OHIO STATE BAR ASSOCIATION Resources/EPTPL_Sect… · · 2011-12-27IRS Circular 230 Disclosure...

OHIO STATE BAR ASSOCIATION

Estate Planning, Trust & Probate Law Section

Report on Section Activities

Winter 2010

OHIO STATE BAR ASSOCIATION ESTATE PLANN LAW SECTION ING, TRUST AND PROBATE

Minutes of Council Meeting

H ilton Columbus/Polaris

8700 Lyra Drive Columbus, Ohio 43240

January 22 & 23, 2010

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TABLE OF CONTENTS

Page

IRS Circular 230 Disclosure ................................................................................................................................ 1

riday, F

January 22, 2010 ....................................................................................................................................... 1

Welcome ........................................................................................................................................................ 1 Introduction of New Council Members ............................................................................................ 1 Roll Call........................................................................................................................................................... 1

Approval of Minutes ................................................................................................................................. 2 Treasurer’s Report ................................................................................................................................... 2

...................................................................... 2

Legislative Report ................................................................

A Repeal of Federal Estate Tax for One Year and Proposed Ohio Legislation ................................................................................................................. 4 OSBA Seminar May 2010 ................................................................................................................. 4 Probate Judge Liaison Report ............................................................................................................... 5 The Probate Court Modernization Act .............................................................................................. 6 Transfer on Death ...................................................................................................................................... 6 New Committees ........................................................................................................................................ 7

Adjournment .............................................................................................................................................................. 9

Saturda y, January 23, 2010 ................................................................................................................................ 9 Welcome ........................................................................................................................................................ 9 Roll Call........................................................................................................................................................... 9 Trust Mill Discussion .............................................................................................................................. 10 Pliskin Advance Probate Seminar 2010 ......................................................................................... 10 Specialization ............................................................................................................................................ 11

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Probate Code Review Committee ..................................................................................................... 11 incinnati Bar Association Advanced Estate CPlanning Institute .................................................................................................................................... 12 Ohio Estate Tax Committee ............................................................................................................... 12 Review of Standard Format for Recorded Documents ............................................................ 12 The Uniform Guardianship Jurisdiction Act ................................................................................. 12 Ohio Trust Income Tax .......................................................................................................................... 13 Formula Clauses ....................................................................................................................................... 13

Adjournment ............................................................................................................................................................ 13

ext Meeting............................................................................................................................................................. 13 N

OHIO STATE BAR ASSOCIATION ESTATE PLANN LAW SECTION ING, TRUST AND PROBATE

Minutes of Council Meeting

H ilton Columbus/Polaris

8700 Lyra Drive Columbus, Ohio 43240

January 22 & 23, 2010

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS in Circular 230, we inform you that, unless we expressly state otherwise in this communication including any attachments , any tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of i avoiding penalties under the nternal Revenue Code or ii promoting, marketing or recommending to another party any

er addressed herein. Itransaction or other matt

uary 22, 2010 Friday, Jan Welcome

Chairperson Bill McGraw called the meeting to order at 8:00 p.m., and welcomed the attendees. Chairperson McGraw distributed a proposed agenda and a roster of our council members and committees. A copy of the alphabetical roster is attached as Exhibit A, and the

s Exhibit B. list of council committees is attached a

Introduction of New Council Members hairperson McGraw introduced two new members of the Council, Bill Graf and Keith oth of Cincinnati.

CMeyer, b

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Secretary Mike Cooney called the roll. A copy of the attendance record for both the riday and Saturday sessions is attached hereto as Exhibit C. Chairperson McGraw also elcomed guest John Cobe

Fw

y of Cincinnati.

Any comments should be directed to: J. Michael Cooney

25 0 Dinsmore & Shohl LLP 5 E. 5th Street, Suite 190Cincinnati, OH 45202

1

Phone: 513.977.8236 Fax: 513.977.8141

Email: [email protected]

Approval of Minutes pon motion duly made and seconded, the minutes for the September 11‐12, 2009 meetings of he Council were approvedUt

unanimously.


25 0 Dinsmore & Shohl LLP 5 E. 5th Street, Suite 190Cincinnati, OH 45202 Phone: 513.977.8236 Fax: 513.977.8141

Email: [email protected] Treasurer’s Report

Treasurer Roy Krall reported that the balance in our treasury was $55,454.42 as of eptember 30, 2009, with no unusual items of income or expense to report. The Treasurer’s eport is attached as ExhibSR

it D.

