NRS: CHAPTER 164 - ADMINISTRATION OF TRUSTS

[Rev. 6/29/2024 3:08:11 PM--2023]

CHAPTER 164 - ADMINISTRATION OF TRUSTS

GENERAL PROVISIONS

NRS 164.005 Applicability of provisions of chapters 132, 153 and 155 of NRS regulating matters of estates.

NRS 164.010 Petition for assumption of jurisdiction; circumstances in which jurisdiction is proper in this State; determination of venue; powers of court; petition for removal of trust from jurisdiction of court.

NRS 164.015 Petition concerning internal affairs of nontestamentary trust; jurisdiction of court; procedure for contests of certain trusts; final order; appeal.

NRS 164.021 Notice by trustee to beneficiary concerning change of revocable trust to irrevocable trust; contents of notice; limitation of action to contest validity of trust; exceptions.

NRS 164.025 Notice of death of settlor; filing of claim against settlor, trust estate or settlor and trust estate; effect of failure to file claim; notice to Department of Health and Human Services; notice of rejected claim; effect of failure to bring suit after notice of rejected claim.

NRS 164.030 Petition for instructions: Notice; hearing; final order; appeal.

NRS 164.033 Petition concerning conveyance, transfer or delivery of property of trust; notice of hearing; order; appeal.

NRS 164.037 Petitions: Notice and hearing.

NRS 164.038 Circumstances under which certain persons are authorized to be represented by persons with similar interests in proceedings concerning administration of trust; binding results; representation by powerholder for permissible appointee or taker in default of appointment; representation by parent or guardian of beneficiary.

NRS 164.040 Power or jurisdiction of court not abridged; court may take action necessary or proper to dispose of matter presented by petition.

NRS 164.041 Confidential information: Redaction and sealing of information without prior court order in certain circumstances.

PAYMENT OF TRUSTEE

NRS 164.043 Expenses and compensation of trustees.

CHOICE OF LAW

NRS 164.045 Circumstances under which laws of this State govern trusts; change of situs to this State.

POWER OVER PROPERTY

NRS 164.067 Power to sell, convey or encumber.

COMMON TRUST FUNDS (UNIFORM ACT)

NRS 164.070 Short title.

NRS 164.080 Establishment; investments; management.

NRS 164.090 Accountings.

NRS 164.100 Uniformity of interpretation.

TRANSFER OF SUPERVISION OF TRUSTS

NRS 164.130 Transfer by court to district court in this State or court outside Nevada.

CERTIFICATIONS OF TRUST IN LIEU OF TRUST INSTRUMENTS

NRS 164.400 Presentation; effect; form.

NRS 164.410 Contents.

NRS 164.420 Dispositive provisions not required; person presented with certification may request excerpts from trust instrument designating trustee.

NRS 164.430 Reliance upon facts contained in certification; enforceability.

NRS 164.440 Failure to demand certification not improper act; liability.

PRUDENT MANAGEMENT OF INSTITUTIONAL FUNDS (UNIFORM ACT)

NRS 164.640 Short title.

NRS 164.643 Definitions.

NRS 164.645 “Charitable purpose” defined.

NRS 164.647 “Endowment fund” defined.

NRS 164.650 “Gift instrument” defined.

NRS 164.653 “Institution” defined.

NRS 164.655 “Institutional fund” defined.

NRS 164.657 “Person” defined.

NRS 164.660 “Program-related asset” defined.

NRS 164.663 “Record” defined.

NRS 164.665 Standard of conduct in managing and investing institutional fund.

NRS 164.667 Appropriation for expenditure or accumulation of endowment fund; rules of construction.

NRS 164.670 Delegation of management and investment functions.

NRS 164.673 Release or modification of restrictions on management, investment or purpose.

NRS 164.675 Reviewing compliance.

NRS 164.677 Relation to Electronic Signatures in Global and National Commerce Act.

NRS 164.680 Uniformity of application and construction.

MANAGEMENT AND INVESTMENT OF PROPERTY

General Provisions

NRS 164.700 Definitions.

Prudent Investor (Uniform Act)

NRS 164.705 Short title.

NRS 164.710 Administration of trust or estate by fiduciary in accordance with its terms or in accordance with provisions of NRS.

NRS 164.715 Acting in interest of beneficiaries.

NRS 164.720 Trust having two or more beneficiaries; impartial administration of trust or estate.

NRS 164.725 Notice of proposed action: Authorized; to whom notice must be sent; content; objection to proposed action; limitations on liability; court order to take action over objection; burden of proof; notice when action not taken.

NRS 164.730 No duty to make adjustment between principal and income; trustee immunity from liability.

NRS 164.735 Applicability.

NRS 164.740 Duty to comply with prudent investor rule; circumstances under which trustee is immune from liability.

NRS 164.745 Satisfaction of prudent investor standard; evaluation of decisions; consideration of circumstances; verification of facts; types of investments; special skills or expertise of trustee.

NRS 164.750 Diversification of investments.

NRS 164.755 Duty to bring trust portfolio into compliance with terms and circumstances of trust and provisions of NRS within reasonable time.

NRS 164.760 Incurring costs.

NRS 164.765 Determination of compliance with prudent investor rule.

NRS 164.770 Delegation of functions by trustee; standard of care owed by agent; trustee immunity from liability; jurisdiction over agent.

NRS 164.775 Terms and language of trust which authorize certain investments or strategies.

Principal and Income (Uniform Act)

NRS 164.780 Short title.

NRS 164.785 Definitions.

NRS 164.790 Allocation of receipt or disbursement to principal when terms of trust and provisions of NRS do not provide rule.

NRS 164.795 Adjustment between principal and income; consideration of factors; adjustment prohibited under certain circumstances; release of power to adjust; effect of terms of trust that limit power to adjust.

NRS 164.796 Circumstances under which trustee authorized to convert trust into unitrust; effect of such conversion on certain terms of trust; liability of trustee or disinterested person.

NRS 164.797 Administration of unitrust: Duties of trustee; valuation of assets of trust.

NRS 164.798 Administration of unitrust: Powers of trustee; manner of distributions.

NRS 164.799 Trustee or beneficiary authorized to petition court to take certain actions concerning unitrust.

NRS 164.800 Applicable rules after death of decedent or end of income interest in trust.

NRS 164.805 Distribution of net income to beneficiaries; rules for determining share of net income.

NRS 164.810 Date on which income interest begins; date on which asset becomes subject to trust or successive income interest; date on which income interest ends.

NRS 164.815 Allocation of certain income receipts and disbursements; due dates for certain payments and distributions.

NRS 164.820 Payment of undistributed income upon end of mandatory income interest; prorating final payment upon end of obligation to pay fixed annuity or fixed fraction of value of trust’s assets.

NRS 164.825 Allocation of money received from entity to income; allocation of receipts from entity to principal; determination of money as return of capital; reliance upon financial statements and other information about character of distribution or source of funds from which distribution is made.

NRS 164.830 Allocation of amount received as distribution of income to income; allocation of distribution of principal to principal; purchase of interest in trust that is investment entity.

NRS 164.835 Accounting separately for business or other activity.

NRS 164.840 Allocation of assets, money, property and other receipts to principal.

NRS 164.845 Allocation of receipts from rental property to income; treatment of refundable deposit.

NRS 164.850 Allocation of interest on obligation to pay money to trustee to income; allocation of amount received from disposition of certain obligations to principal; applicability of provisions.

NRS 164.855 Allocation of proceeds of life insurance policy and certain contracts to principal; allocation of dividends on insurance policy to income or principal.

NRS 164.860 Allocation of entire amount to principal if allocation between principal and income under certain circumstances is insubstantial.

NRS 164.865 Allocation of certain payments received because of services rendered or property transferred to payor in exchange for future payments to income or principal, or both; certain exceptions for trusts that qualify for marital deduction under federal law.

NRS 164.870 Allocation of receipts from liquidating assets to income and principal.

NRS 164.875 Allocation of receipts from interest in minerals to income or to income and principal; allocation of receipts from interest in water to income or to income and principal; applicability.

NRS 164.880 Allocation of net receipts from sale of timber and related products to income or principal, or both; applicability.

NRS 164.885 Request of spouse if marital deduction is allowed and amounts transferred from principal to income and distributed are insufficient to obtain marital deduction; proceeds from sale or disposition of assets generally principal.

NRS 164.890 Allocation of receipts from and disbursements made in connection with transactions in derivatives to principal; allocation of amount received for granting certain options to principal.

NRS 164.895 Allocation from proceeds of collateral financial assets to income and principal; allocation of payments in exchange for interest in asset-backed security to principal or to principal and income.

NRS 164.900 Disbursements required to be made from income; reduction of amount charged against income.

NRS 164.905 Disbursements required to be made from principal.

NRS 164.910 Transfer of net cash receipts from principal asset subject to depreciation to principal.

NRS 164.915 Transfer of amount from income to principal to make certain principal disbursements.

NRS 164.920 Payment of taxes required to be paid by trustee.

NRS 164.925 Adjustments between principal and income to offset shifting economic interests or tax benefits between income beneficiaries and remainder beneficiaries; reimbursement of principal if estate taxes are increased and income taxes are decreased under certain circumstances.

ARBITRATION OF DISPUTES

NRS 164.930 Enforceability of certain arbitration provisions; presumption in favor of binding arbitration; appointment of guardian ad litem; contents of arbitration provisions.

SETTLEMENT OF DISPUTES

NRS 164.940 Nonjudicial settlement agreements: Enforceability; when void; matters that may be resolved.

NRS 164.942 Nonjudicial settlement agreements: When effective; providing objections; notice of proposed action; failure to object constitutes acceptance; petitioning court for approval.

MISCELLANEOUS PROVISIONS

NRS 164.950 Distribution by trustee of community property in nontestamentary trust established by married settlors.

NRS 164.960 Applicability of NRS 111.781 to transfers of property made pursuant to trust.

_________

GENERAL PROVISIONS

NRS 164.005 Applicability of provisions of chapters 132, 153 and 155 of NRS regulating matters of estates. When not otherwise inconsistent with the provisions of chapters 162 to 167, inclusive, of NRS, all of the provisions of chapters 132, 153 and 155 of NRS regulating the matters of estates:

1. Apply to proceedings relating to trusts, as appropriate; or

2. May be applied to supplement the provisions of chapters 162 to 167, inclusive, of NRS.

(Added to NRS by 2001, 2351)

1. Upon petition of any person appointed as trustee of an express trust by any written instrument other than a will, or upon petition of a settlor or beneficiary of the trust, the district court shall assume jurisdiction of the trust as a proceeding in rem unless another court has properly assumed continuing jurisdiction in rem in accordance with the laws of that jurisdiction and the district court determines that it is not appropriate for the district court to assume jurisdiction under the circumstances.

2. For the purposes of this section, jurisdiction is proper in this State if:

(a) The trust instrument expressly provides that:

(1) The situs of the trust is in this State or a county located in this State; or

(2) A court in this State has jurisdiction over the trust;

(b) A person has designated for the trust that this State or a county located in this State is the situs or has jurisdiction, if such person made the designation at a time during which he or she held the power to make such a designation under the express terms of the trust instrument;

(d) The trust owns personal property, wherever situated, if the trustee is:

(1) Incorporated or authorized to do business in this State;

(2) A trust company licensed under chapter 669 of NRS;

(3) A family trust company, as defined in NRS 669A.080; or

(4) A national association having an office in this State;

(e) Any trustee resides or conducts business in this State; or

(f) At least part of the administration of the trust occurs in this State.

3. Notwithstanding the provisions of this section, if a court of a jurisdiction other than this State has jurisdiction over a trust and grants an order authorizing a transfer of jurisdiction over that trust to this State, the district court has the power to assume jurisdiction over the trust and to otherwise supervise the administration of that trust in accordance with the procedures set forth in this title.

4. For the purposes of determining venue within this State, preference is given in the following order:

(a) To the county in which venue was most recently declared by a person granted the power to make such a declaration under the terms of the trust instrument at the time of the filing of the petition;

(b) To the county in which venue is declared in the trust instrument;

(c) To the county in which the situs or domicile is declared by the trustee at the time of the filing of the petition in a certification of the trust which complies with subsection 2 of NRS 164.400 and subsection 2 of NRS 164.410 and which contains a declaration of the trust’s situs or domicile as authorized in subsection 1 of NRS 164.410;

(d) To a county in which any trustee resides or conducts business at the time of the filing of the petition;

(e) To a county in which any real property interest owned by the trust is located; and

(f) To a county in which any beneficiary of the trust resides.

5. When the court assumes jurisdiction pursuant to this section, the court:

(a) Has jurisdiction of the trust as a proceeding in rem as of the date of the filing of the petition;

(b) Shall be deemed to have personal jurisdiction over any trustee confirmed by the court and any person appearing in the matter, unless such an appearance is made solely for the purpose of objecting to the jurisdiction of the court;

(c) May confirm at the same time the appointment of the trustee and specify the manner in which the trustee must qualify; and

(d) May consider at the same time granting orders on other matters relating to the trust, including, without limitation, matters that might be addressed in a declaratory judgment relating to the trust under subsection 2 of NRS 30.040 or petitions filed pursuant to NRS 153.031 or 164.015 whether such matters are raised in the petition to assume jurisdiction pursuant to this section or in one or more separate petitions that are filed concurrently with the petition to assume jurisdiction.

6. At any time, a trustee may petition the court for removal of the trust from continuing jurisdiction of the court.

7. As used in this section, “written instrument” includes, without limitation, an electronic trust as defined in NRS 163.0015.

[1:22:1953]—(NRS A 1961, 400; 1999, 2377; 2001, 2352; 2015, 3551; 2017, 1695; 2023, 1323)

NRS 164.015 Petition concerning internal affairs of nontestamentary trust; jurisdiction of court; procedure for contests of certain trusts; final order; appeal.

1. The court has exclusive jurisdiction of proceedings initiated by the petition of an interested person concerning the internal affairs of a nontestamentary trust, including a revocable living trust while the settlor is still living if the court determines that the settlor cannot adequately protect his or her own interests or if the interested person shows that the settlor is incompetent or susceptible to undue influence. Proceedings which may be maintained under this section are those concerning the administration and distribution of trusts, the declaration of rights and the determination of other matters involving trustees and beneficiaries of trusts, including petitions with respect to a nontestamentary trust for any appropriate relief provided with respect to a testamentary trust in NRS 153.031 and petitions for a ruling that property not formally titled in the name of a trust or its trustee constitutes trust property pursuant to NRS 163.002.

