Nevada Revised Statutes
Chapter 164 - Administration of Trusts
NRS 164.796 - Circumstances under which trustee authorized to convert trust into unitrust; effect of such conversion on certain terms of trust; liability of trustee or disinterested person.


1. Unless expressly prohibited by the trust instrument, a trustee may convert a trust into a unitrust if:
(a) The trustee determines conversion to a unitrust will better enable the trustee to carry out the intent of the settlor and the purpose of the trust;
(b) The trustee gives written notice of his or her intention to convert the trust to a unitrust, including how the unitrust will operate, the income distributions rate established pursuant to subsection 3 of NRS 164.797 and subsection 1 of NRS 164.799, and what initial decisions the trustee will make pursuant to this section, to all beneficiaries who:
(1) Are presently eligible to receive income from the trust;
(2) Would be eligible, if a power of appointment were not exercised, to receive income from the trust if the interest of any beneficiary eligible to receive income terminated immediately before the trustee gives notice; and
(3) Would receive, if a power of appointment were not exercised, a distribution of principal if the trust terminated immediately before the trustee gives notice;
(c) There is at least one beneficiary who meets the requirements of subparagraph (1) of paragraph (b) and at least one beneficiary who meets the requirements of subparagraph (2) of paragraph (b); and
(d) No beneficiary objects, in writing and delivered to the trustee within 60 days of the mailing of the notice, to the conversion of the trust to a unitrust.
2. If a beneficiary timely objects to converting a trust into a unitrust, or if there are no beneficiaries under either subparagraph (1) or (3) of paragraph (b) of subsection 1, the trustee may petition the court to approve the conversion of the trust into a unitrust. The court shall approve the conversion if the court concludes that the conversion will enable the trustee to better carry out the intent of the settlor and the purpose of the trust.
3. A beneficiary may request that a trustee convert a trust into a unitrust. If the trustee does not convert the trust, the beneficiary may petition the court to order the conversion. The court shall direct the conversion if the court concludes that the conversion will enable the trustee to better carry out the intent of the settlor and the purpose of the trust.
4. A trustee, in determining whether and to what extent to convert a trust to a unitrust pursuant to subsection 1, shall consider all factors relevant to the trust and to the beneficiaries, including the factors set forth in subsection 2 of NRS 164.795, as applicable.
5. A conversion of a trust to a unitrust does not affect a term of the trust directing or authorizing the trustee to distribute principal or authorizing a beneficiary to withdraw all or a portion of the principal.
6. A trustee may not convert a trust into a unitrust in any circumstance set forth in subsection 3 of NRS 164.795.
7. If a trustee is prevented from converting a trust because a provision of paragraph (e), (f), (g) or (h) of subsection 3 of NRS 164.795 applies to the trustee and if there is a cotrustee to whom such provisions do not apply, the cotrustee may convert the trust unless the exercise of the power by the remaining trustee is not permitted by the terms of the trust. If all trustees are prevented from converting a trust because a provision of paragraph (e), (f), (g) or (h) of subsection 3 of NRS 164.795 applies to all of the trustees, the trustees may petition the court to direct a conversion.
8. A trustee may permanently, or for a specified period, including a period measured by the life of a person, release the power to convert a trust pursuant to subsection 1 if:
(a) The trustee is uncertain about whether possessing or exercising the power of conversion will cause a result described in paragraphs (a) to (f), inclusive, or (h) of subsection 3 of NRS 164.795; or
(b) The trustee determines that possessing or exercising the power of conversion may or will deprive the trust of a tax benefit or impose a tax burden not described in subsection 3 of NRS 164.795.
9. A trustee or disinterested person who, in good faith, fails to take any action under this section is not liable to any person affected by such action or inaction, regardless of whether the affected person received notice as provided in this section or was under a legal disability at the time of delivery of notice. An affected person’s exclusive remedy is to petition the court for an order directing the trustee to convert the trust into a unitrust, to reconvert a unitrust into a trust or to change the percentage used to calculate the unitrust amount.
10. This section shall be construed to pertain to the administration of a trust, and the provisions of this section are available to any trust administered in this State or that is governed by the laws of this State, unless:
(a) The terms of the trust instrument show an intent that a beneficiary is to receive an amount other than a reasonable current return from the trust;
(b) The trust:
(1) Has a guaranteed annuity interest or fixed percentage interest as described in section 170(f)(2)(B) of the Internal Revenue Code;
(2) Is a charitable remainder trust within the meaning of section 664(d) of the Internal Revenue Code;
(3) Is a qualified subchapter S trust within the meaning of section 1361(c) of the Internal Revenue Code;
(4) Is a personal residence trust within the meaning of section 2702(a)(3)(A) of the Internal Revenue Code; or
(5) Is a trust in which one or more settlors retain a qualified interest within the meaning of section 2702(b) of the Internal Revenue Code;
(c) One or more persons to whom the trustee could distribute income have a power of withdrawal over the trust that is not subject to an ascertainable standard or that can be exercised to discharge a duty of support; or
(d) The terms of the trust instrument expressly prohibit the use of the provisions of this section through reference to this section or the trust instrument expressly states the settlor’s intent that net income is not calculated as a unitrust amount.
11. As used in this section, "ascertainable standard" means a standard relating to an individual’s health, education, support or maintenance within the meaning of section 2041(b)(1)(A) or 2514(c)(1) of the Internal Revenue Code and any regulations of the United States Treasury promulgated thereunder.
(Added to NRS by 2009, 795)

