CHAPTER
166 - SPENDTHRIFT TRUSTS
NRS 166.010
Short
title. This
chapter may be referred to by the short title of
Spendthrift Trust Act of Nevada, and such
reference will be sufficient for all purposes.
[7:86:1939; 1931 NCL §
6880.06]
NRS 166.015
Applicability
of chapter; requirement of trustee if settlor is
beneficiary of trust.
1. Unless
the writing declares to the contrary, expressly, this
chapter governs the construction, operation and
enforcement, in this state, of all spendthrift trusts
created in or outside this state if:
(a) All or part of the
land, rents, issues or profits affected are in this
state;
(b) All or part of the
personal property, interest of money, dividends upon
stock and other produce thereof, affected, are in this
state;
(c) The declared domicile
of the creator of a spendthrift trust affecting
personal property is in this state; or
(d) At least one trustee
qualified under subsection 2 has powers that include
maintaining records and preparing income tax returns
for the trust, and all or part of the administration
of the trust is performed in this state.
2. If
the settlor is a beneficiary of the trust, at least
one trustee of a spendthrift trust must be:
(a) A natural person who
resides and has his domicile in this state;
(b) A trust company that:
(1) Is organized under
federal law or under the laws of this state or another
state; and
(2) Maintains an office
in this state for the transaction of business; or
(c) A bank that:
(1) Is organized under
federal law or under the laws of this state or another
state;
(2) Maintains an office
in this state for the transaction of business; and
(3) Possesses and
exercises trust powers.
3. Except
as otherwise provided in subsection 1, this chapter
also governs the construction, operation and
enforcement, outside of this state, of all spendthrift
trusts created in this state, except so far as
prohibited by valid laws of other states. Unless the
writing declares to the contrary, expressly, it shall
be deemed to be made in the light of this chapter and
all other acts relating to spendthrift trusts enacted
in this state.
[4:86:1939; 1931 NCL §
6880.03]—(NRS A 1999, 1236)—(Substituted in
revision for NRS 166.060)
NRS 166.020
“Spendthrift
trust” defined. For
the purposes of this chapter, a spendthrift trust is
defined to be a trust in which by the terms thereof a
valid restraint on the voluntary and involuntary
transfer of the interest of the beneficiary is
imposed. It is an active trust not governed or
executed by any use or rule of law of uses.
[1:86:1939; 1931 NCL §
6880]
NRS 166.040
Writing
required; competency of settlor.
1. Any
person competent by law to execute a will or deed may,
by writing only, duly executed, by will, conveyance or
other writing, create a spendthrift trust in real,
personal or mixed property for the benefit of:
(a) A person other than
the settlor;
(b) The settlor if the
writing is irrevocable, does not require that any part
of the income or principal of the trust be distributed
to the settlor, and was not intended to hinder, delay
or defraud known creditors; or
(c) Both the settlor and
another person if the writing meets the requirements
of paragraph (b).
2. for
the purposes of this section, a writing:
(a) Is “irrevocable”
even if the settlor may prevent a distribution from
the trust or holds a testamentary special power of
appointment or similar power.
(b) Does not
“require” a distribution to the settlor if he may
receive it only in the discretion of another person.
[2:86:1939; 1931 NCL §
6880.01]—(NRS A 1999, 1236)
[3:86:1939; 1931 NCL §
6880.02]
NRS 166.060
Construction,
operation and enforcement of trusts under this
chapter. [Replaced
in revision by NRS 166.015.]
PRINCIPLES
GOVERNING CONSTRUCTION
NRS 166.070
Principles
enumerated in NRS
166.080 to 166.150,
inclusive. Unless the writing shall declare to
the contrary, expressly, the construction, operation
and enforcement of all spendthrift trusts, heretofore
or hereafter created in this state, shall be governed
by the principles stated in NRS
166.080 to 166.150,
inclusive, to the same effect as if they were written
therein.
[Part 5:86:1939; 1931 NCL
§ 6880.04]
NRS 166.080
Beneficiaries
to be named. The
beneficiary or beneficiaries of such trust shall be
named or clearly referred to in the writing. No
spouse, former spouse, child or dependent shall be a
beneficiary unless named or clearly referred to as a
beneficiary in the writing.
[Part 5:86:1939; 1931 NCL
§ 6880.04]
NRS 166.090
Provision
for support.
1. Provision
for the beneficiary will be for the support,
education, maintenance and benefit of the
beneficiary alone, and without reference to or
limitation by his needs, station in life, or mode of
life, or the needs of any other person, whether
dependent upon him or not.
2. The
existence of a spendthrift trust does not depend on
the character, capacity, incapacity, competency or incompetence
of the beneficiary.
[Part 5:86:1939; 1931 NCL
§ 6880.04]
1. Costs
or fees regularly earned, paid or incurred by the
trustee for administration of or protection of the
trust estate;
2. Taxes
on the same; or
3. Taxes
on the interest of the beneficiary thereof.
[Part 5:86:1939; 1931 NCL
§ 6880.04]
NRS 166.110
Discretion
of trustee.