2. A petition under this section or subsection 2 of NRS 30.040 that relates to a trust may be filed in conjunction with a petition under NRS 164.010 or at any time after the court has assumed jurisdiction under that section.

3. If an interested person contests the validity of a revocable nontestamentary trust, the interested person is the plaintiff and the trustee is the defendant. The written grounds for contesting the validity of the trust constitutes a pleading and must conform with any rules applicable to pleadings in a civil action. This subsection applies whether the person contesting the validity of the trust is the petitioner or the objector and whether or not the opposition to the validity of the trust is asserted under this section or subsection 2 of NRS 30.040.

4. In a proceeding pursuant to subsection 3, the competency of the settlor to make the trust, the freedom of the settlor from duress, menace, fraud or undue influence at the time of execution of the will, the execution and attestation of the trust instrument, or any other question affecting the validity of the trust is a question of fact and must be tried by the court, subject to the provisions of subsection 5.

5. A court may consolidate the cases if there is a contest of a revocable nontestamentary trust and a contest relating to a will executed on the same date. If a jury is demanded pursuant to NRS 137.020 for the contest of the will, the court may instruct the jury to render an advisory opinion with respect to an issue of fact pursuant to subsection 4 in the contest of the trust.

6. Upon the hearing, the court shall enter such order as it deems appropriate. The order is final and conclusive as to all matters determined and is binding in rem upon the trust estate and upon the interests of all beneficiaries, vested or contingent, except that appeal to the appellate court of competent jurisdiction pursuant to the rules fixed by the Supreme Court pursuant to Section 4 of Article 6 of the Nevada Constitution may be taken from the order within 30 days after notice of its entry by filing notice of appeal with the clerk of the district court. The appellant shall mail a copy of the notice to each person who has appeared of record. If the proceeding was brought pursuant to subsection 3, 4 or 5, the court must also award costs pursuant to chapter 18 of NRS.

7. Except as otherwise ordered by the court, a proceeding under this section does not result in continuing supervisory proceedings, and the administration of the trust must proceed expeditiously in a manner consistent with the terms of the trust, without judicial intervention or the order, approval or other action of any court, unless the jurisdiction of the court is invoked by an interested person or exercised as provided by other law.

8. As used in this section, “nontestamentary trust” has the meaning ascribed to it in NRS 163.0016.

(Added to NRS by 1999, 2375; A 2009, 798; 2013, 1749; 2015, 3552)

NRS 164.021 Notice by trustee to beneficiary concerning change of revocable trust to irrevocable trust; contents of notice; limitation of action to contest validity of trust; exceptions.

1. When a revocable trust becomes irrevocable because of the death of a settlor or by the express terms of the trust, the trustee may, after the trust becomes irrevocable, provide notice to any beneficiary of the irrevocable trust, any heir of the settlor or to any other interested person.

2. The notice provided by the trustee must contain:

(a) The identity of the settlor of the trust and the date of execution of the trust instrument;

(b) The name, mailing address and telephone number of any trustee of the trust;

(c) The dispositive provisions of the trust instrument which pertain to the beneficiary, a complete copy of the trust instrument or notice that the heir or interested person is not a beneficiary under the trust;

(d) Any information required to be included in the notice expressly provided by the trust instrument; and

(e) A statement set forth in a separate paragraph, in 12-point boldface type or an equivalent type which states: “You may not bring an action to contest the trust more than 120 days from the date this notice is provided to you.”

3. The trustee shall cause notice pursuant to this section to be provided in accordance with the provisions of NRS 155.010.

4. Except as otherwise provided in this subsection, no person upon whom notice is provided pursuant to this section may bring an action to contest the validity of the trust more than 120 days from the date the notice is served upon the person, unless the person proves that he or she did not receive actual notice. A person upon whom notice is provided pursuant to this section may provide consent in writing to a period of less than 120 days in which the person may bring an action to contest the validity of the trust.

5. For the purposes of paragraph (c) of subsection 2, a copy of the trust instrument shall be considered complete if it includes all amendments and restatements to the trust instrument the trustee has determined to be in effect at the time of the death of the settlor after the trustee has exercised due diligence.

6. A trustee is not liable in providing information pursuant to paragraph (c) of subsection 2 to any person whom the trustee has determined, after the exercise of due diligence, to be a beneficiary, heir or interested person.

(Added to NRS by 2009, 794; A 2011, 1469; 2021, 988; 2023, 1325)

1. Regardless of the filing of a petition under NRS 164.010, the trustee of a nontestamentary trust may after the death of the settlor of the trust cause to be published a notice in the manner specified in paragraph (b) of subsection 1 of NRS 155.020 and mail a copy of the notice to known or readily ascertainable creditors.

2. The notice must be in substantially the following form:

(a) For a claim against the settlor:

NOTICE TO CREDITORS

Notice is hereby given that the undersigned is the duly appointed and qualified trustee of the ................ trust. ................, the settlor of that trust died on ................. A creditor having a claim against the settlor must file a claim with the undersigned at the address given below within 90 days after the first publication of this notice.

Dated.........................................

...........................................................................

Trustee

...........................................................................

Address

(b) For a claim against the trust:

NOTICE TO CREDITORS

Notice is hereby given that the undersigned is the duly appointed and qualified trustee of the ................ trust. ................, the settlor of that trust died on ................. A creditor having a claim against the trust estate must file a claim with the undersigned at the address given below within 90 days after the first publication of this notice.

Dated.........................................

...........................................................................

Trustee

...........................................................................

Address

NOTICE TO CREDITORS

Notice is hereby given that the undersigned is the duly appointed and qualified trustee of the ................ trust. ................, the settlor of that trust died on ................. A creditor having a claim against the settlor and against the trust estate must file a claim with the undersigned at the address given below within 90 days after the first publication of this notice.

Dated.........................................

...........................................................................

Trustee

...........................................................................

Address

3. Except as otherwise provided in subsection 4, a person having a claim, due or to become due, against a settlor or the trust, as applicable, must file the claim with the trustee within 90 days after the mailing, for those required to be mailed, or 90 days after publication of the first notice to creditors. A claim filed within the applicable period is presumed timely filed if it contains on the first page of the claim a title stating it is a “Claim Pursuant to NRS 164.025” in a minimum 12-point bold type and it is mailed to the trustee at the address set forth in the notice with a return receipt or the creditor obtains written confirmation of receipt signed by the trustee or trustee’s counsel. Any claim against a settlor or the trust estate, as applicable, that is not timely filed is forever barred. After the expiration of the time to file a claim as provided in this subsection or, if applicable, subsection 4, the trustee may distribute the assets of the trust to its beneficiaries without personal liability for any claim which has not been timely filed with the trustee. A claim not complying with the requirements of this subsection is rebuttably presumed to be untimely.

4. Notwithstanding the provisions of subsection 3, if the existence of an additional creditor who was not known or readily ascertainable at the time of the first publication of the notice to creditors is discovered by the trustee before the last day that creditors who were provided such notice may file a claim with the trustee pursuant to subsection 3, the trustee shall immediately mail a copy of the notice to the additional creditor, who must file a claim with the trustee in accordance with the provisions of subsection 3 within the applicable time period set forth in subsection 3 or 30 days from the date the trustee mailed such subsequent notice to the creditor, whichever is later.

5. If the trustee knows or has reason to believe that the settlor received public assistance during the lifetime of the settlor, the trustee shall, whether or not the trustee gives notice to other creditors, give notice within 30 days after the death to the Department of Health and Human Services in the manner provided in NRS 155.010. If notice to the Department is required by this subsection but is not given, the trust estate and any assets transferred to a beneficiary remain subject to the right of the Department to recover public assistance received.

6. If a claim is rejected by the trustee, in whole or in part, the trustee must, within 10 days after the rejection, notify the claimant of the rejection by written notice forwarded by registered or certified mail to the mailing address of the claimant. The claimant must bring suit in the proper court against the trustee within 60 days after the notice is given, whether the claim is due or not, or the claim is barred forever and the trustee may distribute the assets of the trust to its beneficiaries without personal liability to any creditor whose claim is barred forever.

7. As used in this section, “nontestamentary trust” has the meaning ascribed to it in NRS 163.0016.

(Added to NRS by 1985, 967; A 1995, 2578; 1999, 2377; 2001, 2352; 2003, 886; 2015, 3553; 2019, 1870; 2021, 989)

NRS 164.030 Petition for instructions: Notice; hearing; final order; appeal.

1. Any trustee whose appointment has been confirmed, as provided in NRS 164.010, at any time thereafter may petition the court for instructions in the administration of the trust or for a construction of the trust instrument, or upon or after the filing of a final account, for the settlement and allowance thereof.

2. Upon the filing of the petition the court shall make an order fixing a time and place for hearing thereof, unless hearing has been waived in writing by the beneficiaries of the trust.

3. Unless otherwise ordered by the court, notice of the hearing must be given as follows:

(a) The clerk shall set the petition for hearing;

(b) The petitioner must give notice stating the filing of the petition and the object and time of the hearing to all persons entitled to notice as provided in NRS 155.010; and

(c) The trustee filing such petition shall cause a copy of the order to be delivered to the beneficiaries of the trust as follows:

(1) By handing the notice or copy to the beneficiary personally or to the beneficiary’s guardian, or attorney of record; or

(2) By sending it by registered or certified mail with return receipt requested to such beneficiary, or the beneficiary’s guardian or attorney of record, at the last known address of the addressee.

4. Upon the hearing the court shall make such order as it deems appropriate, which order is final and conclusive as to all matters thereby determined and binding in rem upon the trust estate and upon the interests of all beneficiaries, vested or contingent, except that appeal to the appellate court of competent jurisdiction pursuant to the rules fixed by the Supreme Court pursuant to Section 4 of Article 6 of the Nevada Constitution may be taken from the order within 30 days from the entry thereof by filing notice of appeal with the clerk of the district court, who shall mail a copy of the notice to each adverse party who has appeared of record.

[3:22:1953]—(NRS A 1967, 354; 1969, 95, 484; 1971, 1998; 1997, 1495; 2013, 1750)

NRS 164.033 Petition concerning conveyance, transfer or delivery of property of trust; notice of hearing; order; appeal.

1. The trustee or an interested person may petition the court to enter an order:

(a) If the trustee is in possession of, or holds title to, property and the property or an interest in it is claimed by another.

(b) If the trustee has a claim to property and another holds title to or is in possession of the property.

2. The court shall not grant a petition under this section if it determines that the matter should be determined by civil action.

3. The petition must state facts showing that it is authorized under this section, the grounds of the petition, and the name and address of each person entitled to notice of the petition.

4. Upon the filing of the petition, the clerk shall set it for hearing and the petitioner shall give notice of the hearing, at least 30 days before the time set, to:

(a) All interested persons, including the Attorney General if the petition relates to a charitable trust, in the manner provided in NRS 155.010.

(b) Each person claiming an interest in, or having title to or possession of the property, and any other person whose right, title or interest in or to the property would be affected by the granting of the petition, in the manner provided in NRS 155.040.

5. Except as otherwise provided in subsection 2, if the court is satisfied that a conveyance, transfer, delivery or other disposition should be made, the court shall enter an order directing the trustee or other person having title to or possession of the property to convey, transfer or deliver it to the person entitled thereto or granting other appropriate relief.

6. Any person aggrieved by an order entered pursuant to this section may appeal to the appellate court of competent jurisdiction pursuant to the rules fixed by the Supreme Court pursuant to Section 4 of Article 6 of the Nevada Constitution within 30 days after the notice of the entry of the order by filing a notice of appeal with the clerk of the district court. The appellant shall mail a copy of the notice to each person who has appeared of record.

(Added to NRS by 1999, 2376; A 2013, 1751)

NRS 164.037 Petitions: Notice and hearing. Except as otherwise provided in NRS 164.033, the clerk shall set a petition authorized by this chapter for hearing, and the petitioner shall give notice to all interested persons for the period and in the manner provided in NRS 155.010. The notice must state the filing of the petition, the object and the time of the hearing. For the purposes of this section, “interested person” means a settlor, trustee, beneficiary or any other person to whom the court directs that notice be given.

(Added to NRS by 1999, 2375)

1. Unless otherwise represented by counsel, a minor, incapacitated person, unborn person or person whose identity or location is unknown and not reasonably ascertainable may be represented by another person who has a substantially similar interest with respect to the question or dispute.

2. A person may only be represented by another person pursuant to subsection 1 if there is no material conflict of interest between the person and the representative with respect to the question or dispute for which the person is being represented. If a person is represented pursuant to subsection 1, the results of that representation in the question or dispute will be binding on the person.

3. A presumptive remainder beneficiary may represent and bind a beneficiary with a contingent remainder for the same purpose, in the same circumstance and to the same extent as an ascertainable beneficiary may bind a minor, incapacitated person, unborn person or person who cannot be ascertained.

4. A powerholder may represent and bind a person who is a permissible appointee or taker in default of appointment.

5. If a trust has a minor or incapacitated beneficiary who may not be represented by another person pursuant to this section, a custodial parent or the guardian of the estate of the minor or incapacitated beneficiary may represent the minor or incapacitated beneficiary in any judicial proceeding or nonjudicial matter pertaining to the trust. A minor or incapacitated beneficiary may only be represented by a parent or guardian if there is no material conflict of interest between the minor or incapacitated beneficiary and the parent or guardian with respect to the question or dispute. If a minor or incapacitated beneficiary is represented pursuant to this subsection, the results of that representation will be binding on the minor or incapacitated beneficiary. The representation of a minor or incapacitated beneficiary pursuant to this subsection is binding on an unborn person or a person who cannot be ascertained if:

(a) The unborn person or a person who cannot be ascertained has an interest substantially similar to the minor or incapacitated person; and

(b) There is no material conflict of interest between the unborn person or a person who cannot be ascertained and the minor or incapacitated person with respect to the question or dispute.

6. As used in this section:

(a) “Permissible appointee” has the meaning ascribed to it in NRS 162B.065.

(b) “Powerholder” has the meaning ascribed to it in NRS 162B.080.

(1) A beneficiary who would receive income or principal of the trust if the trust were to terminate as of that date, regardless of the exercise of a power of appointment; or

(2) A beneficiary who, if the trust does not provide for termination, would receive or be eligible to receive distributions of income or principal of the trust if all beneficiaries of the trust who were receiving or eligible to receive distributions were deceased.

(d) “Taker in default of appointment” has the meaning ascribed to it in NRS 162B.095.

(Added to NRS by 2009, 794; A 2019, 1871; 2021, 991)

NRS 164.040 Power or jurisdiction of court not abridged; court may take action necessary or proper to dispose of matter presented by petition.

