Assembly Bill No. 469–Assemblyman Goldwater

March 10, 1999

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Referred to Committee on Judiciary

 

SUMMARY—Revises provisions concerning spendthrift trusts. (BDR 13-1296)

FISCAL NOTE: Effect on Local Government: No.

Effect on the State or on Industrial Insurance: No.

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

 

AN ACT relating to trusts; enlarging the class of permitted beneficiaries of a spendthrift trust; enlarging the category of spendthrift trusts to which the law of this state applies; providing a limitation of actions; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

1-1 Section 1. Chapter 166 of NRS is hereby amended by adding thereto

1-2 a new section to read as follows:

1-3 A person may not bring an action with respect to a transfer of property

1-4 to a spendthrift trust:

1-5 1. If he is a creditor when the transfer is made, unless the action is

1-6 commenced within:

1-7 (a) Two years after the transfer is made; or

1-8 (b) Six months after he discovers or reasonably should have

1-9 discovered the transfer,

1-10 whichever is later.

1-11 2. If he becomes a creditor after the transfer is made, unless the

1-12 action is commenced within 2 years after the transfer is made.

1-13 Sec. 2. NRS 166.040 is hereby amended to read as follows:

1-14 166.040 1. Any person competent by law to execute a will or deed

1-15 may, by writing only, duly executed, by will, conveyance or other writing,

1-16 create a spendthrift trust in real, personal or mixed property for [any other

1-17 person or persons.] the benefit of:

2-1 (a) A person other than the settlor;

2-2 (b) The settlor if the writing is irrevocable, does not require that any

2-3 part of the income or principal of the trust be distributed to the settlor,

2-4 and was not intended to hinder, delay or defraud known creditors; or

2-5 (c) Both the settlor and another person if the writing meets the

2-6 requirements of paragraph (b).

2-7 2. For the purposes of this section, a writing:

2-8 (a) Is "irrevocable" even if the settlor may prevent a distribution from

2-9 the trust or holds a testamentary special power of appointment or similar

2-10 power.

2-11 (b) Does not "require" a distribution to the settlor if he may receive it

2-12 only in the discretion of another person.

2-13 Sec. 3. NRS 166.060 is hereby amended to read as follows:

2-14 166.060 1. Unless the writing [shall declare] declares to the

2-15 contrary, expressly, this chapter [shall govern] governs the construction,

2-16 operation and enforcement, in this state, of all spendthrift trusts

2-17 [wheresoever created, when:

2-18 (a) The] created in or outside this state if:

2-19 (a) All or part of the land, rents, issues or profits affected are in this

2-20 state;

2-21 (b) [The] All or part of the personal property, interest of money,

2-22 dividends upon stock and other produce thereof, affected, are in this state;

2-23 [or]

2-24 (c) The declared domicile of the creator of a spendthrift trust affecting

2-25 [such] personal property is in this state [.] ; or

2-26 (d) At least one trustee qualified under subsection 2 has powers that

2-27 include maintaining records and preparing income tax returns for the

2-28 trust, and all or part of the administration of the trust is performed in this

2-29 state.

2-30 2. If the settlor is a beneficiary of the trust, at least one trustee of a

2-31 spendthrift trust must be:

2-32 (a) A natural person who resides and has his domicile in this state;

2-33 (b) A trust company organized under the laws of this state which has

2-34 its principal place of business in this state; or

2-35 (c) A bank organized under the laws of this state, or a national

2-36 banking association organized under 12 U.S.C. §§ 21 to 216d, inclusive,

2-37 if the bank or banking association possesses and exercises trust powers

2-38 and has its principal place of business in this state.

2-39 3. Except as [stated] otherwise provided in subsection 1, this chapter

2-40 [shall also govern] also governs the construction, operation and

2-41 enforcement, outside of this state, of all spendthrift trusts created in this

2-42 state, except so far as prohibited by valid laws of other states. Unless the

3-1 writing [of trust shall declare] declares to the contrary, expressly, it shall

3-2 be deemed to be made in the light of this chapter and all other acts relating

3-3 to spendthrift trusts enacted in this state.

3-4 Sec. 4. NRS 166.140 is hereby amended to read as follows:

3-5 166.140 A spendthrift trust [shall] may not continue for a period

3-6 longer than [the life or lives of specified persons in being at the time of its

3-7 creation and for 21 years after the death of the survivor of them.] that

3-8 allowed under NRS 111.103 to 111.1039, inclusive. The free alienation of

3-9 the legal estate by the trustee [shall] may not be suspended for a period

3-10 exceeding the limit prescribed in any constitutional or statutory prohibition

3-11 against perpetuities existing in this state or in the state where the lands

3-12 affected by the trust are situate , [;] but a contingent remainder in fee may

3-13 be created on a prior remainder in fee, to take effect [in the event that] if

3-14 the persons to whom the first remainder is limited die under the age of 21

3-15 years, or upon any other contingency by which the estate of [such] those

3-16 persons may be determined before they attain [their full] that age.

