When a parent or relative names someone as trustee of a Nevada trust, that trustee takes on one of the strictest legal obligations the law recognizes. It's called a fiduciary duty. The trustee is not allowed to favor themselves, hide records, or treat trust assets like personal funds. When they do, beneficiaries have the right to step in.
A breach of fiduciary duty claim is the legal tool Nevada beneficiaries use to hold a trustee accountable. Depending on the facts, the remedy can include a full accounting, return of misappropriated funds, removal of the trustee, monetary damages, and in some cases attorney's fees paid out of the trust.
This guide explains what fiduciary duty actually requires in Nevada, the most common ways trustees breach it, the warning signs beneficiaries see first, and the remedies available through Nevada's probate courts.
What a Trustee's Fiduciary Duty Actually Includes in Nevada
A trustee's duties are defined by both the trust document and Nevada's Uniform Trust Code in NRS Chapter 163. The core duties every Nevada trustee owes the beneficiaries include the following.
Duty of Loyalty
A trustee must administer the trust solely in the interests of the beneficiaries. Self-dealing is a textbook breach. That includes buying trust assets at a discount, hiring a relative on inflated terms, or steering investments to a personal business.
Duty of Prudence
A trustee must invest and manage trust assets like a reasonably careful person managing the property of another. Reckless concentration in a single stock, ignoring market risk, or failing to diversify can all constitute breaches.
Duty of Impartiality
When a trust has multiple beneficiaries, for example a surviving spouse and children from a prior marriage, the trustee cannot favor one over another. Decisions about distributions, investment risk, and timing must balance the interests of all beneficiaries.
Duty to Inform and Account
Nevada trustees must keep beneficiaries reasonably informed and provide accountings on request and at statutorily required intervals under NRS Chapter 165. Refusal to share records is one of the most common warning signs of a deeper problem.
Duty to Administer in Good Faith
The trustee must follow the terms of the trust and act consistent with its purposes. Even a well-intentioned trustee who deviates from the trust document can be liable.
Duty to Avoid Commingling
Trust assets must be kept separate from the trustee's personal funds. Mixing personal and trust money, even temporarily, is a breach. It doesn't matter whether any money is ultimately lost.
A Nevada breach of fiduciary duty attorney can evaluate whether the trustee's conduct crosses the line on any of these duties.
The Most Common Trustee Breaches Nevada Beneficiaries See
In our practice, breach claims tend to fall into a handful of recurring patterns.
- Self-dealing transactions. Selling trust property to themselves, their spouse, or their business at below-market value.
- Excessive trustee fees. Paying themselves fees that exceed reasonable compensation under Nevada law.
- Failure to invest. Leaving trust funds in a low- or no-interest account for years, sometimes losing significant value to inflation.
- Imprudent investment. Concentrating trust assets in speculative positions without diversification.
- Hiding the books. Refusing to provide an accounting, or providing only summary numbers without backup.
- Favoring one beneficiary. Making large distributions to one child and minimal distributions to another without justification.
- Commingling funds. Depositing trust money in personal accounts, or using a personal account to hold trust funds.
- Ignoring trust terms. Making distributions the trust does not authorize, or failing to make distributions the trust requires.
- Conflicts with co-trustees. Acting unilaterally when the trust requires joint decisions.
- Failure to file taxes. Exposing the trust to penalties and interest.
Warning Signs That Should Prompt an Attorney Call
Beneficiaries rarely have direct visibility into the books. What they have is patterns of behavior. The warning signs that consistently turn out to indicate a real breach:
- The trustee will not provide an accounting after a written request.
- The trustee changes their story about distributions or asset values.
- A trust asset (real estate, a business interest, a vehicle) has been sold or transferred without notice to beneficiaries.
- The trustee has hired their own spouse, child, or business as a trust service provider.
- Distributions stop without explanation, or shift heavily to one beneficiary.
- The trustee refuses to answer basic questions about the trust's holdings.
- Trust real estate sits vacant, unmaintained, or uninsured.
- The trustee mixes their own money with trust funds.
None of these are conclusive on their own. Taken together, or paired with one clear self-dealing transaction, they justify a closer look by a Las Vegas trust litigation attorney.
The Remedies Available to Nevada Beneficiaries
Nevada courts have broad authority under NRS 163.115 to remedy a trustee's breach. Depending on the facts, the relief can include the following.
