NRS163.00195. Enforcement of no-contest clauses; exceptions.

      1.  Except as otherwise provided in subsections 3 and 4, a no-contest clause in a trust must be enforced by the court.

      2.  A no-contest clause must be construed to carry out the settlor’s intent. Except to the extent the no-contest clause in the trust is vague or ambiguous, extrinsic evidence is not admissible to establish the settlor’s intent concerning the no-contest clause. The provisions of this subsection do not prohibit such evidence from being admitted for any other purpose authorized by law. Except as otherwise provided in subsections 3 and 4, a beneficiary’s share may be reduced or eliminated under a no-contest clause based upon conduct that is set forth by the settlor in the trust. Such conduct may include, without limitation:

      (a) Conduct other than formal court action; and

      (b) Conduct which is unrelated to the trust itself, including, without limitation:

             (1) The commencement of civil litigation against the settlor’s probate estate or family members;

             (2) Interference with the administration of another trust or a business entity;

             (3) Efforts to frustrate the intent of the settlor’s power of attorney; and

             (4) Efforts to frustrate the designation of beneficiaries related to a nonprobate transfer by the settlor.

      3.  Notwithstanding any provision to the contrary in the trust, a beneficiary’s share must not be reduced or eliminated if the beneficiary seeks only to:

      (a) Enforce the terms of the trust, any document referenced in or affected by the trust, or any other trust-related instrument;

      (b) Enforce the beneficiary’s legal rights related to the trust, any document referenced in or affected by the trust, or any trust-related instrument; or

      (c) Obtain a court ruling with respect to the construction or legal effect of the trust, any document referenced in or affected by the trust, or any other trust-related instrument.

      4.  Notwithstanding any provision to the contrary in the trust, a beneficiary’s share must not be reduced or eliminated under a no-contest clause in a trust because the beneficiary institutes legal action seeking to invalidate a trust, any document referenced in or affected by the trust, or any other trust-related instrument if the legal action is instituted in good faith and based on probable cause that would have led a reasonable person, properly informed and advised, to conclude that the trust, any document referenced in or affected by the trust, or other trust-related instrument is invalid.

      5.  As used in this section:

      (a) “No-contest clause” means one or more provisions in a trust that express a directive to reduce or eliminate the share allocated to a beneficiary or to reduce or eliminate the distributions to be made to a beneficiary if the beneficiary takes action to frustrate or defeat the settlor’s intent as expressed in the trust or in a trust-related instrument.

      (b) “Trust” means the original trust instrument and each amendment made pursuant to the terms of the original trust instrument.

      (c) “Trust-related instrument” means any document purporting to transfer property to or from the trust or any document made pursuant to the terms of the trust purporting to direct the distribution of trust assets or to affect the management of trust assets, including, without limitation, documents that attempt to exercise a power of appointment.

      (Added to NRS by 2009, 1637; A 2011, 1465)