Nrs: Chapter 669A - Family Trust Companies

Link to law: https://www.leg.state.nv.us/NRS/NRS-669A.html
Published: 2015

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[Rev. 11/21/2013 1:03:33

PM--2013]



CHAPTER 669A - FAMILY TRUST COMPANIES

GENERAL PROVISIONS

NRS 669A.010        Declaration

of legislative intent.

NRS 669A.020        Definitions.



NRS 669A.030        “Affiliate”

defined.

NRS 669A.040        “Confidential

information” defined.

NRS 669A.050        “Designated

relative” defined.

NRS 669A.060        “Family

affiliate” defined.

NRS 669A.070        “Family

member” defined.

NRS 669A.080        “Family

trust company” defined.

NRS 669A.085        “Interested

person” defined.

NRS 669A.090        “Licensed

family trust company” defined.

NRS 669A.095        Applicability

of chapter.

NRS 669A.100        Family

trust company not required to be licensed as trust company.

NRS 669A.110        Family

trust company not required to be licensed but may apply for license.

NRS 669A.120        Exchange

of license as trust company for license as family trust company.

NRS 669A.130        Licensed

family trust company has same rights, privileges and exemptions as trust

company.

NRS 669A.133        Standards

for administration and management of trust.

NRS 669A.135        Limitations

on liability.

ORGANIZATION AND LICENSING

NRS 669A.140        Requirements

for licensed family trust company: Resident officer; physical office;

registered agent; licenses and permits; bank account.

NRS 669A.150        Unlawful

to use or advertise word “trust” as part of name; exceptions.

NRS 669A.160        Minimum

stockholders’ equity required for organization and operation.

NRS 669A.170        Certain

organizational structure required for domestic family trust company; authority

to do business in this State required for foreign family trust company.

NRS 669A.180        Certain

provisions required in articles of incorporation, certificate of incorporation

or articles of organization of domestic family trust company; limitation on use

of certain names by foreign trust company.

NRS 669A.190        Application

for license: Contents; fees; regulations; withdrawal of application.

NRS 669A.200        Investigation

of applicant; rights of applicant upon denial of license; entry of final order;

judicial review.

NRS 669A.210        Payment

of license fees; deposit in State Treasury.

POWERS AND MISCELLANEOUS PROVISIONS

NRS 669A.220        Powers

of family trust companies; banking business prohibited.

NRS 669A.225        Authorized

actions and transactions; conflicts of interest.

NRS 669A.230        Investments.

NRS 669A.233        Nonjudicial

settlement agreements: Authority to enter; scope; judicial approval.

NRS 669A.235        Nonjudicial

settlement agreements: Notice to necessary parties; objections; actions

alleging fraud, bad faith or willful violation of terms of trust; limitation of

liability.

NRS 669A.237        Nonjudicial

settlement agreements: Refraining from taking authorized action.

NRS 669A.240        Discontinuing

business.

NRS 669A.250        Fidelity

bonds; insurance.

NRS 669A.255        Annual

and final reports.

EXAMINATION; REGULATION

NRS 669A.260        Fees

for examination.

NRS 669A.270        Regulations

of Commissioner; determination of organization as family trust company.

DISCIPLINARY ACTION AND REMEDIAL ACTION

NRS 669A.280        Authority

of Commissioner to revoke license.

UNLAWFUL ACTS; PENALTIES

NRS 669A.290        Failure

to submit required report; fees; regulations.

NRS 669A.300        Willful

neglect to perform duties imposed by law or failure to conform to material

lawful requirement made by Commissioner; removal.

NRS 669A.310        Confidentiality

of certain records and documents; authority of Commissioner to use discretion

in determining disclosure.

NRS 669A.320        Administrative

fines.

_________

GENERAL PROVISIONS

      NRS 669A.010  Declaration of legislative intent.  The

Legislature finds as facts and determines that:

      1.  There exists a need to modernize trust

company laws in Nevada to make Nevada more competitive in attracting new

business, for Nevada to remain competitive with a majority of other states that

have modernized their laws and to ensure the safety and soundness of all trust

companies licensed pursuant to the provisions of this chapter or chapter 669 of NRS.

      2.  Unlike the public trust companies

required to be licensed pursuant to the provisions of chapter 669 of NRS, family trust companies do

not engage or seek to engage in a trust company business with the public but

rather serve solely the interests of members and related parties of a single

family and the grantors and beneficiaries of trust instruments created for the

purposes of estate planning for the family members. Consequently, there is no

public interest to be protected or furthered and requiring the licensing of family

trust companies will not promote the public advantage and convenience. There

are, however, reasons that some family trust companies may wish to obtain state

licensing and appropriate supervision under trust company law.

      3.  It is the purpose of this chapter to:

      (a) Define those persons who are engaged in or

who desire to provide fiduciary services to a single family and its related

interests as a family trust company and who are not doing trust company

business with the public or offering services to the general public; and

      (b) Bring under public supervision only those

family trust companies desiring the benefits of being licensed pursuant to the

provisions of this chapter or chapter 669 of NRS.

      (Added to NRS by 2009, 1136)

      NRS 669A.020  Definitions.  As

used in this chapter, unless the context otherwise requires, the words and

terms defined in NRS 669A.030 to 669A.090, inclusive, have the meanings ascribed to

them in those sections.

      (Added to NRS by 2009, 1137;

A 2011,

1814)

      NRS 669A.030  “Affiliate” defined.  “Affiliate”

means a family affiliate of any family member of the family trust company who

is qualified to serve and any person controlling, controlled by or under common

control with the family trust company.

