Updated January 25, 2024
The Rhode Island living trusts are used by people who wish to put their assets into a Trust instead of a Last Will and Testament in order to bypass the probate process. In addition to averting probate, a living trust keeps an estate’s disposition private and provides instructions for how the included assets are to be managed during the Settlor’s lifetime. Depending on the type of trust, the Settlor may or may not retain control of their assets as an active Trustee. Because Rhode Island has not adopted the Uniform Probate Code and has such a low limit for beneficiaries to otherwise apply to avoid probate, securing a living trust is a good choice in terms of simplifying things for your inheritors. A lengthy estate probate can greatly diminish that estate’s final value with the accrued legal fees. However, if you have a smaller sized estate, it may be simpler for you to opt for a standard Will.
Laws – Chapter 18-13 (Rhode Island Uniform Custodial Trust Act)
Will (Last Will and Testament) – Whatever property not placed into the living trust should be written into a Will.
Individual Roles
In a Living Trust, the following roles must be assigned:
Grantor (or “Settlor”) – Makes the trust and transfers their property into it.
Trustee – The person appointed as the manager of the trust.
Successor Trustee – Becomes the active Trustee if the Trustee is incapacitated or dies.
Beneficiaries – Named as the inheritors of the assets contained within the trust.
Types
Irrevocable – An Irrevocable Trust can protect the Grantor’s assets from creditors and law suits. It also avoids probate, however, this type of trust cannot be changed or revoked once it has been signed.
Revocable – A Revocable Trust avoids probate and allows greater freedom to the Grantor during their lifetime, also allowing them to amend or revoke the Trust if they choose.
How to Make a Living Trust in Rhode Island
Under § 18-13-18 an individual that is a resident of Rhode Island may create a trust by providing a document that lists the Settlor, Trustee, and Beneficiary(ies). The document must have all property placed in the trust and indicate when it becomes the property of the Beneficiary (if at the time of the transferor’s death then it not need be mentioned). The form, ideally, should be signed by the person creating the trust, as well as a notary public. Trusts in the State of Rhode Island do not need to be registered with any local, county, or State government office.
Motor Vehicles – Cars and other vehicles can be put in the trust’s name using a Bill of Sale.
Real Estate – To put real estate property into the trust, you will need to fill out a Rhode Island Deed, which is to be notarized and filed with the Land Evidence Records department of your city or town.
Do I Need a Living Trust?
If you’d like to make sure that your family does have to go through the complicated and lengthy probate procedures when dividing your assets after your death, you should create a living trust. The only people eligible to bypass probate without a living trust are people who are heirs to estates valued at $15,000 or less. They can use a Small Estate Affidavit to apply to avert probate with the decedent’s local probate court. The primary benefits of a living trust are for the inheritors. However, a living trust does enable you, the Grantor, to rest easy knowing that your various holdings will be managed in line with your instruction should anything happen to you. Also, the division of assets is kept private, which can alleviate conflict between the beneficiaries. If you invest in an Irrevocable Trust, your heirs will not only avoid the litigation of your estate, they also won’t have to worry about estate tax or the threat of creditors. For smaller estates it shouldn’t be too hard to calculate whether a Will or a Living Trust is the most cost-effective choice for you and your situation.