis-closure of confidential information.

6. Explain the Fee or the Basis for the Determination of the Fee and the Billing Arrangements [Including the Material Required Under Rule 1.5 (b)]

(a) If a contingent fee is involved, obtain the client's consent in writing. Nebraska Rules of Profes-sional Conduct §3501.5(c)

(b) Describe factors that might cause the fee to be different from any estimate and how and when changes in standard billing rates may affect the fee.

(c) If appropriate, describe how the fee will be shared with other lawyers outside the firm.

(d) If someone other than the client will pay the lawyer's fees, then in keeping with Nebraska Rule of Professional Conduct 1.8(f): (i) Make sure that the client gives his or her informed consent to the arrangement; and (ii) consider having the person paying the fees acknowledge in writing that all communications with the client are strictly confidential and that he or she may in no way interfere with the lawyer's relationship with his or her client or with the lawyer's indepen-dent professional judgment.

(e) Describe who is responsible for paying the lawyer's fees and expenses. If the representation involves multiple clients, describe the extent to which each client is or may be liable for the lawyer's fees and expenses and whether the liability of multiple clients is to be individual or joint and several.

(f) Describe the lawyer's billing and collection policies.

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(g) Verify the client's billing address and contact information.

(h) Consider whether you want to ask clients to agree to arbitrate or mediate any fee dispute within the rules of state law and practice.

7. Firm Policies of Which Clients Should Be Made Aware

(a) Retention, destruction and sharing of clients' files and original documents.

(b) Advise whether you and your firm carry professional liability insurance.

8. Termination of the Representation

(a) Describe the events, dates, or circumstances that will terminate the representation.

(b) Describe the difference between mandatory and permissive withdrawal and any prior Court approval that may be needed before the lawyer (or firm) may cease representing the client(s).

(c) If the representation involves multiple clients, consider describing what information, if any, the lawyer will give to the clients if the lawyer is required to withdraw from the representation.

(d) Describe what will happen when the lawyer withdraws and to whom the records will be sent.

9. Recommended Procedures

(a) Send an engagement letter to all of the prospective clients prior to the first meeting or telephone conference or immediately following it.

(b) Review the more important terms of the engagement letter with the client.

(c) Require that all clients sign the engagement letter or agreement or otherwise acknowledge the terms of any multiple representation.

NOTE: Specific assistance for the preparation of this checklist came from use of the materials of the American College of Trust and Estate Counsel (ACTEC), Engagement Letters: A Guide for Practitioners, Third Edition 2017, with permission.

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Intestacy: What are Your Options After the Fact: Post-Death Family Agreements;

Alternative Valuations for Taxing Purposes; and Disclaimer

Ramzi Hynek

Rembolt Ludtke, LLP Lincoln

March 23, 2018

UNO Thompson Center

Omaha, NE

Pre-Death Estate Planning Strategies for Families When They Know/Suspect

Intestacy is Inevitable:

• Search, search, search for existing estate plan documents!

• Make use of existing General Durable Power of Attorney document

o Does it allow for the creation of a trust?

o Does it authorize gifting?

o Does it authorize the creation of rights of survivorship?

o Does it allow for the creation of beneficiary designations?

• Consider establishment of conservatorship

o A court may authorize gifting and/or the creation of a trust, rights of

survivorship, or beneficiary designations

• Take an inventory the assets

• Inquire about previous gifts and obtain copies of returns from the IRS- Form 4506

• Consider gifting

o Gifts that qualify for the $15,000 per donee gift tax annual exclusion under

2503(b) do not come within the three-year rule

o Make gifts as necessary to reduce probate assets below $50,000

o Gifts to reduce the valuation of assets that remain in the gross estate (e.g.,

gifting sufficient ownership of a closely held entity to allow for a minority

discount, or a gift to create a fractional interest in real estate so that less

than a full fee simple title will be valued in the estate)

o Transfer of appreciated property between spouses to take advantage of full

step-up in basis, but be mindful of the 1-year rule in 1014(e)

• Anticipate Decedent’s final income tax return

o Preserve losses by selling depreciated property and avoid a step-down in

basis upon death

o Consider accelerating items of income before death to take advantage of tax

benefits that otherwise would be lost

• Consider whether charitable contributions are more advantageous during life or

later made voluntarily by heirs

• Consider paying off debts and other obligations

• Consider establishment of an entity

Postmortem Estate Planning Strategies For Intestate Estates:

• Alternate valuation

• Special use valuation

• Timing options for payment of federal estate tax

• Elections involving estate and beneficiary income taxes

o Choice of fiscal year

o Administration expense election

• Election of portability

• Disclaimer/renunciation options

• Post death agreements under NEB. REV. STAT. §§ 30-24,123 and 30-24,124

• Consider use of neutral, third-party personal representative

• Exemptions and allowances

• Court establishment of self-settled special needs trust

4833-9259-3503, v. 1

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Reginald S. Kuhn

Reginald S. Kuhn joined the Mattson Rickets Law Firm in 1991. Reg is a native of Clarks, Nebraska, where his family is actively involved in agriculture. Previously he was associated with the accounting firm of Deloitte where he was a tax manager and Certified Public Accountant.

