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LEGISLATURE OF NEBRASKA
ONE HUNDRED NINTH LEGISLATURE
SECOND SESSION
LEGISLATIVE BILL 871
Introduced by Conrad, 46.
Read first time January 08, 2026
Committee: Judiciary
A BILL FOR AN ACT relating to inflation adjustments; to amend sections1
8-1,131, 25-1558, 25-1559, 30-2322, 30-2323, 44-371, and 44-1089,2
Reissue Revised Statutes of Nebraska, and section 40-101, Revised3
Statutes Cumulative Supplement, 2024; to increase amounts exempt4
from levy, execution, judgment, operation of law, garnishment, or5
other judicial enforcement as provided; to increase the homestead6
allowance and exempt property allowance; to provide for adjustments7
based on inflation; and to repeal the original sections.8
Be it enacted by the people of the State of Nebraska,9
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Section 1. Section 8-1,131, Reissue Revised Statutes of Nebraska, is1
amended to read: 2
8-1,131 (1) All banks are qualified to act as trustee or custodian3
under the federal Self-Employed Individuals Tax Retirement Act of 1962,4
as amended, or under the terms and provisions of section 408(a) of the5
Internal Revenue Code, if the provisions of such retirement plan require6
the funds of such trust or custodianship to be invested exclusively in7
shares or accounts in the bank or in other banks. If any such retirement8
plan, within the judgment of the bank, constitutes a qualified plan under9
the federal Self-Employed Individuals Tax Retirement Act of 1962, or10
under the terms and provisions of section 408(a) of the Internal Revenue11
Code and the regulations promulgated thereunder at the time the trust was12
established and accepted by the bank, and is subsequently determined not13
to be such a qualified plan or subsequently ceases to be such a qualified14
plan, in whole or in part, the bank may continue to act as trustee of any15
deposits theretofore made under such plan and to dispose of the same in16
accordance with the directions of the member and beneficiaries thereof.17
No bank, in respect to savings made under this subsection, shall be18
required to segregate such savings from other liabilities of the bank.19
The bank shall keep appropriate records showing in proper detail all20
transactions engaged in under the authority of this subsection.21
(2)(a) All banks are qualified to act as trustee or custodian of a22
medical savings account created within the provisions of section 220 of23
the Internal Revenue Code and a health savings account created within the24
provisions of section 223 of the Internal Revenue Code. If any such25
medical savings account or health savings account, within the judgment of26
the bank, constitutes a medical savings account under section 220 of the27
Internal Revenue Code or a health savings account under section 223 of28
the Internal Revenue Code and the regulations promulgated thereunder at29
the time the trust was established and accepted by the bank, and is30
subsequently determined not to be such a medical savings account or31
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health savings account, in whole or in part, the bank may continue to act1
as trustee of any deposits theretofore made under such plan and to2
dispose of the same in accordance with the directions of the account3
holder. No bank, in respect to savings made under this subsection, shall4
be required to segregate such savings from other liabilities of the bank.5
The bank shall keep appropriate records showing in proper detail all6
transactions engaged in under the authority of this subsection.7
(b) Except for judgments against the medical savings account holder8
or health savings account holder or his or her dependents for qualified9
medical expenses as defined under section 223(d)(2) of the Internal10
Revenue Code, funds credited to a medical savings account or health11
savings account below forty thousand eight hundred thirty-one twenty-five12
thousand dollars are not susceptible to levy, execution, judgment, or13
other operation of law, garnishment, or other judicial enforcement and14
are not an asset or property of the account holder for purposes of15
bankruptcy law. 16
(3) The Department of Revenue shall adjust the dollar limitation17
provided for in this section every fifth year commencing July 1, 2030.18
The adjusted limitation shall be equal to the then current limitation19
adjusted by the cumulative percentage change in the Consumer Price Index20
for All Urban Consumers, as prepared by the United States Department of21
Labor, Bureau of Labor Statistics, for the five-year period preceding the22
adjustment date. The adjusted limitation shall be rounded to the nearest23
hundred-dollar amount. 24
Sec. 2. Section 25-1558, Reissue Revised Statutes of Nebraska, is25
amended to read: 26