3-17 Sec. 5. NRS 11.190 is hereby amended to read as follows:

3-18 11.190 Except as otherwise provided in NRS 125B.050 and 217.007,

3-19 actions other than those for the recovery of real property, unless further

3-20 limited by specific statute, may only be commenced as follows:

3-21 1. Within 6 years:

3-22 (a) An action upon a judgment or decree of any court of the United

3-23 States, or of any state or territory within the United States, or the renewal

3-24 thereof.

3-25 (b) An action upon a contract, obligation or liability founded upon an

3-26 instrument in writing, except those mentioned in the preceding sections of

3-27 this chapter.

3-28 2. Within 4 years:

3-29 (a) An action on an open account for goods, wares and merchandise

3-30 sold and delivered.

3-31 (b) An action for any article charged on an account in a store.

3-32 (c) An action upon a contract, obligation or liability not founded upon

3-33 an instrument in writing.

3-34 3. Within 3 years:

3-35 (a) An action upon a liability created by statute, other than a penalty or

3-36 forfeiture.

3-37 (b) An action for waste or trespass of real property, but when the waste

3-38 or trespass is committed by means of underground works upon any mining

3-39 claim, the cause of action shall be deemed to accrue upon the discovery by

3-40 the aggrieved party of the facts constituting the waste or trespass.

3-41 (c) An action for taking, detaining or injuring personal property,

3-42 including actions for specific recovery thereof, but in all cases where the

3-43 subject of the action is a domestic animal usually included in the term

4-1 "livestock," which has a recorded mark or brand upon it at the time of its

4-2 loss, and which strays or is stolen from the true owner without his fault, the

4-3 statute does not begin to run against an action for the recovery of the

4-4 animal until the owner has actual knowledge of such facts as would put a

4-5 reasonable person upon inquiry as to the possession thereof by the

4-6 defendant.

4-7 (d) Except as otherwise provided in NRS 112.230 [,] and section 1 of

4-8 this act, an action for relief on the ground of fraud or mistake, but the

4-9 cause of action in such a case shall be deemed to accrue upon the

4-10 discovery by the aggrieved party of the facts constituting the fraud or

4-11 mistake.

4-12 (e) An action pursuant to NRS 40.750 for damages sustained by a

4-13 financial institution because of its reliance on certain fraudulent conduct of

4-14 a borrower, but the cause of action in such a case shall be deemed to

4-15 accrue upon the discovery by the financial institution of the facts

4-16 constituting the concealment or false statement.

4-17 4. Within 2 years:

4-18 (a) An action against a sheriff, coroner or constable upon liability

4-19 incurred by acting in his official capacity and in virtue of his office, or by

4-20 the omission of an official duty, including the nonpayment of money

4-21 collected upon an execution.

4-22 (b) An action upon a statute for a penalty or forfeiture, where the action

4-23 is given to a person or the state, or both, except when the statute imposing

4-24 it prescribes a different limitation.

4-25 (c) An action for libel, slander, assault, battery, false imprisonment or

4-26 seduction.

4-27 (d) An action against a sheriff or other officer for the escape of a

4-28 prisoner arrested or imprisoned on civil process.

4-29 (e) Except as otherwise provided in NRS 11.215, an action to recover

4-30 damages for injuries to a person or for the death of a person caused by the

4-31 wrongful act or neglect of another. The provisions of this paragraph

4-32 relating to an action to recover damages for injuries to a person apply only

4-33 to causes of action which accrue after March 20, 1951.

4-34 5. Within 1 year:

4-35 (a) An action against an officer, or officer de facto to recover goods,

4-36 wares, merchandise or other property seized by the officer in his official

4-37 capacity, as tax collector, or to recover the price or value of goods, wares,

4-38 merchandise or other personal property so seized, or for damages for the

4-39 seizure, detention or sale of, or injury to, goods, wares, merchandise or

4-40 other personal property seized, or for damages done to any person or

4-41 property in making the seizure.

5-1 (b) An action against an officer, or officer de facto for money paid to

5-2 the officer under protest, or seized by the officer in his official capacity, as

5-3 a collector of taxes, and which, it is claimed, ought to be refunded.

5-4 Sec. 6. NRS 112.230 is hereby amended to read as follows:

5-5 112.230 [A] Except as otherwise provided in section 1 of this act, a

5-6 claim for relief with respect to a fraudulent transfer or obligation under this

5-7 chapter is extinguished unless action is brought:

5-8 1. Under paragraph (a) of subsection 1 of NRS 112.180, within 4 years

5-9 after the transfer was made or the obligation was incurred or, if later,

5-10 within 1 year after the transfer or obligation was or could reasonably have

5-11 been discovered by the claimant;

5-12 2. Under paragraph (b) of subsection 1 of NRS 112.180 or subsection

5-13 1 of NRS 112.190, within 4 years after the transfer was made or the

5-14 obligation was incurred; or

5-15 3. Under subsection 2 of NRS 112.190, within 1 year after the transfer

5-16 was made or the obligation was incurred.

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