      (Added to NRS by 2009, 1137)

      NRS 669A.040  “Confidential information” defined.  “Confidential

information” includes:

      1.  The names of stockholders, members or

other owners;

      2.  Ownership information;

      3.  Capital contributions;

      4.  Addresses;

      5.  Business affiliations;

      6.  Information obtained from the family trust

company;

      7.  Findings of the Commissioner through

any examination or investigation;

      8.  Any information required to be reported

to or filed with the Commissioner;

      9.  Any information that qualifies as any

person’s “nonpublic personal information” under 15 U.S.C. § 6809 and the

regulations adopted pursuant thereto;

      10.  Any information or agreement relating

to any merger, consolidation or transfer;

      11.  Any information or agreement relating

to any relationship with a contracting trustee; and

      12.  Any other nonpublic information that,

in the judgment of the Commissioner, could be useful in connection with an act

of bribery, extortion, identity theft or terrorism.

      (Added to NRS by 2009, 1137)

      NRS 669A.050  “Designated relative” defined.  “Designated

relative” means the common ancestor of the family, who may be either a living

or deceased person. With regard to:

      1.  A licensed family trust company or a

family trust company applying to be licensed pursuant to this chapter, the

designated relative is the person who is designated in the application for a

license or in the annual renewal of a license.

      2.  A family trust company other than a

family trust company described in subsection 1, the designated relative is any

person designated by the family trust company in a letter to the Commissioner

sent by certified mail, return receipt requested.

      (Added to NRS by 2009, 1137)

      NRS 669A.060  “Family affiliate” defined.  “Family

affiliate” means a company or other entity with respect to which one or more

family members or affiliates own, directly or indirectly, a material interest

in the company or entity, or possess, directly or indirectly, the power to

direct or cause the direction of the management and policies of that company or

entity, whether through the ownership of voting securities, by contract, power

of direction or otherwise.

      (Added to NRS by 2009, 1137;

A 2011,

1814)

      NRS 669A.070  “Family member” defined.

      1.  “Family member” includes, without

limitation, the designated relative and:

      (a) Any person within the tenth degree of lineal

kinship of the designated relative;

      (b) Any person within the ninth degree of

collateral kinship to the designated relative;

      (c) Any nonfamily member who is an individual

beneficiary under a will or trust created by a family member specified in

paragraph (a) or (b), including the spouse and issue of that person;

      (d) The spouse and any former spouse of the

designated relative or of any person qualifying as a family member pursuant to

paragraph (a) or (b);

      (e) A person who is a relative of a spouse or

former spouse specified in paragraph (c) or (d) who is within the fifth degree

of lineal kinship of the spouse or former spouse;

      (f) A family affiliate and the officers, managers

and directors of that family affiliate and their immediate families;

      (g) An inter vivos or testamentary trust

established by a family member either individually or jointly with a spouse or

third party and any trustee, advisor or other person assisting with

administration of that trust;

      (h) An inter vivos or testamentary trust

established by a person who is not a family member if noncharitable beneficiaries

of that trust include family members;

      (i) The estate of a family member;

      (j) The estate of a nonfamily member if the

noncharitable beneficiaries of that estate include family members; and

      (k) A charitable foundation, a charitable trust

or charitable entity of which a family member is an organizer, incorporator,

officer, member of the governing board, trustee, major donor or noncharitable

beneficiary and the officers, directors, individual trustees and managers of

that foundation, trust or entity and their immediate families.

      2.  For the purposes of this section:

      (a) A family member is not a member of the

public;

      (b) A legally adopted person must be treated as a

natural child of the adoptive parents;

      (c) A stepchild must be treated as a natural

child of the family member who is or was the stepparent of that child;

      (d) Children of a spouse of a family member must

be treated as a natural child of that family member; and

      (e) Degrees are calculated by adding the number

of steps from the designated relative through each person to the family member

either directly, in the case of lineal kinship, or through the common ancestor,

in the case of collateral kinship.

      3.  As used in this section:

      (a) “Collateral kinship” means a relationship

that is not lineal, but stems from a common ancestor.

      (b) “Lineal kinship” means a family member who is

in the direct line of ascent or descent from the designated relative.

      (Added to NRS by 2009, 1137)

      NRS 669A.080  “Family trust company” defined.  “Family

trust company” means a corporation or limited-liability company that:

      1.  Acts or proposes to act as a fiduciary;

      2.  Is organized or qualified to do

business in this State to serve family members; and

      3.  Does not:

      (a) Transact trust company business with;

      (b) Propose to act as a fiduciary for; or

      (c) Solicit trust company business from,

Ê a person who

is not a family member.

      (Added to NRS by 2009, 1138)

      NRS 669A.085  “Interested person” defined.  “Interested

person” means a person, other than the grantor of a trust, who is:

      1.  A person who would be a necessary party

to a judicial proceeding involving a trust; or

      2.  An authorized representative pursuant

to NRS 164.038.

      (Added to NRS by 2011, 1809)

      NRS 669A.090  “Licensed family trust company” defined.  “Licensed family trust company” means a trust

company licensed pursuant to this chapter.

      (Added to NRS by 2009, 1138)

      NRS 669A.095  Applicability of chapter.  Except

as otherwise provided in this chapter or by specific statute, a family trust

company or licensed family trust company is subject to the provisions of this

chapter only to the extent that the family trust company or licensed family

trust company is engaged in the business of a family trust company or licensed

family trust company, respectively.

      (Added to NRS by 2011, 1809)

      NRS 669A.100  Family trust company not required to be licensed as trust

company.  A family trust company is

not required to be licensed as a trust company pursuant to chapter 669 of NRS. Unless a family trust

company applies for licensure pursuant to chapter

669 of NRS, the family trust company is not:

      1.  Subject to supervision by the

Commissioner pursuant to this chapter or chapter

669 of NRS; or

      2.  Except as otherwise provided in this

chapter, subject to the provisions of chapter 669

of NRS applicable to a trust company that offers trust company services to:

      (a) Persons who are not family members; or

      (b) The public at large.

      (Added to NRS by 2009, 1139)

      NRS 669A.110  Family trust company not required to be licensed but may apply

for license.  A family trust

company:

      1.  Is not required to be licensed pursuant

to this chapter or chapter 669 of NRS.

