All property, including proceeds of life insurance receivable by the executor or administrator to the extent of the amount receivable by the executor or administrator as insurance under policies upon the life of the decedent, which shall pass by will or by the intestate laws of this state from any person who, at the time of death was a resident of this state, or, if the decedent was not a resident, any part of the property within this state, except property exempted by the provisions of Chapter 77, article 20, shall be subject to tax at the rates prescribed by sections 77-2004 to 77-2006.

Annotations

Inheritance taxes are imposed on each beneficiary upon the value of property received by him while estate taxes are upon the right to transmit property and are based upon the whole estate transmitted. Nielsen v. Sidner, 191 Neb. 324, 215 N.W.2d 86 (1974).
To authorize imposition of tax, decedent must have interest in property at time of his death. County of Holt v. Gallagher, 156 Neb. 457, 56 N.W.2d 621 (1953).
A foreign corporation organized exclusively for charitable purposes, although it has domesticated in this state, is not exempt from payment of inheritance tax. In re Estate of Sautter, 142 Neb. 42, 5 N.W.2d 263 (1942).
Property escheating to state is not subject to inheritance tax. In re Estate of O'Connor, 126 Neb. 182, 252 N.W. 826 (1934).
Where property passes by will, it is subject to an inheritance tax even though the devise or bequest was made with the intention of carrying out a previous contract. Krug v. Douglas County, 114 Neb. 517, 208 N.W. 665 (1926).
Legacy to religious institution and to trustees of state cemetery is subject to inheritance tax. In re Rudge's Estate, 114 Neb. 335, 207 N.W. 520 (1926).
Legislature has power to provide for taxation upon inheritance. In re Sanford, 90 Neb. 410, 133 N.W. 870 (1911); State ex rel. Slabaugh v. Vinsonhaler, 74 Neb. 675, 105 N.W. 472 (1905).
Right to succeed to title to mortgage on Nebraska land, payable to nonresident of state, is not subject to tax. Dodge County v. Burns, 89 Neb. 534, 131 N.W. 922 (1911).
Where stocks were held by foreign trustee in trust for resident of this state, property was subject to inheritance tax. Douglas County v. Kountze, 84 Neb. 506, 121 N.W. 593 (1909).
Inheritance tax is not a property tax but a tax upon the right of succession. State ex rel. Slabaugh v. Vinsonhaler, 74 Neb. 675, 105 N.W. 472 (1905).

(1) Any interest in property whether created or acquired prior or subsequent to August 27, 1951, shall be subject to tax at the rates prescribed by sections 77-2004 to 77-2006, except property exempted by the provisions of Chapter 77, article 20, if it shall be transferred by deed, grant, sale, or gift, in trust or otherwise, and: (a) Made in contemplation of the death of the grantor; (b) intended to take effect in possession or enjoyment, after his or her death; (c) by reason of death, any person shall become beneficially entitled in possession or expectation to any property or income thereof; or (d) held as joint owners or joint tenants by the decedent and any other person in their joint names, except such part thereof as may be shown to have originally belonged to such other person and never to have been received or acquired by the latter from the decedent for less than an adequate and full consideration in money or property, except that when such property or any part thereof, or part of the consideration with which such property was acquired, is shown to have been at any time acquired by such other person from the decedent for less than an adequate and full consideration in money or property, there shall be excepted only such part of the value of such property as is proportionate to the consideration furnished by such other person or, when any property has been acquired by gift, bequest, devise, or inheritance by the decedent and any other person as joint owners or joint tenants and their interests are not otherwise specified or fixed by law, then to the extent of the value of a fractional part to be determined by dividing the value of the property by the number of joint owners or joint tenants.

(2) For the purpose of subsection (1) of this section, if the decedent, within a period of three years ending with the date of his or her death, except in the case of a bona fide sale for an adequate and full consideration for money or money's worth, transferred an interest in property for which a federal gift tax return is required to be filed under the provisions of the Internal Revenue Code, such transfer shall be deemed to have been made in contemplation of death within the meaning of subsection (1) of this section; no such transfer made before such three-year period shall be treated as having been made in contemplation of death in any event.