1. NRS 164.010 and 164.015 do not limit or abridge the power or jurisdiction of the district court over trusts and trustees.

2. The court may enter any order or take any other action necessary or proper to dispose of the matters presented by a petition, including the appointment of a temporary trustee to administer the trust in whole or in part.

[4:22:1953]—(NRS A 1999, 2378; 2001, 164)

NRS 164.041 Confidential information: Redaction and sealing of information without prior court order in certain circumstances.

1. Confidential information relating to trusts that is contained in petitions and subsequent related findings under this title or title 12 of NRS may be redacted and filed under seal without a prior court order so long as the unredacted and complete copies of such petitions and filings are promptly provided to the court in camera and to all persons entitled to notice thereto.

2. Unless the court orders otherwise, confidential information once redacted or filed under seal must be redacted and filed under seal without a prior court order in all subsequent filings and orders in the matter relating to the petition, and unredacted and complete copies of such filings and orders must be promptly provided in camera to the court and to all persons entitled to copies thereto, as appropriate.

3. Nothing in this section shall be construed to abridge the power of any court of competent jurisdiction to order the production of unredacted and complete copies of petitions, filings and orders that have been redacted or filed under seal to an interested person, as defined in NRS 132.185, or to other persons for cause shown.

4. As used in this section, “confidential information” includes:

(a) Trust instruments, inventories, accountings and reports;

(b) The names and addresses of trust settlors and beneficiaries;

(1) The identity and amount of distributions or gifts; and

(2) Powers of appointments;

(d) Corporate and company records relating to trusts;

(e) Personally identifying information, including, without limitation, social security numbers and dates of birth; and

(f) Any other information the court deems confidential, if the interest in protecting the confidentiality of the information outweighs the public interest in accessing such information.

(Added to NRS by 2023, 1323)

PAYMENT OF TRUSTEE

NRS 164.043 Expenses and compensation of trustees.

1. The expenses and compensation of a trustee of a nontestamentary trust must initially be governed by the terms of the nontestamentary trust. Thereafter, subject to any contrary terms of the nontestamentary trust, the court shall allow the trustee his or her proper expenses and such compensation for services as are just and reasonable.

2. Where there are several trustees, compensation must be apportioned among the trustees according to the respective services rendered, and such compensation may be:

(a) A fixed yearly compensation for each trustee;

(b) A set amount for the term of service;

(d) Pursuant to a standard schedule of fees.

3. The provisions of this section must not be interpreted to abridge the authority of a court having jurisdiction over a testamentary trust pursuant to NRS 153.020 or 164.010 to review and settle the expenses and compensation of the trustee of a testamentary trust upon the petition of any interested person.

4. As used in this section, “nontestamentary trust” has the meaning ascribed to it in NRS 163.0016.

(Added to NRS by 2019, 1869)

CHOICE OF LAW

NRS 164.045 Circumstances under which laws of this State govern trusts; change of situs to this State.

1. The laws of this State govern the validity and construction of a trust if:

(a) The trust instrument so provides;

(b) Designated by a person who, under the terms of the trust instrument, has the right to designate the laws that govern the validity and construction of the trust, at the time the designation is made; or

(c) The trust instrument does not provide for the law that governs the validity and construction of the trust, a person designated under the terms of the trust instrument to designate the law that governs the validity and construction of the trust, if any, has not made such a designation and the settlor or the trustee of the trust was a resident of this State at the time the trust was created or at the time the trust became irrevocable.

2. A person not domiciled in this State may have the right to designate the laws that govern the validity and construction of a trust if properly designated under the trust instrument.

3. A trust, the situs of which is outside this State, that moves its situs to this State is valid whether or not the trust complies with the laws of this State at the time of its creation or after its creation.

(Added to NRS by 2015, 3548; A 2017, 1696; 2019, 1872)

POWER OVER PROPERTY

NRS 164.067 Power to sell, convey or encumber.

1. When title to real or personal property is taken in the name of a trustee, the trustee has the power to sell, convey or encumber that property unless the deed or conveyance to the trustee specifically limits the power of the trustee to do so.

2. This section applies to property acquired by a trustee on or after July 1, 1979.

(Added to NRS by 1979, 408)

COMMON TRUST FUNDS (UNIFORM ACT)

NRS 164.070 Short title. NRS 164.070 to 164.100, inclusive, may be cited as the Uniform Common Trust Fund Act.

[1:21:1955]—(NRS A 1999, 2379)

NRS 164.080 Establishment; investments; management.

1. Any bank or trust company qualified to act as fiduciary in this State, or in any other state if affiliated with a bank or trust company qualified to act as fiduciary in this State, may:

(a) Establish common trust funds to furnish investments to itself and its affiliated bank or trust company as fiduciary or to itself, its affiliated bank or trust company and others, as cofiduciaries; and

(b) As fiduciary or cofiduciary, invest money which it lawfully holds for investment in interests in those common trust funds, if the investment is not prohibited by the instrument, judgment, decree or order creating the fiduciary relationship, and if, in the case of cofiduciaries, the bank or trust company procures the consent of its cofiduciaries to the investment.

2. Any bank or trust company, qualified to act as fiduciary in the state in which it was chartered, which is not a member of the Federal Reserve System shall, in the operation of the common trust fund, comply with the regulations adopted by the supervisor of banking in the state in which it was chartered and with the regulations adopted by the commissioner of financial institutions in this State.

3. The Commissioner of Financial Institutions of the Department of Business and Industry may adopt regulations to carry out the provisions of NRS 164.070 to 164.100, inclusive.

4. As used in this section, “affiliated” means two or more banks or trust companies:

(a) In which at least 25 percent of their voting shares, excluding shares owned by the United States or by any company wholly owned by the United States, are directly or indirectly owned or controlled by a holding company; or

(b) In which the election of a majority of the directors is controlled in any manner by a holding company.

[2:21:1955]—(NRS A 1985, 972; 1987, 1875; 1993, 1510; 1999, 2379)

NRS 164.090 Accountings. Unless ordered by a court of competent jurisdiction, the bank or trust company operating common trust funds is not required to render a court accounting with regard to those funds, but it may, by petition to the court, secure approval of such an accounting on such conditions as the court may establish.

[3:21:1955]—(NRS A 1999, 2379)

NRS 164.100 Uniformity of interpretation. NRS 164.070 to 164.100, inclusive, must be so interpreted and construed as to effectuate their general purpose to make uniform the law of those states which enact them.

[4:21:1955]—(NRS A 1999, 2380)

TRANSFER OF SUPERVISION OF TRUSTS

NRS 164.130 Transfer by court to district court in this State or court outside Nevada. Upon petition by any trustee or beneficiary, a court having jurisdiction of a trust may transfer supervision of the trust to:

1. Any district court within the State, or to any court outside Nevada which accepts jurisdiction over the trust, when the convenience of beneficiaries, trustees, attorneys or other interested persons makes a transfer desirable.

2. A district court within this State having jurisdiction of the guardianship of a protected person who is currently a beneficiary of the trust and is receiving or is entitled to receive distributions, if the district court has not assumed jurisdiction pursuant to NRS 159.339 or 159A.339.

(Added to NRS by 1967, 205; A 1977, 570; 1999, 2380; 2007, 894; 2017, 1237)

CERTIFICATIONS OF TRUST IN LIEU OF TRUST INSTRUMENTS

NRS 164.400 Presentation; effect; form.

1. Except in connection with an application for benefits pursuant to chapter 422 or 422A of NRS, a trustee may present a certification of trust to any person, in lieu of a copy of any trust instrument, to establish the existence or terms of the trust. The trustee may present the certification voluntarily or at the request of the person with whom the trustee is dealing.

2. Such a certification must be in the form of an affidavit signed and acknowledged by all of the currently acting trustees of the trust.

(Added to NRS by 1995, 211; A 2005, 22nd Special Session, 49)

NRS 164.410 Contents.

1. A certification of trust may confirm the following facts or contain the following information:

(a) The existence of the trust and date of execution of any trust instrument;

(b) The identity of the settlor and each currently acting trustee;

(d) The revocability or irrevocability of the trust and the identity of any person holding a power to revoke it;

(e) If there is more than one trustee, whether all of the currently acting trustees must or less than all may act to exercise identified powers of the trustee;

(f) A declaration regarding the situs or domicile of the trust and regarding the law that governs the validity, construction and administration of the trust;

(g) The form in which title to assets of the trust is to be taken; and

(h) A declaration that:

(1) The incapacity of the former trustee of the trust, including a settlor serving as the former trustee, has been determined pursuant to subsection 3, 4 or 6 of NRS 163.605; and

(2) The current acting trustee succeeded to the office of trustee pursuant to subsection 1 of NRS 163.605.

2. The certification must contain a statement that the trust has not been revoked or amended to make any representations contained in the certification incorrect, and that the signatures are those of all the currently acting trustees.

(Added to NRS by 1995, 211; A 2015, 3554; 2023, 1325)

NRS 164.420 Dispositive provisions not required; person presented with certification may request excerpts from trust instrument designating trustee. A certification of trust need not contain the dispositive provisions of the trust, but the person to whom the certification is presented may require copies of excerpts from any trust instrument which designate the trustee or confer upon him or her the power to act in the pending transaction.

(Added to NRS by 1995, 212)

NRS 164.430 Reliance upon facts contained in certification; enforceability.

1. A person who acts in reliance upon a certification of trust without knowledge that the representations contained therein are incorrect is not liable to any person for so acting. A person who does not know that the facts contained in the certification are incorrect may assume without inquiry the existence of the facts contained in the certification. Knowledge may not be inferred solely from the fact that a copy of all or part of a trust instrument is held by the person relying upon the certification.

2. A transaction, and any lien created thereby, entered into by a trustee and a person acting in reliance upon a certification of trust is fully enforceable against the assets of the trust unless the person knows that the trustee is acting outside the scope of the trust.

(Added to NRS by 1995, 212)

NRS 164.440 Failure to demand certification not improper act; liability. A person’s failure to demand a certification of trust may not be considered to be an improper act by the person and no inference as to whether the person has acted in good faith may be drawn from the failure to demand a certification of trust. This section creates no implication that a person is liable for acting in reliance upon a certification of trust under circumstances where the requirements of NRS 164.400 to 164.430, inclusive, are not satisfied.

(Added to NRS by 1995, 212)

PRUDENT MANAGEMENT OF INSTITUTIONAL FUNDS (UNIFORM ACT)

NRS 164.640 Short title. The provisions of NRS 164.640 to 164.680, inclusive, may be cited as the Uniform Prudent Management of Institutional Funds Act.

(Added to NRS by 2007, 112)

NRS 164.643 Definitions. As used in NRS 164.640 to 164.680, inclusive, unless the context otherwise requires, the words and terms defined in NRS 164.645 to 164.663, inclusive, have the meanings ascribed to them in those sections.

(Added to NRS by 2007, 112)

NRS 164.645 “Charitable purpose” defined. “Charitable purpose” means the relief of poverty, the advancement of education or religion, the promotion of health, the promotion of a governmental purpose or any other purpose the achievement of which is beneficial to the community.

(Added to NRS by 2007, 112)

NRS 164.647 “Endowment fund” defined. “Endowment fund” means an institutional fund or part thereof that, under the terms of a gift instrument, is not wholly expendable by the institution on a current basis. The term does not include assets that an institution designates as an endowment fund for its own use.

(Added to NRS by 2007, 112)

NRS 164.650 “Gift instrument” defined. “Gift instrument” means a record or records, including, without limitation, an institutional solicitation, under which property is granted to, transferred to or held by an institution as an institutional fund.

(Added to NRS by 2007, 112)

NRS 164.653 “Institution” defined. “Institution” means:

1. A person, other than an individual, organized and operated exclusively for charitable purposes;

2. A government or governmental subdivision, agency or instrumentality, to the extent that it holds funds exclusively for a charitable purpose; and

3. A trust that had both charitable and noncharitable interests, after all noncharitable interests have terminated.

(Added to NRS by 2007, 112)

NRS 164.655 “Institutional fund” defined. “Institutional fund” means a fund held by an institution exclusively for charitable purposes. The term does not include:

1. Program-related assets;

2. A fund held for an institution by a trustee that is not an institution; or

3. A fund in which a beneficiary that is not an institution has an interest, other than an interest that could arise upon violation or failure of the purposes of the fund.

(Added to NRS by 2007, 112)

NRS 164.657 “Person” defined. “Person” means an individual, corporation, business trust, estate, trust, partnership, limited-liability company, association, joint venture, public corporation, government or governmental subdivision, agency or instrumentality, or any other legal or commercial entity.

(Added to NRS by 2007, 113)

NRS 164.660 “Program-related asset” defined. “Program-related asset” means an asset held by an institution primarily to accomplish a charitable purpose of the institution and not primarily for investment.

(Added to NRS by 2007, 113)

NRS 164.663 “Record” defined. “Record” means information which is inscribed on a tangible medium or which is stored in an electronic or other medium and is retrievable in perceivable form.

(Added to NRS by 2007, 113)

NRS 164.665 Standard of conduct in managing and investing institutional fund.

1. Subject to the intent of a donor expressed in a gift instrument, an institution, in managing and investing an institutional fund, shall consider the charitable purposes of the institution and the purposes of the institutional fund.

2. In addition to complying with the duty of loyalty imposed by law other than NRS 164.640 to 164.680, inclusive, each person responsible for managing and investing an institutional fund shall manage and invest the fund in good faith and with the care an ordinarily prudent person in a like position would exercise under similar circumstances.

3. In managing and investing an institutional fund, an institution:

(a) May incur only costs that are appropriate and reasonable in relation to the assets, the purposes of the institution and the skills available to the institution; and

(b) Shall make a reasonable effort to verify facts relevant to the management and investment of the fund.

4. An institution may pool two or more institutional funds for purposes of management and investment.

5. Except as otherwise provided by a gift instrument, the following rules apply:

(a) In managing and investing an institutional fund, the following factors, if relevant, must be considered:

(1) General economic conditions;

(2) The possible effect of inflation or deflation;

(3) The expected tax consequences, if any, of investment decisions or strategies;

(4) The role that each investment or course of action plays within the overall investment portfolio of the fund;

(5) The expected total return from income and the appreciation of investments;

(6) Other resources of the institution;

(7) The needs of the institution and the fund to make distributions and to preserve capital; and

(8) An asset’s special relationship or special value, if any, to the charitable purposes of the institution.

(b) Management and investment decisions about an individual asset must be made not in isolation but rather in the context of the institutional fund’s portfolio of investments as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the fund and to the institution.

(c) Except as otherwise provided by law other than NRS 164.640 to 164.680, inclusive, an institution may invest in any kind of property or type of investment consistent with this section.