      2.  May apply for a license as:

      (a) A trust company pursuant to chapter 669 of NRS; or

      (b) A licensed family trust company pursuant to

this chapter.

      (Added to NRS by 2009, 1139)

      NRS 669A.120  Exchange of license as trust company for license as family trust

company.  A trust company licensed

pursuant to the provisions of chapter 669 of

NRS may exchange its license granted pursuant to that chapter for a license

under this chapter, thereby becoming a licensed family trust company, upon

providing the Commissioner with satisfactory evidence that at or before the

effective date of its license under this chapter, the trust company will:

      1.  Satisfy the definition of a family

trust company; and

      2.  Comply with the requirements of NRS 669A.140.

      (Added to NRS by 2009, 1139)

      NRS 669A.130  Licensed family trust company has same rights, privileges and

exemptions as trust company.  Except

as otherwise provided in NRS 669A.150, a family

trust company licensed pursuant to this chapter has all the rights, privileges

and exemptions from licensing and regulation requirements made applicable by

any law of this State to trust companies licensed pursuant to chapter 669 of NRS, including, without

limitation, the requirements for registration, licensing and supervision set

forth in chapter 90 of NRS.

      (Added to NRS by 2009, 1139)

      NRS 669A.133  Standards for administration and management of trust.  While acting as the fiduciary of a trust, a

family trust company or licensed family trust company:

      1.  Shall administer and manage the trust

in accordance with the terms of the trust;

      2.  Shall administer and manage the trust

in the interest of the beneficiaries of the trust;

      3.  Shall administer and manage the trust

in accordance with the provisions of this chapter; and

      4.  May administer and manage the trust by

the exercise of discretionary power of administration given to the fiduciary by

the terms of the trust instrument.

      (Added to NRS by 2011, 1809)

      NRS 669A.135  Limitations on liability.  Notwithstanding

the provisions of any law to the contrary, a family trust company or licensed

family trust company, or an employee or agent of a family trust company or

licensed family trust company, is not liable to an interested person for any

transaction, decision to act or decision to not act if the family trust company

or licensed family trust company or employee or agent thereof acted in good

faith and in reasonable reliance on the express terms of a trust instrument, a

written consent agreement or a court order.

      (Added to NRS by 2011, 1809)

ORGANIZATION AND LICENSING

      NRS 669A.140  Requirements for licensed family trust company: Resident

officer; physical office; registered agent; licenses and permits; bank account.  A licensed family trust company shall

maintain:

      1.  At least one officer of the licensed

family trust company who is a resident of this State;

      2.  A physical office in this State where

original or true copies of all material business records and accounts of the

licensed family trust company may be accessed and readily available for

examination by the Division of Financial Institutions;

      3.  A registered agent, with an office at

the street address of the registered agent, in this State;

      4.  All applicable state and local business

licenses and permits; and

      5.  A bank account with a state chartered

or national bank having a principal or branch offices in this State.

      (Added to NRS by 2009, 1139)

      NRS 669A.150  Unlawful to use or advertise word “trust” as part of name;

exceptions.

      1.  Except as otherwise provided in

subsections 2 and 3, or pursuant to the provisions of NRS 669.095, a family trust company formed

and doing business under the laws of this State or any other state shall not:

      (a) Advertise its services to the public; or

      (b) Use the word “trust” or any direct derivative

of that word as a part of its name.

      2.  The provisions of subsection 1 do not

apply to a family trust company which is licensed pursuant to chapter 669 of NRS.

      3.  The provisions of paragraph (b) of

subsection 1 do not apply to a licensed family trust company.

      (Added to NRS by 2009, 1139)

      NRS 669A.160  Minimum stockholders’ equity required for organization and

operation.  A licensed family trust

company must not be organized or operated with a stockholders’ equity of less

than $300,000. The full amount of the initial stockholders’ equity must be paid

in cash, exclusive of all organization expenses, before the licensed family

trust company is authorized to commence business as a licensed family trust

company.

      (Added to NRS by 2009, 1140)

      NRS 669A.170  Certain organizational structure required for domestic family

trust company; authority to do business in this State required for foreign

family trust company.  An applicant

for a license to conduct business as a licensed family trust company under this

chapter must be organized as a corporation or limited-liability company under

the laws of this State or authorized to do business in this State as a foreign

corporation or foreign limited-liability company.

      (Added to NRS by 2009, 1140)

      NRS 669A.180  Certain provisions required in articles of incorporation,

certificate of incorporation or articles of organization of domestic family

trust company; limitation on use of certain names by foreign trust company.

      1.  If a licensed family trust company is

organized under the laws of this State as a corporation or limited-liability

company, the articles of incorporation, certificate of incorporation or

articles of organization must contain:

      (a) The name adopted by the licensed family trust

company, which must be such as to distinguish it from any other trust company

formed or incorporated in this State, or engaged in the business of a trust

company or licensed family trust company in this State; and

      (b) The purpose for which it is formed.

      2.  The provisions of subsection 1 do not

apply to a licensed family trust company which is licensed or chartered to do

business as a trust company under the laws of another state, but the licensed

family trust company must use a name that distinguishes it from any other trust

company organized as or conducting the business of:

      (a) A trust company; or

      (b) A licensed family trust company,

Ê in this

State.

      (Added to NRS by 2009, 1140)

      NRS 669A.190  Application for license: Contents; fees; regulations; withdrawal

of application.

      1.  An applicant for a license as a family

trust company must file an application with the Commissioner on forms

prescribed by the Commissioner. The application must contain or be accompanied

by such information as the Commissioner requires.

      2.  A nonrefundable fee of not more than

$3,000 must accompany the application. The applicant must also pay such

reasonable additional expenses incurred in the process of investigation as the

Commissioner deems necessary. In addition, a fee of not less than $300 or more

than $1,000, prorated on the basis of the licensing year as provided by the

Commissioner, must be paid at the time of making the application.

