(a)  Notwithstanding any other provision of the general laws, no action of any kind, including, without limitation, an action to enforce a judgment entered by a court or other body having adjudicative authority, shall be brought at law or in equity for an attachment or other provisional remedy against property that is the subject of a qualified disposition or for avoidance of a qualified disposition, unless the action is brought pursuant to the provisions of §?6-16-7.

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Terms Used In Rhode Island General Laws 18-9.2-4

  • advisor: includes a trust "protector" or any other person who, in addition to a qualified trustee, holds one or more trust powers. See Rhode Island General Laws 18-9.2-2
  • Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
  • 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
  • Claim: means a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal equitable, secured or unsecured. See Rhode Island General Laws 18-9.2-2
  • Creditor: means , with respect to a transferor, a person who has claim. See Rhode Island General Laws 18-9.2-2
  • Disposition: means a transfer, conveyance or assignment of property (including a change in the legal ownership of property occurring upon the substitution of one trustee for another or the addition of one or more new trustees), or the exercise of a power so as to cause a transfer of property, to a trustee or trustees, but shall not include the release or relinquishment of an interest that theretofore was the subject of a qualified disposition. See Rhode Island General Laws 18-9.2-2
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • person: may be construed to extend to and include co-partnerships and bodies corporate and politic. See Rhode Island General Laws 43-3-6
  • Property: includes real property, personal property, and interests in real or personal property. See Rhode Island General Laws 18-9.2-2
  • Qualified disposition: means a disposition by or from a transferor to a trustee, with or without consideration, by means of a trust instrument. See Rhode Island General Laws 18-9.2-2
  • Qualified trustee: means a person who:

    (i)  In the case of natural person, is a resident of this state other than the transferor, or, in all other cases, is authorized by the provisions of the general or public laws to act as a trustee, and whose activities are subject to supervision by the department of business regulation, The Federal Deposit Insurance Corporation, the Comptroller of the Currency, or the Office of Thrift Supervision, or any successor to them; and

    (ii)  Maintains or arranges for custody in this state of some or all of the property that is the subject of the qualified disposition, maintains records for the trust on an exclusive or nonexclusive basis, prepares or arranges for the preparation of fiduciary income tax returns for the trust, or otherwise materially participates in the administration of the trust. See Rhode Island General Laws 18-9.2-2

  • Statute: A law passed by a legislature.
  • Transferor: means a natural person who, or entity which, as an owner of property or as a holder of a general power of appointment, which authorizes the holder to appoint in favor of the holder, the holder's creditors, the holder's estate or the creditors of the holder's estate, or as a trustee, directly or indirectly, makes a disposition or causes a disposition to be made. See Rhode Island General Laws 18-9.2-2
  • Trust instrument: means an instrument appointing a qualified trustee or qualified trustees for the property that is the subject of a disposition, which instrument:

    (i)  Expressly incorporates the general or public laws of this state to govern the validity, construction, and administration of the trust;

    (ii)  Is irrevocable; provided, that a trust instrument shall not be deemed revocable due to its inclusion in one or more of the following:

    (A)  A transferor's power to veto a distribution from the trust;

    (B)  A power of appointment (other than a power to appoint to the transferor, the transferor's creditors, the transferor's estate or the creditors of the transferor's estate) exercisable by will or other written instrument of the transferor effective only upon the transferor's death;

    (C)  The transferor's potential or actual receipt of income, including rights to such income retained in the trust instrument;

    (D)  The transferor's potential or actual receipt of income or principal from a charitable remainder unitrust or charitable remainder annuity trust as such terms are defined in § 664 of the Internal Revenue Code of 1986 [26 U. See Rhode Island General Laws 18-9.2-2

  • Trustee: A person or institution holding and administering property in trust.

