NRS 163.5559 Claims of creditors against settlor.

314 words·~1 min read·/nv/chapter-163-trusts/163-5559

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

1. Except as otherwise provided in subsection 2, a creditor of a settlor may not seek to satisfy a claim against the settlor from the assets of a trust because of the existence of:

(a)A discretionary power granted to a person other than the settlor by the terms of the trust or by operation of law or to reimburse the settlor for any tax on trust income or principal which is payable by the settlor under the law imposing such tax;

(b)A power allowing the settlor to reacquire the trust corpus by substituting other property of an equivalent value; or

(c)A power allowing the settlor to borrow trust corpus or income, directly or indirectly, without adequate interest or without adequate security.

2. The provisions of subsection 1 do not preclude a creditor from seeking to satisfy a claim against the settlor of a spendthrift trust from trust property transferred by the settlor to the extent the creditor can prove by clear and convincing evidence that the transfer was fraudulent as to that creditor pursuant to chapter 112 of NRS or violates a legal obligation owed to that creditor under a contract or a valid court order that is legally enforceable by that creditor.

3. For purposes of this section, a beneficiary of a trust shall be deemed to not be a settlor of a trust because of a lapse, waiver or release of the beneficiary’s right to withdraw part or all of the trust property if the value of the property which could have been withdrawn by exercising the right of withdrawal in any calendar year does not, at the time of the lapse, waiver or release, exceed the greater of the amount provided in 26 U.S.C. § 2041(b)(2), 26 U.S.C. § 2503(b) or 26 U.S.C. § 2514(e), as amended, or any successor provision.