NEVADA UNIFORM PRUDENT INVESTOR ACT

NEVADA UNIFORM PRUDENT INVESTOR ACT

 

2019 Nevada Revised Statutes

Chapter 164 – Administration of Trusts

Prudent Investor (Uniform Act)

 

NRS 164.705 – Short title.

NRS 164.700 to 164.775, inclusive, may be cited as the Uniform Prudent Investor Act.
(Added to NRS by 2003, 1967)

NRS 164.710 – Administration of trust or estate by fiduciary in accordance with its terms or in accordance with provisions of NRS.

In performing his or her duties under NRS 164.700 to 164.925, inclusive, a fiduciary:
1. Shall administer a trust or estate in accordance with the terms of the trust or the will, even if there is a different provision in NRS 164.700 to 164.925, inclusive;
2. May administer a trust or estate by the exercise of a discretionary power of administration given to the fiduciary by the terms of the trust or the will, even if the exercise of the power produces a result different from a result required or permitted by NRS 164.700 to 164.925, inclusive; and
3. Shall administer a trust or estate in accordance with NRS 164.700 to 164.925, inclusive, if the terms of the trust or the will do not contain a different provision or do not give the fiduciary a discretionary power of administration.
(Added to NRS by 2003, 1965)

NRS 164.715 – Acting in interest of beneficiaries.

A trustee shall invest and manage the trust property solely in the interest of the beneficiaries.
(Added to NRS by 2003, 1966)

NRS 164.720 – Trust having two or more beneficiaries; impartial administration of trust or estate.

1. If a trust has two or more beneficiaries, the trustee shall act impartially in investing and managing the trust property, taking into account any differing interests of the beneficiaries.
2. In exercising the power to adjust under NRS 164.795 or 164.796 or a discretionary power of administration regarding a matter within the scope of NRS 164.780 to 164.925, inclusive, whether granted by the terms of a trust, a will or NRS 164.780 to 164.925, inclusive, a fiduciary shall administer a trust or estate impartially, based on what is fair and reasonable to all the beneficiaries, except to the extent that the terms of the trust or the will clearly manifest an intention that the fiduciary shall or may favor one or more of the beneficiaries. A determination in accordance with NRS 164.780 to 164.925, inclusive, is presumed to be fair and reasonable to all the beneficiaries.
(Added to NRS by 2003, 1966; A 2009, 799)

NRS 164.725 – Notice of proposed action: Authorized; to whom notice must be sent; content; objection to proposed action; limitations on liability; court order to take action over objection; burden of proof; notice when action not taken.

1. As used in this section, “action” includes a course of action and a decision on whether or not to take action.
2. A trustee may provide a notice of proposed action regarding any matter governed by NRS 163.556 or 164.700 to 164.925, inclusive. Except as otherwise provided in the trust instrument, a trustee, trust protector or trust adviser may provide a notice of proposed action regarding any aspect of the trust administration of the trust within his or her scope of authority.
3. If a trustee, trust protector or trust adviser provides a notice of proposed action, the trustee, trust protector or trust adviser shall mail the notice of proposed action to every adult beneficiary who, at the time the notice is provided, receives, or is entitled to receive, income under the trust or who would be entitled to receive a distribution of principal if the trust were terminated. A notice of proposed action need not be provided to a person who consents in writing to the proposed action. A consent to a proposed action may be executed before or after the proposed action is taken.
4. The notice of proposed action must state:
(a) That the notice is provided pursuant to this section;
(b) The name and mailing address of the trustee;
(c) The name and telephone number of a person with whom to communicate for additional information regarding the proposed action;
(d) A description of the proposed action and an explanation of the reason for taking the action;
(e) The time within which objection to the proposed action may be made, which must be not less than 30 days after the notice of proposed action is mailed; and
(f) The date on or after which the proposed action is to be taken or is to be effective.
5. A beneficiary may object to the proposed action by mailing a written objection to the person providing notice of the proposed action at the address and within the time stated in the notice.
6. If no beneficiary entitled to receive notice of a proposed action objects to the proposed action and the other requirements of this section are met, the trustee is not liable to any present or future beneficiary with respect to that proposed action.
7. If the trustee, trust protector or trust adviser received a written objection to the proposed action within the period specified in the notice, the trustee, trust protector or trust adviser or a beneficiary may petition the court for an order to take the action as proposed, take the action with modification or deny the proposed action. A beneficiary who failed to object to the proposed action is not estopped from opposing the proposed action. The burden is on a beneficiary to prove that the proposed action should not be taken or should be modified. If the trustee, trust protector or trust adviser takes the proposed action as approved by the court, the trustee, trust protector or trust adviser is not liable to any beneficiary with respect to that action.
8. If the trustee, trust protector or trust adviser decides not to take a proposed action for which notice has been provided, the trustee, trust protector or trust adviser shall notify the beneficiaries of his or her decision not to take the proposed action and the reasons for the decision. The trustee, trust protector or trust adviser is not liable to any present or future beneficiary with respect to the decision not to take the proposed action. A beneficiary may petition the court for an order to take the action as proposed. The burden is on the beneficiary to prove that the proposed action should be taken.
9. If the proposed action for which notice has been proved is an adjustment to principal and income pursuant to NRS 164.795 or 164.796, the sole remedy a court may order, pursuant to subsections 7 and 8, is to make the adjustment, to make the adjustment with a modification or to order the adjustment not to be made.
(Added to NRS by 2003, 1966; A 2009, 800; 2015, 3554)

NRS 164.730 – No duty to make adjustment between principal and income; trustee immunity from liability.

