CH. 44: Wills & Trusts: Business Law

Common Terms to Know

• Estate 

• Decedent 

• Testator/Testatrix 

• Testate and Intestate 

• Heir 

• Issue (direct descendants – children or grandchildren) 

• Probate 

• Personal Representative (Executor or Executrix)

Why Have a Will

• Can control who gets your assets after your death 

• Name Guardians for Minor Children. If you don’t name them in your Will, then a Court will make the decision for you. 

• Select a Personal Representative to oversee your Estate. If you don’t designate someone, the Court will appoint one for you. 

• Transfer of Property upon Death goes much smoother and fewer issues to resolve if the Decedent has a Will. 

• Properly Drafted Will can reduce Estate Taxes

Requirements for a valid will in Nebraska 

1. Be of Legal Age – 18 years or older or Not a Minor

2. Be of Sound Mind

3. Must be in Writing in hard copy form on paper. Nebraska does not recognize audio, video or digital/electronic wills.

4. Signatures. Testator must sign the Will in front of 2 Witnesses. Witnesses should not be beneficiaries under the will.

5. Self-Proving Affidavit & Notary Public is not required but makes probate move faster and probate court will accept the Will without contacting Witnesses.

Holographic Will

• Nebraska does recognize a “holographic will”. 

• This is a handwritten will 

• Must be signed and dated by Testator in his/her own handwriting 

• No witnesses are required 

• Holographic Wills are more likely to be challenged

Spouses & Children’s Share in Nebraska 

• Spouse is entitled to the first $100,000 and then half the rest of the estate if left out of the Will or if there is no Will 

• Parents do not have to leave property to children in their Will. 

• If there is no Will, then children split what is left after the spouse gets their required share ($100,000 + ½ of the rest) 

• If no will and no spouse survives, then children split the estate.

• Will’s use the term “issue” instead of children 

• “per stirpes” vs. “per capita”

Can a Will be Amended?

• Yes

• Known as a codicil 

• Can make changes to certain parts of the will without totally redoing the will

• Codicil must meet all of the basic requirements of the will (in writing, signed, 2 witnesses)

Revoking a Will

• Testator Can Revoke a Will anytime prior to death 

• Can do by destroying the will, marking it with words such as Revoked or Cancelled, or Writing a New Will 

• Changes in Family situations can also Revoke a Will. 

• A Divorce or Annulment automatically revokes an ex-spouse’s inheritance rights from a Will or Estate Plan in Nebraska

Intestate Inheritance in Nebraska 

• Spouse, but no issue or parents – Spouse gets entire estate 

• Spouse & Issue – Spouse gets first $100,000m + ½ the rest 

• Spouse, no issue but Parents – Spouse gets first $100,000 + ½ the rest 

• No Spouse, then to issue 

• No Spouse & No issue – then to parents 

• No Spouse, No Issue, No parents – then to Brothers & Sisters 

• None of the above, then grandparents & aunts & uncles 

• Next of kin (cousins nieces nephews, even second cousins)

Property Not Transferred By Will

• Retirement Benefits 

• Life Insurance 

• Jointly Owned Property such as Real Estate, Vehicles, Bank Accounts

Living WIlls or Advance Directives 

• States their wishes in regard to end of life decisions 

• Appoints someone to make such decisions 

• Schiavo case

Trusts

• Control –trust document controls use of the trust funds 

• Care for Minor Children 

• Tax Savings 

• Privacy 

• Avoids Probate if assets placed in trust before grantor dies 

• Protection against creditors 

• Downside is the cost of creation (legal fees)

Some Common Types of Trusts 

• Living Trusts – created during grantor’s lifetime 

• Testamentary Trust – created in a Will 

• Can be revocable (can be modified, more flexible) or irrevocable (cannot be changed or modified once created) 

• Spendthrift Trusts – safeguards the assets from foolish spending 

• Domestic Asset Protection Trusts (DAPT’s) 

• Charitable Trusts 

• Life Insurance Trusts 

• Special Needs Trusts

How Trusts Work

• Grantor – creates & funds the Trust 

• Trustee – named to manage the assets placed in the trust 

• Beneficiary or Beneficiaries – benefits from the trust and receives the financial proceeds 

• Trustee technically owns the property for the trust, but must use it for the good of the beneficiary 

• To establish a Trust, the Grantor must: 1) have legal capacity, 2)appoint at least 1 Trustee, 3) have specific beneficiaries named, 4) transfer specific assets to the trust