      3.  A licensed family trust company may

maintain offices in this and other states. For every branch location of a

family trust company organized under the laws of this State, and every branch

location in this State of a foreign family trust company electing to be

licensed as a family trust company in this State, a request for approval and

licensing must be filed with the Commissioner on such forms as the Commissioner

prescribes. A nonrefundable fee of not more than $500 must accompany each

request. In addition, a fee of not more than $200, prorated on the basis of the

licensing year as provided by the Commissioner, must be paid at the time of

making the request.

      4.  The Commissioner shall adopt

regulations establishing the amount of the fees required pursuant to this

section. All money received by the Commissioner pursuant to this section must

be placed in the Investigative Account for Financial Institutions created by NRS 232.545.

      5.  The Commissioner shall consider an application

to be withdrawn if the Commissioner has not received all information and fees

required to complete the application within 12 months of the Commissioner’s

first request therefor or within such later period as the Commissioner

determines. If an application is deemed to be withdrawn pursuant to this

subsection or if an applicant otherwise withdraws an application, the

Commissioner must not issue a license to the applicant unless the applicant

submits a new application and pays any required fees.

      (Added to NRS by 2009, 1140)

      NRS 669A.200  Investigation of applicant; rights of applicant upon denial of

license; entry of final order; judicial review.

      1.  Within 60 days after the application

for a license as a family trust company is filed, the Commissioner shall

investigate the facts of the application and the other requirements of this

chapter to determine:

      (a) That the persons who will serve as directors

or officers of the corporation, or the managers or members acting in a

managerial capacity of the limited-liability company, as applicable:

             (1) Have a good reputation for honesty,

trustworthiness and integrity and display competence to transact the business

of a licensed family trust company. The applicant must submit satisfactory

proof of these qualifications to the Commissioner.

             (2) Have not been convicted of, or entered

a plea of nolo contendere to, a felony or any crime involving fraud,

misrepresentation or moral turpitude.

             (3) Have not made a false statement of

material fact on the application.

             (4) Have not had a license that was issued

pursuant to the provisions of this chapter or chapter

669 of NRS suspended or revoked within the 10 years immediately preceding

the date of the application.

             (5) Have not had a license as a trust

company which was issued in any other state, district or territory of the

United States or any foreign country suspended or revoked within the 10 years

immediately preceding the date of the application.

             (6) Have not been found guilty of any

violation of any of the provisions of this chapter or any regulation adopted

pursuant thereto that in the judgment of the Commissioner would render the

person unfit for the proposed position.

      (b) That the financial status of the directors

and officers of the corporation, or the managers or members acting in a

managerial capacity of the limited-liability company, as applicable, is

consistent with their responsibilities and duties.

      (c) That the name of the proposed company

complies with the provisions of NRS 657.200.

      (d) That the initial stockholders’ equity is not

less than the required minimum.

      2.  Notice of the entry of an order

refusing a license to a family trust company must be given in writing, served

personally or sent by certified mail to the company affected. The company, upon

application, is entitled to a hearing before a hearing officer appointed by the

Director of the Department of Business and Industry, but if no such application

is made within 30 days after the entry of an order refusing a license to any company,

the Commissioner shall enter a final order.

      3.  If the hearing officer affirms the

order of the Commissioner refusing the license, the applicant may file a

petition for judicial review pursuant to NRS

233B.130.

      (Added to NRS by 2009, 1141)

      NRS 669A.210  Payment of license fees; deposit in State Treasury.

      1.  On or before April 1 of each year, each

licensed family trust company must pay to the Division of Financial

Institutions a license fee of $1,500. All money collected under the provisions

of this section must be deposited in the State Treasury pursuant to the

provisions of NRS 658.091.

      2.  A licensed family trust company which

identifies a new designated relative when the licensed family trust company

renews its license shall pay an additional annual license fee for renewal in

such amount as the Commissioner shall determine.

      (Added to NRS by 2009, 1142)

POWERS AND MISCELLANEOUS PROVISIONS

      NRS 669A.220  Powers of family trust companies; banking business prohibited.

      1.  A family trust company may, but only

for family members:

      (a) Act as a fiduciary, including as a personal

representative, within and outside this State.

      (b) Act within and outside this State as advisory

agent, agent, assignee, assignee for the benefit of creditors,

attorney-in-fact, authenticating agent, bailee, bond or indenture trustee,

conservator, conversion agent, curator, custodian, escrow agent, exchange

agent, fiscal or paying agent, financial advisor, investment advisor,

investment manager, managing agent, purchase agent, receiver, registrar,

safekeeping agent, subscription agent, transfer agent except for public

companies, warrant agent, or in similar capacities generally performed by

corporate trustees, and in so acting to possess, purchase, sell, invest,

reinvest, safekeep or otherwise manage or administer real or personal property

of other persons.

      (c) Exercise the powers of a business corporation

or a limited-liability company organized or qualified as a foreign corporation

or a limited-liability company under the laws of this State and any incidental

powers that are reasonably necessary to enable it to fully exercise, in

accordance with commonly accepted customs and usages, a power conferred in this

chapter.

      (d) Do and perform all acts necessary or

incidental to exercise the powers enumerated in this section or authorized by

this chapter and any other applicable laws of this State.

      2.  A family trust company shall not engage

in any:

      (a) Banking with the public; or

      (b) Trust company business with the public unless

licensed pursuant to chapter 669 of NRS.

      (Added to NRS by 2009, 1142)

      NRS 669A.225  Authorized actions and transactions; conflicts of interest.

