Jurisdiction of Nevada Probate Courts over Trust Disputes

Posted by: on Thu, Jan 08, 2015

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Nevada courts obtain jurisdiction over trusts through the Nevada Revised Statutes.
Specifically, NRS 164.015 provides the courts have exclusive jurisdiction of
proceedings initiated by the petition of an interested person concerning the
internal affairs of a nontestamentary trust. Proceedings which may be
maintained under this section are those concerning the administration
and distribution of trusts, the declaration of rights and the determination of
other matters involving trustees and beneficiaries of trusts, including
petitions with respect to a non-testamentary trust for any appropriate relief
provided with respect to a testamentary trust.

Under section 164.010(1), upon petition of a trustee, the settlor, or a beneficiary,
“the district court of the county in which the trustee resides or conducts
business, or in which the trust has been domiciled, shall . . . [have]
jurisdiction of the trust as a proceeding in rem.”  This in rem distinction
is interesting because not only does the court have jurisdiction over the trust
itself (i.e., the res), it also has jurisdiction over the trustee through in personam jurisdiction, as well as jurisdiction over any agent to which management or investment duties are delegated.  NRS 164.670(4).

 

In Diotallevi v. Sierra Development Company, 95 Nev. 164, 591 P.2d 270 (1979), the Nevada Supreme Court held as follows:

Since its adoption in 1941, NRS Chpt. 153 has permitted probate courts to retain jurisdiction over testamentary trusts “for the purpose of the settlement of accounts…and for the distribution of the residue to those entitled to it.”  …. NRS 153.040(1) provides that
trustees may “petition the court, from time to time, for instructions as to the
administration of the trust.”  This [same] provision of the California
statute has been interpreted by the California courts as conferring upon
probate courts jurisdiction over the administration of trust matters when such
matters are brought to the court by the trustees themselves.  See in re
Keet’s Estate.  15 Cal. 2d 328, 100 P.2d 1045 (1940); In re Smith’s Estate
41 P.2d 565 (1935)  In this case, the matter was  before the court as
a result of a trustee’s petition.  Therefore, NRS 153.040 provided the
predicate for the court’s jurisdiction.”  Id. at 167.

 

Similarly, in Tsai v Hsu, 2010 WL 3270973 (2010), the Nevada Supreme Court in an unpublished case, noted that unlike in some other decisions which were reversed on appeal because indispensable trust parties were not joined, the lower courts “order in this
case affected a trust where both co-trustees were parties to the litigation.  Olsen 874 P.2d at 780; Guerin, 953 P.2d at 720.  Unlike Schwab, where a nonparty owned the asset being disputed in the district court, the assets in dispute in this case are controlled by Hsu and Tsai, the co-trustees and parties to the proceedings.  646 P.2d at 1212.  The purpose of this litigation was to determine Hsu and Tsai’s intent for creating the trust.  Because Hsu and Tsai were the appropriate parties for this case, we conclude that Tsai’s joinder argument fails.”

 

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