Unfortunately for beneficiaries, executors usually don't have one certain deadline by which they must distribute property under the terms of a will. In fact, if they turn over assets to heirs too soon, executors can be held personally liable for taxes due or money owed to creditors. The typical probate process has many incremental timelines -- deadlines by which executors must complete certain tasks. When added together, these deadlines can give you some idea of how long the overall probate process should take.
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The probate proceeding opens when the executor named in the will -- called a personal representative in Nebraska -- applies to the probate court for authority to assume responsibility for settling the estate. The personal representative then has three months to submit to the court a list of all probate assets, complete with their values. If there are assets that require professional appraisals, the representative is likely to need three months to complete the inventory.
The personal representative's next duty is to make sure the decedent's debts are paid from the estate assets. The representative sends notice of the probate proceeding to all persons who have an interest in the estate, including creditors. The court clerk publishes the notice in a local newspaper, along with notice to creditors, advising them they have 60 days within which to make a claim for payment under Nebraska law. This 60-day period begins to run on the first date of publication and can run concurrently with the inventory deadline. The representative has four months after the first publication date to deny any invalid creditor claims. Rejected creditors have an additional 30 days to file a lawsuit asking the probate court to overrule the representative's decision.
Nebraska levies an inheritance tax, and the personal representative must file this tax return within one year from the date of decedent's death. The estate can avoid this tax and its associated delay, if the entire estate goes to a spouse because spousal inheritances are exempt. Otherwise, this process can delay the settlement of your estate. The representative files a final income tax return due April 15 in the year after death. Nebraska doesn't impose an estate tax, but the federal government does. If the estate is worth more than $5.25 million as of 2013, the representative has nine months from the date of death to file the federal estate tax return, and he can also ask for a six-month extension. There's usually a delay after the return is filed while the IRS reviews it and gives clearance for the estate to close.
Distribution of Assets
Distributions of estate assets to the beneficiaries should not occur until the representative has paid all taxes and debts, and the deadline has passed for creditors to object to denials of their claims. Added together, the process can take as much as seven months, but usually a surviving spouse won't have to wait this long. Nebraska law allows a spouse to receive a $20,000 homestead allowance, $20,000 in spousal support and $12,500 in exempt property off the top of the estate assets before anyone, including creditors. All other distributions must wait until the representative has completed a schedule of distribution, and has forwarded it to everyone who has an interest in the estate, allowing them time to object.
Nebraska offers two types of abbreviated probate proceedings, but these won't help the representative settle the estate any sooner unless the estate has only minimal assets. The simplified probate procedure in Nebraska applies to estates with values not exceeding the spousal exemption, the costs of operating the estate, expenses associated with a final illness and burial costs. Heirs can also settle an estate quickly if the total value of estate assets is less than $25,000, by affidavit; they can take ownership of their shares of the assets 30 days later. If the estate is planned to avoid probate, using a living trust or payable-on-death designations, Nebraska's limited probate shortcuts might work to transfer the remaining estate property.
References & Resources
- The Law Office of Glen D. Witte: Lincoln Estate and Probate Attorney
- LawServer: Simplified Probate for Small Estates in Nebraska
- LawServer: Nebraska Statutes 30-2485 -- Litations on Presentation of Claims
- McGrath North: The Nuts and Bolts of Nebraska's Inheritance Tax
- TurboTax: Death in the Family
- IRS: Filing Estate and Gift Tax Returns
- Understand-Estate-Planning.com: Avoid Probate and Hand Down Your Estate on Your Terms
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