Reg has been an instructor at the University of Nebraska-Lincoln College of Business Administration and a guest lecturer at the University of Nebraska College of Law. In addition, for several years he served as an instructor for continuing education courses sponsored by the Nebraska Society of CPA’s.

Reg has extensive experience in practice before the Internal Revenue Service and state taxing authorities.

Ramzi J. Hynek

Ramzi Hynek is a partner of Rembolt Ludtke. Her practice focuses on estate planning, succession planning, and the developing family wealth transfer plans that minimize taxation while achieving each family’s unique needs and goals. She also represents individual and corporate personal representatives and trustees in the administration of estates and trusts.

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Chapter 2 - Intestate Succession, Exempt Property and Allowances

Table of Contents

2-1 Article 23, Part 1, Intestate Succession ....................................................................652-1(a) Introduction ...................................................................................... 652-1(b) Distribution of Intestate Property ..................................................... 66

2-1(b)(1) Definition of Intestate Estate ........................................662-1(b)(2) No Distinction Between Real and Personal Property ..................................................662-1(b)(3) Share of Surviving Spouse ...........................................662-1(b)(4) Share of Heirs Other Than Surviving Spouse ..............66

2-1(c) Other Provisions ............................................................................... 672-1(c)(1) Survival ........................................................................672-1(c)(2) Representation ..............................................................682-1(c)(3) Definitions of Child......................................................692-1(c)(4) Advancements ..............................................................702-1(c)(5) Debts ............................................................................712-1(c)(6) Aliens ...........................................................................712-1(c)(7) Homicide ......................................................................71

2-2 Article 23, Part 4, Exempt Property and Allowances .............................................722-2(a) Introduction ...................................................................................... 72

2-2(a)(1) Protection Measures In General ...................................722-2(a)(2) Use of Protection Measures .........................................722-2(a)(3) Other Statutes ...............................................................72

2-2(b) Homestead Allowance ...................................................................... 732-2(b)(1) Surviving Spouse .........................................................732-2(b)(2) No Surviving Spouse ...................................................732-2(b)(3) Priority .........................................................................732-2(b)(4) Allowance Qualifies for Marital Deduction .................73

2-2(c) Exempt Property ............................................................................... 742-2(c)(1) Surviving Spouse .........................................................742-2(c)(2) No Surviving Spouse ...................................................742-2(c)(3) Eligible Property ..........................................................742-2(c)(4) Priority to Spouse .........................................................742-2(c)(5) Priority to Children ......................................................752-2(c)(6) Property Qualifies for Marital Deduction ....................75

2-2(d) Family Allowance ............................................................................. 75

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2-2(d)(1) Surviving Spouse .........................................................752-2(d)(2) Priority .........................................................................752-2(d)(3) One Year Limitation .....................................................752-2(d)(4) Method of Payment ......................................................752-2(d)(5) Allowance in Addition to Other Shares .......................762-2(d)(6) Effect of Death .............................................................762-2(d)(7) Allowance Qualifies for Marital Deduction .................76

2-2(e) Source, Determination and Documentation ..................................... 762-2(e)(1) Surviving Spouse and Children ...................................762-2(e)(2) Personal Representative ...............................................762-2(e)(3) Amount of Family Allowance ......................................762-2(e)(4) Indefensible Right of Surviving Spouse ......................762-2(e)(5) Court Relief ..................................................................772-2(e)(6) Methods of Distribution ...............................................77

2-3 Probate and Intestacy ................................................................................................772-3(a) Partial Intestacy ................................................................................ 77

2-3(a)(1) When Partial Intestacy Occurs .....................................772-3(a)(2) Discovery of Partial Intestacy ......................................772-3(a)(3) Order of Partial Intestacy .............................................77

2-3(b) Formal or Informal Probate .............................................................. 782-3(b)(1) Choice of Formality .....................................................782-3(b)(2) When Formal Proceedings Required ...........................782-3(b)(3) Bond .............................................................................782-3(b)(4) Payment of Debts, Expenses and Taxes;

Allocation of Tax Deductions ......................................78

AppendixTable of Consanguinity ...................................................................................... 81Table in Intestate Succession ............................................................................. 82

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Chapter 2 - Intestate Succession, Exempt Property and Allowances

2-1 Article 23, Part 1, Intestate Succession (§§ 30-2301 to 30-2312)

2-1(a) Introduction

Features of the Nebraska intestate succession provisions include:

1. The intestate shares of the spouse (Nebraska Probate Code § 30-2302) and other heirs (Nebraska Probate Code § 30-2303) are delineated.

