SB404 - Revises provisions relating to personal financial administration. (BDR 12-901)

- 83rd Session (2025) Senate Bill No. 404–Committee on Judiciary CHAPTER.......... AN ACT relating to personal financial administration; revising certain terms and provisions relating to the administration of trusts and estates; making certain technical corrections relating to the administration of trusts and estates; revising provisions governing the appointment of an administrator of an intestate estate of a decedent; requiring certain personal representatives to submit certain information under the Independent Administration of Estates Act; requiring a court to give certain preferences when determining whether to revoke the authority of a personal representative; increasing certain monetary amounts relating to the administration of estates; revising certain periods of limitation for commencing certain civil actions; authorizing a trustee to make certain distributions under certain circumstances; repealing certain provisions relating to the administration of estates; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law governs the administration of trusts and estates. (Titles 12 and 13 of NRS) Sections 1, 1.1, 1.3, 1.6, 4, 5, 11 and 17 of this bill revise certain terms and make technical corrections relating to the administration of trusts and estates. Existing law sets forth an order of priority for the appointment of an administrator to administrate the intestate estate of a decedent and authorizes any person legally qualified to serve as the administrator. (NRS 139.040) Section 1.2 of this bill: (1) revises the order of priority for the appointment of an administrator to administrate the intestate estate of a decedent; (2) provides that a person may be legally qualified to serve as an administrator upon a finding of good cause based on certain evidence; and (3) authorizes the court to appoint certain persons under certain circumstances. Section 1.5 of this bill makes a conforming change to an internal reference caused by the revisions relating to the order of priority and appointment in section 1.2. Section 1.4 of this bill authorizes a court to appoint one or more persons to serve as personal representative or appoint an independent representative under certain circumstances. Existing law establishes the Independent Administration of Estates Act, which allows a personal representative to administer most aspects of the estate of a decedent without court supervision. (NRS 143.300-143.815) Section 2 of this bill provides that only a personal representative who is named in the will or certain other persons who meet the criteria to be legally qualified as an administrator of an intestate estate may administer an estate. Existing law authorizes any interested person to petition for modification or revocation of the authority of a personal representative. (NRS 143.360) Section 3 of this bill requires the court, when determining whether to revoke the authority of a personal representative, to give preference to any interested person based on the order of priority set forth for the appointment of an administrator for an intestate estate. Under existing law, a court is authorized to enter an order for the summary administration of an estate if the court deems summary administration advisable and the gross value of the estate does not exceed $300,000, after deducting any – 2 – - 83rd Session (2025) encumbrances. (NRS 145.040) Sections 6 and 7 of this bill increase that amount to $500,000. Sections 8 and 9 of this bill increase the monetary amount for an estate to be set aside without administration from $100,000 to $150,000. Section 10 of this bill makes a conforming change to similarly increase the affidavit of entitlement limit for a surviving spouse. Existing law requires certain civil actions to recover damages from another person to be commenced within certain periods. (NRS 11.190) Section 12 of this bill provides that an action against certain persons based on a breach of fiduciary duty, not involving fraud or intentional misrepresentation, must be commenced within 2 years. Section 18 of this bill authorizes a trustee to make an outright distribution to a beneficiary without requiring the trustee to first create a new trust under certain circumstances. Section 19 of this bill makes a conforming change to indicate that certain terms apply to the outright distribution. Section 20 of this bill grants a trustee the power to reimburse a settlor for tax payments. Section 21 of this bill requires certain documentation to be provided to beneficiaries of a trust. Section 22 of this bill specifies the circumstances under which the laws of this State govern the administration of a trust. Section 23 of this bill provides for the circumstances under which an account must be deemed approved and final by a trust adviser or trust protector. Section 32 of this bill repeals the provisions of existing law which set forth a preference for relatives of the whole blood over relatives of the half blood for certain purposes relating to the administration of an estate. EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. NRS 132.115 is hereby amended to read as follows: 132.115 “Distributee” means a person who has received , or has the right to receive, property of a decedent from the decedent’s personal representative other than as a creditor or purchaser. A testamentary trustee is a distributee only to the extent of distributed assets or increment thereto remaining in his or her hands. A beneficiary of a testamentary trust to whom the trustee has distributed property received from a personal representative is a distributee of the personal representative. As used in this section, “testamentary trustee” includes a trustee to whom assets are transferred by will to the extent of the devised assets. Sec. 1.1. NRS 136.150 is hereby amended to read as follows: 136.150 1. If no person appears to contest the probate of a will, the court may admit it to probate on the testimony of only one of the subscribing witnesses, if that testimony shows that the will was executed in all particulars as required by law, and that the – 3 – - 83rd Session (2025) testator was of sound mind and had attained the age of 18 years at the time of its execution. 2. [An ex parte] A filed affidavit of the witness, showing that the will was executed in all particulars as required by law, and that the testator was of sound mind and had attained the age of 18 years at the time of its execution, must be received in evidence and has the same force and effect as if the witness were present and testified orally. Sec. 1.2. NRS 139.040 is hereby amended to read as follows: 139.040 1. [Administration] Except as otherwise provided in subsection 5, administration of the intestate estate of a decedent must be granted to one or more of the persons mentioned in this section, and they are respectively entitled to priority for appointment in the following order: (a) The surviving spouse. (b) The children. (c) The grandchildren. (d) Other issue. (e) A parent. [(d) The brother or the sister. (e) The grandchildren.] (f) A sibling. (g) Any other of the kindred entitled to share in the distribution of the estate. [(g)] (h) The public administrator or a person employed or contracted with pursuant to NRS 253.125, as applicable. [(h)] (i) Creditors who have become such during the lifetime of the decedent. [(i)] (j) Any of the kindred not above enumerated, within the fourth degree of consanguinity. [(j)] (k) Any person [or persons] who is legally qualified [.] upon a finding of good cause. Such a finding must be based on evidence, including, without limitation: (1) An affidavit of due diligence to find any living heir, including, without limitation: (I) A report from an heir finder, as defined in NRS 139.135; and (II) Proof of service via certified mail to all potential heirs identified pursuant to sub-subparagraph (I); and (2) A statement of the qualifications of the person seeking appointment. 