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For Professional Advisors

Professional Advisor Q&A with Brad Holtorf

Q.        We often hear estate planning can seem overwhelming.  As you assist clients, what do you recommend should be included in every comprehensive estate plan?

A.        It is true that several individuals avoid discussing their estate plan as they believe it is going to be a difficult and time-consuming task. After working with the clients, they usually realize that was not the case. In assisting clients on their estate plans, we need them to focus on planning for their lifetime and upon their death. During their lifetime it is necessary that clients appoint a Power of Attorney for both Business and Health Care so there are individuals who can make their business and health care decisions if they are unable due to a physical or mental impairment. This is necessary to avoid creating a Guardianship and/or Conservatorship proceedings through Court. Additionally, Living Will directions should be incorporated into the Health Care Power of Attorney or have a separate document expressing their wishes. 

In estate planning for their passing, it is important to have them express who they want to receive their property and how to minimize any tax issues. In order to accomplish this, we need to have a detailed understanding of their assets, how they are owned, and their specific wishes in regard to passing of the assets. In working with the clients, it is helpful to know the names of their Investment Counselors and Accountants so that we can coordinate on completing of their estate plan.

Q.        What is the question you are most commonly asked?

A.        What is probate and can I avoid it? Probate is the term that we use for the process of taking a person’s Last Will & Testament and filing it with the County Court of their domicile. A Judge will determine if the Will is legally valid and if so, appoint a Personal Representative as nominated in the Will to be in charge of administering of the Estate. Once the probate process has commenced, there are several steps to complete same. The first step is to have a Notice published that Creditors have a certain time period within which to file claims in the estate. This process cuts off the liability of the estate to Creditors. Following the Creditors Notice, the second step of the probate process is to file an Inventory setting forth all assets owned by the Decedent. The Inventory allows the beneficiaries of the Estate to have a general understanding of the assets of the Estate and their value. The Inventory is further used by the Personal Representative in the third step, which determines the inheritance taxes due under the laws of the State of Nebraska. After payment of the inheritance taxes, the Personal Representative provides an accounting of the actions taken and proposes a Schedule of Distribution to each of the beneficiaries. Once the assets are distributed to the beneficiaries in accordance with the Will, the Personal Representative would proceed to close the Estate. This process can be completed in a matter of months or it can be substantially longer based upon the complexity of the Estate as well as the time periods necessary for liquidation of assets of the Estate.

There are methods to have assets of the Decedent pass directly upon a person’s death and outside of the Will through probate. These methods include Trusts, jointly owned assets, payable on death accounts, transfer on death deeds or accounts, and beneficiary provisions on retirement accounts, life insurance, annuities or other investments accounts. All of the foregoing will direct the assets to pass pursuant to the contracted provisions as set forth by the Decedent. However, all of the passing of assets will still be subject to the same inheritance and estate tax considerations which is a part of the probate process. Therefore, an inheritance tax proceeding will need to be filed with the County Court for determination and payment of the tax due.

In completing of the estate plan, it is important that the Will, Trust or payable on death accounts, transfer on death accounts and beneficiaries are coordinated to accomplish the decedent’s wishes.

Q.        For your clients with charitable interests, what makes the Community Foundation a good partner to facilitate giving goals for generations to come?

A.        If a client is charitably inclined and would like to have their funds benefit generations in the future, the Fremont Area Community Foundation is an excellent choice. By giving the funds to the Endowment Fund of the Fremont Area Community Foundation, the income from this gift will be used in perpetuity for grants made by the Foundation to applicants. If the individual has specific directions for their funds, they can be coordinated with the Foundation as a part of their gift. Further, discussions should take place with the Executive Director of the Foundation along with their Accountant and Attorney to discuss the tax benefits of the proposed gift and assets selected for same.

Brad Holtorf was born in Fremont, Nebraska and graduated from Cedar Bluffs High School. He attended the University of Nebraska at Lincoln, majoring in Accounting and Economics and received his Bachelor of Science Degree in 1974. Brad attended the University of Nebraska College of Law and received his Juris Doctor in 1977. Brad graduated with distinction and was awarded Order of the Coif, as well as a member of the Nebraska Law Review. He Is a member of the Nebraska State Bar Association. Brad commenced his legal practice with Sidner Law in 1977 and has been a partner since 1981. As a member of the Fremont community, he has served on various boards and presently serves on the Fremont Area Community Foundation Board of Directors. Contact Brad at (402) 721-7111 and