2. An heir who does not survive the decedent by 120 hours is generally deemed to have predeceased the decedent. Nebraska Probate Code § 30- 2304.

3. Property not distributed pursuant to the intestate statutes passes to the state. Nebraska Probate Code § 30-2305.

4. Taking “by representation” is different from taking “per stripes,” in that the per capita distribution is made at the first degree of relationship in which there are living heirs. Nebraska Probate Code § 30-2306.

5. Relatives of the half blood inherit as if they were relatives of the whole blood. Nebraska Probate Code § 30-2307.

6. Relatives conceived before the decedent’s death but born thereafter inherit as if they had been born prior to the decedent’s death. Nebraska Probate Code § 30-2308.

7. Rules establishing the relationship of a parent and child are delineated. Nebraska Probate Code § 30-2309.

8. Lifetime gifts are not charged as advancements against the intestate share of a donee-heir unless so expressed by the decedent in a contemporaneous writing or so acknowledged in writing by the donee- heir. Nebraska Probate Code § 30-2310.

9. Rules relating to debts owed the decedent by an heir (Right of Retainer) are delineated. Nebraska Probate Code § 30-2311.

10. Rules regarding inheritance by aliens are delineated. Nebraska Probate Code § 30-2312.

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2-1(b) Distribution of Intestate Property

2-1(b)(1) Definition of Intestate Estat

The intestate estate is any part of the estate of a decedent not effectively disposed of by will. Nebraska Probate Code § 30-2301. Property owned in joint tenancy passes to the surviving joint tenant(s). It passes by virtue of the tenancy, rather than by the law of descent and distribution, or by the provisions of the will of the deceased joint tenant. Estate of Walters v. Frick, 212 Neb. 645, 324 N.W.2d 889 (1982). Property passing by virtue of a beneficiary designation, such as life insurance or a retirement plan, passes according to the terms of the controlling contract and is not part of the intestate estate, unless the beneficiary of such property is the estate of the decedent.

2-1(b)(2) No Distinction Between Real and Personal Property

Real and personal property are treated identically.

2-1(b)(3) Share of Surviving Spouse

1. If there is no surviving issue or parent of the decedent, the entire intestate estate. Nebraska Probate Code § 30-2302(1).

2. If there is no surviving issue but the decedent is survived by a parent or parents, the first $100,000, plus one-half of the balance of the intestate estate. Nebraska Probate Code § 30-2302(2).

3. If there are surviving issue, all of whom are issue of the surviving spouse, the first $100,000, plus one-half of the balance of the intestate estate. Nebraska Probate Code § 30-2302(3).

4. If there are surviving issue, one or more of whom are not issue of the surviving spouse, one-half of the intestate estate. Nebraska Probate Code § 30-2302(4).

5. See Nebraska Probate Code § 30-2353 for the definition of “spouse.”

2-1(b)(4) Share of Heirs Other Than Surviving Spouse

1. To the issue of the decedent; if they are all of the same degree of kinship to the decedent they take equally, but if of unequal degree, then those of the more remote degree take by representation. Nebraska Probate Code § 30-2303(1).

2. If there are no surviving issue, to the decedent’s parent or parents equally. Nebraska Probate Code § 30-2303(2).

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3. If there are no surviving issue or parent, to the issue of the parents or either of them by representation. If the issue of the parents are all of the same degree of kinship to the decedent, they take equally. If the issue are of unequal degree, then those of more remote degree take by representation. Nebraska Probate Code § § 30-2303(3) and 30-2306.

4. If there are no surviving issue, parent or issue of a parent, but the decedent is survived by one or more grandparents or issue of grandparents, half of the intestate estate passes to the paternal grandparents, or issue, taking by representation, and the other half to the maternal grandparents, or issue, taking by representation. If there are no relatives on either the paternal or maternal side, the entire intestate estate passes to the relatives on the other side in the same manner as the half they otherwise received. Nebraska Probate Code § 30-2303(4).

