USA – NEVADA Trends and Developments Contributed by: Robert E Armstrong, Zach Noland and Ian DeValliere, McDonald Carano
McDonald Carano LLP 100 West Liberty Street Tenth Floor Reno NV 89501 USA Tel: 775 788 2000 Fax: 775 788 2020 Email: rarmstrong@mcdonaldcarano.com Web: www.mcdonaldcarano.com
Due to the combination of explosive growth in the global private wealth space and Nevada’s highly favourable trust and creditor-protection laws, lack of state income tax, minimal regulatory capital require - ments, and ease of access to international travel hubs and major metropolitan areas in the western United States, Nevada continues to be an increas - ingly attractive private-wealth destination. Recent state-law developments have continued to close the few remaining gaps between Nevada and the hand - ful of jurisdictions that are competitively situated. A discussion of significant trends in Nevada legisla - tive developments, appellate decisions, and private- wealth practice follows. Amendments from the 2025 Legislative Session Two-year limitations period for breach-of- fiduciary-duty claims NRS 11.190 was amended to assign a two-year limi - tations period for breach-of-fiduciary-duty claims not involving fraud or intentional misrepresentation. This resolves a seemingly overbroad precedent in Nevada caselaw assigning a three-year limitations period. It also brings Nevada into closer competition with South Dakota, whose equivalent statute of limitations the amendment was modelled after. Express exculpation for the approved and final trust account NRS 165.1214 was amended to clarify the effect of an approved and final account by adding an express exculpation provision. The amendment also provides, by way of cross-reference to related statutes in Title 13, that an account may be approved by virtual repre - sentation under a non-judicial settlement agreement.
This amendment also brings Nevada into closer com - petition with South Dakota, on whose equivalent stat - ute the amendment was modelled. Statutory reimbursement power for grantor-trust tax payments NRS 163.557 was amended to provide an express, statutory reimbursement power to trustees, making discretionary reimbursement a default power under any Nevada grantor trust that does not provide oth - erwise. Before its amendment, NRS 163.557 merely provided that a trust instrument may grant a trustee the power to reimburse the settlor for tax payments without liability to any person. The power to reimburse the settlor of a grantor trust was the subject of a significant IRS memorandum issued on 29 December 2023 (“CCA 202352018”). CCA 202352018 explains that adding a reimburse - ment power to a trust instrument may constitute a taxable gift from beneficiaries who consent or omit to object to the addition of the reimbursement power. This, of course, is an undesirable outcome for ben - eficiaries. Adding a default reimbursement power to grantor trusts via statute does not have the same effect under CCA 202352018. A recently enacted Florida statute provided a model for Nevada’s amendment. Although its enactment preceded CCA 202352018 and was intended simply to provide the reimbursement power as a matter of convenience, it fortuitously allows Florida trusts also to avoid the gift-tax pitfall by obviating the need to add that power to any trust that does not expressly disallow reimbursement.
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