Ohio HB 7 - Estate Planning, Trust and Probate Law CHANGES
OHIO LEGISLATIVE SERVICE COMMISSION
On August 17, 2021, Ohio HB 7, the Ohio State Bar Association’s Estate Planning, Trust and Probate Law section bill revising some of Ohio probate, guardianship, and trust law will take effect. The entire text of the bill can be found here:
SELECTION OF AUTOMOBILES BY SURVIVING SPOUSE
Modifies the law by providing that if the surviving spouse selected “more than one automobile,” instead of one or more automobiles, the allowance for support is reduced by the value of the automobile having the lowest value “of the automobiles” so selected.
Modifies the law by providing that if the surviving spouse selected “more than one automobile,” the probate court, in considering the needs of the spouse and the minor children when allocating a support allowance, must consider the benefit derived from the transfer of the automobile having the lowest value “of the automobiles so selected.”
GUARDIANSHIP LAW CHANGES
Expands the powers of a guardian to include:
· * Disclaiming the present, contingent, or expectant interests in the ward’s property;
· * Creating, amending, or revoking revocable trusts of property of the ward’s estate that may extend beyond the ward’s minority, disability, or life; and
* Changing beneficiaries of insurance policies, retirement plans, IRAs, and annuities.
Expands the factors the court must consider to determine that a guardian’s exercise of a particular power must not impair the financial ability of the ward’s estate to provide for the ward’s maintenance needs, to include the disposition of property by the ward’s revocable trust, and if there is no knowledge of such trust, the ward’s prospective heirs.
Modifies the law requiring the probate court to cause notice to be given and a hearing to be conducted prior to exercising or directing the exercise of certain powers, such as the power to create, amend, or revoke a revocable trust and to exercise rights to elect options under annuities and insurance policies.
Expands the types of persons to whom the notice is to be given to include the ward’s heirs at law and next of kin and certain beneficiaries, such as those under the ward’s existing will, revocable trust, or last known will; beneficiaries of insurance policies, retirement plans, IRAs, and annuities owned by the ward; and others.
ANATOMICAL GIFT ACT CHANGES
Eliminates the following as a manner of making an anatomical gift: (a) specifying in the donor’s will an intent to make such a gift, or (b) specifying an intent to make such gift in the donor’s declaration governing the use or continuation, or the withholding or withdrawal, of life-sustaining treatment.
Removes law that an amendment of an anatomical gift made in a will was as provided for amendment of wills and that a revocation of an anatomical gift made in a will was as provided for revocation of wills and other statutory methods.
Eliminates the provision for indicating a refusal to make a gift of the body or part in the individual’s will, whether or not the will was admitted to probate or invalidated after the individual’s death.
Removes law dealing with the effects of a conflict between an anatomical gift and a “declaration” (also known as living will) governing the use or continuation, or the withholding or withdrawal, of life-sustaining treatment.
Eliminates the provision regarding the Second Chance Trust Fund’s money to be used to encourage attorneys to assist their clients in making anatomical gifts through their wills or their declarations or living wills.
Repeals the provisions in the Declarations Law pertaining to making an anatomical gift in a “declaration” governing the use or continuation, or the withholding or withdrawal, of life-sustaining treatment.
OHIO TRUST CODE CHANGES
Repeals law providing that upon the lapse, release, or waiver of the power of withdrawal, the holder is treated as the settlor of the trust only to the extent the value of the property affected by the lapse, release, or waiver exceeds the greater of specified amounts determined under the Internal Revenue Code.
OHIO LEGACY TRUST ACT (OLTA) CHANGES
Modifies the definitions of “disposition” and “qualified trustee” in the OLTA.
Expands the definition of “qualified trustee” to include a “family trust company” (FTC) as defined in the Ohio Family Trust Company Act (OFTCA) and which may or may not be licensed under that Act, if all of specified requirements apply regarding the FTC’s licensing status.
Specifies that the records required to be maintained by a qualified trustee for the legacy trust be electronic or physical records.
Expands a transferor’s powers to include a power allowing the transferor, while acting in a nonfiduciary capacity, to substitute property of equivalent value for any property that is part of the principal of the legacy trust.
Changes the reference to a court taking an action in the procedure for the determination or selection of a successor or replacement trustee of a legacy trust, to a reference to a court “entering or issuing an order.”
Specifies that when determining whether a provision of law is similar to any provision of the Ohio Uniform Fraudulent Transfer Act if there is a conflict between that Act and the OLTA, a court must be liberal in finding that such similarity exists.
Adds new provisions that apply if any disposition is made by a trustee of a first legacy trust to a trustee of a second legacy trust, including:
* A provision that generally the disposition is considered a qualified disposition for the benefit of all the beneficiaries of both the first and second legacy trusts;
· * The specification of dates to apply when an item of property is to be treated as having been transferred to a trustee of the second legacy trust;
· * A provision that specifies that a qualified trustee of the first legacy trust may serve as the qualified trustee of the second legacy trust.
Specifies that the OLTA and its provisions reflect and embody the strong public policy of Ohio.