(3) Proceeds of life insurance receivable by a trustee, of either an inter vivos trust or a testamentary trust, as insurance under policies upon the life of the decedent shall not be subject to inheritance tax. This subsection shall not apply if the decedent's estate is the beneficiary of the trust.

Annotations

In determining whether to impose inheritance tax under subdivision (1)(b) of this section on a transferred interest in property, a court must consider all the surrounding circumstances of the transfer rather than simply the form of the transferring legal documents, in order to determine if a decedent intended, as a matter of fact rather than a technical vesting of title or estates, to retain a substantial economic benefit or actual use of the property until death. In re Estate of Lofgreen, 312 Neb. 937, 981 N.W.2d 585 (2022).
Costs and attorney's fees in litigation independent of the estate are not deductible in inheritance tax proceedings. County of Keith v. Triska, 168 Neb. 1, 95 N.W.2d 350 (1959).
Contract subscribing money to college endowment and for scholarship payable on subscriber's death was donative and money thereby transferred therefor was taxable. In re Wheeler's Estate, 119 Neb. 344, 228 N.W. 861 (1930).
Lands, conveyed by deed in which grantor retained life estate and land conveyed by absolute deeds delivered after grantor's death not intended to take effect previously in possession or enjoyment, may be subject to inheritance tax. In re Estate of Bronzynski, 116 Neb. 196, 216 N.W. 558 (1927).

The tax imposed upon transfers under sections 77-2001 and 77-2002 shall be paid to the treasurer of the proper county and all heirs, legatees and devisees, personal representatives, other recipients of property subject to tax, and trustees shall be liable for any and all such taxes until the same shall have been paid as hereinafter directed. This tax shall be a lien on the real property subject thereto until paid or otherwise terminated pursuant to section 77-2037, except that no interest in any property passing from the decedent to the decedent's surviving spouse shall be subject to the lien.

Annotations

This section provides that personal representatives and recipients of property are liable for the payment of inheritance tax on transfers upon death and that there is a lien on the real property subject to the tax until it is paid or terminated by section 77-2039. In re Estate of Reed, 271 Neb. 653, 715 N.W.2d 496 (2006).
When will contest was settled between beneficiaries and heirs at law, and stipulation for a decree of distribution in accord with settlement has been made, and there is no intent thereby to evade or reduce the inheritance tax, the tax hereunder should be computed upon portion received by each beneficiary under the decree. In re Estate of Kierstead, 122 Neb. 694, 241 N.W. 274 (1932).
Agreement between devisees to satisfy claim against estate in favor of one of them by conveyance of portion of such real estate to claimant will not exempt it. In re Estate of Sanford, 90 Neb. 410, 133 N.W. 870 (1911).
An inheritance tax is imposed on a beneficiary's right to receive a portion of the property of the decedent and is a tax of the beneficiary and not of the decedent. In re Estate of Smatlan, 1 Neb. App. 295, 501 N.W.2d 718 (1992).
Where decedent's will directed that all estate and inheritance taxes should be paid from body of estate and not deducted from devises or legacies but residue was not sufficient to pay federal estate taxes and state death taxes, Nebraska apportionment statute controls and bequest to charity should not be reduced by payment thereof. First Nat. Bank of Omaha v. United States, 490 F.2d 1054 (8th Cir. 1974).
Where all of estate except devises and legacies is not sufficient to pay tax burden, decedent's bequests to charity should not be reduced by payment of federal estate and state death taxes. First Nat. Bank of Omaha v. United States, 340 F.Supp. 232 (D. Neb. 1972).

(1) In the case of a person described in subsection (2) of this section, the rate of tax shall be:

(a) For decedents dying prior to January 1, 2023, one percent of the clear market value of the property received by each person in excess of forty thousand dollars; and

(b) For decedents dying on or after January 1, 2023, one percent of the clear market value of the property received by each person in excess of one hundred thousand dollars.

(2) Persons subject to inheritance tax at the rate prescribed by this section are:

(a) A father, mother, grandfather, grandmother, brother, sister, son, daughter, child or children legally adopted as such in conformity with the laws of the state where adopted;

(d) Any person to whom the deceased for not less than ten years prior to death stood in the acknowledged relation of a parent;

(e) Any lineal descendant of a person described in subdivision (d) of this subsection;

(f) Any lineal descendant of a person described in subdivision (d) of this subsection legally adopted as such in conformity with the laws of the state where adopted; and

(g) The spouse or surviving spouse of any person described in subdivisions (a) through (f) of this subsection.

