Previously in Part I, we discussed what happens to the dispensation of an estate if a beneficiary happens to have killed the grantor. You may recall that the rule preventing the murdering-beneficiary from receiving any estate assets is called the “Slayer Rule.” Now that we know why and how the transfer of assets to the sinning beneficiary is prohibited, it may be a good time to discuss what happens if the killer transfers or sells the property to another party? Does the acquiring party have to give the asset back? Is the acquiring party liable to be sued for value of the asset that he or she has no legal right to? We will now unpack the rest of Chapter 41B of the Nevada Revised Statutes, and find out how the slayer rule applies.
So you bought property from a killer, how will the slayer rule affect you?
So you have come across a hot deal for land, a home, or a valuable asset1)please do not interpret this to mean that the assets we are discussing have to be worth a lot of money, and you did what most Americans do when offered such a deal, acted quickly and snatched it up. The next day you are sitting at home, reading the paper, and see a picture of the person you purchased the asset from on the front page. Turns out the seller happened to have murdered the person who granted him the property to sell. Because you are a loyal reader of the Clear Counsel law blog, your mind immediately thinks of the slayer rule. Now what happens? Let us take a look at the end of Chapter 41B of the NRS:
NRS 41B.400 Payor or other third person who pays or transfers forfeited property, interest or benefit. Except as otherwise provided by specific statute, if a payor or other third person, in good faith, pays or transfers any property, interest or benefit to a beneficiary in accordance with the provisions of a governing instrument, the payor or other third person is not liable to another person who alleges that the payment or transfer to the beneficiary violated the provisions of this chapter unless, before the payment or transfer, the payor or other third person had actual knowledge that the beneficiary was prohibited from acquiring or receiving the property, interest or benefit pursuant to the provisions of this chapter.
(Added to NRS by 1999, 1354)
NRS 41B.410 Person who acquires or receives forfeited property, interest or benefit without legal right or authorization.
1. Except as otherwise provided in subsection 2, if a person, without legal right or authorization, acquires or receives any property, interest or benefit forfeited by a killer pursuant to the provisions of this chapter, the person is required to transfer the property, interest or benefit to the beneficiary who is entitled to it pursuant to the provisions of this chapter, or the person is liable to such beneficiary for the value of the property, interest or benefit.
2. The provisions of subsection 1 do not apply to a person who:
(a) Acquired the property, interest or benefit for value and without notice; or
(b) Received the property, interest or benefit in full or partial satisfaction of a legally enforceable obligation and without notice.
(Added to NRS by 1999, 1354)
Ok, let us start here. A quick definition: a payor is “one who pays, or who is to make a payment; particularly the person who is to make payment of a bill or note.”2)Black’s Law Dictionary. If you are wondering why a distinction needs to be made between someone who pays, and someone who “acquires or receives,” remember that a person may be a payor for a third party.
Neither a payor or receiver of the property in question is liable to the rightful owner3)the proper beneficiary of the gift now that the killer no longer has legal rights to the property if:
- The acquisition is done in good faith
- The purchaser/receiver does not know that the property in question may not be sold or transferred by the killer
- He or she pays more than a nominal amount for the property
Whew, that is good to know. Carry yourself above board, and everything should be alright.
Does the slayer rule protect the beneficiaries?
But what about the poor beneficiaries left in the will that have lost a valuable asset that they should have been entitled to. What recourse do they have?
NRS 41B.420 Killer who transfers forfeited property, interest or benefit to third person; effect of preemption by federal law.
1. If a killer, for value or otherwise, transfers to a third person any property, interest or benefit forfeited by the killer pursuant to the provisions of this chapter, the killer is required to recover and transfer the property, interest or benefit to the beneficiary who is entitled to it pursuant to the provisions of this chapter, or the killer is liable to such beneficiary for the value of the property, interest or benefit.
It is always nice when the law is just. The killer is liable for the value of the forfeited property, meaning he or she can reacquire the property and transfer it to the rightful owner or be sued for the value by the asset by the remaining, legitimate beneficiaries.
Crime continues not to pay, at least here in Nevada.
Footnotes [ + ]
|1.||↑||please do not interpret this to mean that the assets we are discussing have to be worth a lot of money|
|2.||↑||Black’s Law Dictionary|
|3.||↑||the proper beneficiary of the gift now that the killer no longer has legal rights to the property|