Compelled Accounting
The court can order the trustee to produce a formal accounting with supporting documents. That includes bank statements, brokerage statements, real estate records, tax returns, fee invoices, and distribution records.
Surcharge (Money Damages)
The trustee can be ordered to repay the trust for losses caused by the breach. Surcharge claims often include lost investment returns, excessive fees, and the value of misappropriated assets.
Return of Property
If a trustee sold trust property to themselves or a related party at below-market value, the court can unwind the transaction or require restitution of the difference.
Removal of the Trustee
The court can remove the trustee under NRS 163.185 and appoint a successor. That can be the next person named in the trust, or a neutral professional fiduciary.
Suspension
In urgent situations, the court can suspend a trustee's powers while the dispute is resolved. This is useful when trust assets are at immediate risk.
Denial of Compensation
The court can deny or reduce the trustee's fees, and in some cases require return of fees already paid.
Attorney's Fees
Nevada courts have discretion to award attorney's fees. The court can order the trustee to pay personally, or it can order payment from the trust, depending on who prevails and whether the trustee acted in bad faith.
Injunctive Relief
The court can order the trustee to stop a specific transaction, freeze accounts, or take specific actions to preserve trust assets.
How a Breach of Fiduciary Duty Case Moves Through Nevada Court
Step 1. Written Demand for Accounting
Before filing anything, your attorney typically sends a formal written request for an accounting under NRS Chapter 165. A trustee who refuses or stonewalls has already given you the foundation for a petition.
Step 2. Investigation
Your attorney gathers the trust document, any prior accountings, available financial records, and witness statements. Forensic accountants are often retained at this stage to trace funds and identify suspicious transactions.
Step 3. Petition Filed
A petition for breach of fiduciary duty is filed in the Nevada district court handling the trust. Most Clark County trust petitions are filed in the Eighth Judicial District Court's Probate Division.
Step 4. Response and Discovery
The trustee files an answer. Both sides exchange documents, conduct depositions, and may retain experts on accounting, real estate valuation, or investment standards.
Step 5. Mediation
Nevada courts strongly favor mediation. Many breach cases settle here with a combination of trustee resignation, surcharge payment, and a release of further claims.
Step 6. Bench Trial
If settlement fails, the case is tried to a judge. The court issues findings of fact and conclusions of law, and can order any of the remedies listed above.
Step 7. Appeal
Either side can appeal to the Nevada Court of Appeals or Nevada Supreme Court. Our appellate litigation team handles fiduciary appeals statewide.
Defending a Nevada Trustee Against a Breach Claim
Breach claims are not always justified. Trustees, especially family members serving without professional training, frequently face claims that are emotional, opportunistic, or simply mistaken. A defense often involves:
- Producing a complete and accurate accounting up front to defuse the dispute.
- Demonstrating that distributions and investments were consistent with the trust document.
- Showing that the trustee sought professional advice (legal, accounting, investment) before key decisions.
- Documenting communications with beneficiaries that contradict allegations of secrecy.
- Moving to dismiss claims that miss statutory deadlines under NRS 164.021 or NRS 164.041.
A trustee who responds quickly and transparently often resolves the dispute without ever going to trial.
How Hutchison & Steffen Handles Trustee Breach Cases in Nevada
Our Trust & Probate Litigation team represents both beneficiaries and trustees in Nevada breach of fiduciary duty disputes. Our approach:
- Document the conduct. Before we file or defend, we build the factual record. Records, transactions, communications.
- Pressure the right lever. A demand for accounting, a motion to compel, or a request for trustee suspension often produces a better result than a contested trial.
- Try the case when needed. When the breach is serious and the trustee won't resolve, we prepare every case to be tried, with the appellate experience to defend the ruling on appeal.
Learn more about our Trust & Probate Litigation practice or meet our attorneys.
Talk to a Nevada Breach of Fiduciary Duty Attorney
If you believe a Nevada trustee is mismanaging trust assets, hiding records, or paying themselves at the trust's expense, or if you are a trustee facing claims you believe are unfounded, the right move is an early, honest case assessment.
Contact Hutchison & Steffen to schedule a confidential consultation. Our team serves clients across Las Vegas, Henderson, Reno, and statewide.