5. If there are no surviving issue, parent, issue of a parent, grandparent or issue of a grandparent, the entire intestate estate passes to the next of kin in equal degree. However, where there are two or more collateral kindred in equal degree, but claiming through different ancestors, those claiming through the nearest ancestor will be preferred to those claiming through a more remote ancestor. Nebraska Probate Code § 30-2303(5). Note that under this provision collateral kindred do not take by representation. A Table of Consanguinity (not a part of the Nebraska statutes) is found in the Appendix of this Chapter.

6. If there are no heirs under Nebraska Probate Code §§ 30-2302 and 30- 2303, the intestate estate passes to the state. Nebraska Probate Code § 30- 2305.

7. The term “heirs” refers to those person, including the surviving spouse, who are entitled under the statutes of intestate succession to the property of a decedent. The devisees under a will are not necessarily also heirs. Nebraska Probate Code §30-2209(18).

2-1(c) Other Provisions

2-1(c)(1) Survival

Any person who fails to survive the decedent by 120 hours is deemed to have predeceased the decedent for purposes of homestead allowance, exempt property and intestate succession. However, this rule does not apply if it would result in the state taking the intestate estate. Nebraska Probate Code §§ 30-2304 and 30-2305.

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2-1(c)(2) Representation

1. Taking by representation is determined by dividing the intestate estate into as many shares as there are surviving heirs in the nearest degree of kinship and deceased persons in the same degree who left issue who survive the decedent, with each surviving heir in the nearest degree receiving one share and the share of each deceased person in the same degree being divided among his or her issue in the same manner. Nebraska Probate Code § 30-2306. Note that this is not the same as a strict per stirpes approach to distribution; rather, it reflects a modern per stirpes approach codified originally found in the Uniform Probate Code and codified in Nebraska.

(a) The difference between strict per stirpes and taking by representation (modern per stirpes) is the generation at which shares of the estate are divided.

(b) Under a strict per stirpes approach, the decedent’s estate is divided at the generation closest to the decedent, regardless of whether there are any surviving individuals in that generation. In contrast, taking by representation begins at the first generation in which there is living issue.

(c) In taking by representation, then, we look for the first generation to come after the decedent in which there is a surviving heir, and then we divide the intestate estate equally at that generation. See In re Estate of Evans, 20 Neb. App. 602, 610-11 (2013).

2. Examples of Distribution by Representation:

(a) Decedent died without a surviving spouse leaving an estate of $90,000 and three children, Abel, Baker and Charlie. Each child would inherit $30,000. This is because the “child” generation is the first generation in which there is living issue, so we make the division equally at this generation.

(b) Abel has one child; Baker has three children; and Charlie has five children. If Baker and Charlie both predeceased the decedent, the distribution would be $30,000 to Abel; $10,000 to each of Baker’s three children; and $6,000 to each of Charlie’s five children. Like in (a), we make the division at the “child” generation because there is living issue – Abel – at that generation.

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(c) If Abel died 100 hours after the decedent, then there would be no surviving children in that degree of kinship, and the nine grandchildren would each inherit $10,000. This is because under Nebraska’s 120-hour survival rule, there would be no living issue in the “child” generation, so no division would be made at that generation. Rather, the decedent’s estate would be divided at the next, “grandchild,” generation. Each grandchild would thus get an equal one-ninth share.

(d) In the example in (c) above under a strict per stirpes distribution, Abel’s child would have received $30,000, each of Baker’s children would have received $10,000, and each of Charlie’s children would have received $6,000, even though Abel, Baker, and Charlie all predeceased the decedent. Recall that under strict per stirpes, the decedent’s estate is divided equally at the closest generation regardless of whether there are living issue in that generation. Therefore, the estate would be split three ways at the “child” generation and the grandchildren would take accordingly. Note that this approach resulted in Abel’s child receiving a substantially greater share ($30,000) than each of Charlie’s children ($6,000).

2-1(c)(3) Definitions of Chil

1. An adopted person is the child of the adopting parent and not of the natural parent, except that adoption of a child by the spouse of a natural parent has no effect on the relationship between the child and that natural parent. Nebraska Probate Code § 30-2309(1).

(a) A twice-adopted child may not inherit under the laws of intestacy from its first adoptive parent who has thereafter consented to the second adoption and relinquished all rights as a parent. In Re Estate of Luckey, Bailey v. Luckey, 206 Neb. 53, 291 N.W.2d 235 (1980).

(b) Adult adoption, which was valid at the time it was granted in another state but would not have been allowed under Nebraska law, is entitled to full faith and credit in determining the beneficiaries of a trust created under a Nebraska will because a Nebraska court may not refuse to recognize the judgment consisting of an adoption decree validly entered by a court of another state. John A. Nixon Family Trust v. Nixon, 277 Neb. 546, 763 N.W.2d 404 (2009).