25-1558 (1) Except as provided in subsection (2) of this section,27
the maximum part of the aggregate disposable earnings of an individual28
for any workweek which is subject to garnishment shall not exceed the29
lesser of the following amounts: 30
(a) Twenty-five percent of his or her disposable earnings for that31
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week; 1
(b) The amount by which his or her disposable earnings for that week2
exceed thirty times the minimum wage rate as prescribed by section3
48-1203 federal minimum hourly wage prescribed by 29 U.S.C. 206(a)(1) in4
effect at the time earnings are payable; or 5
(c) Fifteen percent of his or her disposable earnings for that week,6
if the individual is a head of a family. 7
(2) The restrictions of subsection (1) of this section shall not8
apply in the case of: 9
(a) Any order of any court for the support of any persons;10
(b) Any order of any court of bankruptcy under Chapter XIII of the11
Bankruptcy Act; or 12
(c) Any debt due for any state or federal tax.13
(3) No court shall make, execute, or enforce any order or process in14
violation of this section. The exemptions allowed in this section shall15
be granted to any person so entitled without any further proceedings.16
(4) For the purposes of this section: 17
(a) Earnings shall mean compensation paid or payable by an employer18
to an employee for personal services, whether denominated as wages,19
salary, commission, bonus, or otherwise, and includes periodic payments20
pursuant to a pension or retirement program; 21
(b) Disposable earnings shall mean that part of the earnings of any22
individual remaining after the deduction from those earnings of any23
amounts required by law to be withheld; 24
(c) Garnishment shall mean any legal or equitable procedure through25
which the earnings of any individual are required to be withheld for26
payment of any debt; and 27
(d) Head of a family shall mean an individual who actually supports28
and maintains one or more individuals who are closely connected with him29
or her by blood relationship, relationship by marriage, by adoption, or30
by guardianship, and whose right to exercise family control and provide31
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for the dependent individuals is based upon some moral or legal1
obligation. 2
(5) Every assignment, sale, transfer, pledge, or mortgage of the3
wages or salary of an individual which is exempted by this section, to4
the extent of the exemption provided by this section, shall be void and5
unenforceable by any process of law. 6
(6) No employer shall discharge any employee by reason of the fact7
that his or her earnings have been subjected to garnishment for any one8
indebtedness. 9
(7) In the case of earnings for any pay period other than a week,10
the Commissioner of Labor shall by regulation prescribe a multiple of the11
minimum wage rate as prescribed by section 48-1203 that is federal12
minimum hourly wage equivalent in effect to that set forth in this13
section. 14
Sec. 3. Section 25-1559, Reissue Revised Statutes of Nebraska, is15
amended to read: 16
25-1559 (1) In addition to the exemptions otherwise provided for,17
there shall also be exempt from levy and sale upon execution or18
attachment, to every resident of the State of Nebraska, who became19
disabled in the service of the United States as a soldier, sailor or20
marine, all pension money hereafter received and all property hereafter21
purchased and improved exclusively therewith, not exceeding sixty-four22
thousand eight hundred thirty two thousand dollars in value, of and23
belonging to such soldier, sailor or marine. 24
(2) The Department of Revenue shall adjust the dollar limitation25
provided for in this section every fifth year commencing July 1, 2030.26
The adjusted limitation shall be equal to the then current limitation27
adjusted by the cumulative percentage change in the Consumer Price Index28
for All Urban Consumers, as prepared by the United States Department of29
Labor, Bureau of Labor Statistics, for the five-year period preceding the30
adjustment date. The adjusted limitation shall be rounded to the nearest31
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hundred-dollar amount. 1
Sec. 4. Section 30-2322, Reissue Revised Statutes of Nebraska, is2
amended to read: 3
30-2322 (1) A surviving spouse of a decedent who was domiciled in4
this state is entitled to a homestead allowance of seven thousand five5
hundred dollars for a decedent who dies before January 1, 2011, and6
twenty thousand dollars for a decedent who dies before December 31, 2027,7
and twenty-nine thousand one hundred forty-two dollars for a decedent who8
dies on or after January 1, 2027 on or after January 1, 2011. If there is9
no surviving spouse, each minor child and each dependent child of the10