(d) An institution shall diversify the investments of an institutional fund unless the institution reasonably determines that, because of special circumstances, the purposes of the fund are better served without diversification.

(e) Within a reasonable time after receiving property, an institution shall make and carry out decisions concerning the retention or disposition of the property or to rebalance a portfolio, in order to bring the institutional fund into compliance with the purposes, terms and distribution requirements of the institution or necessary to meet other circumstances of the institution and the requirements of NRS 164.640 to 164.680, inclusive.

(f) A person that has special skills or expertise, or is selected in reliance upon the person’s representation that the person has special skills or expertise, has a duty to use those skills or that expertise in managing and investing institutional funds.

(Added to NRS by 2007, 113)

NRS 164.667 Appropriation for expenditure or accumulation of endowment fund; rules of construction.

1. Subject to the intent of a donor expressed in the gift instrument and to subsection 4, an institution may appropriate for expenditure or accumulate so much of an endowment fund as the institution determines is prudent for the uses, benefits, purposes and duration for which the endowment fund is established. Unless stated otherwise in the gift instrument, the assets in an endowment fund are donor-restricted assets until appropriated for expenditure by the institution. In making a determination to appropriate or accumulate, the institution shall act in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances, and shall consider, if relevant, the following factors:

(a) The duration and preservation of the endowment fund;

(b) The purposes of the institution and the endowment fund;

(d) The possible effect of inflation or deflation;

(e) The expected total return from income and the appreciation of investments;

(f) Other resources of the institution; and

(g) The investment policy of the institution.

2. To limit the authority to appropriate for expenditure or accumulate under subsection 1, a gift instrument must specifically state the limitation.

3. Terms in a gift instrument designating a gift as an endowment, or a direction or authorization in the gift instrument to use only “income,” “interest,” “dividends,” or “rents, issues or profits,” or “to preserve the principal intact,” or words of similar import:

(a) Create an endowment fund of permanent duration unless other language in the gift instrument limits the duration or purpose of the fund; and

(b) Do not otherwise limit the authority to appropriate for expenditure or accumulate under subsection 1.

4. The appropriation for expenditure in any year of an amount greater than 7 percent of the fair market value of an endowment fund, calculated on the basis of market values determined at least quarterly and averaged over a period of not less than 3 years immediately preceding the year in which the appropriation for expenditure was made, creates a rebuttable presumption of imprudence. For an endowment fund in existence for less than 3 years, the fair market value of the endowment fund must be calculated for the period the endowment fund has been in existence. This subsection does not:

(a) Apply to an appropriation for expenditure permitted under law other than NRS 164.640 to 164.680, inclusive, or by the gift instrument; or

(b) Create a presumption of prudence for an appropriation for expenditure of an amount less than or equal to 7 percent of the fair market value of the endowment fund.

(Added to NRS by 2007, 114)

NRS 164.670 Delegation of management and investment functions.

1. Subject to any specific limitation set forth in a gift instrument or in law other than NRS 164.640 to 164.680, inclusive, an institution may delegate to an external agent the management and investment of an institutional fund to the extent that an institution could prudently delegate under the circumstances. An institution shall act in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances, in:

(a) Selecting an agent;

(b) Establishing the scope and terms of the delegation, consistent with the purposes of the institution and the institutional fund; and

(c) Periodically reviewing the agent’s actions in order to monitor the agent’s performance and compliance with the scope and terms of the delegation.

2. In performing a delegated function, an agent owes a duty to the institution to exercise reasonable care to comply with the scope and terms of the delegation.

3. An institution that complies with subsection 1 is not liable for the decisions or actions of an agent to which the function was delegated.

4. By accepting delegation of a management or investment function from an institution that is subject to the laws of this State, an agent submits to the jurisdiction of the courts of this State in all proceedings arising from or related to the delegation or the performance of the delegated function.

5. An institution may delegate management and investment functions to its committees, officers or employees as authorized by law of this State other than NRS 164.640 to 164.680, inclusive.

(Added to NRS by 2007, 115)

NRS 164.673 Release or modification of restrictions on management, investment or purpose.

1. If the donor consents in a record, an institution may release or modify, in whole or in part, a restriction contained in a gift instrument on the management, investment or purpose of an institutional fund. A release or modification may not allow a fund to be used for a purpose other than a charitable purpose of the institution.

2. The court, upon application of an institution, may modify a restriction contained in a gift instrument regarding the management or investment of an institutional fund if the restriction has become impracticable or wasteful, if it impairs the management or investment of the fund or if, because of circumstances not anticipated by the donor, a modification of a restriction will further the purposes of the fund. The institution shall notify the Attorney General of the application, and the Attorney General must be given an opportunity to be heard. To the extent practicable, any modification must be made in accordance with the donor’s probable intention.

3. If a particular charitable purpose or a restriction contained in a gift instrument on the use of an institutional fund becomes unlawful, impracticable, impossible to achieve or wasteful, the court, upon application of an institution, may modify the purpose of the fund or the restriction on the use of the fund in a manner consistent with the charitable purposes expressed in the gift instrument. The institution shall notify the Attorney General of the application, and the Attorney General must be given an opportunity to be heard.

4. If an institution determines that a restriction contained in a gift instrument on the management, investment or purpose of an institutional fund is unlawful, impracticable, impossible to achieve or wasteful, the institution, 60 days after notification to the Attorney General, may release or modify the restriction, in whole or part, if:

(a) The institutional fund subject to the restriction has a total value of less than $25,000;

(b) More than 20 years have elapsed since the fund was established; and

(c) The institution uses the property in a manner consistent with the charitable purposes expressed in the gift instrument.

(Added to NRS by 2007, 115)

NRS 164.675 Reviewing compliance. Compliance with NRS 164.640 to 164.680, inclusive, is determined in light of the facts and circumstances existing at the time a decision is made or action is taken, and not by hindsight.

(Added to NRS by 2007, 116)

NRS 164.677 Relation to Electronic Signatures in Global and National Commerce Act. The provisions of NRS 164.640 to 164.680, inclusive, modify, limit and supersede the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. §§ 7001 et seq., but do not modify, limit or supersede Section 101 of that Act, 15 U.S.C. § 7001(a), or authorize electronic delivery of any of the notices described in Section 103 of that Act, 15 U.S.C. § 7003(b).

(Added to NRS by 2007, 116)

NRS 164.680 Uniformity of application and construction. In applying and construing the Uniform Prudent Management of Institutional Funds Act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

(Added to NRS by 2007, 116)

MANAGEMENT AND INVESTMENT OF PROPERTY

General Provisions

NRS 164.700 Definitions. As used in NRS 164.700 to 164.925, inclusive:

1. “Fiduciary” means a trustee or, to the extent that NRS 164.780 to 164.925, inclusive, apply to an estate, a personal representative.

2. “Terms of a trust” means the manifestation of the intent of a settlor or decedent with respect to the trust, expressed in a manner that admits of its proof in a judicial proceeding, whether by written or spoken words or by conduct.

3. “Unitrust” means a trust in which a certain percentage of annually assessed fair market value of trust property is paid to a trust beneficiary.

(Added to NRS by 2003, 1965; A 2009, 799)

Prudent Investor (Uniform Act)

NRS 164.705 Short title. NRS 164.700 to 164.775, inclusive, may be cited as the Uniform Prudent Investor Act.

(Added to NRS by 2003, 1967)

NRS 164.710 Administration of trust or estate by fiduciary in accordance with its terms or in accordance with provisions of NRS. In performing his or her duties under NRS 164.700 to 164.925, inclusive, a fiduciary:

1. Shall administer a trust or estate in accordance with the terms of the trust or the will, even if there is a different provision in NRS 164.700 to 164.925, inclusive;

2. May administer a trust or estate by the exercise of a discretionary power of administration given to the fiduciary by the terms of the trust or the will, even if the exercise of the power produces a result different from a result required or permitted by NRS 164.700 to 164.925, inclusive; and

3. Shall administer a trust or estate in accordance with NRS 164.700 to 164.925, inclusive, if the terms of the trust or the will do not contain a different provision or do not give the fiduciary a discretionary power of administration.

(Added to NRS by 2003, 1965)

NRS 164.715 Acting in interest of beneficiaries. A trustee shall invest and manage the trust property solely in the interest of the beneficiaries.

(Added to NRS by 2003, 1966)

NRS 164.720 Trust having two or more beneficiaries; impartial administration of trust or estate.

1. If a trust has two or more beneficiaries, the trustee shall act impartially in investing and managing the trust property, taking into account any differing interests of the beneficiaries.

2. In exercising the power to adjust under NRS 164.795 or 164.796 or a discretionary power of administration regarding a matter within the scope of NRS 164.780 to 164.925, inclusive, whether granted by the terms of a trust, a will or NRS 164.780 to 164.925, inclusive, a fiduciary shall administer a trust or estate impartially, based on what is fair and reasonable to all the beneficiaries, except to the extent that the terms of the trust or the will clearly manifest an intention that the fiduciary shall or may favor one or more of the beneficiaries. A determination in accordance with NRS 164.780 to 164.925, inclusive, is presumed to be fair and reasonable to all the beneficiaries.

(Added to NRS by 2003, 1966; A 2009, 799)

1. As used in this section, “action” includes a course of action and a decision on whether or not to take action.

2. A trustee may provide a notice of proposed action regarding any matter governed by NRS 163.556 or 164.700 to 164.925, inclusive. Except as otherwise provided in the trust instrument, a trustee, trust protector or trust adviser may provide a notice of proposed action regarding any aspect of the trust administration of the trust within his or her scope of authority.

3. If a trustee, trust protector or trust adviser provides a notice of proposed action, the trustee, trust protector or trust adviser shall mail the notice of proposed action to every adult beneficiary who, at the time the notice is provided, receives, or is entitled to receive, income under the trust or who would be entitled to receive a distribution of principal if the trust were terminated. A notice of proposed action need not be provided to a person who consents in writing to the proposed action. A consent to a proposed action may be executed before or after the proposed action is taken.

4. The notice of proposed action must state:

(a) That the notice is provided pursuant to this section;

(b) The name and mailing address of the trustee;

(c) The name and telephone number of a person with whom to communicate for additional information regarding the proposed action;

(d) A description of the proposed action and an explanation of the reason for taking the action;

(e) The time within which objection to the proposed action may be made, which must be not less than 30 days after the notice of proposed action is mailed; and

(f) The date on or after which the proposed action is to be taken or is to be effective.

5. A beneficiary may object to the proposed action by mailing a written objection to the person providing notice of the proposed action at the address and within the time stated in the notice.

6. If no beneficiary entitled to receive notice of a proposed action objects to the proposed action and the other requirements of this section are met, the trustee is not liable to any present or future beneficiary with respect to that proposed action.

7. If the trustee, trust protector or trust adviser received a written objection to the proposed action within the period specified in the notice, the trustee, trust protector or trust adviser or a beneficiary may petition the court for an order to take the action as proposed, take the action with modification or deny the proposed action. A beneficiary who failed to object to the proposed action is not estopped from opposing the proposed action. The burden is on a beneficiary to prove that the proposed action should not be taken or should be modified. If the trustee, trust protector or trust adviser takes the proposed action as approved by the court, the trustee, trust protector or trust adviser is not liable to any beneficiary with respect to that action.

8. If the trustee, trust protector or trust adviser decides not to take a proposed action for which notice has been provided, the trustee, trust protector or trust adviser shall notify the beneficiaries of his or her decision not to take the proposed action and the reasons for the decision. The trustee, trust protector or trust adviser is not liable to any present or future beneficiary with respect to the decision not to take the proposed action. A beneficiary may petition the court for an order to take the action as proposed. The burden is on the beneficiary to prove that the proposed action should be taken.

9. If the proposed action for which notice has been proved is an adjustment to principal and income pursuant to NRS 164.795 or 164.796, the sole remedy a court may order, pursuant to subsections 7 and 8, is to make the adjustment, to make the adjustment with a modification or to order the adjustment not to be made.

(Added to NRS by 2003, 1966; A 2009, 800; 2015, 3554)

NRS 164.730 No duty to make adjustment between principal and income; trustee immunity from liability.

1. The provisions of NRS 164.700 to 164.925, inclusive, do not impose or create a duty of a trustee to make an adjustment between principal and income pursuant to the provisions of NRS 164.795 or 164.796.

2. A trustee shall not be liable for:

(a) Not considering whether to make such an adjustment; or

(b) Deciding not to make such an adjustment.

(Added to NRS by 2003, 1967; A 2009, 801)

NRS 164.735 Applicability. Except as specifically provided in a trust instrument, a will or NRS 164.700 to 164.925, inclusive, the provisions of NRS 164.700 to 164.925, inclusive, apply to any trust or estate of a decedent existing on or after October 1, 2003.

(Added to NRS by 2003, 1967)

NRS 164.740 Duty to comply with prudent investor rule; circumstances under which trustee is immune from liability. Except as otherwise provided in chapter 669A of NRS, a trustee who invests and manages trust property owes a duty to the beneficiaries of the trust to comply with the prudent investor rule as set forth in NRS 164.700 to 164.775, inclusive, but a trustee is not liable to a beneficiary to the extent that the trustee:

1. Acted in reasonable reliance on the terms of the trust or a court order; and

2. Determined in good faith to not diversify the investments of a trust pursuant to NRS 164.750.

(Added to NRS by 2003, 1967; A 2011, 1817; 2015, 3555)

NRS 164.745 Satisfaction of prudent investor standard; evaluation of decisions; consideration of circumstances; verification of facts; types of investments; special skills or expertise of trustee.

1. A trustee shall invest and manage trust property as a prudent investor would, considering the terms, purposes, requirements for distribution, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill and caution.

2. A trustee’s decisions concerning investment and management as applied to individual assets must be evaluated not in isolation but in the context of the trust portfolio as a whole and as part of an overall strategy of investment having objectives for risk and return reasonably suited to the trust.

3. Among circumstances that a trustee shall consider in investing and managing trust property are such of the following as are relevant to the trust or its beneficiaries:

(a) General economic conditions;

(b) The possible effect of inflation or deflation;

(d) The role that each investment or course of action plays within the overall trust portfolio;

(e) The expected total return from income and the appreciation of capital;

(f) Other resources of the beneficiaries;

(g) Needs for liquidity, regularity of income, and preservation or appreciation of capital; and

(h) An asset’s special relationship or special value, if any, to the purposes of the trust or to one or more of the beneficiaries.