Any comments should be directed to: Roy A. Krall

Akron, OH 44303‐1414 670 W. Market Street

Phone: 330.252.9901 Fax: 330.252.9907

Email: [email protected] Legislative Report

Bill Weisenberg gave a report on pending legislative activity, along with a written summary, prepared by Steve Stover, attached as Exhibit E. There was a significant amount of legislative activity. Senate Bill 106, an omnibus bill containing many of the Council's proposals had passed the Legislature and been signed by the Governor on December 22, with an effective date of March 23, 2010.

Senate Bill 124, which contains proposed technical changes to transfer on‐death real

estate, primarily to change the manner in which such designations are made from a deed to an affidavit, had been enacted in December, with an emergency clause, making it effective immediately. A form of affidavit was distributed, which is attached as Exhibit F. Mr. Weisenberg stated that the probate judges legislation, which among other changes, seeks to increase probate fees, which were last revised 20 years ago, is being proposed for this legislative session.

2

The Omnibus Probate Law Bill, containing six proposals from the Section was at the Legislative Services Commission. Senator Seitz and Senator Schiavoni have agreed to sponsor the Bill in the Senate.

The Omnibus Bill will include the proposal to add new Section 5809.031 to modify a

trustee s duties with respect to life insurance policies held as trust assets. See’ , Section Council Minutes, September 11 & 12, 2009, p. 6.

he Bill will include the proposed decanting statute. SeeT , Section Council Minutes,

September 11 & 12, 2009, p. 9. he Bill will amend Ohio’s income tax on trusts to allow a credit to “resident” trusts for

incomeT taxes payable to other states. See, Section Council Minutes, May 15 & 16, 2009, p. 11. The Bill will amend the anti‐lapse statute, as it relates to Wills, Section 2107.52. It will

enact an anti‐lapse statute applicable to trusts. It would add provisions to the trust code to grant statutory authority to a trustee to make distributions directly to the heirs of a deceased trust b neficiary, rather than through the estate of the deceased beneficiary. See

e , Section Council Minutes, September 11 & 12, 2009, p. 4.

he Bill will enact the uniform power of attorney act in Ohio as modified. SeeT , Section

Council Minutes, September 11 & 12, 2009, p. 9. he Bill will clarify the titling of assets in trust form and add a provision regarding

validityT of instruments. See, Section Council Minutes, September 12‐13, 2008, p. 16. A proposal to provide for involuntary commitment of persons for drugs or alcohol was

proposed to be attached to the omnibus bill. This issue was referred to the Guardianship Committee, with Nic Thakur as Chair.

Mr. Weisenberg spoke of several joint projects with the Ohio Association of Probate

Judges. One is the uniform adult guardianship jurisdiction act. A second is a probate proced res project. A third is a summit on aging set for October 15, 2010. This is a joint effort of the S

uupreme Court of Ohio and the Judges’ Association. r. Weisenberg discussed Medicaid recovery issues and the problem that the existing

law is r quiring more reportMe

ing that is useful.

Any comments should be directed to: Stephan W. Stover

Ohio State Bar Association 1700 Lake Shore Drive

Columbus, OH 43216‐1008

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PO Box 16562

Phone: 614.487.4464 Fax: 614.487.1008


Repe A al of Federal Estate Tax for One Year and Proposed Ohio Legislation Mike Cooney reported that a committee, comprised of Roy Krall, Don Cairns, and Bob Brucken, and chaired by Mike Cooney, had been formed on January 11, 2010, to consider whether legislation in Ohio is desirable to address the ambiguities in federal estate tax formula clauses and federal generation‐skipping tax formula clauses caused by the one year repeal of the federal estate tax and the federal generation‐skipping transfer tax. The report of the Committee, with a draft statute, is attached as Exhibit G. There was extended discussion about the desirability of the statute. Discussion centered on the possible adverse effect on surviving spouses of certain forms of formula clauses. The problems for Ohio charities potentially caused by the effect of repeal on formula clauses, and on the inapplicability of Code Section 2055, on which charitable bequests are often conditioned, was also discussed. Concerns were expressed about the possibility of retroactive federal estate tax legislation. After discussion, the report of the Committee was unanimously endorsed by the Council. Because the Council meeting does not coincide with a meeting of the Board of Governors of the Association, it is oped that the Executive Committee of the Association can approve the proposal with a view o seeking legislative spons next few months. ht

ors and seeking enactment within the



Email: [email protected] OSBA Seminar May 2010 Seminar Chair, Dan Ramer, reported on the program for the annual seminar for the OSBA annual convention to be held in Dayton, Ohio on May 7, 2010, in the afternoon. Included in the program will be a discussion of the Cochran case in Indiana regarding life insurance investments in a trust, and the proposed Ohio legislation on this subject. The seminar will also nclude an estate and gift tax review and update and an elder law and Medicaid planning ession. A complete scheduis

le is attached as Exhibit H.