1. In
all cases where the creator of a spendthrift trust
shall indicate the sum to be applied for or paid to
the beneficiary or shall make the application or
payment of sums or further sums for or to the
beneficiary discretionary with the trustee, or shall
make the amount thereof discretionary with the
trustee, or shall give the trustee discretion to pay
all or any part of the income to any one or more of
the beneficiaries, such discretionary power shall be
absolute, whether any valid provision for the
accumulation of income is made or not and whether it
relates to the income from real or personal property.
2. Such
discretion shall never be interfered with for any
consideration of the needs, station in life or mode of
life of the beneficiary, or for uncertainty, or on any
pretext whatever.
3. The
giving of any such discretion does not invalidate any
spendthrift trust.
[Part 5:86:1939; 1931 NCL
§ 6880.04]
NRS 166.120
Restraints
on alienation.
1. A
spendthrift trust as defined in this chapter restrains
and prohibits generally the assignment, alienation,
acceleration and anticipation of any interest of the
beneficiary under the trust by the voluntary or
involuntary act of the beneficiary, or by operation of
law or any process or at all. An exception is
declared, however, when the trust does not provide for
the application for or the payment to any beneficiary
of sums out of capital or corpus or out of rents,
profits, income, earnings, or produce of property,
lands or personality. In such cases, the corpus or
capital of the trust estate, or the interest of the
beneficiary therein, may be anticipated, assigned or
aliened by the beneficiary voluntarily, but not
involuntarily or by operation of law or by any process
or involuntarily at all. The trust estate, or corpus
or capital thereof, shall never be assigned, aliened,
diminished or impaired by any alienation, transfer or
seizure so as to cut off or diminish the payments, or
the rents, profits, earnings or income of the trust
estate that would otherwise be currently available for
the benefit of the beneficiary.
2. Payments
by the trustee to the beneficiary shall be made only
to and into the proper hands of the beneficiary and
not by way of acceleration or anticipation, nor to any
assignee of the beneficiary, nor to or upon any order,
written or oral, given by the beneficiary, whether
such assignment or order be the voluntary contractual
act of the beneficiary or be made pursuant to or by
virtue of any legal process in judgment, execution,
attachment, garnishment, bankruptcy or otherwise, or
whether it be in connection with any contract, tort or
duty.
3. The
beneficiary shall have no power or capacity to make
any disposition whatever of any of the income by his
order, voluntary or involuntary, and whether made upon
the order or direction of any court or courts, whether
of bankruptcy or otherwise; nor shall the interest of
the beneficiary be subject to any process of
attachment issued against the beneficiary, or to be
taken in execution under any form of legal process
directed against the beneficiary or against the
trustee, or the trust estate, or any part of the
income thereof, but the whole of the trust estate and
the income of the trust estate shall go to and be
applied by the trustee solely for the benefit of the
beneficiary, free, clear, and discharged of and from
any and all obligations of the beneficiary whatsoever
and of all responsibility therefore.
4. The
trustee of a spendthrift trust is required to
disregard and defeat every assignment or other act,
voluntary or involuntary, that is attempted contrary
to the provisions of this chapter.
[Part 5:86:1939; 1931 NCL
§ 6880.04]
[Part 5:86:1939; 1931 NCL
§ 6880.04]
NRS 166.140
Perpetuities.
A
spendthrift trust may not continue for a period longer
than that allowed under NRS
111.103 to 111.1039,
inclusive. The free alienation of the legal estate by
the trustee may not be suspended for a period
exceeding the limit prescribed in any constitutional
or statutory prohibition against perpetuities existing
in this state or in the state where the lands affected
by the trust are situate, but a contingent remainder
in fee may be created on a prior remainder in fee, to
take effect if the persons to whom the first remainder
is limited die under the age of 21 years, or upon any
other contingency by which the estate of those persons
may be determined before they attain that age.
[Part 5:86:1939; 1931 NCL
§ 6880.04]—(NRS A 1999, 1237)
NRS 166.150
Accumulation
of income. An
accumulation of the income of trust property may be
directed in the will or other writing creating a
spendthrift trust, for the benefit of one or more
beneficiaries, to commence within the time permitted
for the vesting of future interests and not to extend
beyond the period limiting the time within which the
absolute power of alienation of property may be
suspended. If the direction is for a longer term than
is permitted by law, it is void only as to the excess
time, whether the direction be separable from the
other clauses in the trust or not, and in such cases
of invalidity the income may be paid and distributed
to the next succeeding beneficiary in interest.
[Part 5:86:1939; 1931 NCL
§ 6880.04]
NRS 166.160
Settlor
may make different provisions.
The
principles stated in NRS
166.080 to 166.150,
inclusive, shall not prevent the creator of any
spendthrift trust, by will or other writing, from
making other or different provisions provided he uses
express, specific language to that end.
[Part 5:86:1939; 1931 NCL
§ 6880.04]
MISCELLANEOUS
PROVISIONS
NRS 166.170
Limitation
of actions with respect to transfer of property to
trust. A
person may not bring an action with respect to a
transfer of property to a spendthrift trust:
1. If
he is a creditor when the transfer is made, unless the
action is commenced within:
(a) Two years after the
transfer is made; or
(b) Six months after the
discovers or reasonably should have discovered the
transfer,
whichever
is later.
2. If
he becomes a creditor after the transfer is made,
unless the action is commenced within 2 years after
the transfer is made.
(Added to NRS by 1999,
1236)
