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

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

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, 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 .