(b)  Notwithstanding the provisions of §?6-16-9, a creditor may not bring an action under subsection (a) of this section if:

(1)  The creditor’s claim against the transferor arose before the qualified disposition was made, unless the action is brought within four (4) years after the qualified disposition is made or, if later, within one year after the qualified disposition was or could reasonably have been discovered by the creditor; or

(2)  The creditor’s claim against the transferor arose subsequent to the qualified disposition, unless the action is brought within four (4) years after the qualified disposition is made.

In any action described in subsection (a) of this section, the burden to prove the matter by clear and convincing evidence shall be upon the creditor.

(c)  For purposes of this chapter, a qualified disposition that is made by means of a disposition by a transferor who is a trustee shall be deemed to have been made as of the time the property that is the subject of the qualified disposition was originally transferred to the transferor (or any predecessor trustee) making the qualified disposition in a form that meets the requirements of subdivisions 18-9.2-2(10)(ii) and (iii). If a trustee of an existing trust proposes to make a qualified disposition pursuant to the provisions of this subsection (c) of this section but the trust would not conform to the requirements of subparagraph 18-9.2-2(10)(ii)(B) as a result of the original transferor’s nonconforming powers of appointment, then, upon the trustee’s delivery to the qualified trustee of an irrevocable written election to have this subsection apply to the trust, the nonconforming powers of appointment shall be deemed modified to the extent necessary to conform with subparagraph 18-9.2-2(10)(ii)(B). For purposes of this chapter, the irrevocable written election shall include a description of the original transferor’s powers of appointment as modified together with the original transferor’s written consent thereto, but no such consent of the original transferor shall be considered a disposition within the meaning of subsection 18-9.2-2(4).

(d)  Notwithstanding any law to the contrary, a creditor, including a creditor whose claim arose before or after a qualified disposition, or any other person shall have only such rights with respect to a qualified disposition as are provided in this section and §§?18-9.2-5 and 18-9.2-6, and no such creditor nor any other person shall have any claim or cause of action against the trustee, or advisor described in subdivision 18-9.2-2(9)(iii), of a trust that is the subject of a qualified disposition, or against any person involved in the counseling, drafting, preparation, execution or funding of a trust that is the subject of a qualified disposition.

(e)  Notwithstanding any other provision of law, no action of any kind, including, without limitation, an action to enforce a judgment by a court or other body having adjudicative authority, shall be brought at law or in equity against the trustee, or advisor described in subdivision 18-9.2-2(9)(iii), of a trust that is the subject of the qualified disposition, or against any person involved in the counseling, drafting, preparation, execution or funding of a trust that is the subject of a qualified disposition, if, as of the date such action is brought, an action by a creditor with respect to such qualified disposition would be barred under this section.

(f)  In circumstances where more than one qualified disposition is made by means of the same trust instrument, then:

(1)  The making of a subsequent qualified disposition shall be disregarded in determining whether a creditor’s claim with respect to a prior qualified disposition is extinguished as provided in subsection (b) of this section; and

(2)  Any distribution to a beneficiary shall be deemed to have been made from the latest such qualified disposition.

(g)  If, in any action brought against a trustee of a trust that is the result of a qualified disposition, a court takes any action whereby such court declines to apply the law of this state in determining the validity, construction or administration of such trust, or the effect of a spendthrift provision thereof, such trustee shall immediately upon such court’s action and without the further order of any court, cease in all respects to be a trustee of such trust and a successor trustee shall thereupon succeed as trustee in accordance with the terms of the trust instrument or, if the trust instrument does not provide for a successor trustee and the trust would otherwise be without a trustee, the Superior Court, upon the application of any beneficiary of such trust, shall appoint a successor trustee upon such terms and conditions as it determines to be consistent with the purposes of such trust and this statute. Upon such trustee’s ceasing to be trustee, such trustee shall have no power or authority other than to convey the trust property to the successor trustee named in the trust instrument or appointment by the Superior Court in accordance with this subsection.

History of Section.
P.L. 1999, ch. 402, § 1; P.L. 2007, ch. 302, § 1; P.L. 2007, ch. 478, § 1.