Comparing Revocable Trusts in Rhode Island Versus Nevada
Compare the benefits and features of revocable trusts in Rhode Island versus Nevada to make informed estate planning decisions.
When comparing revocable trusts in Rhode Island versus Nevada, the differences come from each state’s tax environment and trust statutes. Both states support modern planning. Yet their rules create distinct experiences for families and trustees.
The core benefits of a revocable trust are similar in both places. Revocable trusts are flexible in both states. You keep control while living and can change terms at any time. At passing, the trust typically guides management and distribution without court probate. That core idea is the same whether the trust sits in Providence or Reno. The differences show up later—when the trust is irrevocable, generating income, or spanning generations.
One big difference is that Rhode Island has a state income tax. Trusts with Rhode Island income or resident status may need to file RI-1041 and pay tax on Rhode Island–source income. Nonresident trusts file if they have Rhode Island–source income. Nevada does not impose a state income tax. Nevada-situs trusts therefore avoid a state-level income tax, though other states can still tax based on connections to them.
Another contrast between the two states is how they handle duration. Rhode Island abolished the common-law rule against perpetuities. This allows very long-term or even perpetual trusts—but only for trusts drafted specifically that way. Nevada adopted a statutory approach. All future interests can remain unvested for up to 365 years under NRS 111.1031. That long window supports “dynasty” planning across many generations.
Directed Trusts and Decanting
Nevada stands out for directed trusts. Its statutes define trust advisers and protectors, describe when a trustee is a “directed fiduciary,” and limit the directed trustee’s liability when following an adviser’s instructions. This lets families split roles for investments, distributions, and administration.
Both states permit “decanting,” which is the statutory power to move assets from one irrevocable trust to a new trust with updated terms. Nevada’s decanting is in NRS 163.556. Rhode Island’s decanting appears at R.I. Gen. Laws § 18-4-31. These tools help refresh older trusts without starting from scratch.
More on Estate Tax
Again, Rhode Island has a separate state estate tax with an inflation-indexed threshold (although no inheritance tax). For 2025, the estate tax threshold is $1,802,431, published each December by the Division of Taxation. Nevada has no state estate or inheritance tax. This backdrop matters when estimating potential transfer costs for larger estates.
Situs for Revocable Trusts in Rhode Island Versus Nevada
Situs is where a trust is legally based. With revocable trusts in Rhode Island versus Nevada, the differences lie with income taxation, court supervision, trustee options, and how easily you can use advisers or protectors. Nevada’s directed-trust framework and no-income-tax regime are attractive to some families. Rhode Island’s local connection can be useful for trusts centered on Rhode Island real estate, businesses, or beneficiaries.