(a)  Upon termination of a custodial trust, the custodial trustee shall transfer the unexpended custodial trust property:

(1)  To the beneficiary, if not incapacitated or deceased;

(2)  To the conservator or other recipient designated by the court for an incapacitated beneficiary; or

(3)  Upon the beneficiary’s death, in the following order:

(i)  As last directed in a writing signed by the deceased beneficiary while not incapacitated and received by the custodial trustee during the life of the deceased beneficiary;

(ii)  To the survivor of multiple beneficiaries if survivorship is provided for pursuant to § 18-13-6;

(iii)  As designated in the instrument creating the custodial trust; or

(iv)  To the estate of the deceased beneficiary.

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Terms Used In Rhode Island General Laws 18-13-17

  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Beneficiary: means an individual for whom property has been transferred to or held under a declaration of trust by a custodial trustee for the individual's use and benefit under this chapter. See Rhode Island General Laws 18-13-1
  • Conservator: means a person appointed or qualified by a court to manage the estate of an individual or a person legally authorized to perform substantially the same functions. See Rhode Island General Laws 18-13-1
  • Court: means the probate courts of this state. See Rhode Island General Laws 18-13-1
  • Custodial trust property: means an interest in property transferred to or held under a declaration of trust by a custodial trustee under this chapter and the income from and proceeds of that interest. See Rhode Island General Laws 18-13-1
  • Custodial trustee: means a person designated as trustee of a custodial trust under this chapter or a substitute or successor to the designated person. See Rhode Island General Laws 18-13-1
  • Incapacitated: means lacking the ability to manage property and business affairs effectively by reason of mental illness, mental deficiency, physical illness or disability, chronic use of drugs, chronic intoxication, confinement, detention by a foreign power, disappearance, minority, or other disabling cause. See Rhode Island General Laws 18-13-1
  • Trustee: A person or institution holding and administering property in trust.

(b)  If, when the custodial trust would otherwise terminate, the distributee is incapacitated, the custodial trust continues for the use and benefit of the distributee as beneficiary until the incapacity is removed or the custodial trust is otherwise terminated.

(c)  Death of a beneficiary does not terminate the power of the custodial trustee to discharge obligations of the custodial trustee or beneficiary incurred before the termination of the custodial trust.

History of Section.
P.L. 1988, ch. 623, § 1.