§ 111.779 — Liability of nonprobate transferee; proceedings to impose liability; payment of claims against nonprobate assets

Nevada § 111.779

• Jurisdiction: Nevada
• Title 10: PROPERTY RIGHTS AND TRANSACTIONS
• Ch. 111: Estates

Text

1. Except as otherwise provided in NRS 21.090 and other applicable law, a transferee of a nonprobate transfer is liable to the probate estate of the decedent for allowed claims against that decedent’s probate estate to the extent the estate is insufficient to satisfy those claims.
2. The liability of a nonprobate transferee may not exceed the value of nonprobate transfers received or controlled by that transferee.
3. Nonprobate transferees are liable for the insufficiency described in subsection 1 in the following order of priority:
(a) A transferee specified in the decedent’s will or any other governing instrument as being liable for such an insufficiency, in the order of priority provided in the will or other governing instrument;
(b) The trustee of a trust serving as the principal nonprobate instrument in the decedent’s estate plan as shown by its designation as devisee of the decedent’s residuary estate or by other facts or circumstances, to the extent of the value of the nonprobate transfer received or controlled; and
(c) Other nonprobate transferees, in proportion to the values received.
4. Unless otherwise provided by the trust instrument, interests of beneficiaries in all trusts incurring liabilities under this section abate as necessary to satisfy the liability, as if all the trust instruments were a single will and the interests were devises under it.
5. If a nonprobate transferee is a spouse or a minor child, the nonprobate transferee may petition the court to be excluded from the liability imposed by this section as if the nonprobate property received by the spouse or minor child were part of the decedent’s estate. Such a petition may be made pursuant to the applicable provisions of chapter 146 of NRS, including, without limitation, the provisions of NRS 146.010 and 146.020 and subsection 2 of NRS 146.070 .
6. A provision made in one instrument may direct the apportionment of the liability among the nonprobate transferees taking under that or any other governing instrument. If a provision in one instrument conflicts with a provision in another, the later one prevails.
7. Upon due notice to a nonprobate transferee, the liability imposed by this section is enforceable in probate proceedings in this State, whether or not the transferee is located in this State.
8. If a probate proceeding is pending at the time of filing and it has been determined by a final order issued by the probate court that there are insufficient assets to pay a valid creditor, a proceeding under this section may be commenced by one of the following persons:
(a) The personal representative of the decedent’s estate. A personal representative who declines in good faith to commence a proceeding incurs no personal liability for declining.
(b) A creditor of the estate, if the personal representative has declined or refused to commence an action within 30 days after receiving a written demand by a creditor. Such demand must identify the nonprobate transfers known to the creditor. If the creditor is unaware of any nonprobate transfers, in the probate proceeding, the creditor may, pursuant to NRS 155.170 , obtain discovery, perpetuate testimony or conduct examinations in any manner authorized by law or by the Nevada Rules of Civil Procedure to ascertain whether any nonprobate transfers exist. If the creditor is unable to identify any nonprobate transfers within a reasonable time after conducting discovery, the creditor may not proceed under this section. If a creditor commences an action under this section:
(1) The creditor must proceed at the expense of the creditor and not of the estate.
(2) If a creditor successfully establishes an entitlement to payment under this section and collects nonprobate transfers, the court must order the reimbursement of the costs reasonably incurred by the creditor, including attorney’s fees, from the transferee from whom the payment is to be made, subject to the limitations of subsection 2, or from the estate as a cost of administration, or partially from each, as the court deems just.
9. If a probate proceeding is not pending, a proceeding under this section may be commenced as a civil action by a creditor at the expense of the creditor.
10. If a proceeding is commenced pursuant to this section, it must be commenced:
(a) If a probate proceeding is pending in which notice to creditors has been given at the time of filing a proceeding under this section:
(1) As to a creditor whose claim was properly and timely filed, allowed by the personal representative or partially allowed by the personal representative, and accepted by the creditor pursuant to NRS 147.160 , within 60 days after the probate court enters an order confirming the amount of payment of the approved claim that is final and no longer subject to reconsideration or appeal or within 1 year after the decedent’s death, whichever is later.
(2) As to a creditor:
(I) Whose claim was rejected by the personal representative, partially allowed by the personal representative and rejected by the creditor pursuant to NRS 147.160 , or deemed rejected by the personal representative pursuant to NRS 147.110 ;
(II) Who adjudicated the creditor’s claims in the proper court or by a summary adjudication; and
(III) Who obtained a favorable final judgment on its claim from the proper court,
