Rhode Island Estate Planning Considerations
Rhode Island is a Common Law State, which means the rules governing the ownership, division, and inheritance of income and property acquired by a husband or wife during their marriage holds that subject to various qualifications, each spouse owns and has complete control over his or her income and property.
Last Will and Testament
The minimum age of a person competent to make a will is 18. The number of witnesses necessary to execute a will is two.
Uniform Transfers to Minors Act (UTMA)
The custodial arrangement terminates when:
- The minor child reaches age 21 for custodial transfers made by irrevocable lifetime gift, will, trust, or exercise of a power of appointment.
- The minor child reaches age 18 regarding other custodial transfers.
- The minor child dies.
Dying without a Last Will, the Rhode Island laws of Intestacy
The estate goes to the surviving spouse, as follows:
- A life estate in all real property, and upon petition, the probate court may grant the spouse up to a $150,000 interest in the real property
- If there are no descendants—the first $50,000 of the personal property plus 50% of the balance of the personal property
- If there are descendants, —50% of the personal property
Except as provided above, the entire estate, or the balance after the spouse’s share:
- 100% to children or their descendants
If there are no surviving children or descendants:
- 100% to surviving parent or parents equally
If there are no surviving children, descendants, or parents:
- 100% to siblings and their descendants (see R.I. Gen. Laws §33‐1‐7; case law suggests distribution per stirpes)
If none of the above:
- Intestacy laws outline further distribution steps to the level of grandparents, related individuals, and descendants, and if none, finally to the spouse and the spouse’s descendants. They are entitled to 100% of the estate if none of the decedent’s descendants can take under the rules of descent, as described. See R.I. Gen. Laws §33‐1‐2(1)‐(4) and §33‐1‐3.
- If no legally described recipient can be found, estate assets go to the state of Rhode Island.
Rhode Island follows the Uniform Fiduciary Access to Digital Assets Act to ensure that testators can retain control of their digital property and plan for its ultimate disposition.
Rhode Island does not impose an inheritance tax.
Credit Estate Tax
Rhode Island imposes an estate tax equal to the maximum credit permitted for paid state estate and inheritance taxes under the federal tax code in effect on January 1, 2001.
The exemption amount is as follows:
The top tax rate is 16%.
Generation-Skipping Transfer Tax (G.S.T. Tax)
Rhode Island imposes a G.S.T. tax equal to the maximum credit allowed under I.R.C. Sec. 2604 for paid state G.S.T. tax. However, since the current federal tax code does not permit a credit for paid state G.S.T. tax, there is no current G.S.T. tax.
Rhode Island does not impose a gift tax.