4. A trustee shall make a reasonable effort to verify facts relevant to the investment and management of trust property.

5. A trustee may invest in any kind of property or type of investment consistent with the standards of NRS 164.700 to 164.775, inclusive, which may include financial assets, interests in closely held enterprises, tangible and intangible personal property, and real property.

6. A trustee who has special skills or expertise, or is named trustee in reliance upon the trustee’s representation that he or she has special skills or expertise, has a duty to use those special skills or expertise.

(Added to NRS by 2003, 1967)

NRS 164.750 Diversification of investments. A trustee shall diversify the investments of the trust unless the trustee reasonably determines that, because of special circumstances, the purposes of the trust are better served without diversifying.

(Added to NRS by 2003, 1968)

NRS 164.755 Duty to bring trust portfolio into compliance with terms and circumstances of trust and provisions of NRS within reasonable time. Within a reasonable time after accepting a trusteeship or receiving trust property, a trustee shall review the trust property and make and carry out decisions concerning the retention and disposition of assets, in order to bring the trust portfolio into compliance with the purposes, terms, requirements for distribution and other circumstances of the trust, and with the requirements of NRS 164.700 to 164.775, inclusive.

(Added to NRS by 2003, 1968)

NRS 164.760 Incurring costs. In investing and managing trust property, a trustee may only incur costs that are appropriate and reasonable in relation to the property, the purposes of the trust and the skills of the trustee.

(Added to NRS by 2003, 1968)

NRS 164.765 Determination of compliance with prudent investor rule. Compliance with the prudent investor rule is determined in light of the facts and circumstances existing at the time of a trustee’s decision or action and not by hindsight.

(Added to NRS by 2003, 1968)

NRS 164.770 Delegation of functions by trustee; standard of care owed by agent; trustee immunity from liability; jurisdiction over agent.

1. A trustee may delegate functions of investment and management that a prudent trustee of comparable skills could properly delegate under the circumstances. The trustee shall exercise reasonable care, skill and caution in:

(a) Selecting an agent;

(b) Establishing the scope and terms of the delegation, consistent with the purposes and terms of the trust; and

(c) Periodically reviewing the agent’s actions in order to verify the agent’s performance and compliance with the terms of the delegation.

2. In performing a delegated function, an agent owes a duty to the trust to exercise reasonable care to comply with the terms of the delegation.

3. A trustee who complies with the requirements of subsection 1 is not liable to the beneficiaries or to the trust for the decisions or actions of the agent to whom the function was delegated.

4. By accepting the delegation of a function from the trustee of a trust that is subject to the law of this state, an agent submits to the jurisdiction of the courts of this state.

(Added to NRS by 2003, 1968)

NRS 164.775 Terms and language of trust which authorize certain investments or strategies. The following terms or comparable language in the terms of a trust, unless otherwise limited or modified, authorizes any investment or strategy permitted under NRS 164.700 to 164.775, inclusive: “investments permissible by law for investment of trust funds,” “legal investments,” “authorized investments,” “using the judgment and care under the circumstances then prevailing that persons of prudence, discretion and intelligence exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital,” “prudent man rule,” “prudent trustee rule,” “prudent person rule” and “prudent investor rule.”

(Added to NRS by 2003, 1968)

Principal and Income (Uniform Act)

NRS 164.780 Short title. NRS 164.700, subsection 2 of NRS 164.720 and NRS 164.780 to 164.925, inclusive, may be cited as the Uniform Principal and Income Act (1997).

(Added to NRS by 2003, 1969)

NRS 164.785 Definitions. As used in NRS 164.780 to 164.925, inclusive:

1. “Accounting period” means a calendar year unless another 12-month period is selected by a fiduciary. The term includes a portion of a calendar year or other 12-month period that begins when an income interest begins or ends when an income interest ends.

2. “Beneficiary” includes, in the case of a decedent’s estate, an heir, legatee and devisee and, in the case of a trust, an income beneficiary and a remainder beneficiary.

3. “Fiduciary” includes an executor, administrator, successor personal representative, special administrator and a person performing substantially the same function.

4. “Income” means money or property that a fiduciary receives as current return from a principal asset. The term includes a portion of receipts from a sale, exchange or liquidation of a principal asset, to the extent provided in NRS 164.825 to 164.895, inclusive.

5. “Income beneficiary” means a person to whom net income of a trust is or may be payable.

6. “Income interest” means the right of an income beneficiary to receive all or part of net income, whether the terms of the trust require it to be distributed or authorize it to be distributed in the trustee’s discretion.

7. “Mandatory income interest” means the right of an income beneficiary to receive net income that the terms of the trust require the fiduciary to distribute.

8. “Net income” means the total receipts allocated to income during an accounting period minus the disbursements made from income during the period, plus or minus transfers under NRS 164.780 to 164.925, inclusive, to or from income during the period.

9. “Principal” means property held in trust for distribution to a remainder beneficiary when the trust terminates.

10. “Remainder beneficiary” means a person entitled to receive principal when an income interest ends.

(Added to NRS by 2003, 1969)

NRS 164.790 Allocation of receipt or disbursement to principal when terms of trust and provisions of NRS do not provide rule. In allocating receipts and disbursements to or between principal and income, and with respect to any matter within the scope of NRS 164.800 to 164.820, inclusive, a fiduciary shall add a receipt or charge a disbursement to principal to the extent that the terms of the trust and NRS 164.780 to 164.925, inclusive, do not provide a rule for allocating the receipt or disbursement to or between principal and income.

(Added to NRS by 2003, 1969)

1. A trustee may adjust between principal and income to the extent the trustee considers necessary if the trustee invests and manages trust assets as a prudent investor, the terms of the trust describe the amount that may or must be distributed to a beneficiary by referring to the trust’s income, and the trustee determines, after applying the rules in NRS 164.710 and 164.790, that he or she is unable to comply with subsection 2 of NRS 164.720.

2. In deciding whether and to what extent to exercise the power conferred by subsection 1, a trustee shall consider all factors relevant to the trust and its beneficiaries, including the following factors to the extent they are relevant:

(a) The nature, purpose and expected duration of the trust;

(b) The intent of the settlor;

(d) The needs for liquidity, regularity of income, and preservation and appreciation of capital;

(e) The assets held in the trust, the extent to which the assets consist of financial assets, interests in closely held enterprises, tangible and intangible personal property, or real property, the extent to which an asset is used by a beneficiary, and whether an asset was purchased by the trustee or received from the settlor;

(f) The net amount allocated to income under the other provisions of NRS 164.780 to 164.925, inclusive, and the increase or decrease in the value of the principal assets, which the trustee may estimate as to assets for which market values are not readily available;

(g) Whether and to what extent the terms of the trust give the trustee the power to invade principal or accumulate income or prohibit the trustee from invading principal or accumulating income, and the extent to which the trustee has exercised a power from time to time to invade principal or accumulate income;

(h) The actual and anticipated effect of economic conditions on principal and income and effects of inflation and deflation; and

(i) The anticipated tax consequences of an adjustment.

3. A trustee may not make an adjustment:

(a) That diminishes the income interest in a trust that requires all the income to be paid at least annually to a surviving spouse and for which an estate tax or gift tax marital deduction would be allowed, in whole or in part, if the trustee did not have the power to make the adjustment;

(b) That reduces the actuarial value of the income interest in a trust to which a person transfers property with the intent to qualify for a gift tax exclusion;

(c) That changes the amount payable to a beneficiary as a fixed annuity or a fixed fraction of the value of the trust assets;

(d) From any amount that is permanently set aside for charitable purposes under a will or the terms of a trust unless both income and principal are so set aside;

(e) If possessing or exercising the power to make an adjustment causes a natural person to be treated as the owner of all or part of the trust for income tax purposes, and the natural person would not be treated as the owner if the trustee did not possess the power to make an adjustment;

(f) If possessing or exercising the power to make an adjustment causes all or part of the trust assets to be included for estate tax purposes in the estate of a natural person who has the power to remove a trustee or appoint a trustee, or both, and the assets would not be included in the estate of the natural person if the trustee did not possess the power to make an adjustment;

(g) If the trustee is a beneficiary of the trust; or

(h) If the trustee is not a beneficiary, but the adjustment would benefit the trustee directly or indirectly.

4. If paragraph (e), (f), (g) or (h) of subsection 3 applies to a trustee and there is more than one trustee, a cotrustee to whom the provision does not apply may make the adjustment unless the exercise of the power by the remaining trustee or trustees is not permitted by the terms of the trust.

5. A trustee may release the entire power conferred by subsection 1 or may release only the power to adjust from income to principal or the power to adjust from principal to income if the trustee is uncertain about whether possessing or exercising the power will cause a result described in paragraphs (a) to (f), inclusive, or (h) of subsection 3 or if the trustee determines that possessing or exercising the power will or may deprive the trust of a tax benefit or impose a tax burden not described in subsection 3. The release may be permanent or for a specified period, including a period measured by the life of a natural person.

6. Terms of a trust that limit the power of a trustee to make an adjustment between principal and income do not affect the application of this section unless it is clear from the terms of the trust that the terms are intended to deny the trustee the power of adjustment conferred by subsection 1.

(Added to NRS by 2003, 1969)

NRS 164.796 Circumstances under which trustee authorized to convert trust into unitrust; effect of such conversion on certain terms of trust; liability of trustee or disinterested person.

1. Unless expressly prohibited by the trust instrument, a trustee may convert a trust into a unitrust if:

(a) The trustee determines conversion to a unitrust will better enable the trustee to carry out the intent of the settlor and the purpose of the trust;

(b) The trustee gives written notice of his or her intention to convert the trust to a unitrust, including how the unitrust will operate, the income distributions rate established pursuant to subsection 3 of NRS 164.797 and subsection 1 of NRS 164.799, and what initial decisions the trustee will make pursuant to this section, to all beneficiaries who:

(1) Are presently eligible to receive income from the trust;

(2) Would be eligible, if a power of appointment were not exercised, to receive income from the trust if the interest of any beneficiary eligible to receive income terminated immediately before the trustee gives notice; and

(3) Would receive, if a power of appointment were not exercised, a distribution of principal if the trust terminated immediately before the trustee gives notice;

(c) There is at least one beneficiary who meets the requirements of subparagraph (1) of paragraph (b) and at least one beneficiary who meets the requirements of subparagraph (2) of paragraph (b); and

(d) No beneficiary objects, in writing and delivered to the trustee within 60 days of the mailing of the notice, to the conversion of the trust to a unitrust.

2. If a beneficiary timely objects to converting a trust into a unitrust, or if there are no beneficiaries under either subparagraph (1) or (3) of paragraph (b) of subsection 1, the trustee may petition the court to approve the conversion of the trust into a unitrust. The court shall approve the conversion if the court concludes that the conversion will enable the trustee to better carry out the intent of the settlor and the purpose of the trust.

3. A beneficiary may request that a trustee convert a trust into a unitrust. If the trustee does not convert the trust, the beneficiary may petition the court to order the conversion. The court shall direct the conversion if the court concludes that the conversion will enable the trustee to better carry out the intent of the settlor and the purpose of the trust.

4. A trustee, in determining whether and to what extent to convert a trust to a unitrust pursuant to subsection 1, shall consider all factors relevant to the trust and to the beneficiaries, including the factors set forth in subsection 2 of NRS 164.795, as applicable.

5. A conversion of a trust to a unitrust does not affect a term of the trust directing or authorizing the trustee to distribute principal or authorizing a beneficiary to withdraw all or a portion of the principal.

6. A trustee may not convert a trust into a unitrust in any circumstance set forth in subsection 3 of NRS 164.795.

7. If a trustee is prevented from converting a trust because a provision of paragraph (e), (f), (g) or (h) of subsection 3 of NRS 164.795 applies to the trustee and if there is a cotrustee to whom such provisions do not apply, the cotrustee may convert the trust unless the exercise of the power by the remaining trustee is not permitted by the terms of the trust. If all trustees are prevented from converting a trust because a provision of paragraph (e), (f), (g) or (h) of subsection 3 of NRS 164.795 applies to all of the trustees, the trustees may petition the court to direct a conversion.

8. A trustee may permanently, or for a specified period, including a period measured by the life of a person, release the power to convert a trust pursuant to subsection 1 if:

(a) The trustee is uncertain about whether possessing or exercising the power of conversion will cause a result described in paragraphs (a) to (f), inclusive, or (h) of subsection 3 of NRS 164.795; or

(b) The trustee determines that possessing or exercising the power of conversion may or will deprive the trust of a tax benefit or impose a tax burden not described in subsection 3 of NRS 164.795.

9. A trustee or disinterested person who, in good faith, takes or fails to take any action under this section is not liable to any person affected by such action or inaction, regardless of whether the affected person received notice as provided in this section or was under a legal disability at the time of delivery of notice. An affected person’s exclusive remedy is to petition the court for an order directing the trustee to convert the trust into a unitrust, to reconvert a unitrust into a trust or to change the percentage used to calculate the unitrust amount.

10. This section shall be construed to pertain to the administration of a trust, and the provisions of this section are available to any trust administered in this State or that is governed by the laws of this State, unless:

(a) The terms of the trust instrument show an intent that a beneficiary is to receive an amount other than a reasonable current return from the trust;

(b) The trust:

(1) Has a guaranteed annuity interest or fixed percentage interest as described in section 170(f)(2)(B) of the Internal Revenue Code;

(2) Is a charitable remainder trust within the meaning of section 664(d) of the Internal Revenue Code;

(3) Is a qualified subchapter S trust within the meaning of section 1361(c) of the Internal Revenue Code;

(4) Is a personal residence trust within the meaning of section 2702(a)(3)(A) of the Internal Revenue Code; or

(5) Is a trust in which one or more settlors retain a qualified interest within the meaning of section 2702(b) of the Internal Revenue Code;

(c) One or more persons to whom the trustee could distribute income have a power of withdrawal over the trust that is not subject to an ascertainable standard or that can be exercised to discharge a duty of support; or

(d) The terms of the trust instrument expressly prohibit the use of the provisions of this section through reference to this section or the trust instrument expressly states the settlor’s intent that net income is not calculated as a unitrust amount.

11. As used in this section, “ascertainable standard” means a standard relating to an individual’s health, education, support or maintenance within the meaning of section 2041(b)(1)(A) or 2514(c)(1) of the Internal Revenue Code and any regulations of the United States Treasury promulgated thereunder.

(Added to NRS by 2009, 795; A 2023, 1326)

NRS 164.797 Administration of unitrust: Duties of trustee; valuation of assets of trust. After a trust is converted into a unitrust:

1. A trustee shall follow an investment policy seeking a total return for the investments held by the trust whether or not the return is derived from appreciation of capital, from earnings and distributions of capital or from a combination thereof.

