Trust Decanting Requirements in Rhode Island

At a glance

Requirements one by one

Rhode Island uses one short appointment-in-further-trust section

Rhode Island General Laws § 18-4-31(a) lets a trustee appoint all or part of principal to the trustee of another trust under the same or a different trust instrument. The statute calls that exercise a power of appointment and preserves other instrument, statutory, and common-law authority. It does not create a duty to use the power.

The instrument controls entry and may expressly opt out

The trustee must hold first-trust authority to invade principal for distributions to or for one or more persons. The section does not separately require irrevocability, a Rhode Island situs or governing-law clause, or a creation date. It excludes a Special Needs Trust or Supplemental Needs Trust created under 42 U.S.C. § 1396p(d)(4)(A), and an express contrary provision in the instrument controls. A spendthrift clause or generic no-amendment or no- revocation provision does not itself block the power.

Only the trustee with principal-invasion authority may exercise

Section 18-4-31(a) names the trustee, not any fiduciary or powerholder. The appointment goes to a trustee of the second trust for the current benefit of one or more people to or for whom principal could be invaded. The section supplies no special-fiduciary, interested-trustee, cotrustee, resignation, or removal procedure.

Rhode Island does not divide authority by discretion level

The section has no expanded-discretion, limited-discretion, ascertainable- standard, or mandatory-distribution branches. The operative threshold is the first trust's authority to invade principal. The exclusion for the specified federal special- or supplemental-needs trust is categorical within this section, not an alternative power tier.

Beneficiary and fixed-interest protections are explicit

Under § 18-4-31(a), every second-trust beneficiary must already be a first-trust beneficiary, and the appointment must serve the current benefit of at least one person eligible under the invasion power. The second trust cannot reduce a fixed income, annuity, or unitrust interest. Subsection (c) treats the exercise as a power of appointment but excludes appointment to the trustee, the trustee's creditors or estate, and the estate's creditors.

The section says little about second-trust administration

The trustee may appoint all or part of the principal under the same or a different trust instrument to the trustee of another trust. Section 18-4-31 states no separate rule for multiple second trusts, duration, perpetuities, situs, governing law, trustee replacement, later property, partial-decanting effect, or administrative terms.

The tax rule is narrow and the special-needs exclusion matters

Section 18-4-31(a)(3) preserves a federal marital or charitable deduction that a first-trust contribution received: a second-trust provision cannot defeat or reduce that deduction. The section states no comparable grantor-trust, GST, annual-exclusion, S-corporation, retirement-interest, compensation, exculpation, or indemnification rule. Its separate § 1396p(d)(4)(A) exclusion means this statutory route does not supply a special-needs exception.

Qualified beneficiaries receive advance notice, not a consent request

Under § 18-4-31(d)-(e), every living beneficiary in the current, next-line, or termination distribution horizon receives written notice describing the manner of exercise at least 60 days before the effective date. A copy of the proposed exercise instrument satisfies the notice content rule. All qualified beneficiaries may waive the period by signed writings delivered to the trustee, but notice or waiver does not eliminate a beneficiary's right to object. The section states no representation, delivery-method, unknown-recipient, Attorney General, or affirmative-consent rule.

The trustee signs, acknowledges, and retains the exercise

Section 18-4-31(b) requires a written instrument signed and acknowledged by the trustee and filed with the first trust's records. The proposed instrument may serve as the notice, but subsection (b) still governs the actual exercise. The section states no public recording, court petition or approval, judicial-review standard, special-fiduciary route, saving rule, defect effect, limitations period, or reliance protection.

What trips people up

• A generic spendthrift or no-amendment clause does not bar the power, but an instrument that expressly provides otherwise does.
• The 60-day period is waivable only when all qualified beneficiaries deliver signed writings; silence is not a statutory waiver.
• The statute requires acknowledgment and trust-record filing. Those are exercise formalities, not a substitute for the separate advance notice.

Common questions

Must the second trust use the same document?

No. Section 18-4-31(a) expressly permits appointment under the same trust instrument or a different trust instrument.

Does Rhode Island require beneficiary consent?

Section 18-4-31 does not make consent a condition. Qualified beneficiaries get written advance notice and retain objection rights. Unanimous signed writings are needed only to shorten the 60-day waiting period.

Does the decanting section require a court petition?

No court filing or approval appears in § 18-4-31. A separate court proceeding may raise law outside this statute-only survey, but it is not an exercise formality stated in the decanting section.

Statutes and sources

• R.I. Gen. Laws § 18-4-31 — authority, exclusions, beneficiary and fixed- interest limits, federal-deduction protection, notice, waiver, exercise instrument, and preserved nonstatutory authority. Rhode Island General Assembly (accessed 2026-09-19).