Structure Nevada Revised Statutes

Nevada Revised Statutes

Chapter 164 - Administration of Trusts

NRS 164.005 - Applicability of provisions of chapters 132, 153 and 155 of NRS regulating matters of estates.

NRS 164.010 - Petition for assumption of jurisdiction; circumstances in which trust is domiciled in this State; determination of venue; powers of court; petition for removal of trust from jurisdiction of court.

NRS 164.015 - Petition concerning internal affairs of nontestamentary trust; jurisdiction of court; procedure for contests of certain trusts; final order; appeal.

NRS 164.021 - Notice by trustee to beneficiary concerning change of revocable trust to irrevocable trust; contents of notice; limitation of action to contest validity of trust.

NRS 164.025 - Notice of death of settlor; filing of claim against settlor, trust estate or settlor and trust estate; effect of failure to file claim; notice to Department of Health and Human Services; notice of rejected claim; effect of failure to br...

NRS 164.030 - Petition for instructions: Notice; hearing; final order; appeal.

NRS 164.033 - Petition concerning conveyance, transfer or delivery of property of trust; notice of hearing; order; appeal.

NRS 164.037 - Petitions: Notice and hearing.

NRS 164.038 - Circumstances under which certain persons are authorized to be represented by persons with similar interests in proceedings concerning administration of trust; binding results; representation by powerholder for permissible appointee or...

NRS 164.040 - Power or jurisdiction of court not abridged; court may take action necessary or proper to dispose of matter presented by petition.

NRS 164.043 - Expenses and compensation of trustees.

NRS 164.045 - Circumstances under which laws of this State govern trusts; change of situs to this State.

NRS 164.067 - Power to sell, convey or encumber.

NRS 164.070 - Short title.

NRS 164.080 - Establishment; investments; management.

NRS 164.090 - Accountings.

NRS 164.100 - Uniformity of interpretation.

NRS 164.130 - Transfer by court to district court in this State or court outside Nevada.

NRS 164.400 - Presentation; effect; form.

NRS 164.410 - Contents.

NRS 164.420 - Dispositive provisions not required; person presented with certification may request excerpts from trust instrument designating trustee.

NRS 164.430 - Reliance upon facts contained in certification; enforceability.

NRS 164.440 - Failure to demand certification not improper act; liability.

NRS 164.640 - Short title.

NRS 164.643 - Definitions.

NRS 164.645 - "Charitable purpose" defined.

NRS 164.647 - "Endowment fund" defined.

NRS 164.650 - "Gift instrument" defined.

NRS 164.653 - "Institution" defined.

NRS 164.655 - "Institutional fund" defined.

NRS 164.657 - "Person" defined.

NRS 164.660 - "Program-related asset" defined.

NRS 164.663 - "Record" defined.

NRS 164.665 - Standard of conduct in managing and investing institutional fund.

NRS 164.667 - Appropriation for expenditure or accumulation of endowment fund; rules of construction.

NRS 164.670 - Delegation of management and investment functions.

NRS 164.673 - Release or modification of restrictions on management, investment or purpose.

NRS 164.675 - Reviewing compliance.

NRS 164.677 - Relation to Electronic Signatures in Global and National Commerce Act.

NRS 164.680 - Uniformity of application and construction.

NRS 164.700 - Definitions.

NRS 164.705 - Short title.

NRS 164.710 - Administration of trust or estate by fiduciary in accordance with its terms or in accordance with provisions of NRS.

NRS 164.715 - Acting in interest of beneficiaries.

NRS 164.720 - Trust having two or more beneficiaries; impartial administration of trust or estate.

NRS 164.725 - Notice of proposed action: Authorized; to whom notice must be sent; content; objection to proposed action; limitations on liability; court order to take action over objection; burden of proof; notice when action not taken.

NRS 164.730 - No duty to make adjustment between principal and income; trustee immunity from liability.

NRS 164.735 - Applicability.

NRS 164.740 - Duty to comply with prudent investor rule; circumstances under which trustee is immune from liability.

NRS 164.745 - Satisfaction of prudent investor standard; evaluation of decisions; consideration of circumstances; verification of facts; types of investments; special skills or expertise of trustee.

NRS 164.750 - Diversification of investments.

NRS 164.755 - Duty to bring trust portfolio into compliance with terms and circumstances of trust and provisions of NRS within reasonable time.