(3) Any interest in property, including any interest acquired in the manner set forth in section 77-2002, which may be valued at a sum less than or equal to the applicable exempt amount under subsection (1) of this section shall not be subject to tax. In addition, the homestead allowance, exempt property, and family maintenance allowance shall not be subject to tax. Interests passing to the surviving spouse by will, in the manner set forth in section 77-2002, or in any other manner shall not be subject to tax. Any interest passing to a person described in subsection (2) of this section who is under twenty-two years of age shall not be subject to tax.

Annotations

1. Family member

2. Tax rate

1. Family member

The language "any person to whom the deceased for not less than ten years prior to death stood in the acknowledged relation of a parent" is not limited in application to blood relatives, and includes parties to whom the decedent stood "in loco parentis". In determining if the requisite acknowledged parental relationship exists for purposes of this section, the following factors should guide the trial court: (1) the family, (2) assumption of the responsibility for support beyond occasional gifts and financial aid, (3) exercise of parental authority and discipline, (4) relationship by blood or marriage, (5) advice and guidance to the child, (6) sharing of time and affection, and (7) existence of written documentation evincing the decedent's intent to act as parent. In re Estate of Ackerman, 250 Neb. 665, 550 N.W.2d 678 (1996).
For the purpose of determining whether a devisee under a will is a "person to whom the deceased for not less than ten years prior to death stood in the acknowledged relation of a parent" under this section, it is not necessary that there be a written acknowledgment. In re Estate of Stanton, 245 Neb. 942, 516 N.W.2d 586 (1994).
Section 77-2005.01 expands the operation of this section and section 77-2005, extending the same tax treatment to the relatives of a former spouse to whom the deceased person was married at the time of the spouse's death, but in no sense conflicts with either of the other two statutes. In re Estate of Morse, 241 Neb. 40, 486 N.W.2d 195 (1992).
Physical absence from home of testatrix, while attending school, did not of itself prevent stepdaughter from being member of household of testatrix for inheritance tax purposes. Wondra v. Platte Valley State Bank & Trust Co., 194 Neb. 41, 230 N.W.2d 182 (1975).
Persons standing in loco parentis for ten years prior to death are within provisions of this section even though they are not relatives of the blood. In re Estate of Dowell, 149 Neb. 599, 31 N.W.2d 745 (1948).
Factual findings necessary in determining whether the requisite acknowledged parent-child relationship of this section exists should be reviewed for sufficient evidence and should not be disturbed on appeal unless clearly wrong. In re Estate of Chambers, 27 Neb. App. 398, 932 N.W.2d 343 (2019); In re Estate of Sedlacek, 27 Neb. App. 390, 932 N.W.2d 91 (2019).
The following factors serve as appropriate guideposts to the trial court in making a determination of an acknowledged relationship of a parent under this section: (1) reception of the child into the home and treatment of the child as a member of the family, (2) assumption of the responsibility for support beyond occasional gifts and financial aid, (3) exercise of parental authority and discipline, (4) relationship by blood or marriage, (5) advice and guidance to the child, (6) sharing of time and affection, and (7) existence of written documentation evincing the decedent's intent to act as parent. In re Estate of Chambers, 27 Neb. App. 398, 932 N.W.2d 343 (2019); In re Estate of Sedlacek, 27 Neb. App. 390, 932 N.W.2d 91 (2019).
Even though a natural parent-child relationship may exist elsewhere, if the parties regard each other in all of the usual incidents and relationships of family life as parent and child, the benefits of this section should be allowed. In re Estate of Malloy, 15 Neb. App. 755, 736 N.W.2d 399 (2007).
The burden is on the taxpayer to show that he or she clearly falls within the statutory language. In re Estate of Malloy, 15 Neb. App. 755, 736 N.W.2d 399 (2007).
Persons standing in loco parentis are within the intent and scope of this section. The fact that a parent-child relationship may start when both parties are adults, or may begin when the child is a minor and continue after that child reaches adulthood, is not a bar to a claim brought under this section. While a child's residence is necessarily a factor to be considered in determining whether a parent-child relationship exists for purposes of this section, it is not the only factor. In re Estate of Quinn, 1 Neb. App. 1025, 510 N.W.2d 488 (1993).

