The trustee appealed to the district court, which concluded both trusts were invalid, even the one for the minor child, but that the trustee's claims might be time barred on the 7 year statute of limitations. "[T]he trustee of a resulting trust is considered a voluntary trustee and . We therefore conclude that Goodrich's claim is not time-barred, and we affirm the district court's judgment that the Apartment Trust is invalid." Lastly, as to the legal ownership issue, the Ninth Circuit concluded that equitable ownership is sufficient to confer ownership rights and therefore alter ego did exist.Additionally, the district court concluded that to establish alter ego, the trustee had to prove legal ownership and since the debtor was neither a trustee nor beneficiary, the trusts were not his alter ego. The Ninth Circuit applied existing California state law and found that the trusts were established for a fraudulent purpose and therefore, the failure of an express trust merely creates a resulting trust. All of the debtor's shenanigans and shell trusts were for nothing. NRS 163.00195 Enforcement of no-contest clauses; exceptions. NRS 163.007 Validity of trust providing for one or more successor beneficiaries. NRS 163.060 Trustee selling from one trust to self as trustee of another trust. NRS 163.115 Breach of trust by trustee: Maintenance of proceeding; permissible purposes for maintenance of proceeding; nonexclusivity of remedies; method of commencing proceeding. NRS 163.340 Exercise of options, rights and privileges. NRS 163.410 Execution of contract or other instrument. (Added to NRS by 2009, 1637; A 2011, 1465) CREATION AND VALIDITY OF TRUSTS Except as otherwise provided by specific statute, a trust may be created by any of the following methods: 1. The settlor properly manifests an intention to create a trust; and 2.
The trusts ultimately had assets of several million dollars, and the trustee appeared to make payments to the debtor for years for all kinds of personal expenses.
NRS 163.160 Power of settlor; liability of trustee for breach of trust. NRS 163.187 Termination of trust when value of trust property insufficient to justify cost of administration. TRUST POWERS WHICH MAY BE INCLUDED IN A WILL OR AGREEMENT BY REFERENCE NRS 163.260 Incorporation by reference of powers enumerated in NRS 163.265 to 163.410, inclusive; restriction on exercise of such powers. NRS 163.270 Sale, exchange or other disposition of property. NRS 163.290 Formation of corporation, limited-liability company or other entity. A beneficiary or class of beneficiaries that is ascertainable with reasonable certainty or that is sufficiently described so that it can be determined whether a person meets the description or is within the class; 2.
NRS 163.150 Withdrawal from mingled money of multiple trusts. NRS 163.185 Power of court to order termination and distribution of trust before time provided in trust instrument. This requirement is satisfied if the trust instrument provides for: 1.
After the debtor filed bankruptcy and sought to discharge $5.4M in debt, the trustee sued to avoid $4M in transfers and recover from the two trusts. Because the Apartment Trust is invalid, Briones is a voluntary trustee on a resulting trust for Michaels and his heirs.
The bankruptcy court initially found both trusts valid, but after the Trustee's motion for reconsideration, then concluded one trust was the debtor's alter ego, but that the other trust was valid since it had been created for the debtor's daughter and that it was not the alter ego of the debtor. the statute of limitations does not begin to run in favor of a voluntary trustee until he repudiates the trust." Davenport v. The statute of limitations did not begin to run until Briones repudiated the trust, that is, until he answered Goodrich's complaint and denied that the Apartment Trust's assets are property of the bankruptcy estate.
This has immediate implications for the statute of limitations issue as expressed by the Court in its opinion: "Moreover, even to the extent it alleges fraudulent transfer, Goodrich's claim is not time-barred by the seven-year statute of limitations set forth in California Civil Code § 3439.09(c).2 If an express trust fails—if, for instance, it was formed for a fraudulent purpose—the trustee holds legal title to the property on a resulting trust for the trustor and his or her heirs.
CHAPTER 163 - TRUSTS GENERAL PROVISIONS NRS 163.001 Definitions. NRS 163.190 Penalty for violation of certain provisions of chapter. TESTAMENTARY ADDITIONS TO TRUSTS (UNIFORM ACT) NRS 163.220 Short title. NRS 163.275 Investments; reinvestments; delegation of authority to invest. A grant of power to the trustee or some other person to select the beneficiary based on a standard or in the discretion of the trustee or other person; 3. A trust for the care of one or more animals created pursuant to NRS 163.0075; or 5. (Added to NRS by 1991, 1704; A 2015, 3542) If a trust provides for one or more successor beneficiaries after the death of the settlor, the trust is not invalidated, merged or terminated because: 1.
NRS 163.008 Validity of trust created in relation to real property; recordation. NRS 163.130 Exoneration or reimbursement of trustee for tort. NRS 163.320 Borrowing money; renewing existing loans. In the absence of a contrary declaration by the owner of the property or of a transfer of the property to a third party and regardless of formal title to the property: (a) Property declared to be trust property, together with all income therefrom and the reinvestment thereof, must remain trust property; and (b) If the property declared to be trust property includes an account, contract, certificate, note, judgment, business interest, contents of a safe deposit box or other property interest that is subject to additions or contributions, all subsequent additions and contributions to the property are also trust property. A transfer of property by the owner during his or her lifetime to another person as trustee. A testamentary transfer of property by the owner to another person as trustee. This section must be liberally construed to give maximum effect to the principle of freedom of disposition and to the enforceability of trust instruments.
CREATION AND VALIDITY OF TRUSTS NRS 163.002 Creation: Methods; certain property deemed trust property. NRS 163.004 Creation: Terms; revocability; rules of construction. NRS 163.0075 Validity of trust providing for care of one or more animals. NRS 163.070 Purchase by corporate trustee of its own stocks, bonds or other securities for trust prohibited unless specifically authorized. NRS 163.120 Claims based on certain contracts or obligations: Assertion against trust; entry of judgment; notice; intervention; personal liability of trustee; significance of use of certain terms. A declaration by the owner of property that he or she holds the property as trustee. There is trust property, except as otherwise provided in NRS 163.230. Except as otherwise provided by law, the terms of a trust instrument may expand, restrict, eliminate or otherwise vary the rights and interests of beneficiaries in any manner that is not illegal or against public policy, including, without limitation: (a) The right to be informed of the beneficiarys interest for a period of time; (b) The grounds for the removal of a fiduciary; (c) The circumstances, if any, in which the fiduciary must diversify investments; (d) A fiduciarys powers, duties, standards of care, rights of indemnification and liability to persons whose interests arise from the trust instrument; and (e) The provisions of general applicability to trusts and trust administration. A trust is irrevocable by the settlor except to the extent that a right to amend the trust or a right to revoke the trust is expressly reserved by the settlor. Nothing in this section shall be construed to: (a) Authorize the exculpation or indemnification of a fiduciary for the fiduciarys own willful misconduct or gross negligence; or (b) Preclude a court of competent jurisdiction from removing a fiduciary because of the fiduciarys willful misconduct or gross negligence. The rule that statutes in derogation of the common law are to be strictly construed has no application to this section.
NRS 163.145 Using power to appoint or distribute income to discharge own legal obligation prohibited. (Added to NRS by 1991, 1705) A trust is created only if there is a beneficiary.
NRS 163.140 Commission of tort by trustee or predecessor: Prerequisites to suit and collection from trust property; plaintiff not required to prove certain matters; entry of judgment; notice; intervention; personal liability of trustee; nonalteration of certain existing law. (Added to NRS by 1991, 1704; A 2011, 1466; 2015, 3542) Consideration is not required to create a trust, but a promise to create a trust in the future is enforceable only if it meets the requirements for enforcement as a contract.