      1.  In addition to the transactions

authorized by NRS 669A.230 and notwithstanding the

provisions of any other law to the contrary, while acting as the fiduciary of a

trust, a family trust company or licensed family trust company may:

      (a) Invest in a security of an investment company

or investment trust for which the family trust company or licensed family trust

company, or a family affiliate, provides services in a capacity other than as a

fiduciary;

      (b) Place a security transaction using a broker

that is a family affiliate;

      (c) Invest in an investment contract that is

purchased from an insurance company or carrier owned by or affiliated with the

family trust company or licensed family trust company, or a family affiliate;

      (d) Enter into an agreement with a beneficiary or

grantor of a trust with respect to the appointment or compensation of the

fiduciary or a family affiliate;

      (e) Transact with another trust, estate,

guardianship or conservatorship for which the family trust company or licensed

family trust company is a fiduciary or in which a beneficiary has an interest;

      (f) Make an equity investment in a closely held

entity that may or may not be marketable and that is owned or controlled,

either directly or indirectly, by one or more beneficiaries, family members or

family affiliates;

      (g) Deposit trust money in a financial

institution that is owned or operated by a family affiliate;

      (h) Delegate the authority to conduct any

transaction or action pursuant to this section to an agent of the family trust

company or licensed family trust company, or a family affiliate;

      (i) Purchase, sell, hold, own or invest in any

security, bond, real or personal property, stock or other asset of a family

affiliate;

      (j) Loan money to or borrow money from:

             (1) A family member of the trust or his or

her legal representative;

             (2) Another trust managed by the family

trust company or licensed family trust company; or

             (3) A family affiliate;

      (k) Act as proxy in voting any shares of stock

which are assets of the trust;

      (l) Exercise any powers of control with respect

to any interest in a company that is an asset of the trust, including, without

limitation, the appointment of officers or directors who are family affiliates;

and

      (m) Receive reasonable compensation for its

services or the services of a family affiliate.

      2.  A transaction or action authorized

pursuant to subsection 1 must:

      (a) Be for a fair price, if applicable;

      (b) Be in the interest of the beneficiaries; and

      (c) Comply with:

             (1) The terms of the trust instrument

establishing the fiduciary relationship;

             (2) A judgment, decree or court order;

             (3) The written consent of each interested

person; or

             (4) A notice of proposed action issued

pursuant to NRS 164.725.

      3.  Except as otherwise provided in

subsection 2, nothing in this section prohibits a family trust company or

licensed family trust company from transacting business with or investing in

any asset of:

      (a) A trust, estate, guardianship or

conservatorship for which the family trust company or licensed family trust

company is a fiduciary;

      (b) A family affiliate; or

      (c) Any other company, agent, entity or person

for which a conflict of interest may exist.

      4.  A conflict of interest between the

fiduciary duty and personal interest of a family trust company or licensed

family trust company does not void a transaction or action that:

      (a) Complies with the provisions of this section;

or

      (b) Occurred before the family trust company or

licensed family trust company entered into a fiduciary relationship pursuant to

a trust instrument.

      5.  A transaction by or action of a family

trust company or licensed family trust company authorized by this section is

not voidable if:

      (a) The transaction or action was authorized by

the terms of the trust;

      (b) The transaction or action was approved by a

court or pursuant to a court order;

      (c) No interested person commenced a legal action

relating to the transaction or action pursuant to subsection 6;

      (d) The transaction or action was authorized by a

valid consent agreement, release or pursuant to the issuance of a notice of

proposed action issued pursuant to NRS

164.725; or

      (e) The transaction or action occurred before the

family trust company or licensed family trust company entered into a fiduciary

relationship pursuant to a trust instrument.

      6.  A legal action by an interested person

alleging that a transaction or action by a family trust company or licensed

family trust company is voidable because of the existence of a conflict of

interest must be commenced within 1 year after the date on which the interested

person discovered, or by the exercise of due diligence should have discovered,

the facts in support of his or her claim.

      7.  Notwithstanding the provisions of any

other law to the contrary, a family trust company or licensed family trust

company is not required to obtain court approval for any transaction that

otherwise complies with the provisions of this section.

      (Added to NRS by 2011, 1809)

      NRS 669A.230  Investments.

      1.  Except as otherwise provided in

subsection 2, the assets forming the minimum capital of a licensed family trust

company pursuant to NRS 669A.160 must:

      (a) Consist of:

             (1) Cash;

             (2) Governmental obligations or insured

deposits that mature within 3 years after acquisition;

             (3) Readily marketable securities or other

liquid, secure assets, bonds, sureties or insurance; or

             (4) Any combination thereof.

      (b) Have an aggregate market value that equals or

exceeds 100 percent of the company’s required stockholders’ equity.

      2.  A licensed family trust company may purchase

or rent real or personal property for use in the conduct of the business and

other activities of the company.

      3.  Except as otherwise provided in NRS 669A.225 and notwithstanding any other provisions

of law to the contrary, a licensed family trust company may invest its funds

for its own account, other than those required or permitted to be maintained by

subsection 1 or 2, in any type or character of equity securities, debt securities

or other asset provided the investment complies with the prudent investor

standards set forth in NRS 164.700 to 164.775, inclusive.

      4.  Except as otherwise provided in NRS 669A.225 and notwithstanding the provisions of

any other law to the contrary, a family trust company is authorized while

acting as a fiduciary to purchase for the fiduciary estate, directly from

underwriters or distributors or in the secondary market:

      (a) Bonds or other securities underwritten or

distributed by the family trust company or an affiliate thereof or by a

syndicate which includes the family trust company, provided that the family

trust company discloses in any written communication or account statement

reflecting the purchase of those bonds or securities the nature of the interest

of the family trust company in the underwriting or distribution of those bonds

and securities and whether the family trust company received any fee in

connection with the purchase; and

      (b) Securities of any investment company for

which the family trust company acts as advisor, custodian, distributor, manager,

registrar, shareholder servicing agent, sponsor or transfer agent, or provided

the family trust company discloses in any written communication or account

statement reflecting the purchase of the securities the nature of the

relationship and whether the family trust company received any fee for

providing those services.

      5.  Except as otherwise provided in NRS 669A.225, the authority granted in subsection 4

may be exercised only if:

      (a) The investment is not expressly prohibited by

the instrument, judgment, decree or order establishing the fiduciary

relationship;

      (b) The family trust company discloses in writing

to the person or persons to whom it sends account statements its intent to

exercise the authority granted in subsection 4 before the first exercise of

that authority; and

      (c) The family trust company procures in writing

the consent of its cofiduciaries with discretionary investment powers, if any,

to the investment.