Any comments should be directed to: Daniel E. Ramer

Senior Trust Officer Fifth Third Private Bank

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123 Market Street

Phone: 937.778.4417 Piqua, OH 45356

Fax: 937.778.4434

Email: [email protected] Probate Judge Liaison Report Judge Brown of the Franklin County Probate Court was introduced as the new liaison between the Section and the Ohio Probate Judges’ Association. Judge Brown first spoke of legislative matters and referred to the presentation earlier by Bill Weisenberg and Steve Stover. He commented on Senate Bills 106 and 124. He also spoke about House Bill 10. The H.B. 10 deals with allowing juvenile courts to issue detention orders and also addressed Probate Court fees. The bill has been recommended by House Committee and is awaiting further action at the Legislature. Originally, the Probate Judges had proposed to increase the various statutory filing fees. The pending approach in the Legislature would allow Courts to increase fees up to a cap, generally allowing them to double the current fees. In a few cases, for nstance to fund indigent guardianships, the proposal would set a statutory minimum. The iJudges believe that the proposed legislation is on a fast track in the Legislature. Judge Brown spoke about proposed House Bill 197 dealing with kinship caregivers. he proposal would expand the class of persons who can execute affidavits allowing family Tmembers to step in and care for a child. The Judges have concerns. Judge Brown spoke about House Bill 395, which is the probate modernization bill. The Bill was discussed extensively in the September meeting of the Council. The Bill updates and modernizes the language of the Probate Code. It is important to Judges. It does contain some ubstantive changes, including allowing not‐for‐profit agencies to serve as guardian of the sperson. O.R.C. Section 2111.10.

Judge Brown also spoke about House Bill 411, which would allow adult adoption if the child is the child of the spouse of the petitioner and consents to the adoption. He also spoke about Senate Bill 189, dealing with custody of abused and neglected hildren. The Probate Judges have some concerns, but no official position as of the time of the cmeeting. Judge Brown also spoke about legislative proposals under discussions, including the act that a number of provisions of the Code impose personal liability on the Probate Judge for fdefault, malfeasance or nonfeasance of an employee or appointee of the Court. Finally, Judge Brown followed up on the Summit on Aging discussion by Bill Weisenberg nd stated that the Probate Courts, along with the Supreme Court, want to involve in this rocess all agencies that deal with the aging population. ap

5

Any comments should be directed to: Judge Eric Brown

Franklin County Probate Court 373 S. High St., 22nd Fl.

Columbus, OH 43215‐6311

The Probate Court Modernization Act Judge Lawrence Belskis reported on the Probate Judges Probate Court Modernization Act, H. B. 395, which had been discussed in the September meeting. See, Section Council Minutes for September 11 & 12, 2009, p. 10. Judge Belskis distributed a summary of substantive changes to the Act, which is attached as Exhibit I. Four changes that were suggested by Bill McGraw and Bob Brucken on behalf of the Section had been incorporated in the bill. Section 2701.10 changes the time requirement that causes a beneficial interest not to pass to one who withholds a Will from three years to one year. Section 2107.60 reduced the time provision for filing an oral Will from six months to three months. Section 2111.10 permits a public agency to be a guardian of a person or an estate. Accordingly, a non‐profit orporation could be a guardian. Section 2109.37 expands fiduciary investment authority. ection 2109.371 removes guardians. cS

the 60/40 rule for persons other than

Any comments should be directed to: Lawrence A. Belskis

300 Spruce Street, Floor 1 Columbus, OH 43215‐1173 Phone: 614.340.7475 Fax: 614.221.4541

Email: [email protected] Transfer on Death Bob Meredith reported on the statute, Senate Bill 124, which had been enacted with an emergency clause, making it immediately effective. The effective date provision was a surprise, and unrelated to the transfer on death portion of the statute. A transfer on death deed recorded on or after December 28 is a nullity. Under the new law, an affidavit is required. Two sample affidavits appear on the State Bar Association’s website in Word format. A confirmation affidavit is to be filed on death. Mr. Meredith reported that some uditors want to log in the affidavits and require exemption from conveyance fee forms. The ar plans to meet with the Auditor’s Association and the Recorder’s Association. aB

Any comments should be directed to:

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Robert J. Meredith 101 N. Elizabeth St., Ste 607