decedent is entitled to a homestead allowance amounting to the amount11
allowed for a surviving spouse divided by the number of minor and12
dependent children of the decedent. The homestead allowance is exempt13
from and has priority over all claims against the estate except for costs14
and expenses of administration. Homestead allowance is in addition to any15
share passing to the surviving spouse or minor or dependent child by the16
will of the decedent unless otherwise provided therein, by intestate17
succession or by way of elective share. 18
(2) The Department of Revenue shall adjust the dollar limitation19
provided for in this section every fifth year commencing July 1, 2030.20
The adjusted limitation shall be equal to the then current limitation21
adjusted by the cumulative percentage change in the Housing Price Index22
for Nebraska, as prepared by the Federal Housing Finance Agency, for the23
five-year period preceding the adjustment date. The adjusted limitation24
shall be rounded to the nearest hundred-dollar amount.25
Sec. 5. Section 30-2323, Reissue Revised Statutes of Nebraska, is26
amended to read: 27
30-2323 (1)(a) (1) In addition to the homestead allowance, the28
surviving spouse of a decedent who was domiciled in this state is29
entitled from the estate to value not exceeding five thousand dollars for30
a decedent who dies before January 1, 2011, and twelve thousand five31
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hundred dollars for a decedent who dies before December 31, 2027, and1
eighteen thousand two hundred fourteen dollars for a decedent who dies on2
or after January 1, 2027 on or after January 1, 2011, in excess of any3
security interests therein in household furniture, automobiles,4
furnishings, appliances, and personal effects. If there is no surviving5
spouse, children of the decedent are entitled jointly to the same value6
unless the decedent has provided in his or her will that one or more of7
such children shall be disinherited, in which case only those children8
not so disinherited shall be so entitled. For purposes of this section,9
disinherited means providing in one's will that a child shall take10
nothing or a nominal amount of ten dollars or less from the estate.11
(b) The Department of Revenue shall adjust the dollar limitation12
provided for in this section every fifth year commencing July 1, 2030.13
The adjusted limitation shall be equal to the then current limitation14
adjusted by the cumulative percentage change in the Consumer Price Index15
for All Urban Consumers, as prepared by the United States Department of16
Labor, Bureau of Labor Statistics, for the five-year period preceding the17
adjustment date. The adjusted limitation shall be rounded to the nearest18
hundred-dollar amount. 19
(2) If encumbered chattels are selected and if the value in excess20
of security interests, plus that of other exempt property, is less than21
the amount allowed under subsection (1) of this section, or if there is22
not that amount worth of exempt property in the estate, the spouse or23
children are entitled to other assets of the estate, if any, to the24
extent necessary to make up the amount allowed under subsection (1) of25
this section. Rights to exempt property and assets needed to make up a26
deficiency of exempt property have priority over all claims against the27
estate except for costs and expenses of administration, except for claims28
filed by the Department of Health and Human Services pursuant to section29
68-919 notwithstanding the order of payment established in section30
30-2487, and except that the right to any assets to make up a deficiency31
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of exempt property shall abate as necessary to permit prior payment of1
homestead allowance and family allowance. 2
(3) These rights are in addition to any benefit or share passing to3
the surviving spouse by the will of the decedent unless otherwise4
provided therein, by intestate succession, or by way of elective share.5
These rights are in addition to any benefit or share passing to the6
surviving children by intestate succession and are in addition to any7
benefit or share passing by the will of the decedent to those surviving8
children not disinherited unless otherwise provided in the will.9
Sec. 6. Section 40-101, Revised Statutes Cumulative Supplement,10
2024, is amended to read: 11
40-101 (1) Each natural person residing in this state shall have12
exempt from judgment liens and from execution or forced sale, except as13
provided in sections 40-101 to 40-116, a homestead not exceeding two14
hundred twenty-eight thousand one hundred forty-eight one hundred twenty15
thousand dollars in value consisting of the dwelling house in which the16
claimant resides, its appurtenances, and the land on which the same is17