Ê within 60 days after the probate court enters an order confirming the amount of payment of the approved claim that is final and no longer subject to reconsideration or appeal or within 1 year after the decedent’s death, whichever is later.
(b) If an action had been commenced against the decedent before the decedent’s death, the creditor receives a judgment against the decedent’s estate and the creditor has filed a proper and timely creditor’s claim against the estate, within 60 days after the probate court enters an order confirming the amount of payment of the adjudicated claim that is final and no longer subject to reconsideration or appeal or within 1 year after the decedent’s death, whichever is later.
(c) As to the recovery of benefits paid for Medicaid, within 3 years after the decedent’s death.
(d) As to all other creditors, within 1 year after the decedent’s death.
11. Unless a written notice asserting that a decedent’s probate estate is nonexistent or insufficient to pay allowed claims and statutory allowances has been received from the decedent’s personal representative, the following rules apply:
(a) Payment or delivery of assets by a financial institution, registrar or other obligor to a nonprobate transferee in accordance with the terms of the governing instrument controlling the transfer releases the obligor from all claims for amounts paid or assets delivered.
(b) A trustee receiving or controlling a nonprobate transfer is released from liability under this section with respect to any assets distributed to the trust’s beneficiaries. Each beneficiary to the extent of the distribution received becomes liable for the amount of the trustee’s liability attributable to assets received by the beneficiary.
12. Except as otherwise provided in subsection 13, notwithstanding any provision of this section to the contrary:
(a) A creditor has no claim against:
(1) Property transferred pursuant to a power of appointment exercised by a decedent unless the power of appointment was actually exercised in favor of the decedent or the decedent’s estate.
(2) Property transferred pursuant to a beneficiary designation by a decedent which transfers money held by any of the following:
(I) An individual retirement arrangement which conforms with or is maintained pursuant to the applicable limitations and requirements of section 408 or 408A of the Internal Revenue Code, 26 U.S.C. §§ 408 and 408A, including, without limitation, an inherited individual retirement arrangement;
(II) A written simplified employee pension plan which conforms with or is maintained pursuant to the applicable limitations and requirements of section 408 of the Internal Revenue Code, 26 U.S.C. § 408, including, without limitation, an inherited simplified employee pension plan;
(III) A cash or deferred arrangement plan which is qualified and maintained pursuant to the Internal Revenue Code, including, without limitation, an inherited cash or deferred arrangement plan;
(IV) A trust forming part of a stock bonus, pension or profit-sharing plan which is qualified and maintained pursuant to sections 401 et seq. of the Internal Revenue Code, 26 U.S.C. §§ 401 et seq.; and
(V) A trust forming part of a qualified tuition program pursuant to chapter 353B of NRS, any applicable regulations adopted pursuant to chapter 353B of NRS and section 529 of the Internal Revenue Code, 26 U.S.C. § 529, unless the money is deposited after the entry of a judgment against the purchaser or account owner or the money will not be used by any beneficiary to attend a college or university.
(3) Property transferred pursuant to a beneficiary designation by a decedent which transfers money, benefits or privileges that accrue in any manner out of life insurance.
(4) Proceeds of any wages of the decedent which were exempt from execution during the decedent’s lifetime pursuant to paragraph (g) of subsection 1 of NRS 21.090 .
(5) A trust, a beneficial interest of the decedent under a trust or amount payable from a trust if the trust was created by someone other than the decedent, except to enforce a valid assignment of the decedent’s beneficial interest under a trust that is not a spendthrift trust.
(6) An irrevocable trust or amounts payable from a trust if the trust was properly created as a valid spendthrift trust under chapter 166 of NRS, except with respect to property transferred to the trust by the decedent to the extent permitted under subsections 1, 2 and 3 of NRS 166.170 .
(b) A purchaser for value of property or a lender who acquires a security interest in the property from a beneficiary of a nonprobate transfer after the death of the owner, in good faith:
(1) Takes the property free of any claims or of liability to the owner’s estate, creditors of the owner’s estate, persons claiming rights as beneficiaries under the nonprobate transfer or heirs of the owner’s estate, in absence of actual knowledge that the transfer was improper; and
(2) Has no duty to verify sworn information relating to the nonprobate transfer. The protection provided by this subparagraph applies to information that relates to the ownership interest of the beneficiary in the property and the beneficiary’s right to sell, encumber and transfer good title to a purchaser or lender and does not relieve a purchaser or lender from the notice imparted by instruments of record respecting the property.
13. Nothing in this section exempts any real or personal property from any statute of this State that authorizes the recovery of money owed to the Department of Health and Human Services as a result of the payment of benefits from Medicaid.
14. As used in this section, “devise” has the meaning ascribed to it in NRS 132.095 .

Legislative History

(Added to NRS by 2011, 1424 ; A 2017, 1665 ; 2019, 1847 )