P.O. Box 1217 Lima, OH 45802‐1217 Phone: 419.228.6365 Fax: 419.228.5319

Email: [email protected] N mmitteesew Co Chairperson McGraw discussed several new committees as follows: 1. Ohio Trust Code/Private Settlement Agreement; Trust Modification. Chairman McGraw referred to an article in the Probate Law Journal of Ohio by Rick Davis. The Committee is formed to examine several aspects of Private Settlement Agreements, including the threshold for modification of trusts contained in Section 5804.11 B of the Revised Code. Prior case law had a lower threshold for modification than is contained in the Trust Code, and the Committee will review this. In addition, the Private Settlement Agreement statute cannot be used to modify beneficial interest in a trust. There is interest in permitting modification with some limitations. The current statute prohibits use of a Private Settlement Agreement if there is a charitable interest. A suggestion is to parallel the existing provisions for modifying a charitable remainder trust which requires Attorney General approval. There is a desire to examine whether a Private Settlement Agreement could be used to change a trust with respect to parties who agree, even if not all of the parties agrees. Further the Committee will examine whether the Private Settlement Agreement is an exclusive form of agreement, or whether ther forms of agreement from common‐law survive. Formation of the Committee was pproved. oa

Any comments should be addressed to: Robert M. Brucken

1900 East Ninth St., Suite 3200 Cleveland, OH 44114‐3485

Facsimile: 216 696‐0740 Telephone: 216 861‐7552

[email protected] or

Fifth Third Bank Northeast Ohio Joanne E. Hindel

600 Superior Avenue East

Telephone: 216 274‐5633 Cleveland, Ohio 44114

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[email protected]

2. Probate Court Jurisdiction Clarification. A suggestion is to expand the current jurisdiction of the Probate Court to deal with disputes over Will substitutes, such as beneficiary designations, payable on death assets, and joint and survivor accounts. The

mailto:[email protected]

Probate Court has jurisdiction if an attorney‐in‐fact abuses authority. It was pointed out that persons taking advantage of elderly and infirm persons can take advantage of transfer on death designations and beneficiary changes, as well as Will and trust provisions. Concern with eneficiary changes for state teachers’ retirement system and other employee benefits was lso discussed. The Commi Court. ba

ttee will review the jurisdiction of the

Any comments should be directed to: Richard L. Kolb

405 Madison Avenue, Ste. 2000 Toledo, OH 43604

Phone: 419.244.3006 Fax: 419.246.4754

Email: [email protected] 3. A committee, to be chaired by Dave Rectenwald, will consider inheritance rights involving children born using artificial reproduction technologies. The National Conference for Commissioners on Uniform State Laws address the issue in amendments to the Uniform robate Code. The SavageP case in Toledo addressed the situation in which the wrong embryo as implanted. A Commit rea. w

tee will review the need for law in this a

Any comments should be addressed to: David J. Rectenwald 1000 Jackson Street Toledo, OH 43604

Phone: 419.321.1407 Fax: 419.241.6894

Email: drectenwald@slk‐law.com 4. A committee was formed to address an elective community property regime for Ohio, such as Alaska has. An elective community property regime would allow a full step up in basis. It would alleviate the need to balance assets between couples. It would allow persons moving from a community property jurisdiction to elect a form of ownership they are familiar with. It revents disinheritance of the spouse. In the case of a divorce, it roughly corresponds with the arital property approach

pm

currently in use.

Any comments should be addressed to: Michael J. Stegman

PNC Center, Suite 800

Cincinnati, OH 45202‐4190 201 East Fifth Street

Phone: 513.381.0656 Fax: 513.381.5823


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5. Ohio Legacy Trust/Domestic Asset Protection Trust. It was reported that the ommittee is looking at a new draft of proposed legislation. The Committee expects to discuss t at the May meeting of theCi

Council.

Any comments should be directed to: Joanne E. Hindel

Fifth Third Bank Northeast Ohio 600 Superior Avenue East Cleveland, Ohio 44114

Telephone: 216 274‐5633 Email: [email protected]

Adjournment

There being no further business to come before the Friday evening session of the ouncil, the meeting was adjourned at 10:33 p.m. C

January 23, 2010 Saturday, Welcome

airperson Bill McGraw called the meeting to order at 9:00 a.m.

Ch

oll CaR ll

Secretary J. Michael Cooney called the roll. A copy of the attendance record for both the Friday and Saturday sessions is attached hereto as Exhibit C. The only guest in attendance was John Cobey.