2. A trustee shall make regular distributions in accordance with the trust instrument and the provisions of this section.

3. Under the terms of the trust, the term “income” means an annual distribution from the trust equal to not less than 3 percent and not more than 5 percent of the net fair market value of the trust’s assets. The value of the trust assets must be determined at the end of the calendar year by averaging, over the preceding 3 years or during the period of the trust’s existence, whichever is less, both the income and the principal assets of the trust.

(Added to NRS by 2009, 797)

NRS 164.798 Administration of unitrust: Powers of trustee; manner of distributions.

1. A trustee of a unitrust may, in the trustee’s discretion, determine:

(a) The effective date of a conversion to a unitrust;

(b) The provisions for prorating a unitrust distribution for a beneficiary whose right to payments commences or ceases during a calendar year;

(d) The effect of other payments from or contributions to the trust on the trust’s value;

(e) How frequently to value nonliquid assets and whether to estimate the value of nonliquid assets;

(f) Whether to omit from the calculations of the trust property occupied or possessed by a beneficiary; and

(g) Any other matters necessary for the proper functioning of the unitrust.

2. Expenses which would be deducted from income if the trust were not a unitrust may not be deducted from the unitrust distribution. Unless otherwise provided by the trust instrument, the unitrust distribution must be paid from income. To the extent income is insufficient to pay a distribution, the distribution must be paid from realized short-term capital gains. To the extent income and realized short-term capital gains are insufficient, the distribution must be paid from realized long-term capital gains. To the extent none of these funds are sufficient, the distribution must be paid from the principal of the trust.

(Added to NRS by 2009, 797)

NRS 164.799 Trustee or beneficiary authorized to petition court to take certain actions concerning unitrust. A trustee or a beneficiary of a unitrust may petition the court to:

1. Select an income distribution percentage different from 3 to 5 percent.

2. Provide for a distribution of net income as would be determined if the trust were not a unitrust, in excess of the unitrust distribution if such distribution is necessary to preserve a tax benefit.

3. Average the value of the trust assets over a period other than 3 years.

4. Reconvert a unitrust to a trust.

(Added to NRS by 2009, 798)

NRS 164.800 Applicable rules after death of decedent or end of income interest in trust. After a decedent dies, in the case of an estate, or after an income interest in a trust ends, the following rules apply:

1. A fiduciary of an estate or of a terminating income interest shall determine the amount of net income and net principal receipts received from property specifically given to a beneficiary under the rules in NRS 164.810 to 164.925, inclusive, which apply to trustees and the rules in subsection 5. The fiduciary shall distribute the net income and net principal receipts to the beneficiary who is to receive the specific property.

2. A fiduciary shall determine the remaining net income of a decedent’s estate or a terminating income interest under the rules in NRS 164.810 to 164.925, inclusive, which apply to trustees and by:

(a) Including in net income all income from property used to discharge liabilities;

(b) Paying from income or principal, in his or her discretion, fees of attorneys, accountants and fiduciaries, court costs and other expenses of administration, and interest on death taxes, but the fiduciary may pay those expenses from income of property passing to a trust for which the fiduciary claims an estate tax marital or charitable deduction only to the extent that the payment of those expenses from income will not cause the reduction or loss of the deduction; and

(c) Paying from principal all other disbursements made or incurred in connection with the settlement of a decedent’s estate or the winding up of a terminating income interest, including debts, funeral expenses, disposition of remains, family allowances, and death taxes and related penalties that are apportioned to the estate or terminating income interest by the will, the terms of the trust, or applicable law.

3. A fiduciary shall distribute to a beneficiary who receives a pecuniary amount outright the interest or any other amount provided by the will, the terms of the trust, or applicable law from net income determined under subsection 2 or from principal to the extent that net income is insufficient. If a beneficiary is to receive a pecuniary amount outright from a trust after an income interest ends and no interest or other amount is provided for by the terms of the trust or applicable law, the fiduciary shall distribute the interest or other amount to which the beneficiary would be entitled under applicable law if the pecuniary amount were required to be paid under a will.

4. A fiduciary shall distribute the net income remaining after distributions required by subsection 3 in the manner described in NRS 164.805 to all other beneficiaries, including a beneficiary who receives a pecuniary amount in trust, even if he or she holds an unqualified power to withdraw assets from the trust or other presently exercisable general power of appointment over the trust.

5. A fiduciary may not reduce principal or income receipts from property described in subsection 1 because of a payment described in NRS 164.900 or 164.905 to the extent that the will, the terms of the trust, or applicable law requires the fiduciary to make the payment from assets other than the property or to the extent the fiduciary recovers or expects to recover the payment from a third party. The net income and principal receipts from the property are determined by including all the amounts the fiduciary receives or pays with respect to the property, whether those amounts accrued or became due before, on, or after the date of a decedent’s death or an income interest’s terminating event, and by making a reasonable provision for amounts that the fiduciary believes the estate or terminating income interest may become obligated to pay after the property is distributed.

(Added to NRS by 2003, 1971)

NRS 164.805 Distribution of net income to beneficiaries; rules for determining share of net income.

1. Each beneficiary described in subsection 4 of NRS 164.800 is entitled to receive a portion of the net income equal to the beneficiary’s fractional interest in undistributed principal assets, using values as of the date of distribution. If a fiduciary makes more than one distribution of assets to beneficiaries to whom this section applies, each beneficiary, including one who does not receive part of the distribution, is entitled, as of each date of distribution, to the net income the fiduciary has received after the date of death or terminating event or earlier date of distribution but has not distributed as of the current date of distribution.

2. In determining a beneficiary’s share of net income, the following rules apply:

(a) The beneficiary is entitled to receive a portion of the net income equal to the beneficiary’s fractional interest in the undistributed principal assets immediately before the date of distribution, including assets that later may be sold to meet principal obligations.

(b) The beneficiary’s fractional interest in the undistributed principal assets must be calculated without regard to property specifically given to a beneficiary and property required to pay pecuniary amounts not in trust.

(c) The beneficiary’s fractional interest in the undistributed principal assets must be calculated on the basis of the aggregate value of those assets as of the date of distribution without reducing the value by any unpaid principal obligation.

(d) The date of distribution for purposes of this section may be the date as of which the fiduciary calculates the value of the assets if that date is reasonably near the date on which assets are actually distributed.

3. If a fiduciary does not distribute all the collected but undistributed net income to each person as of a date of distribution, the fiduciary shall maintain appropriate records showing the interest of each beneficiary in that net income.

4. A trustee may apply the rules in this section, to the extent that the trustee considers it appropriate, to net gain or loss realized after the date of death or terminating event or earlier date of distribution from the disposition of a principal asset if this section applies to the income from the asset.

(Added to NRS by 2003, 1972)

NRS 164.810 Date on which income interest begins; date on which asset becomes subject to trust or successive income interest; date on which income interest ends.

1. An income beneficiary is entitled to net income from the date on which the income interest begins. An income interest begins on the date specified in the terms of the trust or, if no date is specified, on the date an asset becomes subject to a trust or successive income interest.

2. An asset becomes subject to a trust:

(a) On the date it is transferred to the trust in the case of an asset that is transferred to a trust during the transferor’s life;

(b) On the date of a testator’s death in the case of an asset that becomes subject to a trust by reason of a will, even if there is an intervening period of administration of the testator’s estate; or

(c) On the date of the death of a natural person in the case of an asset that is transferred to a fiduciary by a third party because of the death of the natural person.

3. An asset becomes subject to a successive income interest on the day after the preceding income interest ends, as determined under subsection 4, even if there is an intervening period of administration to wind up the preceding income interest.

4. An income interest ends on the day before an income beneficiary dies or another terminating event occurs, or on the last day of a period during which there is no beneficiary to whom a trustee may distribute income.

(Added to NRS by 2003, 1973)

NRS 164.815 Allocation of certain income receipts and disbursements; due dates for certain payments and distributions.

1. A trustee shall allocate an income receipt or disbursement other than one to which subsection 1 of NRS 164.800 applies to principal if its due date occurs before a decedent dies in the case of an estate or before an income interest begins in the case of a trust or successive income interest.

2. A trustee shall allocate an income receipt or disbursement to income if its due date occurs on or after the date on which a decedent dies or an income interest begins and it is a periodic due date. An income receipt or disbursement must be treated as accruing from day to day if its due date is not periodic or it has no due date. The portion of the receipt or disbursement accruing before the date on which a decedent dies or an income interest begins must be allocated to principal and the balance must be allocated to income.

3. An item of income or an obligation is due on the date the payor is required to make a payment. If a date for payment is not stated, there is no due date for the purposes of NRS 164.780 to 164.925, inclusive. Distributions to shareholders or other owners from an entity to which NRS 164.825 applies are deemed to be due on the date fixed by the entity for determining who is entitled to receive the distribution or, if no date is fixed, on the date of declaration of the distribution. A due date is periodic for receipts or disbursements that must be paid at regular intervals under a lease or an obligation to pay interest or if an entity customarily makes distributions at regular intervals.

(Added to NRS by 2003, 1973)

NRS 164.820 Payment of undistributed income upon end of mandatory income interest; prorating final payment upon end of obligation to pay fixed annuity or fixed fraction of value of trust’s assets.

1. As used in this section, “undistributed income” means net income received before the date on which an income interest ends. The term does not include an item of income or expense that is due or accrued or net income that has been added or is required to be added to principal under the terms of the trust.

2. When a mandatory income interest ends, the trustee shall pay to a mandatory income beneficiary who survives that date, or the estate of a deceased mandatory income beneficiary whose death causes the interest to end, his or her share of the undistributed income that is not disposed of under the terms of the trust unless the trustee has an unqualified power to revoke more than 5 percent of the trust immediately before the income interest ends. In the latter case, the undistributed income from the portion of the trust that may be revoked must be added to principal.

3. When a trustee’s obligation to pay a fixed annuity or a fixed fraction of the value of the trust’s assets ends, the trustee shall prorate the final payment if and to the extent required by applicable law to accomplish a purpose of the trust or its settlor relating to income, gift, estate or other tax requirements.

(Added to NRS by 2003, 1973)

1. As used in this section, “entity” means a corporation, partnership, limited-liability company, regulated investment company, real estate investment trust, common trust fund or any other organization in which a trustee has an interest other than a trust or estate to which NRS 164.830 applies, a business or activity to which NRS 164.835 applies or an asset-backed security to which NRS 164.895 applies.

2. Except as otherwise provided in this section, a trustee shall allocate to income money received from an entity.

3. A trustee shall allocate the following receipts from an entity to principal:

(a) Property other than money;

(b) Money received in one distribution or a series of related distributions in exchange for part or all of a trust’s interest in the entity;

(c) Money received in a distribution if and to the extent that the trustee determines that the distribution is a return of capital; and

(d) Money received from an entity that is a regulated investment company or a real estate investment trust if the money distributed is a capital gain dividend for federal income tax purposes.

4. A trustee may determine that money is received as a return of capital if and to the extent that the money received exceeds the total amount of income tax that the beneficiaries must pay on their respective shares of the taxable income of the entity and the trust must pay from income under NRS 164.810 to 164.925, inclusive, on its share of the taxable income of the entity. A trustee may determine that money which represents gain upon the sale or other disposition of property described in subsection 5 is a return of capital.

5. In determining if and to what extent a distribution is a return of capital, a trustee may rely upon and determine the weight to be given to any information concerning the source of the money from which the distribution is made which is reasonably available to the trustee, including, without limitation, information concerning:

(a) The amount of the distribution in question compared to the amount of the entity’s regular, periodic distributions, if any, during the year in which the distribution is made and in prior years;

(b) If the primary activity of the entity is not an investment activity described in paragraph (c), the amount of money the entity has received from the conduct of its normal business activities compared to the amount of money the entity has received from all other sources, including, without limitation:

(1) The sale of all or part of a business conducted by the entity or by another entity in which it owns an interest, directly or indirectly, including, without limitation, money representing any gain realized on such a sale;

(2) The sale of one or more business assets that are not sold to customers in the normal course of the entity’s business, including, without limitation, money representing any gain realized on such a sale; and

(3) The sale of one or more investment assets, including, without limitation, money representing any gain realized on such a sale;

(c) If the primary activity of the entity is to invest funds in another entity or in investment property that the entity owns directly for the purpose of realizing gain on the disposition of all or a part of such an investment, the amount of money that the entity has received from the sale of all or part of one or more of those investments, including, without limitation, money representing any gain realized on such a disposition;

(d) The amount of money the entity has accumulated, to the extent that the governing body of the entity has decided the money is no longer needed for the business or investment needs of the entity;

(e) The amount of income tax, if any, that each beneficiary has paid on the undistributed income of the entity before the year of the distribution and the amount of income tax on the undistributed income of the entity that the trust has paid from the income or principal of the trust;

(f) The amount of money the entity has borrowed, whether or not repayment of the loan is secured to any extent by one or more of the entity’s assets;

(g) The amount of money the entity has received from the sources described in NRS 164.855, 164.870, 164.875 and 164.880; and

(h) The amount of money the entity has received from a source not described in this subsection.

6. If a trustee is in doubt about the portion of a distribution that is a return of capital, the trustee shall resolve the doubt by allocating to income the amount, if any, the trustee believes is clearly not a return of capital and by allocating the balance of the distribution to principal.

7. A trustee may rely upon, without independent investigation, the financial statements of an entity and any other information provided by an entity about the character of a distribution or the source of funds from which the distribution is made if the information is provided at or near the time of distribution by the entity’s board of directors or other person or group of persons authorized to exercise powers to pay money or transfer property comparable to those of a corporation’s board of directors. The trustee is not bound by any statement made or implied by the entity about the extent to which a distribution is or is not a return of capital. If the trustee receives additional information about the distribution after the trustee has decided the amount that is a return of capital, the trustee is not required to change that decision.

(Added to NRS by 2003, 1974; A 2007, 409)

NRS 164.830 Allocation of amount received as distribution of income to income; allocation of distribution of principal to principal; purchase of interest in trust that is investment entity. A trustee shall allocate to income an amount received as a distribution of income from a trust or an estate in which the trust has an interest other than a purchased interest, and a trustee shall allocate to principal an amount received as a distribution of principal from such a trust or estate. If a trustee purchases an interest in a trust that is an investment entity, or a decedent or donor transfers an interest in such a trust to a trustee, NRS 164.825 or 164.895 applies to a receipt from the trust.

(Added to NRS by 2003, 1974)

NRS 164.835 Accounting separately for business or other activity.