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(c) The next of kin of adoptive parents have the same right to inherit from an adoptive child as they would from a natural child of said adoptive parent. Neil v. Masterson, 187 Neb. 364, 191 N.W.2d 448 (1971)

2. A decedent’s son-in-law or daughter-in-law is not considered an heir at law for purposes of intestate succession. See In re Estate of Balvin, 295 Neb. 346 (2016).

3. A person born out of wedlock is a child of the mother (Nebraska Probate Code § 30-2309(2)), but is considered a child of the father only if:

(a) The natural parents participated in a marriage ceremony before or after the birth of the child even though the attempted marriage is void. Nebraska Probate Code § 30-2309(2)(i).

(b) The paternity is established by an adjudication before the death of the father or is established thereafter by strict, clear and convincing proof. The open cohabitation of the mother and alleged father during the period of conception is admissible as evidence of paternity. Any paternity so established is ineffective to qualify the father or his kindred to inherit from or through the child unless the father has openly treated the child as his, and has not refused to support the child. Nebraska Probate Code § 30-2309(2)(ii).

4. Relatives conceived before the decedent’s death but born thereafter inherit as if they had been born prior to the decedent’s death. Nebraska Probate Code §30-2308.

(a) However, the Nebraska Supreme Court held that a child who is posthumously conceived cannot inherit from the biological father’s estate, even if the child is born within nine months of the biological father’s death. See Amen v. Astrue, 284 Neb. 691, 822 N.W.2d 419 (2012).

2-1(c)(4) Advancements (gifts intended to be deducted from donee's inheritance)

1. The doctrine of advancements applies to all heirs. Nebraska Probate Code § 30-2310. It applies to both testate and intestate estates. In re Estate of Soule, 248 Neb. 878, 540 N.W.2d 118 (1995).

2. Advancements are charged against an heir’s share only if declared in a contemporaneous writing by the decedent or acknowledged in writing by the heir to be an advancement. In re Estate of Soule, 248 Neb. at 884-85.

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3. Advancements are valued as of the time the heir came into possession or enjoyment of the property, or as of the time of death of the decedent, whichever occurs first.

4. If the recipient of the property fails to survive the decedent, the property is not taken into account in computing the intestate share to be received by the recipient’s issue, unless the declaration or acknowledgment provided otherwise.

2-1(c)(5) Debts

A debt owed to the decedent is not charged against the intestate share of any person except the debtor (right of retainer). If the debtor fails to survive the decedent, the debt is not taken into account in computing the intestate share of the debtor’s issue. Nebraska Probate Code § 30-2311.

2-1(c)(6) Aliens

No person is disqualified to take as an heir because of alienage, except as provided in Nebraska Revised Statutes § 4-107 (rights of nonresident alien to take property by succession or testamentary disposition) and Chapter 76, Article 4 (escheat and alien ownership of land). Nebraska Probate Code § 30-2312.

2-1(c)(7) Homicide

1. A person who feloniously and intentionally kills or aids and abets the killing of a decedent is prohibited from taking property as a surviving spouse, heir, devisee, joint tenant or named beneficiary. Nebraska Probate Code §§ 30-2354(a), (b), (c), (d), and (e).

2. The estate of the decedent passes as if the offending person had predeceased. Nebraska Probate Code §§ 30-2354(a), (b), (c), (d), and (e).

3. A final judgment of conviction of felonious and intentional killing or aiding and abetting is conclusive. In the absence of such a conviction, the court may determine by a preponderance of the evidence whether the killing was felonious and intentional for the purpose of the taking of the decedent’s property. Nebraska Probate Code § 30-2354 (f).

(a) Due to the differences in burdens of proof between criminal and civil cases, it is possible that a person who has been acquitted of the murder of a decedent in a criminal prosecution and who attempts to claim as an heir, devisee, joint tenant or beneficiary of the decedent may be found by the probate court to have

72

feloniously and intentionally killed the decedent and thus be barred from taking the decedent’s property.

4. Eligibility To Serve as Personal Representative:

(a) Trial court did not err when it removed a husband as personal representative of his wife’s estate and appointed her son as successor personal representative, where son met his burden of showing that husband intentionally and feloniously killed wife. Krumwiede v. Krumwiede, 264 Neb. 378, 647 N.W.2d 625 (2002).

