Assembly Bill No. 325–Assemblymen Goldwater and Parks

 

CHAPTER..........

 

AN ACT relating to property; revising the provisions concerning the rule against perpetuities; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

   Section 1. NRS 111.1037 is hereby amended to read as follows:

   111.1037  NRS 111.1031 does not apply to:

   1.  A nonvested property interest or a power of appointment arising out

 of a nondonative transfer, except a nonvested property interest or a power

 of appointment arising out of:

   (a) A premarital or postmarital agreement;

   (b) A separation or divorce settlement;

   (c) A spouse’s election;

   (d) A similar arrangement arising out of a prospective, existing or

 previous marital relationship between the parties;

   (e) A contract to make or not to revoke a will or trust;

   (f) A contract to exercise or not to exercise a power of appointment;

   (g) A transfer in satisfaction of a duty of support; or

   (h) A reciprocal transfer;

   2.  A fiduciary’s power relating to the administration or management of

 assets, including the power of a fiduciary to sell, lease or mortgage

 property, and the power of a fiduciary to determine principal and income;

   3.  A power to appoint a fiduciary;

   4.  A discretionary power of a trustee to distribute principal before

 termination of a trust to a beneficiary having an indefeasibly vested

 interest in the income and principal;

   5.  A nonvested property interest held by a charity, government, or

 governmental agency or subdivision, if the nonvested property interest is

 preceded by an interest held by another charity, government, or

 governmental agency or subdivision;

   6.  A nonvested property interest in , or a power of appointment with

 respect to , a trust or other property arrangement forming part of a pension,

 profit-sharing, stock bonus, health, disability, death benefit, income

 deferral, or other current or deferred benefit plan for one or more

 employees, independent contractors, or their beneficiaries or spouses, to

 which contributions are made for the purpose of distributing to or for the

 benefit of the participants or their beneficiaries or spouses the property,

 income or principal in the trust or other property arrangement, except a

 nonvested property interest or a power of appointment that is created by an

 election of a participant or a beneficiary or spouse; [or]

   7.  A nonvested property interest in, or a power of appointment with

 respect to, a trust if:

   (a) The trustee of the trust has the unlimited power to sell assets of the

 trust or at least one person, including, without limitation, the trustee,

 has the power to terminate the entire trust;

   (b) The instrument creating the trust states that the rule against

 perpetuities or the provisions of NRS 111.1031 do not apply to the trust;

 and

   (c) The trust:

     (1) Is executed in this state;

     (2) Has at least one trustee who is domiciled in this state;

     (3) Is administered in this state, regardless of whether a portion or

 all of the assets of the trust are physically deposited for safekeeping in

 another state; or

     (4) Has assets of which a substantial portion is located in this state;

 or

   8.  A property interest, power of appointment or arrangement that was

 not subject to the common-law rule against perpetuities or is expressly

 excluded by another statute of this state.

   Sec. 2.  NRS 111.1039 is hereby amended to read as follows:

   111.1039  1.  Except as extended by subsection 2[,] and as otherwise

 provided in subsection 3, NRS 111.103 to 111.1037, inclusive, apply to a

 nonvested property interest or a power of appointment that is created on or

 after July 1, 1987. For purposes of this section only, a nonvested property

 interest or a power of appointment created by the exercise of a power of

 appointment is created when the power is irrevocably exercised or when a

 revocable exercise becomes irrevocable.

   2.  With respect to a nonvested property interest or a power of

 appointment that was created before July 1, 1987, and that violates the rule

 against perpetuities as that rule existed before that date, a court , upon the

 petition of an interested person , may exercise its equitable power to

 reform the disposition in the manner that most closely approximates the

 transferor’s manifested plan of distribution and is within the limits of the

 rule against perpetuities applicable when the nonvested property interest or

 power of appointment was created.

   3.  The provisions of subsection 7 of NRS 111.1037 apply to an

 interest in property that is created by:

   (a) A testamentary trust if the testator dies on or after December 1,

 2002;

   (b) An inter vivos trust if the settlor dies on or after December 1, 2002;

   (c) An inter vivos trust that is executed on or after December 1, 2002;

 or

   (d) The exercise of a general power of appointment on or after

 December 1, 2002.

   Sec. 3.  This act becomes effective on December 1, 2002, only if

 Assembly Joint Resolution No. 4 of the 70th session of the Nevada

 Legislature is approved by the voters at the general election on

November 5, 2002.

 

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