Nevada Revised Statutes 163.419 – Discretionary interest: Beneficiary does not have enforceable right to distribution; court review; trustee’s powers and duties
Except as otherwise provided in the trust instrument, with respect to a discretionary interest as described in NRS 163.4185:
Terms Used In Nevada Revised Statutes 163.419
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Trustee: A person or institution holding and administering property in trust.
1. A beneficiary who has a discretionary interest in a trust does not have an enforceable right to a distribution from the trust, and a court may review a trustee‘s exercise of discretion concerning a discretionary interest only if the trustee acts dishonestly, with bad faith or willful misconduct.
2. A trustee given discretion in a trust instrument that is described as sole, absolute, uncontrolled, unrestricted or unfettered discretion, or with similar words, has no duty to act reasonably in the exercise of that discretion.
3. Absent express language in a trust to the contrary, if a discretionary interest permits unequal distributions between beneficiaries or to the exclusion of other beneficiaries, the trustee may distribute all of the undistributed income and principal to one beneficiary in the trustee’s discretion.
4. Regardless of whether a beneficiary has an outstanding creditor, a trustee of a discretionary interest may directly pay any expense on the beneficiary’s behalf and may exhaust the income and principal of the trust for the benefit of such beneficiary.