J. Michael Cooney



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Trust Mill Discussion Gene Whetzel from the Ohio State Bar Association and Bruce Campbell, the legal counsel for the Columbus Bar Association, made a presentation to the Council regarding consequences flowing out of the successful prosecution of a California‐based trust mill


operating in Ohio, Columbus Bar Association v. American Family Services. The operations of the trust mill were brought to the attention of the Bar Association by persons on the staff of the Ohio Attorney General’s Office. A case was brought by the Columbus Bar Association against the original entity, American Family. The case began in 2002. A consent decree was ultimately entered into in which American Family agreed to cease engaging in the unauthorized practice of law. The persons who had originally been involved from the Columbus Bar Association left for other employment. Porter Wright took over the unauthorized practice of law case and a federal court action on a pro bono basis. In the federal court action, the Supreme Court rule on unauthorized practice was challenged on due process grounds. In the course of the litigation, a great deal of material was received in discovery, and other material was reviewed under seal. The State Bar Association filed an amicus brief in the Supreme Court. In the Ohio Supreme Court opinion, Ohio State Bar Assn v. United Financial Systems Corp., the Court ordered a $6,000,000 penalty for unauthorized practice. In addition, it ordered American Family to release its customer list and imposed a $25,000 per day penalty for delay. American Family filed for bankruptcy in California. The only asset found in the bankruptcy filing was the customer list. The list was sold to an entity called Puritan and to Heritage, an annuity firm affiliated with American Family. The Columbus Bar Association still does not have the customer list. When and if it receives the list, the Ohio Supreme Court order requires a letter to each customer. The letter will say that unlicensed practice of law was found and the customer should check his or her trust. The purpose of the presentation was to contemplate how to handle the potential responses from these customers. The Council then entered into a general discussion of how to help victims of the trust mill. A committee is to be formed. The general consensus is that the plans sold by the trust mill probably are uniform. The plan provisions are likely superfluous for some customers, but possibly harmful for some. The ommittee will be charged with anticipating issues arising from the letters to customers. The ormation of the committee ed. cf

was approved. A chair will be recruit

Any comments should be directed to: William J. McGraw, III 210 W. Main Street

Troy, OH 45373‐0520 Phone: 937.339.0511 Fax: 937.335.5802

raw@dungan‐lefevre.com Email: bmcg

liskin P Advance Probate Seminar 2010 Committee Brian Layman announced that the date of the seminar has been changed to September 24, 2010. Tentative speakers include Alan Acker on fixing broken irrevocable trusts; Richard Kolb on trust and estate litigation and a possible presentation on business development or practice building. The Committee is considering a presentation on law firm ancillary services, including financial services with a speaker, Mr. Matthews from the Brooker irm. There is also a possible speaker on beneficiary controlled trusts. A list of speakers and

ed as Exhibit J. f

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topics is attach Specialization

Committee Chairperson Don Schweller made a presentation. In his presentation, Mr.

Schweller suggested to council members that they consider becoming certified specialists and that they encourage others to do so as well. There are only 159 certified specialists in Ohio. Seven persons took the exam and each passed it this year. There are over 2500 members of this Section. Mr. Schweller believes there sho ld be far more than 159 certified specialists. Certification is a voluntary

uprocess committed to excellence.


Donald G. Schweller

Dayton, Ohio 45423‐2700 40 N. Main Street, Suite 2700

Phone: 937.223.1130 Fax: 937.223.0339

il: Ema [email protected] Probate Code Review Committee Committee Chair, Mike Ogline gave a presentation on his committee and the issues they are reviewing. These include the requirement of residency of an administrator; the desirability of providing for a limited type of administration, other than the summary release rocedure; and the Code provisions regarding sale of assets by fiduciaries. If other persons ave suggestions, they shoph

uld send them to Mike Ogline.

Any comments should be addressed to: Michael A. Ogline

1 844 West State StreetAlliance, OH 44601 Phone: 330.821.1430 Fax: 330.821.2217


At 10:15, the Section took a short break.

incinn C ati Bar Association Advanced Estate Planning Institute After the break, Michael Stegman, who chairs the Cincinnati Bar Association Advanced state Planning Institute, scheduled for February 26, encouraged persons to consider

d the program highlights. E

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attending it and summarize Ohio Estate Tax Committee


Bob Brucken reported on an upcoming article in the Probate Law Journal of Ohio. There is a rumor that the Ohio Tax Department was refusing to allow the Ohio estate tax marital deduction for a power of appointment trust. The rumor was that there was no Ohio marital deduction because Ohio law does not have a parallel to Internal Revenue Code Section 2056 b 5 , an exception to the federal terminable interest rule. Of course, Ohio has no terminable interest rule either, against which to grant an exception. Mark Friedman of the Department of Taxation has advised that the Ohio marital deduction is available for a general ower of appointment trust, which has been the official position of the Department of Taxation pfor as long as anyone could remember. Mr. Brucken discussed the possibility of Congress not renewing the federal estate tax in 2010 and resuming it in 2011. In 2011, the federal credit for state death taxes would resume automatically. The Ohio Sponge Tax might not be automatically reinstated. Mr. Brucken uggests efforts to repeal the Ohio regular estate tax and replace with the sponge tax effective sin 2011.

