Proposal would adjust limits on property protected from creditors

The proposal would set five-year adjustments for specified limits on savings, insurance benefits, and veterans’ pension property protected from creditors. The provisions concern certain medical and health savings accounts, qualifying veterans’ pension money and property, and specified life insurance and annuity interests. Medical and health savings account protection does not apply to judgments for qualified medical expenses. Insurance exceptions include certain amounts added within three years before bankruptcy or a final money judgment. The Department of Revenue would begin the specified adjustments every five years on July 1, 2030.

The proposal would provide recurring adjustments to the homestead allowance and the value of household property claimed from an estate. The allowances may go to a surviving spouse or, in specified cases, the decedent’s minor, dependent, or other eligible children. The decedent must have been domiciled in Nebraska. A surviving spouse may claim the allowances; children may qualify if there is no surviving spouse, subject to the rules for each allowance. Administration costs take priority over the homestead allowance. Certain costs and claims, including specified state health-care claims, may take priority over household property claims. The allowance amounts depend on the date of death. The specified recurring adjustments would begin July 1, 2030.

The proposal would adjust the value limit for a Nebraska resident’s home to be protected from judgment liens, execution, or forced sale. This applies to natural persons living in Nebraska who claim a qualifying home as their homestead. The home must be where the claimant lives. Outside an incorporated city or village, the land may not exceed 160 acres; within one, the claimant may choose up to two adjoining lots. The Department of Revenue would make the specified adjustment every five years, beginning July 1, 2030.