1. If a trustee who conducts a business or other activity determines that it is in the best interest of all the beneficiaries to account separately for the business or activity instead of accounting for it as part of the trust’s general accounting records, the trustee may maintain separate accounting records for its transactions, whether or not its assets are segregated from other trust assets.

2. A trustee who accounts separately for a business or other activity may determine the extent to which its net cash receipts must be retained for working capital, the acquisition or replacement of fixed assets, and other reasonably foreseeable needs of the business or activity, and the extent to which the remaining net cash receipts are accounted for as principal or income in the trust’s general accounting records. If a trustee sells assets of the business or other activity, other than in the ordinary course of the business or activity, the trustee shall account for the net amount received as principal in the trust’s general accounting records to the extent the trustee determines that the amount received is no longer required in the conduct of the business.

3. Activities for which a trustee may maintain separate accounting records include:

(a) Retail, manufacturing, service and other traditional business activities;

(b) Farming;

(d) Management of rental properties;

(e) Extraction of minerals and other natural resources;

(f) Timber operations; and

(g) Activities to which NRS 164.890 applies.

(Added to NRS by 2003, 1975)

NRS 164.840 Allocation of assets, money, property and other receipts to principal. A trustee shall allocate to principal:

1. To the extent not allocated to income under NRS 164.780 to 164.925, inclusive, assets received from a transferor during the transferor’s lifetime, a decedent’s estate, a trust with a terminating income interest, or a payor under a contract naming the trust or its trustee as beneficiary;

2. Money or other property received from the sale, exchange, liquidation or change in form of a principal asset, including realized profit, subject to NRS 164.780 to 164.925, inclusive;

3. Amounts recovered from third parties to reimburse the trust because of disbursements described in paragraph (g) of subsection 1 of NRS 164.905 or for other reasons to the extent not based on the loss of income;

4. Proceeds of property taken by eminent domain, but a separate award made for the loss of income with respect to an accounting period during which a current income beneficiary had a mandatory income interest is income;

5. Net income received in an accounting period during which there is no beneficiary to whom a trustee may or must distribute income; and

6. Other receipts as provided in NRS 164.810, 164.815 and 164.820.

(Added to NRS by 2003, 1975)

NRS 164.845 Allocation of receipts from rental property to income; treatment of refundable deposit. To the extent that a trustee accounts for receipts from rental property pursuant to this section, the trustee shall allocate to income an amount received as rent of real or personal property, including an amount received for cancellation or renewal of a lease. An amount received as a refundable deposit, including a security deposit or a deposit that is to be applied as rent for future periods, must be added to principal and held subject to the terms of the lease and is not available for distribution to a beneficiary until the trustee’s contractual obligations have been satisfied with respect to that amount.

(Added to NRS by 2003, 1976)

NRS 164.850 Allocation of interest on obligation to pay money to trustee to income; allocation of amount received from disposition of certain obligations to principal; applicability of provisions.

1. An amount received as interest, whether determined at a fixed, variable or floating rate, on an obligation to pay money to the trustee, including an amount received as consideration for prepaying principal, must be allocated to income without any provision for amortization of premium.

2. A trustee shall allocate to principal an amount received from the sale, redemption or other disposition of an obligation to pay money to the trustee more than 1 year after it is purchased or acquired by the trustee, including an obligation whose purchase price or value when it is acquired is less than its value at maturity. If the obligation matures within 1 year after it is purchased or acquired by the trustee, an amount received in excess of its purchase price or its value when acquired by the trust must be allocated to income.

3. This section does not apply to an obligation to which NRS 164.865, 164.870, 164.875, 164.880, 164.890 or 164.895 applies.

(Added to NRS by 2003, 1976)

NRS 164.855 Allocation of proceeds of life insurance policy and certain contracts to principal; allocation of dividends on insurance policy to income or principal.

1. Except as otherwise provided in this section, a trustee shall allocate to principal the proceeds of a life insurance policy or other contract in which the trust or its trustee is named as beneficiary, including a contract that insures the trust or its trustee against loss for damage to, destruction of, or loss of title to a trust asset. The trustee shall allocate dividends on an insurance policy to income if the premiums on the policy are paid from income, and to principal if the premiums are paid from principal.

2. A trustee shall allocate to income proceeds of a contract that insures the trustee against loss of occupancy or other use by an income beneficiary, loss of income, or, subject to NRS 164.835, loss of profits from a business.

3. This section does not apply to a contract to which NRS 164.865 applies.

(Added to NRS by 2003, 1976)

NRS 164.860 Allocation of entire amount to principal if allocation between principal and income under certain circumstances is insubstantial. If a trustee determines that an allocation between principal and income required by NRS 164.865, 164.870, 164.875, 164.880 or 164.895 is insubstantial, the trustee may allocate the entire amount to principal unless one of the circumstances described in subsection 3 of NRS 164.795 applies to the allocation. This power may be exercised by a cotrustee in the circumstances described in subsection 4 of NRS 164.795 and may be released for the reasons and in the manner described in subsection 5 of NRS 164.795. An allocation is presumed to be insubstantial if:

1. The amount of the allocation would increase or decrease net income in an accounting period, as determined before the allocation, by less than 10 percent; or

2. The value of the asset producing the receipt for which the allocation would be made is less than 10 percent of the total value of the trust’s assets at the beginning of the accounting period.

(Added to NRS by 2003, 1976)

1. As used in this section:

(a) “Payment” means a payment that a trustee may receive over a fixed number of years or during the life of one or more natural persons because of services rendered or property transferred to the payor in exchange for future payments. The term includes a payment made in money or property from the payor’s general assets or from a separate fund created by the payor. As used in subsections 4 to 7, inclusive, the term also includes any payment from any separate fund, regardless of the reason for the payment.

(b) “Separate fund” includes a private or commercial annuity, an individual retirement account, and a pension, profit-sharing, stock-bonus or stock-ownership plan.

2. To the extent that a payment is characterized as interest, a dividend or a payment made in lieu of interest or a dividend, a trustee shall allocate the payment to income. The trustee shall allocate to principal the balance of the payment and any other payment received in the same accounting period that is not characterized as interest, a dividend or an equivalent payment.

3. If no part of a payment is characterized as interest, a dividend or an equivalent payment, and all or part of the payment is required to be made, a trustee shall allocate to income 10 percent of the part that is required to be made during the accounting period and the balance to principal. If no part of a payment is required to be made or the payment received is the entire amount to which the trustee is entitled, the trustee shall allocate the entire payment to principal. For purposes of this subsection, a payment is not “required to be made” to the extent that it is made because the trustee exercises a right of withdrawal.

4. Except as otherwise provided in subsection 5, the provisions of subsections 6 and 7 apply and the provisions of subsections 2 and 3 do not apply in determining the allocation of a payment made from a separate fund to:

(a) A trust to which an election to qualify for a marital deduction under section 2056(b)(7) of the Internal Revenue Code, 26 U.S.C. § 2056(b)(7), has been made; or

(b) A trust that qualifies for the marital deduction under section 2056(b)(5) of the Internal Revenue Code, 26 U.S.C. § 2056(b)(5).

5. The provisions of subsections 4, 6 and 7 do not apply if and to the extent that the series of payments would, without the application of subsection 4, qualify for the marital deduction under section 2056(b)(7)(C) of the Internal Revenue Code, 26 U.S.C. § 2056(b)(7)(C).

6. A trustee shall determine the internal income of each separate fund for the accounting period as if the separate fund were a trust subject to NRS 164.780 to 164.925, inclusive. Upon request of the surviving spouse, the trustee shall demand that the person administering the separate fund distribute the internal income to the trust. The trustee shall allocate a payment from the separate fund to income to the extent of the internal income of the separate fund and distribute that amount to the surviving spouse. The trustee shall allocate the balance of the payment to principal. Upon request of the surviving spouse, the trustee shall allocate principal to income to the extent the internal income of the separate fund exceeds payments made from the separate fund to the trust during the accounting period.

7. If a trustee cannot determine the internal income of a separate fund but can determine the value of the separate fund, the internal income of the separate fund is deemed to equal 4 percent of the value of the fund, according to the most recent statement of value preceding the beginning of the accounting period. If the trustee can determine neither the internal income of the separate fund nor the value of the fund, the internal income of the fund is deemed to equal the product of the interest rate and the present value of the expected future payments, as determined under section 7520 of the Internal Revenue Code, 26 U.S.C. § 7520, for the month preceding the accounting period for which the computation is made.

8. This section does not apply to a payment to which NRS 164.870 applies.

(Added to NRS by 2003, 1977; A 2009, 330)

NRS 164.870 Allocation of receipts from liquidating assets to income and principal.

1. As used in this section, “liquidating asset” means an asset whose value will diminish or terminate because the asset is expected to produce receipts for a period of limited duration. The term includes a leasehold, patent, copyright, royalty right and right to receive payments during a period of more than 1 year under an arrangement that does not provide for the payment of interest on the unpaid balance. The term does not include a payment subject to NRS 164.865, resources subject to NRS 164.875, timber subject to NRS 164.880, an activity subject to NRS 164.890, an asset subject to NRS 164.895, or any asset for which the trustee establishes a reserve for depreciation under NRS 164.910.

2. A trustee shall allocate to income 10 percent of the receipts from a liquidating asset and the balance to principal.

(Added to NRS by 2003, 1977)

NRS 164.875 Allocation of receipts from interest in minerals to income or to income and principal; allocation of receipts from interest in water to income or to income and principal; applicability.

1. To the extent that a trustee accounts for receipts from an interest in minerals or other natural resources pursuant to this section, the trustee shall allocate them as follows:

(a) If received as nominal delay rental or nominal annual rent on a lease, a receipt must be allocated to income.

(b) If received from a production payment, a receipt must be allocated to income if and to the extent that the agreement creating the production payment provides a factor for interest or its equivalent. The balance must be allocated to principal.

(c) If an amount received as a royalty, shut-in-well payment, take-or-pay payment, bonus or delay rental is more than nominal, 90 percent must be allocated to principal and the balance to income.

(d) If an amount is received from a working interest or any other interest not provided for in paragraph (a), (b) or (c), 90 percent of the net amount received must be allocated to principal and the balance to income.

2. An amount received on account of an interest in water that is renewable must be allocated to income. If the water is not renewable, 90 percent of the amount must be allocated to principal and the balance to income.

3. NRS 164.780 to 164.925, inclusive, apply whether or not a decedent or donor was extracting minerals, water, or other natural resources before the interest became subject to the trust.

4. If a trust owns an interest in minerals, water or other natural resources on October 1, 2003, the trustee may allocate receipts from the interest as provided in NRS 164.780 to 164.925, inclusive, or in the manner used by the trustee before October 1, 2003. If the trust acquires an interest in minerals, water or other natural resources after October 1, 2003, the trustee shall allocate receipts from the interest as provided in NRS 164.780 to 164.925, inclusive.

(Added to NRS by 2003, 1977)

NRS 164.880 Allocation of net receipts from sale of timber and related products to income or principal, or both; applicability.

1. To the extent that a trustee accounts for receipts from the sale of timber and related products pursuant to this section, the trustee shall allocate the net receipts:

(a) To income to the extent that the amount of timber removed from the land does not exceed the rate of growth of the timber during the accounting periods in which a beneficiary has a mandatory income interest;

(b) To principal to the extent that the amount of timber removed from the land exceeds the rate of growth of timber or the net receipts are from the sale of standing timber;

(c) To or between income and principal if the net receipts are from the lease of timberland or from a contract to cut timber from land owned by a trust, by determining the amount of timber removed from the land under the lease of contract and applying the rules in paragraphs (a) and (b); or

(d) To principal to the extent that advance payments, bonuses and other payments are not allocated pursuant to paragraph (a), (b) or (c).

2. In determining net receipts to be allocated pursuant to subsection 1, a trustee shall deduct and transfer to principal a reasonable amount for depletion.

3. NRS 164.780 to 164.925, inclusive, apply whether or not a decedent or transferor was harvesting timber from the property before it became subject to the trust.

4. If a trust owns an interest in timberland on October 1, 2003, the trustee may allocate net receipts from the sale of timber and related products as provided in NRS 164.780 to 164.925, inclusive, or in the manner used by the trustee before October 1, 2003. If the trust acquires an interest in timberland after October 1, 2003, the trustee shall allocate net receipts from the sale of timber and related products as provided in NRS 164.780 to 164.925, inclusive.

(Added to NRS by 2003, 1978)

1. If a marital deduction is allowed for all or part of a trust whose assets consist substantially of property that does not provide the surviving spouse with sufficient income from or use of the trust assets, and if the amounts that the trustee transfers from principal to income under NRS 164.795 and distributes to the spouse from principal pursuant to the terms of the trust are insufficient to provide the spouse with the beneficial enjoyment required to obtain the marital deduction, the spouse may require the trustee to make property productive of income, convert property within a reasonable time, or exercise the power conferred by subsection 1 of NRS 164.795. The trustee may decide which action or combination of actions to take.

2. In cases not governed by subsection 1, proceeds from the sale or other disposition of an asset are principal without regard to the amount of income the asset produces during any accounting period.

(Added to NRS by 2003, 1978)

NRS 164.890 Allocation of receipts from and disbursements made in connection with transactions in derivatives to principal; allocation of amount received for granting certain options to principal.

1. As used in this section, “derivative” means a contract of financial instrument or a combination of contracts and financial instruments which gives a trust the right or obligation to participate in some or all changes in the price of a tangible or intangible asset or group of assets, or changes in a rate, an index of prices or rates, or other market indicator for an asset or a group of assets.

2. To the extent that a trustee accounts for transactions in derivatives pursuant to this section, the trustee shall allocate to principal receipts from and disbursements made in connection with those transactions.

3. If a trustee grants an option to buy property from the trust, whether or not the trust owns the property when the option is granted, grants an option that permits another person to sell property to the trust, or acquires an option to buy property for the trust or an option to sell an asset owned by the trust, and the trustee or other owner of the asset is required to deliver the asset if the option is exercised, an amount received for granting the option must be allocated to principal. An amount paid to acquire the option must be paid from principal. A gain or loss realized upon the exercise of an option, including an option granted to a settlor of the trust for services rendered, must be allocated to principal.

(Added to NRS by 2003, 1979)

1. As used in this section, “asset-backed security” means an asset whose value is based upon the right it gives the owner to receive distributions from the proceeds of financial assets that provide collateral for the security. The term includes an asset that gives the owner the right to receive from the collateral financial assets only the interest or other current return or only the proceeds other than interest or current return. The term does not include an asset to which NRS 164.825 or 164.865 applies.

2. If a trust receives a payment from interest or other current return and from other proceeds of the collateral financial assets, the trustee shall allocate to income the portion of the payment which the payor identifies as being from interest or other current return and shall allocate the balance of the payment to principal.