eview R of Standard Format for Recorded Documents Dave Allen reported on some issues with the new statute enacted last year. The statute requires uniform margins. Some recorders have taken the position that if a notary stamp or a signature exceeds the margin, a surcharge is to be charged. There is an Ohio Attorney opinion n this subject that generally excuses notary stamps, signatures, or initials from the margin

ity of the document. orules, other than initials relating to the valid

he Un T iform Guardianship Jurisdiction Act Nic Thakur, Chairman of the Guardianship Committee, talked about this Act, which is being reviewed by his Committee. The Uniform Act is intended to deal with when a state obtains or loses jurisdiction. Generally, the Act requires six months of residence. The Guardianship Committee has other action items to address. The Committee is studying the ssue of Probate Court ordered treatment for drug or alcohol abuse. There is concern about he civi oit l rights of the person rdered to be treated. The Committee is studying this proposal. A report was given on medical orders for life‐sustaining treatment. The Health Committee of the Ohio Bar had proposed legislation contained in H.B. 241. It would affect DNR rders and Living Wills. Several groups have commented on the legislation. The palliative care owebsite is tracking the legislation.

on the change regarding small guardianship issues. Nic also reported Ohio Trust Income Tax

Kevin Robertson reported that the proposed correction to the residency credit is still ncluded in the proposed legislation combined into the omnibus probate bill. i

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13

Formula Clauses Further discussion ensued regarding the effect of formula clause legislation discussed the previous evening. It was pointed out that a rule of construction treating a person as if he died on December 31, 2009, does not optimize federal estate tax planning, assuming the federal estate tax is applicable to the surviving spouse’s estate. It was pointed out that one goal of the legislation was clarity. There is a perception of a trade off between clarity and ikely donor intent on the one side, and optimum estate tax results on the other. After

re was no change to the Section’s approval of the previous evening. ldiscussion, the Adjournment

There being no further business to come before the meeting, the meeting was 1:25 a.m.

adjourned at 1 Next Meeting

The next meeting of the Section Council is on May 7 and 8, 2010, in Dayton, Ohio, in onnection with the OSBA Annual Convention. c 1689026_4

OHIO STATE BAR ASSOCIATION ESTATE PLANNING, TRUST

AND PROBATE LAW SECTION LEGISLATIVE REPORT

January 22-23, 2010

Ohio Acts Enacted 2008-2009 Ohio Acts Enacted 2007-2008

Ohio Bills Introduced 2009-2010

New and Proposed Rules and Legislation Affecting Section Members

Roy A. Krall Weston Hurd LLP

Akron, Ohio

TABLE OF CONTENTS

I. BILLS ENACTED DURING 128TH GENERAL ASSEMBLY (2009-2010)

P. 1

A. Sponsored by the Estate Planning, Trust and Probate Law Section

P. 1

1. S.B. 106; Buehrer, Kearney B. Not sponsored by the Estate Planning, Trust and Probate

Law Section

P. 1

P. 2

1. S.B. 124; Faber, Schiavoni II. BILLS INTRODUCED DURING 128TH GENERAL ASSEMBLY

(2009-2010)

P. 3

A. Sponsored by Estate Planning, Trust and Probate Law Section.

P. 3

None as yet – But See Section V(A)(13) of this Report.

B. Not Sponsored by Estate Planning, Trust and Probate Law Section.

P. 3

1. H.B. 61; Hottinger, Grossman

P. 3

2. H.B. 241: Garland

P. 3

3. H.B. 10; Brown

P. 4

4. H.B. 197 Harris

P. 4

5. H.B. 395; Bacon, Harwood

P. 4

6. H.B. 411; Martin

P. 5

7.S.B. 189; Goodman

P. 5

8. H.B. 326; Hottinger Grossman

P. 5

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III. BILLS ENACTED BY 127TH GENERAL ASSEMBLY (2007-2008)

P. 6

1. H.B. 134; Seitz Permits Operating Agreement of Limited Liability

Company to Control Membership Rights at Death

P. 6

2. S.B. 134; Faber Execution and acknowledgment of Memoranda of Trust

P. 6

3. H.B. 458; Uecker Re-enacting 5701.11 references to Internal Revenue Code

P. 7

4. H.B. 372; R. McGregor Exemption from Probate Court costs for military deaths in

a combat zone

P. 7

5. H.B. 160; Bubp Update of Disclaimer Statute

P. 7

6. Sub. S.B. 157; Buehrer Permit nomination of guardian for adult incompentent child

P. 8

7. S.B. 302; Goodman Conscious presence test in Will execution

P. 8

8. H.B. 499; Oelslager Ohio Trust Code

P. 8

9. H.B. 562; Hottinger Capital and other appropriations

P. 9

10. Sub. H.B. 529; Wachtman Revised Uniform Anatomical Gift Act

P. 9

11. H.B. 522; Oelslager Uniform Prudent Management of Institutional Funds Act

(“UPMIFA”)

