USA Statutes : nevada
Title : Title 13 - GUARDIANSHIPS; CONSERVATORSHIPS; TRUSTS
Chapter : CHAPTER 166 - SPENDTHRIFT TRUSTS
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]
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)
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]
” As used in this
chapter, unless the context otherwise requires, when the term “writing”
or “written” is used in reference to a will, trust or instrument, the
term includes an electronic will as defined in NRS 132.119 and an electronic trust as defined in NRS
163.0015 .
(Added to NRS by 2001, 2353 )
CREATION OF SPENDTHRIFT TRUSTS
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 )
No specific language is necessary for the creation of a spendthrift
trust. It is sufficient if by the terms of the writing (construed in the
light of this chapter if necessary) the creator manifests an intention to
create such a trust.
[3:86:1939; 1931 NCL § 6880.02]
PRINCIPLES GOVERNING CONSTRUCTION
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]
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]
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 incompetency of the
beneficiary.
[Part 5:86:1939; 1931 NCL § 6880.04]
Provision for the beneficiary will extend to
all of the income from the trust estate, devoted for that purpose by the
creator of the trust, without exception or deduction, other than for:
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]
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]
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 personalty. 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 therefor.
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]
A beneficiary
of a spendthrift trust has no legal estate in the capital, principal or
corpus of the trust estate unless under the terms of the trust he or one
deriving title from him is entitled to have it conveyed or transferred to
him immediately or after a term of years or after a life, and in the
meantime the income from the corpus is not to be paid to him or any other
beneficiary.
[Part 5:86:1939; 1931 NCL § 6880.04]
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 )
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]
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
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 he discovers or reasonably should have
discovered the transfer,
Ê 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 )