3. If a trust receives one or more payments in exchange for the trust’s entire interest in an asset-backed security in one accounting period, the trustee shall allocate the payments to principal. If a payment is one of a series of payments that will result in the liquidation of the trust’s interest in the security over more than one accounting period, the trustee shall allocate 10 percent of the payment to income and the balance to principal.

(Added to NRS by 2003, 1979)

NRS 164.900 Disbursements required to be made from income; reduction of amount charged against income.

1. A trustee shall make the following disbursements from income to the extent that they are not disbursements to which paragraph (b) or (c) of subsection 2 of NRS 164.800 applies:

(a) Except as otherwise provided in subsection 2 or otherwise ordered by the court, one-half of the regular compensation of the trustee and of any person providing investment advisory or custodial services to the trustee;

(b) Except as otherwise ordered by the court, one-half of all expenses for accountings, judicial proceedings, or other matters that involve both the income and remainder interests;

(c) All the other ordinary expenses incurred in connection with the administration, management or preservation of trust property and the distribution of income, including interest, ordinary repairs, regularly recurring taxes assessed against principal, and expenses of a proceeding or other matter that concerns primarily the income interest; and

(d) All recurring premiums on insurance covering the loss of a principal asset or the loss of income from or use of the asset.

2. If the amount charged to the income of an irrevocable trust pursuant to paragraph (a) of subsection 1 exceeds 15 percent of the income of the trust in the accounting period, the trustee shall exercise the authority in NRS 164.795 to equitably reduce the amount charged against income for that accounting period unless:

(a) The trustee, after taking into consideration the terms of the trust instrument, reasonably concludes that the reduction is not in the best interest of the beneficiaries of the trust;

(b) The reduction of the amount charged to income would violate the express terms of the trust instrument other than a general directive to comply with the Uniform Principal and Income Act (1997) or with a general provision that contains language similar to that found in paragraph (a) of subsection 1;

(c) The trustee is authorized under the terms of the trust instrument to distribute trust principal to each income beneficiary; or

(d) The trustee gives notice in compliance with NRS 164.725 of the intent not to make the adjustment and no current income beneficiary objects.

(Added to NRS by 2003, 1979; A 2007, 411; 2009, 801; 2011, 1470)

NRS 164.905 Disbursements required to be made from principal.

1. A trustee shall make the following disbursements from principal:

(a) The remaining portion of the disbursements described in paragraph (a) of subsection 1 of NRS 164.900;

(b) All the trustee’s compensation calculated on principal as a fee for acceptance, distribution or termination, and disbursements made to prepare property for sale;

(d) Expenses of a proceeding that concerns primarily principal, including a proceeding to construe the trust or to protect the trust or its property;

(e) Premiums paid on a policy of insurance not described in paragraph (d) of subsection 1 of NRS 164.900 of which the trust is the owner and beneficiary;

(f) Estate, inheritance and other transfer taxes, including penalties, apportioned to the trust; and

(g) Disbursements related to environmental matters, including reclamation, assessing environmental conditions, remedying and removing environmental contamination, monitoring remedial activities and the release of substances, preventing future releases of substances, collecting amounts from persons liable or potentially liable for the costs of those activities, penalties imposed under environmental laws or regulations and other payments made to comply with those laws or regulations, statutory or common law claims by third parties, and defending claims based on environmental matters.

2. If a principal asset is encumbered with an obligation that requires income from that asset to be paid directly to the creditor, the trustee shall transfer from principal to income an amount equal to the income paid to the creditor in reduction of the principal balance of the obligation.

(Added to NRS by 2003, 1980; A 2007, 412; 2011, 1471)

NRS 164.910 Transfer of net cash receipts from principal asset subject to depreciation to principal.

1. As used in this section, “depreciation” means a reduction in value due to wear, tear, decay, corrosion or gradual obsolescence of a fixed asset having a useful life of more than 1 year.

2. A fiduciary may transfer to principal a reasonable amount of the net cash receipts from a principal asset that is subject to depreciation, but may not transfer any amount for depreciation:

(a) Of that portion of real property used or available for use by a beneficiary as a residence or of tangible personal property held or made available for the personal use or enjoyment of a beneficiary;

(b) During the administration of a decedent’s estate; or

(c) Under this section if a trustee is accounting under NRS 164.835 for the business or activity in which the asset is used.

3. An amount transferred to principal need not be held as a separate fund.

(Added to NRS by 2003, 1980)

NRS 164.915 Transfer of amount from income to principal to make certain principal disbursements.

1. If a trustee makes or expects to make a principal disbursement described in this section, the trustee may transfer an appropriate amount from income to principal in one or more accounting periods to reimburse principal or to provide a reserve for future principal disbursements.

2. Principal disbursements to which subsection 1 applies include the following, but only to the extent that the trustee has not been and does not expect to be reimbursed by a third party:

(a) An amount chargeable to income but paid from principal because it is unusually large, including extraordinary repairs;

(b) A capital improvement to a principal asset, whether in the form of changes to an existing asset or the construction of a new asset, including special assessments;

(c) Disbursements made to prepare property for rental, including tenant allowances, leasehold improvements and broker’s commissions;

(d) Periodic payments on an obligation secured by a principal asset to the extent that the amount transferred from income to principal for depreciation is less than the periodic payments; and

(e) Disbursements described in paragraph (g) of subsection 1 of NRS 164.905.

3. If the asset whose ownership gives rise to the disbursements becomes subject to a successive income interest after an income interest ends, a trustee may continue to transfer amounts from income to principal as provided in subsection 1.

(Added to NRS by 2003, 1981)

NRS 164.920 Payment of taxes required to be paid by trustee.

1. A tax required to be paid by a trustee based on receipts allocated to income must be paid from income.

2. A tax required to be paid by a trustee based on receipts allocated to principal must be paid from principal, even if the tax is called an income tax by the taxing authority.

3. A tax required to be paid by a trustee on the trust’s share of an entity’s taxable income must be paid:

(a) From income to the extent that receipts from the entity are allocated only to income;

(b) From principal to the extent that receipts from the entity are allocated only to principal;

(c) Proportionately from principal and income to the extent that receipts from the entity are allocated to both income and principal; and

(d) From principal to the extent that the tax exceeds the total receipts from the entity.

4. After applying the provisions of subsections 1, 2 and 3, the trustee shall adjust income or principal receipts to the extent that the taxes on the trust are reduced because the trust receives a deduction for payments made to a beneficiary.

(Added to NRS by 2003, 1981; A 2009, 331)

1. A fiduciary may make adjustments between principal and income to offset the shifting of economic interests or tax benefits between income beneficiaries and remainder beneficiaries which arise from:

(a) Elections and decisions, other than those described in subsection 2, that the fiduciary makes from time to time regarding tax matters;

(b) An income tax or any other tax that is imposed upon the fiduciary or a beneficiary as a result of a transaction involving or a distribution from the estate or the trust; or

(c) The ownership by an estate or trust of an interest in an entity whose taxable income, whether or not distributed, is includable in the taxable income of the estate, the trust or a beneficiary.

2. If the amount of an estate tax marital deduction or charitable contribution deduction is reduced because a fiduciary deducts an amount paid from principal for income tax purposes instead of deducting it for estate tax purposes, and as a result estate taxes paid from principal are increased and income taxes paid by an estate, trust or beneficiary are decreased, each estate, trust or beneficiary that benefits from the decrease in income tax shall reimburse the principal from which the increase in estate tax is paid. The total reimbursement must equal the increase in the estate tax to the extent that the principal used to pay the increase would have qualified for a marital deduction or charitable contribution deduction but for the payment. The proportionate share of the reimbursement for each estate, trust or beneficiary whose income taxes are reduced must be the same as its proportionate share of the total decrease in income tax. An estate or trust shall reimburse principal from income.

(Added to NRS by 2003, 1981)

ARBITRATION OF DISPUTES

NRS 164.930 Enforceability of certain arbitration provisions; presumption in favor of binding arbitration; appointment of guardian ad litem; contents of arbitration provisions.

1. A provision in a will or trust instrument requiring the arbitration of disputes other than disputes of the validity of all or a part of a will or trust, between or among one or more beneficiaries or fiduciaries under the will or trust, a settlor of a nontestamentary trust, or any combination of such persons or entities, is enforceable. Such a provision in a will or trust instrument is not subject to the requirements of NRS 597.995.

2. Unless otherwise specified in the will or trust, a will or trust provision requiring arbitration shall be presumed to require binding arbitration under NRS 38.206 to 38.248, inclusive. If an arbitration enforceable under this section is governed under NRS 38.206 to 38.248, inclusive, the arbitration provision in the will or trust shall be treated as an agreement for the purposes of applying the provisions of NRS 38.206 to 38.248, inclusive.

3. The court is authorized to appoint a guardian ad litem at any time during the arbitration procedure to represent the interests of a minor or a person who is incapacitated, unborn, unknown or unascertained, or a designated class of persons who are not ascertained or are not in being. If not precluded by a conflict of interest, a guardian ad litem may be appointed to represent several persons or interests. The guardian ad litem is entitled to reasonable compensation for services with such compensation to be paid from the principal of the estate or trust whose beneficiaries are represented. The provisions of NRS 164.038 and the common law relating to the doctrine of virtual representation apply to the dispute resolution procedure unless the common law rule or doctrine is inconsistent with the provisions of NRS 164.038, and any action taken by a court enforcing the judgment is conclusive and binding upon each person receiving actual or constructive notice or who is otherwise virtually represented.

4. Such arbitration in a provision in a will or trust may include, without limitation:

(a) The number, method of selection and minimum qualifications of arbitrators;

(b) The selection and establishment of arbitration procedures, including, without limitation, the incorporation of the arbitration rules for wills and trusts adopted by the American Arbitration Association;

(d) The scope of discovery;

(e) The burden of proof;

(f) Confidentiality of the arbitration process and the evidence produced during arbitration and discovery;

(g) The awarding of attorney’s fees, expert fees and costs;

(h) The time period in which the arbitration must be conducted and deciding an award;

(i) The method of allocating the appointed person’s fees and expenses among the parties;

(j) The required appointment of guardians ad litem;

(k) The consequences to a party who fails to act in accordance with such provisions or contests such provisions; and

(l) Other matters which are not inconsistent with NRS 38.206 to 38.248, inclusive.

(Added to NRS by 2015, 3549; A 2019, 1872)

SETTLEMENT OF DISPUTES

NRS 164.940 Nonjudicial settlement agreements: Enforceability; when void; matters that may be resolved.

1. Except as otherwise provided in this section, a settlement agreement entered into by all indispensable parties, as described in subsection 1 of NRS 164.942 is enforceable with respect to the administration of a trust without approval by the court, as defined in NRS 132.116.

2. A nonjudicial settlement agreement is void to the extent it violates a material purpose of the trust and to the extent it includes terms and conditions that could not be properly approved by the court, as defined in NRS 132.116, under the law governing the trust instrument.

3. Matters that may be resolved by a nonjudicial settlement agreement include, without limitation:

(a) The investment or use of trust assets;

(b) The lending or borrowing of money;

(d) The interpretation or construction of a term of the trust;

(e) The designation or transfer of the principal place of administration of the trust;

(f) The approval of a trustee’s report or accounting;

(g) The choice of law governing the construction of the trust instrument or administration of the trust, or both;

(h) Direction to a trustee to perform or refrain from performing a particular act;

(i) The granting of any necessary or desirable power to a trustee;

(j) The resignation or appointment of a trustee and the determination of a trustee’s compensation;

(k) The merger or division of trusts;

(l) The granting of approval or authority, for a trustee to make charitable gifts from a noncharitable trust;

(m) The transfer of a trust’s principal place of administration;

(n) Negating the liability of a trustee for an action relating to the trust and providing indemnification therefor; and

(o) The termination of the trust.

(Added to NRS by 2015, 3550)

NRS 164.942 Nonjudicial settlement agreements: When effective; providing objections; notice of proposed action; failure to object constitutes acceptance; petitioning court for approval.

1. Except as otherwise provided in this section, a nonjudicial settlement agreement is effective when the agreement has been signed by all indispensable parties. A party who is represented by another person pursuant to NRS 164.038 shall be deemed to have signed an agreement when the person who represents that party has signed the agreement.

2. Except as otherwise provided in this section, if an indispensable party neither signs the agreement nor provides the trustee with a written objection, the trustee may follow the procedure provided in NRS 164.725 by giving a notice of proposed action to all indispensable parties who have not signed the settlement agreement, where the proposed action is to accept and comply with the nonjudicial settlement agreement.

3. Failure to object to the notice of proposed action constitutes acceptance of the settlement agreement. If the trustee is personally aware that an indispensable party, or a person representing that indispensable party under NRS 164.038, has not received the notice of proposed action, the trustee may not proceed to honor the agreement pursuant to subsection 6 of NRS 164.725, but may proceed under subsection 7 of NRS 164.725 as if that indispensable party had objected. Once all indispensable parties have agreed to a settlement agreement as provided in subsection 1 or 2, it is irrevocable.

4. Any indispensable party may petition the court for an order approving a nonjudicial settlement agreement under the procedure set forth in NRS 164.015. In order to approve a nonjudicial settlement, the court must find that the agreement complies with the requirements of this section and NRS 164.940.

5. For the purposes of this section, “indispensable parties” refers to all interested persons, as defined in NRS 132.185, whose consent would be required in order to achieve a binding settlement were the settlement to be approved by the court.

(Added to NRS by 2015, 3550)

MISCELLANEOUS PROVISIONS

NRS 164.950 Distribution by trustee of community property in nontestamentary trust established by married settlors.

1. If two settlors who are married establish a nontestamentary trust jointly, and the trust provides for the pecuniary or fractional division of the community property held by the settlors upon the death of one of the settlors, the trustee has the authority to distribute the community property unless the trust instrument expressly provides otherwise. The trustee may distribute the community property on a non-pro rata basis so long as the fair market value of the distribution is, at the time of the distribution, the same as if the distribution were made pro rata. The provisions of this section do not affect the distribution of assets that are specifically allocated in the trust instrument to be distributed in kind.

2. As used in this section, “nontestamentary trust” has the meaning ascribed to it in NRS 163.0016.

(Added to NRS by 2009, 798; A 2015, 3555)

NRS 164.960 Applicability of NRS 111.781 to transfers of property made pursuant to trust. The provisions of NRS 111.781 concerning the revocation of certain transfers based upon divorce or annulment apply to transfers of property made pursuant to a trust.

(Added to NRS by 2011, 1469)