2-2 Article 23, Part 4, Exempt Property and Allowances (§§ 30-2322 to 30-2325)

2-2(a) Introduction

2-2(a)(1) Protection Measures In General

The Nebraska Probate Code provides certain protection measures to assure that some property is available to the decedent’s spouse and/or children which is exempt from the claims of the decedent’s unsecured creditors and other persons who might otherwise receive such property.

2-2(a)(2) Use of Protection Measures

If the gross value of the decedent’s assets does not exceed the aggregate value of the exemptions and allowances, the personal representative can distribute the estate in kind to the beneficiaries of the exemptions and allowances without regard to whether the estate is testate, intestate, solvent or insolvent. If the estate is worth more than the aggregate value of the exemptions and allowances, the personal representative can still make an early distribution of the aggregate value of the exemptions and allowances with minimal risk.

2-2(a)(3) Other Statutes

Other statutes which should be reviewed in connection with these measures:

1. Nebraska Probate Code § 30-2353 regarding the definition of “spouse.”

2. Nebraska Probate Code § 30-2309 regarding the definition of “child.”

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3. Nebraska Probate Code § 30-2304 regarding the requirement that an heir survive the decedent for 120 hours.

4. Nebraska Probate Code § 30-2316 which provides the methods by which a surviving spouse may waive rights to the homestead allowance, exempt property and the family allowance. The waiver of such rights by the surviving spouse will not affect the rights of the decedent’s children.

5. Nebraska Probate Code § 30-2352 which provides the methods by which a surviving spouse or children may renounce the allowances and exempt property.

6. Nebraska Probate Code § 30-2318(b) which grants the surviving spouse the right to the homestead allowance, exempt property and the family allowance whether or not the surviving spouse elects to take an elective share of the decedent’s estate.

2-2(b) Homestead Allowance: Nebraska Probate Code § 30-2322

2-2(b)(1) Surviving Spouse

A surviving spouse of a domiciled decedent is entitled to a homestead allowance of $20,000 in cash or property, which is exempt from and has priority over all claims, except costs and expenses of administration.

2-2(b)(2) No Surviving Spouse

If there is no surviving spouse, the minor and dependent children of the decedent may equally share the homestead allowance.

2-2(b)(3) Priority

The homestead allowance is in addition to any share passing by the decedent’s will (unless otherwise provided therein) by intestate succession, or by elective share.

2-2(b)(4) Allowance Qualifies fo Marital Deduction

Homestead allowance distributed to the surviving spouse qualifies for the federal estate tax marital deduction.

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2-2(c) Exempt Property: Nebraska Probate Code § 30-2323

2-2(c)(1) Surviving Spouse

A surviving spouse of a domiciled decedent is entitled to exempt property not exceeding $12,500 in value (in excess of any security interest therein), which is exempt from and has priority over all claims, except the homestead allowance, the family allowance, and costs and expenses of administration.

2-2(c)(2) No Surviving Spouse

If there is no surviving spouse, the children of the decedent may equally share exempt property unless the decedent has provided in his or her will that one or more of such children shall be disinherited, in which case only those children not so disinherited shall be so entitled. There is no requirement that the children be minors or dependents of the decedent to receive the exempt property.

2-2(c)(3) Eligible Property

Exempt property may be selected from:

1. Household furniture

2. Automobiles

3. Furnishings

4. Appliances

5. Personal effects

6. Other property to the extent the property listed in 3.1 through 3.5 above does not equal $12,500.

2-2(c)(4) Priority to Spouse

Exempt property is in addition to any share passing to the surviving spouse by the decedent’s will (unless otherwise provided therein), by intestate succession or by elective share.

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2-2(c)(5) Priority to Children

These rights are in addition to any benefit or share passing to the surviving children by intestate succession and are in addition to any benefit or share passing by the will of the decedent to those surviving children not disinherited unless otherwise provided in the will.

2-2(c)(6) Property Qualifies fo Marital Deduction

Exempt property distributed to the surviving spouse qualifies for the federal estate tax marital deduction.

2-2(d) Family Allowance: Nebraska Probate Code § 30-2323

2-2(d)(1) Surviving Spouse

A surviving spouse, minor children, and dependent children of a domiciled decedent are entitled to a reasonable allowance, in money, for their support and maintenance during the period of administration.

2-2(d)(2) Priority

The family allowance is exempt from and has priority over all claims, except the homestead allowance and costs and expenses of administration.

2-2(d)(3) One Year Limitation

The family allowance may not continue for longer than one year if the estate is inadequate to pay claims.

