Klabacka v. Nelson, 133 Nev. 164, 394 P.3d 940 (2017)

Reviewed by Elizabeth A. Tresp, JD, LL.M., trust & probate litigator · Updated August 2026

What the court held

1. The family court had subject-matter jurisdiction; the case was initiated under NRS ch. 125, not as a trust proceeding.
2. Both trusts were validly created Nevada self-settled spendthrift trusts: written, irrevocable, no mandatory distribution to the settlor, a Nevada resident distribution trustee under NRS 166.015(2)(a), and no evidence of intent to hinder, delay or defraud known creditors under NRS 166.040(1)(b).
3. Parol evidence is inadmissible where the agreement is clear and unambiguous. The parties’ contradictory testimony about what they meant “carries no weight.”
4. Breach of trust formalities does not invalidate an otherwise validly created trust, the remedy is a suit against the trustee, not invalidation.
5. A court order equalizing assets between the trusts was improper. NRS 163.417(1)(c)(1) bars a court from ordering the exercise of a trustee’s discretion to distribute a discretionary interest, and Nevada has no statutory exception creditor for support, unlike South Dakota, Wyoming and Florida.

What actually happened

Separate property held inside the trusts was held not subject to attachment or execution. The court did remand for tracing: any community property inside the trusts must be equally distributed.

What this case does not establish

It is worth being precise, because this decision gets oversold:

• These were two mirror trusts funded with separate property under a valid separate property agreement. The result depends entirely on that predicate, and the court remanded for tracing of community property.
• The protection turned on the absence of a Nevada exception-creditor statute. That is a legislative choice specific to Nevada. In most other DAPT states, which do carve out support claims, the analysis flips.
• The support obligations were not known when the trusts were created, the trusts date from 2001 and the divorce was filed in 2009. The court’s language is limited to obligations unknown at creation.
• The decision carries no negative direct history, but it has been declined to extend in Board of Trustees of Painters & Floorcoverers Joint Committee v. Super Structures Inc., 375 F. Supp. 3d 1172 (D. Nev. 2019), and distinguished in Lopez v. Lopez, 541 P.3d 117 (Nev. Ct. App. 2023).

The planning lesson

Read alongside Huber, this is the clearest illustration in American law that the difference between a structure that holds and one that does not is rarely the jurisdiction on the cover page. Here the settlors were Nevada domiciled, used a Nevada trustee, funded with traceable separate property, created the trusts eight years before the claim, and kept the paperwork clean. Every one of those is a planning decision.

Why this matters for your plan

Reading the cases is not an academic exercise. Every one of these decisions turned on something a planner controls: when the structure was created, how much control the settlor kept, whether the governing-law choice was backed by real contacts, and whether the client told the truth on the record. We build to the way these disputes are actually litigated, because Elizabeth litigates them. To discuss how your situation maps onto this body of law, call (858) 755-6672.