Henderson Office: 702.433.4455
Las Vegas Office: 702.254.4455
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Nevada recently passed legislation to protect the elderly from exploitation on transfers of property after death.  Unfortunately, the elderly are often targets of financial exploitation. We often hear tragic stories of caregivers or others deceiving the elderly by fraud or undue influence and convincing them into leaving the exploiter a large inheritance. In its most recent legislative session, Nevada passed a law to protect the elderly from certain types of fraud and undue influence relating to transfers occurring after death.

The new law creates a presumption that a transfer occurring after the date of death is void if the recipient is:

  1. The person who drafted the transfer document;
  2. The transferor’s caregiver;
  3. A person who paid or arranged for the drafting of the document; or
  4. A person who is related to, affiliated with, or subordinate to anyone described in (a), (b), or (c).

The law provides that the presumption does not apply where the transfer does not exceed what the recipient would have received if the decedent died intestate or without a will. The presumption that the transfer is void can be overcome if a court determines by clear and convincing evidence that the transfer was not the product of fraud, duress, or undue influence.

We think the new statute is a positive change and we hope this new law will play a large role in protecting the elderly in the state of Nevada.

Attorney Corey Schmutz

No contest clauses in a Trust and Will have been discussed previously in this blog. A no contest clause is a provision in a Trust or Will that provides that any beneficiary challenging the validity of the terms of the Trust or Will shall have his or her share reduced or eliminated. Nevada law has recognized the validity of no contest clauses with certain exceptions.

Along with these legal exceptions, many courts in the past have held that the actions of the beneficiary must directly relate to the Trust or Estate itself and/or an actual lawsuit must be filed in court in order for a no contest clause to be enforceable. The last session of the Nevada Legislature has expanded the existing law to make it clear that, with certain important exceptions, a beneficiary’s share may be reduced or eliminated under a no contest clause by conduct contrary to the express wishes of the Decedent as set forth in the Decedent’s Trust or Will. Under the new law, which is effective October 1, 2011, conduct by a beneficiary that could trigger a no contest clause may include, without limitation:

  1. Conduct other than formal court action; and
  2. Conduct which is unrelated to the Trust or Estate itself, including, without limitation:
  1. The commencement of civil litigation against the Decedent’s Trust or probate Estate or family members;
  2. Interference with the administration of another Trust or Estate or a business entity;
  3. Efforts to frustrate the intent of the Decedent’s power of attorney; and
  4. Efforts to frustrate the designation of beneficiaries related to a nonprobate transfer by the Decedent by operation of law or by operation of contract such as joint tenancy, payable on death designations, and contractual beneficiary designations.

However, the new law specifically states that a no contest clause will not be enforced if the beneficiary seeks only to:

  1. Enforce the terms of the Trust or Will, any document referenced in or affected by the Trust or Will, or any other Trust or Will related document;
  2. Enforce the beneficiary’s legal rights related to the Trust or Will, any document referenced in or affected by the Trust or Will, or any other Trust or Will related document;
  3. Obtain a court ruling with respect to the construction or legal effect of the Trust or Will, any document referenced in or affected by the Trust or Will, or any other related Trust or Will.

Also a no contest clause is unenforceable, notwithstanding its terms, if the court finds that the challenge to the Trust or Will, any document referenced in or affected by the Trust or Will, or any other Trust or Will related document was made in good faith based on probable cause.

Except for these four exceptions, it is now clear under Nevada law that a beneficiary could see his or her share of the Trust or Estate reduced or eliminated via a no contest clause even though the actions of the beneficiary do not directly relate to the Trust or Estate itself and/or the beneficiary does not bring a formal action in court challenging the validity of the terms of the Trust or Will.

- Attorney John Mugan

Henderson Office
2600 Paseo Verde Parkway, Suite 200
Henderson, NV 89074
Phone: 702.433.4455
Fax: 702.451.1853
Las Vegas Office
10000 W. Charleston Blvd., Suite 100
Las Vegas, NV 89135
Phone: 702.254.4455
Fax: 702.254.3330
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