2. If any heir who is otherwise entitled to appointment is a minor, the court may appoint the custodial parent or legal – 4 – - 83rd Session (2025) guardian of the minor as administrator. The custodial parent or legal guardian has the same priority for appointment as the minor. 3. If any heir who is otherwise entitled to appointment is an incapacitated person, the court may appoint the guardian or equivalent fiduciary as administrator. The guardian or equivalent fiduciary has the same priority for appointment as the incapacitated person. 4. A person in each of the foregoing classes is entitled: (a) To appointment, if the person is: (1) A resident of the State of Nevada or the person: (I) Associates as coadministrator a resident of the State of Nevada or a banking corporation authorized to do business in this State; or (II) Is named as personal representative in the will if the will is the subject of a pending petition for probate, and the court in its discretion believes it would be appropriate to make such an appointment; or (2) A banking corporation which is authorized to do business in this State or which: (I) Associates as coadministrator a resident of the State of Nevada or a banking corporation authorized to do business in this State; or (II) Is named as personal representative in the will if the will is the subject of a pending petition for probate, and the court in its discretion believes it would be appropriate to make such an appointment. (b) To nominate a resident of the State of Nevada or a qualified banking corporation for appointment, whether or not the nominator is a resident of the State of Nevada or a qualified banking corporation. The nominee has the same priority as the nominator. That priority is independent of the residence or corporate qualification of the nominator. [3. If any heir who is otherwise entitled to appointment is a minor or an incapacitated person for whom a guardian has been appointed, the court may appoint the guardian of the minor or incapacitated person as administrator.] 5. If there is no surviving spouse, the court may, in its discretion: (a) Disregard the order of priority set forth in subsection 1 to favor the appointment of an heir or the nominee of an heir, or group of heirs, who have an equal or larger interest in the estate than the heir entitled to priority for appointment; or (b) Appoint an independent personal representative. – 5 – - 83rd Session (2025) Sec. 1.3. NRS 139.050 is hereby amended to read as follows: 139.050 Administration may be granted upon petition to one or more qualified persons, although not otherwise entitled to serve, at the written request of the person entitled, filed in the court. The qualified person making the written request must provide his or her current address [and telephone number] in the written request [.] and be given notice of the hearing. Failure to provide such information voids the written request. Sec. 1.4. NRS 139.070 is hereby amended to read as follows: 139.070 When there are several persons equally entitled to [the administration,] appointment as personal representative, the court may, in its discretion, [grant letters to] appoint one or more of them [.] to serve as personal representative or appoint an independent representative. Sec. 1.5. NRS 139.090 is hereby amended to read as follows: 139.090 1. A petition for letters of administration must be in writing, signed by the petitioner or the attorney for the petitioner and filed with the clerk of the court, and must state: (a) The jurisdictional facts; (b) The names and addresses of the heirs of the decedent and their relationship to the decedent, so far as known to the petitioner, and the age of any who is a minor; (c) The character and estimated value of the property of the estate; (d) The names and personal addresses of the proposed appointed administrators and the name and personal address of any associated coadministrator under paragraph (a) of subsection [2] 4 of NRS 139.040 or, if the coadministrator is an attorney who is licensed in this State or a banking corporation authorized to do business in this State, the business address of the coadministrator; and (e) Whether the person to be appointed as administrator has been convicted of a felony. 2. No defect of form or in the statement of jurisdictional facts actually existing voids an order appointing an administrator or any of the subsequent proceedings. Sec. 1.6. NRS 139.110 is hereby amended to read as follows: 139.110 An interested person may contest the petition by filing a written opposition on the ground that the petitioner is not qualified or may assert the contestant’s own right to [the administration] appointment and request that letters be issued to the contestant [.] or nominee. In the latter case, the contestant or nominee must file a petition and give the notice required for the original petition, and the court must hear the [two] competing petitions together. – 6 – - 83rd Session (2025) Sec. 2. NRS 143.340 is hereby amended to read as follows: 143.340 1. To obtain authority to administer the estate pursuant to NRS 143.300 to 143.815, inclusive, the personal representative must petition the court for that authority in a petition for appointment of the personal representative or in a separate petition filed in the estate proceedings. 2. Only a personal representative who is named in the will or a person described in paragraphs (a) to (g) inclusive, of subsection 1 of NRS 139.040 may be granted authority to administer the estate pursuant to NRS 143.300 to 143.815, inclusive. All other persons who are legally qualified to serve as the personal representative may not be granted authority to administer the estate pursuant to NRS 143.300 to 143.815, inclusive. 3. The personal representative may request either of the following: (a) Full authority to administer the estate pursuant to NRS 143.300 to 143.815, inclusive; or (b) Limited authority to administer the estate pursuant to NRS 143.300 to 143.815, inclusive. Sec. 3. NRS 143.360 is hereby amended to read as follows: 143.360 1. Any interested person may file a petition requesting that the court make either of the following orders: (a) An order revoking the authority of the personal representative to continue administr [Text truncated for display. Full text available on LegiScan.]