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Trustee Accounting Requirements Under NRS 165.135: A Complete Guide for Nevada Trustees

Category: Trust Administration
trustee accountingNRS 165trust administrationbeneficiary rightsfiduciary dutynevada trust

One of the most important — and most commonly overlooked — duties of a Nevada trustee is the obligation to provide regular accountings to beneficiaries. Nevada law, specifically NRS 165.135, establishes detailed requirements for trustee accountings that go beyond the standards of many other states.

Under NRS 165.135, every trustee administering a trust in Nevada must furnish an accounting to each beneficiary of the trust. The statute requires accountings “not less often than annually” and sets forth specific content requirements.

Failure to provide required accountings is one of the most common breaches of fiduciary duty in Nevada, and beneficiaries have the right to petition the court to compel an accounting and seek removal of a non-compliant trustee.

What a Nevada Trust Accounting Must Include

NRS 165.135 requires each accounting to contain:

1. Period Covered

A clear statement of the accounting period (e.g., “January 1, 2025 through December 31, 2025”).

2. Principal Schedule

A separate schedule showing:

  • Additions to trust principal during the period, including dates and sources of acquisition
  • Investments collected, sold, or charged off
  • Investments made, with date, source, and cost of each
  • Deductions from principal, with date and purpose of each
  • Trust principal on hand at end of period, reflecting approximate market value

3. Income Schedule

A separate schedule showing:

  • Trust income on hand at the beginning of the period
  • Trust income received, including when and from what source
  • Trust income paid out, including when, to whom, and for what purpose
  • Trust income on hand at end of period and how invested

4. Claims Statement

A statement of any unpaid claims with the reason for failure to pay them.

5. Summary

A brief summary of the account.

Timing of Accountings

The statute requires accountings “not less often than annually.” There are two prevailing interpretations in Nevada probate practice:

  • Traditional View: The first accounting should be provided within a reasonable time after the settlor’s death, with subsequent accountings on the anniversary date.
  • Current Clark County Practice: The first accounting may be due one year after the settlor’s death, with subsequent annual accountings thereafter.

To avoid uncertainty, the trust instrument should specify the timing and frequency of accountings.

Best Practices for Trustee Accountings

Maintain Detailed Records

The foundation of any accounting is accurate, contemporaneous recordkeeping. Maintain separate bank accounts for the trust and document every transaction with receipts, statements, and correspondence.

Use Professional Accounting Software

Trust accounting software can generate compliant accountings and reduce the risk of errors. Many Nevada corporate trustees use specialized trust accounting platforms.

Provide Supporting Documentation

While not always required by statute, providing bank statements, brokerage statements, and receipts alongside the accounting increases transparency and beneficiary confidence.

Include a Narrative Summary

A plain-English summary explaining significant transactions, investment performance, and distribution decisions helps beneficiaries understand the accounting.

Engage a Trust Attorney for Complex Matters

If the trust holds hard-to-value assets, operates a business, or has complex tax issues, consult an attorney experienced in Nevada trust administration.

Beneficiary Rights Regarding Accountings

Beneficiaries under Nevada law have the right to:

  • Receive accountings at least annually
  • Request additional information or clarification
  • Object to accountings within a reasonable time
  • Petition the court to compel an accounting if the trustee fails to provide one
  • Seek removal of a trustee who fails to account

Trustees should encourage beneficiaries to review accountings and raise questions promptly. Early communication prevents disputes from escalating into litigation.

Common Accounting Mistakes

Commingling Assets

Mixing trust assets with personal assets is prohibited and makes accurate accounting impossible. Always maintain separate accounts.

Failing to Value Assets Properly

Principal schedules must reflect approximate market value. Obtaining periodic appraisals for hard-to-value assets is recommended.

Incomplete Income Tracking

All trust income must be accounted for, including interest, dividends, rents, and business income. Missing income creates suspicion and potential liability.

Delayed Accountings

Providing accountings late or only upon demand creates friction with beneficiaries and may violate NRS 165.135.

Conclusion

Trustee accounting under NRS 165.135 is a fundamental fiduciary obligation in Nevada trust administration. By maintaining meticulous records, providing timely and complete accountings, and communicating openly with beneficiaries, trustees can fulfill their duties, reduce litigation risk, and build trust with the families they serve.

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