1. The provisions of NRS 164.700 to 164.925, inclusive, do not impose or create a duty of a trustee to make an adjustment between principal and income pursuant to the provisions of NRS 164.795 or 164.796.
2. A trustee shall not be liable for:
(a) Not considering whether to make such an adjustment; or
(b) Deciding not to make such an adjustment.
(Added to NRS by 2003, 1967; A 2009, 801)

NRS 164.735 – Applicability.

Except as specifically provided in a trust instrument, a will or NRS 164.700 to 164.925, inclusive, the provisions of NRS 164.700 to 164.925, inclusive, apply to any trust or estate of a decedent existing on or after October 1, 2003.
(Added to NRS by 2003, 1967)

NRS 164.740 – Duty to comply with prudent investor rule; circumstances under which trustee is immune from liability.

Except as otherwise provided in chapter 669A of NRS, a trustee who invests and manages trust property owes a duty to the beneficiaries of the trust to comply with the prudent investor rule as set forth in NRS 164.700 to 164.775, inclusive, but a trustee is not liable to a beneficiary to the extent that the trustee:
1. Acted in reasonable reliance on the terms of the trust or a court order; and
2. Determined in good faith to not diversify the investments of a trust pursuant to NRS 164.750.
(Added to NRS by 2003, 1967; A 2011, 1817; 2015, 3555)

NRS 164.745 – Satisfaction of prudent investor standard; evaluation of decisions; consideration of circumstances; verification of facts; types of investments; special skills or expertise of trustee.

1. A trustee shall invest and manage trust property as a prudent investor would, considering the terms, purposes, requirements for distribution, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill and caution.
2. A trustee’s decisions concerning investment and management as applied to individual assets must be evaluated not in isolation but in the context of the trust portfolio as a whole and as part of an overall strategy of investment having objectives for risk and return reasonably suited to the trust.
3. Among circumstances that a trustee shall consider in investing and managing trust property are such of the following as are relevant to the trust or its beneficiaries:
(a) General economic conditions;
(b) The possible effect of inflation or deflation;
(c) The expected tax consequences of decisions or strategies;
(d) The role that each investment or course of action plays within the overall trust portfolio;
(e) The expected total return from income and the appreciation of capital;
(f) Other resources of the beneficiaries;
(g) Needs for liquidity, regularity of income, and preservation or appreciation of capital; and
(h) An asset’s special relationship or special value, if any, to the purposes of the trust or to one or more of the beneficiaries.
4. A trustee shall make a reasonable effort to verify facts relevant to the investment and management of trust property.
5. A trustee may invest in any kind of property or type of investment consistent with the standards of NRS 164.700 to 164.775, inclusive, which may include financial assets, interests in closely held enterprises, tangible and intangible personal property, and real property.
6. A trustee who has special skills or expertise, or is named trustee in reliance upon the trustee’s representation that he or she has special skills or expertise, has a duty to use those special skills or expertise.
(Added to NRS by 2003, 1967)

NRS 164.750 – Diversification of investments.

A trustee shall diversify the investments of the trust unless the trustee reasonably determines that, because of special circumstances, the purposes of the trust are better served without diversifying.
(Added to NRS by 2003, 1968)

NRS 164.755 – Duty to bring trust portfolio into compliance with terms and circumstances of trust and provisions of NRS within reasonable time.

Within a reasonable time after accepting a trusteeship or receiving trust property, a trustee shall review the trust property and make and carry out decisions concerning the retention and disposition of assets, in order to bring the trust portfolio into compliance with the purposes, terms, requirements for distribution and other circumstances of the trust, and with the requirements of NRS 164.700 to 164.775, inclusive.
(Added to NRS by 2003, 1968)

NRS 164.760 – Incurring costs.

In investing and managing trust property, a trustee may only incur costs that are appropriate and reasonable in relation to the property, the purposes of the trust and the skills of the trustee.
(Added to NRS by 2003, 1968)

NRS 164.765 – Determination of compliance with prudent investor rule.

Compliance with the prudent investor rule is determined in light of the facts and circumstances existing at the time of a trustee’s decision or action and not by hindsight.
(Added to NRS by 2003, 1968)

NRS 164.770 – Delegation of functions by trustee; standard of care owed by agent; trustee immunity from liability; jurisdiction over agent.

1. A trustee may delegate functions of investment and management that a prudent trustee of comparable skills could properly delegate under the circumstances. The trustee shall exercise reasonable care, skill and caution in:
(a) Selecting an agent;
(b) Establishing the scope and terms of the delegation, consistent with the purposes and terms of the trust; and
(c) Periodically reviewing the agent’s actions in order to verify the agent’s performance and compliance with the terms of the delegation.
2. In performing a delegated function, an agent owes a duty to the trust to exercise reasonable care to comply with the terms of the delegation.
3. A trustee who complies with the requirements of subsection 1 is not liable to the beneficiaries or to the trust for the decisions or actions of the agent to whom the function was delegated.
4. By accepting the delegation of a function from the trustee of a trust that is subject to the law of this state, an agent submits to the jurisdiction of the courts of this state.
(Added to NRS by 2003, 1968)

NRS 164.775 – Terms and language of trust which authorize certain investments or strategies.

The following terms or comparable language in the terms of a trust, unless otherwise limited or modified, authorizes any investment or strategy permitted under NRS 164.700 to 164.775, inclusive: “investments permissible by law for investment of trust funds,” “legal investments,” “authorized investments,” “using the judgment and care under the circumstances then prevailing that persons of prudence, discretion and intelligence exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital,” “prudent man rule,” “prudent trustee rule,” “prudent person rule” and “prudent investor rule.”
(Added to NRS by 2003, 1968)

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