2-2(d)(4) Method of Payment

The family allowance is payable to the surviving spouse for the use of the spouse and minor and dependent children, as their needs may appear, in a lump sum or in periodic installments. If there is no surviving spouse, the family allowance is payable to the decedent’s children, or to persons having their care or custody. If there is a surviving spouse and minor and dependent children who do not live with the surviving spouse, the family allowance may be paid partially to such children (or to persons having their care and custody) and partially to the surviving spouse, as their needs may appear.

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2-2(d)(5) Allowance in Addition to Other Shares

The family allowance is in addition to any share passing by the decedent’s will (unless otherwise provided therein), by intestate succession or by elective share.

2-2(d)(6) Effect of Deat

The death of any person entitled to the family allowance, other than the surviving spouse, terminates all rights to the family allowance not yet paid.

2-2(d)(7) Allowance Qualifies fo Marital Deduction

The family allowance distributed to the surviving spouse qualifies for the federal estate tax marital deduction.

2-2(e) Source, Determination and Documentation: Nebraska Probate Code § 30-2323

2-2(e)(1) Surviving Spouse and Children

The surviving spouse, guardians of minor children, or adult children may select property of the estate as the homestead allowance and exempt property, but not from specifically devised property, unless the estate is otherwise insufficient to pay homestead allowance and exempt property.

2-2(e)(2) Personal Representative

After giving such notice as the court may require for proceedings initiated under Nebraska Probate Code § 30-2405, the personal representative may make selections of the homestead allowance and exempt property if the surviving spouse, children, or guardians of minor children are unable or fail to do so within a reasonable time or if there are no guardians of the minor children.

2-2(e)(3) Amount of Family Allowance

The personal representative may determine the family allowance in a lump sum not to exceed $20,000 or period installments not exceeding $1,666.67 per month for one year.

2-2(e)(4) Indefensible Right of Surviving Spouse

The homestead allowance, exempt property, and the family allowance as determined by the personal representative or the court vest as an indefeasible right of property in the surviving spouse as of the date of the decedent’s death. They survive as

77

assets of the surviving spouse’s estate if unpaid on the date of death of the surviving spouse, and do not terminate upon the death or remarriage of the surviving spouse. This ensures their qualification for the federal estate tax marital deduction.

2-2(e)(5) Court Relief

The personal representative or any interested person (surviving spouse, children or others) aggrieved by any selection, determination, payment, proposed payment, or failure to act under § 2325, may petition the court for appropriate relief. The relief may include a larger or smaller family allowance than the personal representative determines or could have determined.

2-2(e)(6) Methods of Distribution

The personal representative may execute instruments or deeds of distribution to establish ownership of property distributed as homestead allowance or exempt property.

2-3 Probate and Intestacy

2-3(a) Partial Intestacy

2-3(a)(1) When Partial Intestacy Occurs

Partial intestacy may occur when some, but not all, of a decedent’s assets are disposed of by will or otherwise.

2-3(a)(2) Discovery of Partial Intestacy

If it appears during a probate proceeding that apart of the estate is intestate, then the proceedings shall either be dismissed and refiled as intestate or changed to a formal proceeding.

2-3(a)(3) Order of Partial Intestacy

If in a formal proceeding, it is determined that the estate is or may be partially intestate, the court shall enter an order to that effect. Nebraska Probate Code § 30-2435.

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2-3(b) Formal or Informal Probate

2-3(b)(1) Choice of Formality

Intestate proceedings may be initiated through either formal or informal proceedings.

2-3(b)(2) When Formal Proceedings Required

Formal proceedings must be commenced when:

1. The estate is partially intestate and an adjudication of heirship is desired or a finding of partial intestacy is desired. Nebraska Probate Code § 30-2426(a)(1) and 30-2435.

2. The estate is intestate and an adjudication of heirship is desired, supervised administration is desired, the proposed personal representative does not have priority for appointment, there is an unrevoked will which may relate to Nebraska property and which is not being presented for probate, there is an objection to a proposed appointment of personal representative in an informal appointment proceeding, or a personal representative appointed in Nebraska has not resigned and the appointment has not been terminated. Nebraska Probate Code § 30-2436, 30-2440, 30-2412(e), 30-2424, 30-2414(4)(i), 30-2414(b), 30-2425, 30-2421(b), and 30-2455.

2-3(b)(3) Bond

A bond shall be required of the personal representative in an intestate proceeding unless all of the heirs file with the court a written waiver of the bond requirement; the personal representative is a national banking association, a holder of a banking permit, or a trading company; or the petition alleges that the probable value of the entire estate will permit summary procedures. Nebraska Probate Code § 30-2446.

