NRS111.779. Liability of nonprobate transferee; proceedings to impose liability; payment of claims against nonprobate assets.

      1.  Except as otherwise provided in NRS 21.090 and other applicable law, a transferee of a nonprobate transfer is liable to the probate estate of the decedent for allowed claims against that decedent’s probate estate to the extent the estate is insufficient to satisfy those claims.

      2.  The liability of a nonprobate transferee may not exceed the value of nonprobate transfers received or controlled by that transferee.

      3.  Nonprobate transferees are liable for the insufficiency described in subsection 1 in the following order of priority:

      (a) A transferee specified in the decedent’s will or any other governing instrument as being liable for such an insufficiency, in the order of priority provided in the will or other governing instrument;

      (b) The trustee of a trust serving as the principal nonprobate instrument in the decedent’s estate plan as shown by its designation as devisee of the decedent’s residuary estate or by other facts or circumstances, to the extent of the value of the nonprobate transfer received or controlled; and

      (c) Other nonprobate transferees, in proportion to the values received.

      4.  Unless otherwise provided by the trust instrument, interests of beneficiaries in all trusts incurring liabilities under this section abate as necessary to satisfy the liability, as if all the trust instruments were a single will and the interests were devises under it.

      5.  If a nonprobate transferee is a spouse or a minor child, the nonprobate transferee may petition the court to be excluded from the liability imposed by this section as if the nonprobate property received by the spouse or minor child were part of the decedent’s estate. Such a petition may be made pursuant to the applicable provisions of chapter 146 of NRS, including, without limitation, the provisions of NRS 146.010, NRS 146.020 without regard to the filing of an inventory and subsection 2 of NRS 146.070.

      6.  A provision made in one instrument may direct the apportionment of the liability among the nonprobate transferees taking under that or any other governing instrument. If a provision in one instrument conflicts with a provision in another, the later one prevails.

      7.  Upon due notice to a nonprobate transferee, the liability imposed by this section is enforceable in probate proceedings in this State, whether or not the transferee is located in this State.

      8.  If a probate proceeding is pending, a proceeding under this section may be commenced by the personal representative of the decedent’s estate or, if the personal representative declines to do so, by a creditor in the name of the decedent’s estate, at the expense of the creditor and not of the estate. If a creditor successfully establishes an entitlement to payment under this section, the court must order the reimbursement of the costs reasonably incurred by the creditor, including attorney’s fees, from the transferee from whom the payment is to be made, subject to the limitations of subsection 2, or from the estate as a cost of administration, or partially from each, as the court deems just. A personal representative who declines in good faith to commence a requested proceeding incurs no personal liability for declining.

      9.  If a probate proceeding is not pending, a proceeding under this section may be commenced as a civil action by a creditor at the expense of the creditor.

      10.  If a proceeding is commenced pursuant to this section, it must be commenced:

      (a) As to a creditor whose claim was allowed after proceedings challenging disallowance of the claim by the personal representative, within 60 days after final allowance of the claim by the probate court or within 1 year after the decedent’s death, whichever is later.

      (b) As to a creditor whose claim against the decedent is being adjudicated in a separate proceeding that is still pending 1 year after the decedent’s death, within 60 days after the adjudication of the claim in favor of the creditor is final and no longer subject to reconsideration or appeal.

      (c) As to the recovery of benefits paid for Medicaid, within 3 years after the decedent’s death.

      (d) As to all other creditors, within 1 year after the decedent’s death.

      11.  Unless a written notice asserting that a decedent’s probate estate is nonexistent or insufficient to pay allowed claims and statutory allowances has been received from the decedent’s personal representative, the following rules apply:

      (a) Payment or delivery of assets by a financial institution, registrar or other obligor to a nonprobate transferee in accordance with the terms of the governing instrument controlling the transfer releases the obligor from all claims for amounts paid or assets delivered.

      (b) A trustee receiving or controlling a nonprobate transfer is released from liability under this section with respect to any assets distributed to the trust’s beneficiaries. Each beneficiary to the extent of the distribution received becomes liable for the amount of the trustee’s liability attributable to assets received by the beneficiary.

      12.  Notwithstanding any provision of this section to the contrary:

      (a) A creditor has no claim against property transferred pursuant to a power of appointment exercised by a decedent unless it was exercisable in favor of the decedent or the decedent’s estate.

      (b) A purchaser for value of property or a lender who acquires a security interest in the property from a beneficiary of a nonprobate transfer after the death of the owner, in good faith:

             (1) Takes the property free of any claims or of liability to the owner’s estate, creditors of the owner’s estate, persons claiming rights as beneficiaries under the nonprobate transfer or heirs of the owner’s estate, in absence of actual knowledge that the transfer was improper; and

             (2) Has no duty to verify sworn information relating to the nonprobate transfer. The protection provided by this subparagraph applies to information that relates to the ownership interest of the beneficiary in the property and the beneficiary’s right to sell, encumber and transfer good title to a purchaser or lender and does not relieve a purchaser or lender from the notice imparted by instruments of record respecting the property.

      13.  As used in this section, “devise” has the meaning ascribed to it in NRS 132.095.

      (Added to NRS by 2011, 1424)