situated, not exceeding one hundred and sixty acres of land, to be18
selected by the owner, and not in any incorporated city or village, or,19
at the option of the claimant, a quantity of contiguous land not20
exceeding two lots within any incorporated city or village.21
(2)(a) The Department of Revenue shall adjust the dollar limitation22
provided for in this section every fifth year commencing July 1, 2030, to23
reflect the statewide average residential value for single-family24
residential properties. The statewide average residential value for25
single-family residential properties shall be determined by dividing the26
total statewide residential value for single-family properties by the27
number of single-family residential properties in the state.28
(b) For purposes of this subsection, total statewide residential29
value for single-family properties means the sum of the total residential30
values for single-family residential properties for each county.31
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(c) The total residential value for single-family properties for1
each county and the number of single-family residential properties shall2
be determined by using the values certified to the Department of Revenue3
pursuant to section 77-3506.02. 4
Sec. 7. Section 44-371, Reissue Revised Statutes of Nebraska, is5
amended to read: 6
44-371 (1)(a) Except as provided in subdivision (1)(b) of this7
section and in section 68-919, all proceeds, cash values, and benefits8
accruing under any annuity contract, under any policy or certificate of9
life insurance payable upon the death of the insured to a beneficiary10
other than the estate of the insured, or under any accident or health11
insurance policy shall be exempt from attachment, garnishment, or other12
legal or equitable process and from all claims of creditors of the13
insured and of the beneficiary if related to the insured by blood or14
marriage, unless a written assignment to the contrary has been obtained15
by the claimant. 16
(b) Subdivision (1)(a) of this section shall not apply to:17
(i) An individual's aggregate interests greater than one hundred18
twenty-nine thousand eight hundred three one hundred thousand dollars in19
all loan values or cash values of all matured or unmatured life insurance20
contracts and in all proceeds, cash values, or benefits accruing under21
all annuity contracts owned by such individual; and22
(ii) An individual's interest in all loan values or cash values of23
all matured or unmatured life insurance contracts and in all proceeds,24
cash values, or benefits accruing under all annuity contracts owned by25
such individual, to the extent that the loan values or cash values of any26
matured or unmatured life insurance contract or the proceeds, cash27
values, or benefits accruing under any annuity contract were established28
or increased through contributions, premiums, or any other payments made29
within three years prior to bankruptcy or within three years prior to30
entry against the individual of a money judgment which thereafter becomes31
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final. 1
(c) An insurance company shall not be liable or responsible to any2
person to determine or ascertain the existence or identity of any such3
creditors prior to payment of any such loan values, cash values,4
proceeds, or benefits. 5
(d) The Department of Revenue shall adjust the dollar limitation6
provided for in subdivision (1)(b)(i) of this section every fifth year7
commencing July 1, 2030. The adjusted limitation shall be equal to the8
then current limitation adjusted by the cumulative percentage change in9
the Consumer Price Index for All Urban Consumers, as prepared by the10
United States Department of Labor, Bureau of Labor Statistics, for the11
five-year period preceding the adjustment date. The adjusted limitation12
shall be rounded to the nearest hundred-dollar amount.13
(2) Notwithstanding subsection (1) of this section, proceeds, cash14
values, and benefits accruing under any annuity contract or under any15
policy or certificate of life insurance payable upon the death of the16
insured to a beneficiary other than the estate of the insured shall not17
be exempt from attachment, garnishment, or other legal or equitable18
process by a judgment creditor of the beneficiary if the judgment against19
the beneficiary was based on, arose from, or was related to an act,20
transaction, or course of conduct for which the beneficiary has been21
convicted by any court of a crime punishable only by life imprisonment or22
death. No insurance company shall be liable or responsible to any person23
to determine or ascertain the existence or identity of any such judgment24
creditor prior to payment of any such proceeds, cash values, or benefits.25
This subsection shall apply to any judgment rendered on or after January26