2. Tax rate

Clear market value is measured by the fair market value of the property as of the date of the death of the grantor, less the consideration paid for the property. In re Estate of Craven, 281 Neb. 122, 794 N.W.2d 406 (2011).
An inheritance by the widower of a daughter is not taxable at the rate prescribed by this section. Todd v. County of Box Butte, 169 Neb. 311, 99 N.W.2d 245 (1959).
For purpose of inheritance tax, property should be valued at amount of money which it would produce if offered and sold for cash at time of death of decedent. In re Woolsey's Estate, 109 Neb. 138, 190 N.W. 215 (1922).
Law abolishing estates of dower and curtesy gives surviving spouse enlarged estate of same kind and nature as that of dower or curtesy, and, like dower, is not subject to inheritance tax. In re Estate of Strahan v. Wayne County, 93 Neb. 828, 142 N.W. 678 (1913).
Where widow elects to take under the will, her interest, to extent of statutory interest, is exempt from tax. In re Estate of Sanford, 91 Neb. 752, 137 N.W. 864 (1912).

(1) In the case of an uncle, aunt, niece, or nephew related to the deceased by blood or legal adoption, or other lineal descendant of the same, or the spouse or surviving spouse of any of such persons, the rate of tax shall be:

(a) For decedents dying prior to January 1, 2023, thirteen percent of the clear market value of the property received by each person in excess of fifteen thousand dollars; and

(b) For decedents dying on or after January 1, 2023, eleven percent of the clear market value of the property received by each person in excess of forty thousand dollars.

(2) If the clear market value of the beneficial interest is less than or equal to the applicable exempt amount under subsection (1) of this section, it shall not be subject to tax. In addition, any interest passing to a person described in subsection (1) of this section who is under twenty-two years of age shall not be subject to tax.

Annotations

Section 77-2005.01 expands the operation of section 77-2004 and this section, extending the same tax treatment to the relatives of a former spouse to whom the deceased person was married at the time of the spouse's death, but in no sense conflicts with either of the other two statutes. In re Estate of Morse, 241 Neb. 40, 486 N.W.2d 195 (1992).
The Legislature may properly distinguish inheritance tax laws in favor of blood relations, since such distinction is neither arbitrary nor unconstitutionally ambiguous. Ralston v. County of Dawson, 200 Neb. 678, 264 N.W.2d 868 (1978).
A more burdensome tax is imposed in the case of named remote relatives by blood or legal adoption. Todd v. County of Box Butte, 169 Neb. 311, 99 N.W.2d 245 (1959).

(1) For the purposes of sections 77-2004 and 77-2005, relatives of the decedent shall include:

(a) 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; and

(b) Relatives of a spouse or former spouse of the decedent's parent, grandparent, child, sibling, uncle, aunt, niece, or nephew, if the decedent's parent, grandparent, child, sibling, uncle, aunt, niece, or nephew was married to the spouse at the date of death of the decedent or at the date of death of such spouse.

(2) The computation of any tax due pursuant to sections 77-2004, 77-2005, and 77-2006 shall be made without regard to Nebraska inheritance tax apportionment.

Annotations

This section expands the operation of sections 77-2004 and 77-2005, extending the same tax treatment to the relatives of a former spouse to whom the deceased person was married at the time of the spouse's death, but in no sense conflicts with either of the other two statutes. In re Estate of Morse, 241 Neb. 40, 486 N.W.2d 195 (1992).

(a) For decedents dying prior to January 1, 2023, eighteen percent of the clear market value of the beneficial interests received by each person in excess of ten thousand dollars; and

(b) For decedents dying on or after January 1, 2023, fifteen percent of the clear market value of the beneficial interests received by each person in excess of twenty-five thousand dollars.

(2) If the clear market value of the beneficial interest is less than or equal to the applicable exempt amount under subsection (1) of this section, it shall not be subject to any tax. In addition, any interest passing to a person who is under twenty-two years of age shall not be subject to tax.