§ 18-9.2-4. Avoidance of qualified dispositions.
(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 §â€‚6-16-7.
(b) Notwithstanding the provisions of §â€‚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 §§â€‚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.