      6.  Except as otherwise provided in NRS 669A.225, a family trust company may:

      (a) Invest in the securities of an investment

company or investment trust, to which the family trust company or its affiliate

provides services in a capacity other than as trustee. The investment is not

presumed to be affected by a conflict between personal and fiduciary interests

if the investment complies with the prudent investor standards set forth in NRS 164.700 to 164.775, inclusive.

      (b) Be compensated by an investment company or

investment trust described in paragraph (a) for providing services in a

capacity other than as trustee if the family trust company discloses at least

annually to each person to whom it sends account statements the rate and method

by which the compensation was determined.

      7.  Except as otherwise provided in NRS 669A.225, nothing in subsections 4, 5 and 6 shall

affect the degree of prudence which is required of fiduciaries under the laws

of this State. Any bonds or securities purchased under authority of this

section are not presumed to be affected by a conflict between the fiduciary’s

personal and fiduciary interest if the purchase of the bonds or securities:

      (a) Is at a fair price;

      (b) Is in accordance with:

             (1) The interest of the beneficiaries; and

             (2) The purposes of the trusts; and

      (c) Complies with:

             (1) The prudent investor standards set

forth in NRS 164.700 to 164.775, inclusive; and

             (2) The terms of the instrument, judgment,

decree or order establishing the fiduciary relationship.

      8.  Except as otherwise provided in NRS 669A.225 and notwithstanding the provisions of

subsections 4 to 7, inclusive, a family trust company which is authorized to

exercise trust powers in this State and which is acting as a fiduciary shall

not purchase for the fiduciary estate any fixed income or equity security

issued by the family trust company or an affiliate thereof unless:

      (a) The family trust company is expressly

authorized to do so by:

             (1) The terms of the instrument creating

the trust;

             (2) A court order;

             (3) The written consent of the grantor of

the trust; or

             (4) The written consent of every adult

beneficiary of the trust who, at the time notice is provided pursuant to

paragraph (b) of subsection 5, receives or is entitled to receive income under

the trust or who would be entitled to receive a distribution of principal if

the trust were terminated; or

      (b) The purchase of the security:

             (1) Is at a fair price; and

             (2) Complies with:

                   (I) The prudent investor standards

set forth in NRS 164.700 to 164.775, inclusive; and

                   (II) The terms of the instrument,

judgment, decree or order establishing the fiduciary relationship.

      9.  As used in this section:

      (a) “Face-amount certificate” has the meaning

ascribed to it in 15 U.S.C. § 80a-2(a)(15).

      (b) “Government securities” has the meaning

ascribed to it in 15 U.S.C. § 80a-2(a)(16).

      (c) “Investment company” means any issuer which:

             (1) Is or holds itself out as being

engaged primarily, or proposes to engage primarily, in the business of

investing, reinvesting or trading in securities;

             (2) Is engaged or proposes to engage in

the business of issuing face-amount certificates of the installment type, or

has been engaged in such business and has any such certificate outstanding; or

             (3) Is engaged or proposes to engage in

the business of investing, reinvesting, owning, holding or trading in

securities, and owns or proposes to acquire investment securities having a value

exceeding 40 percent of the value of the total assets of the issuer, exclusive

of government securities and cash items, on an unconsolidated basis.

      (d) “Issuer” has the meaning ascribed to it in 15

U.S.C. § 80a-2(a)(22).

      (Added to NRS by 2009, 1142;

A 2011,

1814)

      NRS 669A.233  Nonjudicial settlement agreements: Authority to enter; scope;

judicial approval.

      1.  A family trust company or licensed

family trust company and an interested person may enter into a nonjudicial

settlement agreement with respect to any matter involving the management,

administration or interpretation of a trust that is managed pursuant to this

chapter.

      2.  A nonjudicial settlement agreement that

is entered into pursuant to this section must not contain:

      (a) Terms that violate a material purpose of the

trust; or

      (b) Terms or conditions that could not be

approved by a court.

      3.  The matters that may be resolved by a

nonjudicial settlement agreement which is entered into pursuant to this section

include, without limitation:

      (a) Those pertaining to any transaction or action

authorized pursuant to paragraphs (a) to (m), inclusive, of subsection 1 of NRS 669A.225;

      (b) The investment or use of trust assets;

      (c) The lending or borrowing of money;

      (d) The addition, deletion or modification of a

term or condition of the trust;

      (e) The interpretation or construction of a term

or condition of the trust;

      (f) The designation or transfer of the principal place

of administration of the trust;

      (g) The approval of a report or accounting that

is provided pursuant to NRS 669A.255;

      (h) Direction to a fiduciary to refrain from

performing a particular act or the grant to a fiduciary of any necessary or

desirable power;

      (i) The resignation or appointment of a

fiduciary;

      (j) The liability of a fiduciary for an action

related to the management of the trust; and

      (k) The termination of the trust.

      4.  After notice has been provided pursuant

to NRS 669A.235, a family trust company or

licensed family trust company or an interested person may petition a court to

approve a nonjudicial settlement agreement, to determine whether the

nonjudicial settlement agreement was accurately represented to each interested

person or to determine whether the nonjudicial settlement agreement contains

terms or conditions that the court could approve. A family trust company or

licensed family trust company is not liable to an interested person for taking

an action that is authorized by a nonjudicial settlement agreement which has

been approved by a court.

      (Added to NRS by 2011, 1811)

      NRS 669A.235  Nonjudicial settlement agreements: Notice to necessary parties;

objections; actions alleging fraud, bad faith or willful violation of terms of

trust; limitation of liability.

      1.  A family trust company or licensed

family trust company shall provide written notice by personal service or by

certified mail to each interested person who is a necessary party to a

nonjudicial settlement agreement entered into pursuant to NRS 669A.233. A family trust company or licensed

family trust company is not required to provide notice to any interested person

who has consented in writing to the nonjudicial settlement agreement.