P. 9

12. Sub. H.B. 525 Standard Format Requirement for Documents to be

Recorded

P. 10

13. H.B. 7; Brinkman Adoption

P. 10

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IV. BILLS INTRODUCED DURING 127TH GENERAL ASSEMBLY (2007-2008), BUT NOT ENACTED

P. 11

A. Not Sponsored by Estate Planning, Trust, and Probate Law Section

P. 11

1. H.B. 3; Latta Repeal of Ohio estate tax, subject to local option to

impose “municipal” estate tax

P. 11

2. H.B. 4; Wolpert Reduction of Ohio estate tax, subject to local option to

repeal

P. 11

3. Am. H.B. 96; Healy Waiver of probate costs for military deaths in combat

zones

P. 12

4. H.B. 255; Latta Reliance on real estate values in probate inventory,

and new limitations on doctor-patient privilege

P. 12

5. H.B. 564; Stebelton Probate Court fee increases

P. 12

V. LEGISLATIVE PROPOSALS

P. 13

A. Sponsored by the Estate Planning, Trust, and Probate Law Section and Approved by the Council of Delegates

P. 13

1. Estate Tax Provisions

P. 13

2. Uniform Multiple Party Accounts Act

P. 13

3. Waivers of accounts and inventories in estates

P. 14

4. Statutory share of surviving spouses

P. 15

5. Estate Tax Apportionment Act

P. 16

6. Joint and survivor accounts

P. 16

7. Decanting of Trusts P. 17 8. Protection of Trustees P. 17 9. Ohio Income Tax on Trusts P. 18

- iv -

10. Uniform power of attorney P. 18 11. Anti-lapse statute for trusts P. 18 12. Titling Trust Property

P. 19

13. Omnibus Probate Bill

P. 19

B. Approved by the Estate Planning, Trust, and Probate Law Section Council

P. 19

1. Claims against non-probate property

P. 19

2. Postnuptial Agreements

P. 20

3. Formula clause constructed

P. 20

C. Under Study by the Estate Planning, Trust, and Probate Law Section

P. 21

1. Anti-ademption statute applicable to trusts

P. 21

2. Asset Protection Trusts

P. 21

3. Bequests of tangibles

P. 21

4. Business entities

P. 21

5. Claims against non-probate property

P. 22

6. Community Property

P. 22

7. Creditors’ access to IRAs

P. 22

8. Creditors’ access to IRC Section 529 Plans

P. 23

9. Death or incapacity of a lawyer

P. 23

10. Disentailment statute simplification

P. 23

11. Dynasty Trust

P. 24

12. General partnerships

P. 24

13. Illegitimate children

P. 24

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14. Inheritance rights

P. 25

15. Insurable interests in life insurance

P. 25

16. Joint Trusts

P. 25

17. Jury instructions in probate litigation

P. 25

18. Living Wills/Central Location

P. 26

19. Lump sum life insurance payments

P. 26

20. Ohio estate tax

P. 26

21. Ohio income tax

P. 26

22. Ohio Principal and Income Act

P. 27

23. Partnership inventories

P. 27

24. Privacy of probate pleadings

P. 27

25. Private Settlement Agreements

P. 28

26. Probate Code review

P. 28

27. Probate Court Jurisdiction

P. 28

28. Probate reform

P. 29

29. Rules of Superintendence

P. 29

30. Safe deposit box procedures

P. 29

31. Statutory share of surviving spouses; postnuptials

P. 30

32. Successor custodians

P. 30

33. Summary sale procedures update

P. 31

34. Tortious interference

P. 31

35. Transfer on Death Real Estate

P. 31

36. Trust Code technical changes

P. 31

37. Trust withholding for non-resident beneficiaries P. 32

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- vii -

38. Unauthorized practice of law

P. 32

39. Uniform Conservation Easement Act

P. 32

40. Uniform International Wills Act P. 33

I. BILLS ENACTED BY THE 128TH GENERAL ASSEMBLY (2009-2010) A. Sponsored by Estate Planning, Trust and Probate Law Section. Bill No./Sponsor Description Status

1. Sub. S.B. 106;

Buehrer, Kearney Revised Code Sections amended: 2101.16, 2107.76, 2109.21, 2111.05, 2111.18, 2125.04, 2305.19, 5747.01, and 5815.31

Introduced 4/9/2009 Passed Senate 6/25/2009 Passed House 12/08/2009 Governor’s action 12/23/2009 – effective 3/24/2010

