Nevada Revised Statutes 422A.494 – Purposes for which fiduciary organization may authorize individual development account holder to accumulate assets; withdrawal of money from account; removal of account holder from Program
1. A person may:
Terms Used In Nevada Revised Statutes 422A.494
- Credit Score: A number, roughly between 300 and 800, that measures an individual's credit worthiness. The most well-known type of credit score is the FICO score. This score represents the answer from a mathematical formula that assigns numerical values to various pieces of information in your credit report. Source: OCC
- Dependent: A person dependent for support upon another.
- Fiduciary: A trustee, executor, or administrator.
- person: means a natural person, any form of business or social organization and any other nongovernmental legal entity including, but not limited to, a corporation, partnership, association, trust or unincorporated organization. See Nevada Revised Statutes 0.039
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
(a) Enter into an agreement with a fiduciary organization to establish an individual development account pursuant to NRS 422A.493 only for a purpose authorized by the fiduciary organization; and
(b) After establishing an individual development account pursuant to NRS 422A.493, withdraw money from the individual development account only for a purpose authorized by the fiduciary organization.
2. A fiduciary organization may authorize the establishment of an individual development account and the withdrawal of money from the individual development account for one or more of the following purposes:
(a) The acquisition of postsecondary education or job training.
(b) If the account holder has established the individual development account for the benefit of a member of his or her household who is under 18 years of age, the payment of expenses for extracurricular activities, not including the payment of tuition, that are designed to prepare the member for postsecondary education or job training.
(c) The purchase of a primary residence. In addition to paying the price of purchasing the residence, the account holder may use money in the individual development account to pay any usual or reasonable settlement, financing or other closing costs. Unless the account holder was displaced from the residence, had lost ownership of the residence as a result of a divorce or is the owner of a manufactured home, the account holder must not have owned or held any interest in a residence during the 3 years immediately preceding the purchase.
(d) The rental of a primary residence. The account holder may use money in the individual development account to pay for security deposits, the rent for the first and last month of the rental period, any application fees and any other expenses necessary to move into the primary residence, as specified in the personal development plan for increasing the financial independence of the account holder developed pursuant to NRS 422A.493.
(e) The establishment of a small business. The account holder may use money in the individual development account to pay for expenses related to establishing the small business, to hire employees and to use for working capital pursuant to a business plan. The business plan must have been developed by a financial institution, nonprofit organization or other agent which has demonstrated expertise in business and which has been approved by the fiduciary organization. The business plan must include a description of the services or goods to be sold, a marketing plan and projected financial statements.
(f) Improvements, repairs or modifications necessary to make or keep the primary residence of the account holder habitable or accessible for the account holder or a member of his or her household.
(g) The purchase of equipment, technology or specialized training that is required for the account holder to become competitive in obtaining or maintaining employment or to establish or maintain a business, as specified in the personal development plan for increasing the financial independence of the account holder developed pursuant to NRS 422A.493.
(h) The purchase or repair of a vehicle, as specified in the personal development plan for increasing the financial independence of the account holder developed pursuant to NRS 422A.493.
(i) The saving of money for retirement, as specified in the personal development plan for increasing the financial independence of the account holder developed pursuant to NRS 422A.493.
(j) The payment of debts owed for educational or medical purposes when the account holder is saving for another authorized purpose, as specified in the personal development plan for increasing the financial independence of the account holder developed pursuant to NRS 422A.493.
(k) The creation or improvement of the credit score of the account holder by obtaining a secured loan or a financial product that is designed to improve credit, as specified in the personal development plan for increasing the financial independence of the account holder developed pursuant to NRS 422A.493.
(l) The replacement of the primary residence of the account holder when such replacement offers a significant opportunity to improve the habitability or energy efficiency of the primary residence.
(m) The payment of medical expenses incurred by the account holder or a member of his or her household.
3. If the account holder is a child for whom a provider of foster care established an individual development account pursuant to NRS 424.088 or a child for whom a relative or fictive kin established an individual development account pursuant to NRS 432B.645 and such an account holder seeks to withdraw money from the individual development account for a purpose authorized pursuant to subsection 2 that requires information to be specified in the personal development plan for increasing the financial independence of the account holder, the account holder shall develop a personal development plan that substantially complies with subsection 4 of NRS 422A.493.
4. If the account holder of an individual development account established for the purpose set forth in paragraph (i) of subsection 2 has achieved the purpose of the account holder in accordance with the personal development plan developed pursuant to NRS 422A.493, the account holder may withdraw, or authorize the withdrawal of, all deposits, including, without limitation, matching deposits and interest accrued on deposits, in the individual development account by rolling over the entire withdrawal amount into an individual retirement account, a retirement plan or a similar account or plan established under the Internal Revenue Service. Upon the withdrawal of all deposits in the individual development account, the fiduciary organization shall terminate the account relationship with the account holder.
5. If an account holder withdraws money from an individual development account without receiving the authorization of the fiduciary organization pursuant to subsection 2, the fiduciary organization may remove the account holder from the Program.
6. Except as otherwise provided in NRS 424.088 and 432B.645, if the account holder moves outside of this State or is otherwise unable to continue in the Program, the fiduciary organization may remove the account holder from the Program.
7. If an account holder is removed from the Program pursuant to subsection 5 or 6, all matching deposits in the individual development account and all interest accrued on matching deposits shall revert to the fiduciary organization. The fiduciary organization shall use the reverted funds as a source of matching deposits for other individual development accounts.
8. As used in this section, ‘household’ means an association of persons who:
(a) Live in the same residence or dwelling;
(b) Are related by blood, adoption or marriage; and
(c) Are mutually dependent on each other for the basic necessities of life.