2-3(b)(4) Payment of Debts, Expenses, and Taxes; Allocation of Tax Deductions

1. Valid debts and expenses of the estate are paid from the estate assets and abatement as between the shares of each beneficiary is in proportion to the amount of property each of the beneficiaries would have received if full distribution had been made (i.e., what each person would have received if debts and expenses were not paid).

79

2. For purposes of inheritance tax, deductions are allocated on the worksheet in proportion to the amount of property each of the beneficiaries are receiving. Note that even though no inheritance tax will result from a share passing to a surviving spouse, a proportionate amount of deduction must be allocated to the spouse, Therefore, those deductions are essentially wasted.

3. Payment of inheritance tax is made from each beneficiary’s share based upon each beneficiary’s actual calculation on the inheritance tax worksheet.

4. Payment of federal estate tax is made from each beneficiary’s share in proportion to the value of the property the beneficiary is receiving to the total value of the estate, except that in making such proration, allowances shall be made for any exemptions granted by law, including the marital deduction. Nebraska Revised Statutes § 77-2108.

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FORM 2.1 TABLE OF CONSANGUINITY

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ouse

, iss

ue, o

r par

ent

4(a)

All

4(a)

To

issu

e of

par

ents

(br

othe

rs o

r/and

sis

ters

) by

re

pres

enta

tion

5. G

rand

pare

nts,

(aun

ts, u

ncle

s, co

usin

s an

d th

eir

issue

) or i

ssue

of

gra

ndpa

rent

s

5(a)

No

surv

ivin

g sp

ouse

, iss

ue p

aren

t, br

othe

r or

sist

er

5(a)

1/

2 to

pat

erna

l re

lativ

es;

l/2 to

m

ater

nal r

elat

ives

: all

to p

ater

nal

rela

tives

if n

o m

ater

nal r

elat

ives

su

rviv

e, o

r vic

e ve

rsa,

by

repr

esen

tatio

n

5(a)

1/

/2 to

pat

erna

l gr

andp

aren

ts e

qual

ly i

f bot

h liv

ing,

or

to th

e su

rviv

ors

if on

e is

dea

d; to

issu

e of

gra

ndpa

rent

s if

both

gra

ndpa

rent

s de

ad; i

ssue

taki

ng e

qual

ly if

of

sam

e de

gree

of k

insh

ip, o

ther

wis

e th

ose

of m

ore

rem

ote

degr

ee ta

king

by

repr

esen

tatio

n.

Oth

er 1

/2 t

o

mat

erna

l rel

ativ

e in

sam

e m

anne

r 6.

Nex

t of k

m; n

ephe

ws

and

niec

es

and

thei

r chi

ldre

n 6(

a) N

o su

rviv

ing

spou

se, i

ssue

, par

ent i

ssue

of a

par

ent,

gran

dpar

ent

or is

sue

of a

gra

ndpa

rent

6(

a) A

ll 6(

a) E

qual

ly if

of s

ame

degr

ee.

If tw

o or

mor

e co

llate

ral

kind

red

of e

qual

deg

ree

clai

m th

roug

h di

ffer

ent

ance

stor

s th

ose

who

cla

im th

roug

h th

e ne

ares

t anc

esto

r sh

all b

e pr

efer

red

7. R

elat

ives

of t

he h

alf b

lood

inhe

rit

the

sam

e as

thos

e of

the

who

le b

lood

8. A

fterb

orn

heirs

8(

a) R

elat

ives

of

dece

dent

con

ceiv

ed b

efor

e hi

s de

ath

but

born

ther

eafte

r in

herit

as

if th

ey h

ad b

een

born

in th

e lif

etim

e of

the

dece

dent

9. E

sche

at 3

0-23

05

9(a)

No

take

r un

der

prov

isio

ns o

f Arti

cle

23

* Th

e sh

are

of th

e su

rviv

ing

rela

tive(

s) d

oes

not t

ake

into

acc

ount

the

hom

este

ad a

llow

ance

, exe

mpt

pro

perty

, and

fa

mily

allo

wan

ce a

sset

s. T

hese

ass

ets

are

take

n fr

om th

e es

tate

and

dis

tribu

ted

befo

re t

he in

test

ate

shar

es a

re

dist

ribut

ed, t

here

by d

ecre

asin

g th

e si

ze o

f the

est

ate

to b

e di

vide

d am

ong

the

surv

ivin

g he

irs.

The 2018 Annual Estate Planning & Probate Institute The Nuts …€¦ · The 2018 Annual Estate...

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Transcript of The 2018 Annual Estate Planning & Probate Institute The Nuts …€¦ · The 2018 Annual Estate...