      2.  The notice provided pursuant to this

section must:

      (a) Be provided at least 15 days before the

execution of the nonjudicial settlement agreement;

      (b) Include a true and correct copy of the

nonjudicial settlement agreement;

      (c) State that the notice is provided pursuant to

this section and NRS 669A.233;

      (d) State the name and mailing address of the

family trust company or licensed family trust company;

      (e) State the date by which an objection to the

nonjudicial settlement agreement must be made; and

      (f) State the date on which the nonjudicial

settlement agreement is to be executed.

      3.  An interested person who receives

notice pursuant to this section may object to any term or condition of, or any

act that is authorized by, the nonjudicial settlement agreement by submitting

his or her objection in writing to the family trust company or licensed family

trust company within 1 year after the date on which the interested person

received the notice. Except as otherwise provided in subsection 5, if an

interested person does not object within 1 year after receiving notice, his or

her objection is waived, and the interested person may not bring any action

relating to the terms and conditions of, or any act taken pursuant to, the

nonjudicial settlement agreement.

      4.  An interested person who objects within

the period specified in subsection 3 may petition the court for an order to

approve, disapprove, enforce or modify the nonjudicial settlement agreement.

The burden is on the interested person to prove that the nonjudicial settlement

agreement should be approved, disapproved, enforced or modified.

      5.  The provisions of subsection 3 do not

prohibit an interested person who has received notice pursuant to this section

and who fails to object to the nonjudicial settlement agreement within 1 year

after receiving the notice from bringing an action alleging that the

nonjudicial settlement agreement was procured fraudulently, or entered into by

the family trust company or licensed family trust company in bad faith or in

willful violation of the terms of the trust. A person who brings such an action

has the burden of proving by clear and convincing evidence that the nonjudicial

settlement agreement was procured fraudulently, in bad faith or in willful

violation of the terms of the trust.

      6.  Except as otherwise provided in

subsection 5, if no interested person who is entitled to receive notice

pursuant to this section objects to the nonjudicial settlement agreement within

1 year after receiving the notice, a family trust company or licensed family

trust company is not liable to any interested person for taking any action that

is authorized by the nonjudicial settlement agreement.

      (Added to NRS by 2011, 1812)

      NRS 669A.237  Nonjudicial settlement agreements: Refraining from taking

authorized action.

      1.  A family trust company or licensed

family trust company may refrain from taking an action that is authorized by a

nonjudicial settlement agreement if the family trust company or licensed family

trust company determines in good faith that the action is not in the interest

of the beneficiaries of the trust.

      2.  A family trust company or licensed

family trust company that refrains from taking an action pursuant to subsection

1 shall provide written notice to each interested person within 15 days after

its decision not to take the action and include in the notice the reasons for

not taking the action.

      3.  An interested person who receives

notice pursuant to subsection 2 may petition the court for an order requiring

the family trust company or licensed family trust company to take the action

authorized by the nonjudicial settlement agreement. The burden is on the

beneficiary to prove that the proposed action is in the interest of the

beneficiaries of the trust and should be taken.

      4.  A family trust company or licensed

family trust company is not liable to an interested person for not taking an

action that is authorized by a nonjudicial settlement agreement if the family

trust company or licensed family trust company acted in good faith in not

taking the action.

      (Added to NRS by 2011, 1813)

      NRS 669A.240  Discontinuing business.  Whenever

a licensed family trust company desires to discontinue its business as a family

trust company, it shall furnish to the Commissioner satisfactory evidence of

its release and discharge from all the obligations and trusts which it has

assumed or which have been imposed by law. Thereafter, the Commissioner shall

enter an order cancelling the license of the family trust company.

      (Added to NRS by 2009, 1144)

      NRS 669A.250  Fidelity bonds; insurance.

      1.  The directors or managers of a licensed

family trust company shall obtain fidelity bonds in such amounts as they shall

determine on any active officers, managers, members acting in a managerial

capacity and employees, whether or not they receive a salary or other

compensation from the licensed family trust company, to indemnify the licensed

family trust company against loss because of any dishonest, fraudulent or

criminal act or omission by any of the persons bonded, acting alone or in

combination with any other person. The bonds may be in any form and may be paid

for by the licensed family trust company.

      2.  A licensed family trust company may

also procure property and casualty insurance of a nature and with such coverage

amounts as the licensed family trust company deems advisable.

      (Added to NRS by 2009, 1144)

      NRS 669A.255  Annual and final reports.

      1.  Except as otherwise provided in

subsection 4, a family trust company or licensed family trust company, while

acting as the fiduciary of a trust, shall provide an annual report to each

interested person for each year of the existence of the trust until the trust

is terminated, at which time the trust company shall provide to each interested

person a final report.

      2.  A report that is provided pursuant to

this section must, for the year immediately preceding the report, provide an

accounting of:

      (a) Each asset and liability of the trust and its

current market value or amount, if known;

      (b) Each disbursement of income or principal,

including the amount of the disbursement and to whom the disbursement was made;

      (c) All payments of compensation from any source

to the family trust company or licensed family trust company or any other

person for services rendered; and

      (d) Any other transaction involving an asset of

the trust.

      3.  An interested person who is entitled to

a report pursuant to this section may waive his or her right to the report by

submitting a written waiver to the family trust company or licensed family

trust company. An interested person who waives his or her right to a report may

withdraw the waiver by submitting to the family trust company or licensed

family trust company a written request for a report.

      4.  A family trust company or licensed

family trust company is not required to provide a report pursuant to this

section if the terms of the trust provide an exception to this requirement.

      5.  A family trust company or licensed

family trust company may require an interested person who is entitled to

receive confidential information pursuant to this section to execute a

confidentiality agreement before providing the person with any confidential

information.