NRS 164.760 - Incurring costs.

NRS 164.765 - Determination of compliance with prudent investor rule.

NRS 164.770 - Delegation of functions by trustee; standard of care owed by agent; trustee immunity from liability; jurisdiction over agent.

NRS 164.775 - Terms and language of trust which authorize certain investments or strategies.

NRS 164.780 - Short title.

NRS 164.785 - Definitions.

NRS 164.790 - Allocation of receipt or disbursement to principal when terms of trust and provisions of NRS do not provide rule.

NRS 164.795 - Adjustment between principal and income; consideration of factors; adjustment prohibited under certain circumstances; release of power to adjust; effect of terms of trust that limit power to adjust.

NRS 164.796 - Circumstances under which trustee authorized to convert trust into unitrust; effect of such conversion on certain terms of trust; liability of trustee or disinterested person.

NRS 164.797 - Administration of unitrust: Duties of trustee; valuation of assets of trust.

NRS 164.798 - Administration of unitrust: Powers of trustee; manner of distributions.

NRS 164.799 - Trustee or beneficiary authorized to petition court to take certain actions concerning unitrust.

NRS 164.800 - Applicable rules after death of decedent or end of income interest in trust.

NRS 164.805 - Distribution of net income to beneficiaries; rules for determining share of net income.

NRS 164.810 - Date on which income interest begins; date on which asset becomes subject to trust or successive income interest; date on which income interest ends.

NRS 164.815 - Allocation of certain income receipts and disbursements; due dates for certain payments and distributions.

NRS 164.820 - Payment of undistributed income upon end of mandatory income interest; prorating final payment upon end of obligation to pay fixed annuity or fixed fraction of value of trust’s assets.

NRS 164.825 - Allocation of money received from entity to income; allocation of receipts from entity to principal; determination of money as return of capital; reliance upon financial statements and other information about character of distribution o...

NRS 164.830 - Allocation of amount received as distribution of income to income; allocation of distribution of principal to principal; purchase of interest in trust that is investment entity.

NRS 164.835 - Accounting separately for business or other activity.

NRS 164.840 - Allocation of assets, money, property and other receipts to principal.

NRS 164.845 - Allocation of receipts from rental property to income; treatment of refundable deposit.

NRS 164.850 - Allocation of interest on obligation to pay money to trustee to income; allocation of amount received from disposition of certain obligations to principal; applicability of provisions.

NRS 164.855 - Allocation of proceeds of life insurance policy and certain contracts to principal; allocation of dividends on insurance policy to income or principal.

NRS 164.860 - Allocation of entire amount to principal if allocation between principal and income under certain circumstances is insubstantial.

NRS 164.865 - Allocation of certain payments received because of services rendered or property transferred to payor in exchange for future payments to income or principal, or both; certain exceptions for trusts that qualify for marital deduction unde...

NRS 164.870 - Allocation of receipts from liquidating assets to income and principal.

NRS 164.875 - Allocation of receipts from interest in minerals to income or to income and principal; allocation of receipts from interest in water to income or to income and principal; applicability.

NRS 164.880 - Allocation of net receipts from sale of timber and related products to income or principal, or both; applicability.

NRS 164.885 - Request of spouse if marital deduction is allowed and amounts transferred from principal to income and distributed are insufficient to obtain marital deduction; proceeds from sale or disposition of assets generally principal.

NRS 164.890 - Allocation of receipts from and disbursements made in connection with transactions in derivatives to principal; allocation of amount received for granting certain options to principal.

NRS 164.895 - Allocation from proceeds of collateral financial assets to income and principal; allocation of payments in exchange for interest in asset-backed security to principal or to principal and income.

NRS 164.900 - Disbursements required to be made from income; reduction of amount charged against income.

NRS 164.905 - Disbursements required to be made from principal.

NRS 164.910 - Transfer of net cash receipts from principal asset subject to depreciation to principal.

NRS 164.915 - Transfer of amount from income to principal to make certain principal disbursements.

NRS 164.920 - Payment of taxes required to be paid by trustee.

NRS 164.925 - Adjustments between principal and income to offset shifting economic interests or tax benefits between income beneficiaries and remainder beneficiaries; reimbursement of principal if estate taxes are increased and income taxes are decre...

NRS 164.930 - Enforceability of certain arbitration provisions; presumption in favor of binding arbitration; appointment of guardian ad litem; contents of arbitration provisions.

NRS 164.940 - Nonjudicial settlement agreements: Enforceability; when void; matters that may be resolved.

NRS 164.942 - Nonjudicial settlement agreements: When effective; providing objections; notice of proposed action; failure to object constitutes acceptance; petitioning court for approval.

NRS 164.950 - Distribution by trustee of community property in nontestamentary trust established by married settlors.

NRS 164.960 - Applicability of NRS 111.781 to transfers of property made pursuant to trust.