1, 1995, irrespective of when the criminal conviction is or was rendered27
and irrespective of whether proceedings for attachment, garnishment, or28
other legal or equitable process were pending on March 14, 1997.29
Sec. 8. Section 44-1089, Reissue Revised Statutes of Nebraska, is30
amended to read: 31
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44-1089 (1) No noninsurance benefit, charity, relief, or aid to be1
paid, provided, or rendered by any society shall be liable to attachment,2
garnishment, or other process, or to be seized, taken, appropriated, or3
applied by any legal or equitable process or operation of law to pay any4
debt or liability of a member or beneficiary, or any other person who may5
have a right thereunder, either before or after payment by the society.6
(2)(a) Except as provided in subdivision (2)(b) of this section, all7
proceeds, cash values, and benefits accruing under any annuity contract,8
under any policy or certificate of life insurance payable upon the death9
of the insured to a beneficiary other than the estate of the insured, or10
under any accident or health insurance policy shall be exempt from11
attachment, garnishment, or other legal or equitable process and from all12
claims of creditors of the insured and of the beneficiary if related to13
the insured by blood or marriage, unless a written assignment to the14
contrary has been obtained by the claimant. 15
(b) Subdivision (2)(a) of this section shall not apply to:16
(i) An individual's aggregate interests greater than one hundred17
sixty-three thousand three hundred twenty-six one hundred thousand18
dollars in all loan values or cash values of all matured or unmatured19
life insurance contracts and in all proceeds, cash values, or benefits20
accruing under all annuity contracts owned by such individual; and21
(ii) An individual's interest in all loan values or cash values of22
all matured or unmatured life insurance contracts and in all proceeds,23
cash values, or benefits accruing under all annuity contracts owned by24
such individual, to the extent that the loan values or cash values of any25
matured or unmatured life insurance contract or the proceeds, cash26
values, or benefits accruing under any annuity contract were established27
or increased through contributions, premiums, or any other payments made28
within three years prior to bankruptcy or within three years prior to29
entry against the individual of a money judgment which thereafter becomes30
final. 31
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(c) A fraternal benefit society shall not be liable or responsible1
to any person to determine or ascertain the existence or identity of any2
such creditors prior to payment of any such loan values, cash values,3
proceeds, or benefits. 4
(d) The Department of Revenue shall adjust the dollar limitation5
provided for in subdivision (1)(b)(i) of this section every fifth year6
commencing July 1, 2030. The adjusted limitation shall be equal to the7
then current limitation adjusted by the cumulative percentage change in8
the Consumer Price Index for All Urban Consumers, as prepared by the9
United States Department of Labor, Bureau of Labor Statistics, for the10
five-year period preceding the adjustment date. The adjusted limitation11
shall be rounded to the nearest hundred-dollar amount.12
(3) Notwithstanding subsection (2) of this section, proceeds, cash13
values, and benefits accruing under any annuity contract or under any14
policy or certificate of life insurance payable upon the death of the15
insured to a beneficiary other than the estate of the insured shall not16
be exempt from attachment, garnishment, or other legal or equitable17
process by a judgment creditor of the beneficiary if the judgment against18
the beneficiary was based on, arose from, or was related to an act,19
transaction, or course of conduct for which the beneficiary has been20
convicted by any court of a crime punishable only by life imprisonment or21
death. No fraternal benefit society shall be liable or responsible to any22
person to determine or ascertain the existence or identity of any such23
judgment creditor prior to payment of any such proceeds, cash values, or24
benefits. This subsection shall apply to any judgment rendered on or25
after January 1, 1995, irrespective of when the criminal conviction is or26
was rendered and irrespective of whether proceedings for attachment,27
garnishment, or other legal or equitable process were pending on March28
14, 1997. 29
Sec. 9. Original sections 8-1,131, 25-1558, 25-1559, 30-2322,30
30-2323, 44-371, and 44-1089, Reissue Revised Statutes of Nebraska, and31
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section 40-101, Revised Statutes Cumulative Supplement, 2024, are1
repealed. 2
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