      6.  In lieu of the information that a

trustee is required to provide to an interested person pursuant to subsection

2, a trustee may provide to an interested person a statement indicating the

accounting period and a financial report of the trust which is prepared by a

certified public accountant and which summarizes the information required by

paragraphs (a) to (d), inclusive, of subsection 2. Upon request, the trustee

shall make all the information used in the preparation of the financial report

available to each interested person who was provided a copy of the financial

report pursuant to this subsection.

      7.  For the purposes of this chapter,

information provided by a trustee to an interested person pursuant to

subsection 6 is deemed an annual report.

      8.  A trustee may provide an annual report

to an interested person via electronic mail or through a secure Internet

website.

      (Added to NRS by 2011, 1813)

EXAMINATION; REGULATION

      NRS 669A.260  Fees for examination.

      1.  The Commissioner may examine the books

and records of a licensed family trust company. For each examination of the

books and records of a licensed family trust company as authorized under this

chapter, the Commissioner shall charge and collect from the licensed family

trust company a fee for conducting the examination and in preparing, typing and

copying the report of the examination at the rate established pursuant to NRS 658.101.

      2.  All money collected under this section

must be deposited in the State Treasury pursuant to the provisions of NRS 658.091.

      (Added to NRS by 2009, 1145)

      NRS 669A.270  Regulations of Commissioner; determination of organization as

family trust company.

      1.  The Commissioner may adopt such

regulations as may be necessary to carry out the purposes and provisions of

this chapter.

      2.  The Commissioner may issue rules,

orders, approvals, declaratory rulings or interpretations which determine, in

individual circumstances or circumstances of more general applicability,

whether an existing or proposed family trust company meets, or family trust

companies within such circumstances of more general applicability would meet,

the definition of a family trust company. Any person applying for such a

determination shall pay an application fee to the Division of Financial

Institutions upon submittal of that application for a determination in such

amount as the Commissioner shall prescribe.

      (Added to NRS by 2009, 1145)

DISCIPLINARY ACTION AND REMEDIAL ACTION

      NRS 669A.280  Authority of Commissioner to revoke license.

      1.  The violation of any of the provisions

of this chapter by the officers or directors, or the managers or members acting

in a managerial capacity, of any licensed family trust company is sufficient

cause for the Commissioner to revoke the license of the family trust company.

      2.  If a licensed family trust company or

any person authorized to act on behalf of the family trust company refuses to

allow the Commissioner or the Commissioner’s deputies to inspect all books,

records, papers and effects of the business of the family trust company, the

Commissioner may revoke the license of the licensed family trust company.

      (Added to NRS by 2009, 1145)

UNLAWFUL ACTS; PENALTIES

      NRS 669A.290  Failure to submit required report; fees; regulations.

      1.  If a licensed family trust company

fails to submit within the prescribed period any report required pursuant to

this chapter or any regulation adopted pursuant thereto, the Commissioner may

impose and collect a fee of not more than $25 for each day the report is

overdue.

      2.  The Commissioner shall adopt regulations

establishing the amount of the fee that may be imposed pursuant to this

section.

      (Added to NRS by 2009, 1145)

      NRS 669A.300  Willful neglect to perform duties imposed by law or failure to

conform to material lawful requirement made by Commissioner; removal.  Each officer, director, manager, member,

employee or agent of a licensed family trust company who, following written

notice from the Commissioner sent by certified mail, knowingly or willfully:

      1.  Neglects to perform any duty required

by this chapter or other applicable law; or

      2.  Fails to conform to any material lawful

requirement made by the Commissioner,

Ê is subject

to removal upon order of the Commissioner.

      (Added to NRS by 2009, 1145)

      NRS 669A.310  Confidentiality of certain records and documents; authority of

Commissioner to use discretion in determining disclosure.

      1.  Except as otherwise provided in this

section, any application and personal or financial records submitted by a

person pursuant to the provisions of this chapter, any personal or financial

records or other documents obtained by the Division of Financial Institutions

pursuant to an examination or audit conducted by the Division pursuant to this

chapter and any other private information relating to a family trust company

are confidential and may be disclosed only to:

      (a) The Division, any authorized employee of the

Division and a state or federal agency investigating activities regulated

pursuant to this chapter; and

      (b) Any other person if the Commissioner, in the

Commissioner’s discretion, determines that the interests of the public in

disclosing the information outweigh the interests of the person about whom the

information pertains in not disclosing the information.

      2.  The Commissioner shall give to the family

trust company to which the information relates 10-days’ prior written notice of

intent to disclose confidential information directly or indirectly to a person

pursuant to paragraph (b) of subsection 1. Any family trust company which

receives such a notice may object to the disclosure of the confidential

information and will be afforded the right to a hearing in accordance with the

provisions of chapter 233B of NRS. If a

family trust company requests a hearing, the Commissioner may not reveal

confidential information prior to the conclusion of the hearing and a ruling.

Prior to dissemination of any confidential information, the Commissioner shall

require a written agreement not to reveal the confidential information by the

party receiving the confidential information. In no event shall the

Commissioner disclose confidential information to the general public, any

competitor or any potential competitor of a family trust company.

      3.  Nothing in this chapter is intended to

preclude a law enforcement officer from gaining access to otherwise

confidential records by subpoena, court order, search warrant or other lawful

means. Notwithstanding any other provision of this chapter, the Commissioner

shall have the ability to share information with other out of state or federal

regulators with whom the Department of Business and Industry has an agreement

regarding the sharing of information. Nothing in this chapter is intended to

preclude any agency of this State from gaining access to otherwise confidential

records in accordance with any applicable law.

      (Added to NRS by 2009, 1145)

      NRS 669A.320  Administrative fines.  In

addition to any other remedy or penalty, the Commissioner may impose an

administrative fine of not more than $10,000 upon a person who:

      1.  Without a license, conducts any

business or activity for which a license is required pursuant to the provisions

of this chapter; or

      2.  Violates any provision of this chapter

or any regulation adopted pursuant thereto.

      (Added to NRS by 2009, 1146)