SUMMARY

The Bill (i) excludes from the application of the savings statute certain estate and trust proceedings that have limitations periods, superseding Vitantonio v. Baxter, 116 Ohio St. 3d 195; (ii) raises the threshold amount from $10,000 to $25,000 for the termination or avoidance of guardianships of small estates, or upon settlement of claims of minors or adult incompetents ; (iii) clarifies that termination of marriage revokes any trust provision conferring a beneficial interest on the former spouse; (iv) clarifies the definition of “qualifying transfer” for purpose of the Ohio income tax on trusts to make it clear that a transfer to a trust pursuant to a Will is only a qualifying transfer if the testator was domiciled in Ohio at the time of death; (v) clarifies that a guardian must be a resident of Ohio unless nominated in will of parent, selected by minor over age 14, nominated in a durable power of attorney or other writing; (vi) modifies the period within which a plaintiff in a wrongful death action may commence a new action after the reversal of a judgment for the plaintiff or the plaintiff's failure otherwise than upon the merits, and (vii) changes Probate Court filing fees.

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B. Not sponsored by Estate Planning, Trust and Probate Law Section. Bill No./Sponsor Description Status

1. S.B. 124; Faber,

Schiavoni Revised Code Sections amended: 317.114, 1321.51, 1321.522, 1321.53, 1321.531, 1321.532, 1321.533, 1321.535, 1321.54, 1321.55, 1321.59, 1322.01, 1322.02, 1322.022, 1322.023, 1322.03, 1322.031, 1322.04, 1322.041, 1322.062, 1322.07, 1322.074, 1322.10, 1322.99, 1343.011, 1345.01, 1345.05, 1345.09, 1349.31, 1349.43, 1541.083, 1733.252, 5302.01, 5302.02, 5302.22, 5302.221, 5302.23, and 5815.36; Revised Code Sections enacted: 5302.222 and 5302.24; Am. S. B. 1 of the 128th General Assembly Section amended: 745.60

Introduced 4/30/2009 Passed Senate 10/28/2009 Passed House 12/16/2009; Governor’s action 12/28/2009; effective 12/28/2009 (emergency legislation)

SUMMARY

The Bill (i) changes the transfer on death (TOD) designation instrument form from a deed to an affidavit; (ii) allows real property owners holding title in survivorship tenancy to execute a TOD affidavit; (iii) clarifies the status of a trustee of a trust as TOD beneficiary and the dower rights of the spouse of the property owner; (iv) makes other changes pertaining to the transfer on death of real property; (v) allows a county recorder to accept for filing certain nonconforming documents without charging the fees otherwise required to be collected for nonconforming documents; and (vi) makes several other changes not related to estate planning, probate or trust law. Sponsored by the OSBA Real Property Section.

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II. BILLS INTRODUCED DURING 128TH GENERAL ASSEMBLY (2009-2010)

A. Sponsored by Estate Planning, Trust and Probate Law Section. None as yet, but see Section V(A)(13) of this Report. B. Not Sponsored by Estate Planning, Trust and Probate Law

Section. Bill No./Sponsor Description Status

1. H.B. 61;

Hottinger, Grossman

Introduced 3/4/2009 Referred to Ways and Means Committee

SUMMARY

The Bill would reduce the Ohio estate tax by increasing the credit to $15,575, indexed to the C.P.I. and permit townships and municipalities to exempt property within their political subdivision. Bill No./Sponsor Description Status

2. H.B. 241; Garland Introduced 6/24/2009

Referred to Health Committee

SUMMARY

The Bill would require the Director of Health to prescribe a form to document medical orders for life-sustaining treatment and to make changes to the law governing DNR identification and orders.

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Bill No./Sponsor Description Status

3. H.B. 10; Brown Introduced 2/17/2009

Passed House 6/24/2009; Introduced to Senate 6/25/2009; Referred to Judiciary and Civil Service Committee

SUMMARY

The Bill would (i) allow a juvenile court to issue a protection order against a child who is alleged to have committed certain offenses or domestic violence against the person to be protected; and (ii) provide for the establishment by court rule of certain fees to be charged by the probate and other courts. Bill No./Sponsor Description Status

4. H.B. 197; Harris Introduced 5/27/2009

Referred to Judiciary Committee

SUMMARY

The Bill would expand the class of persons who may execute a caretaker authorization affidavit or be designated as attorney in fact under a power of attorney for the purpose of exercising authority over the care, custody, and control of a child and to enhance Ohio's policies regarding kinship caregivers. Bill No./Sponsor Description Status

5. H.B. 395; Bacon,

Harwood Introduced 12/14/2009

Referred to Civil and Commercial Law Committee

SUMMARY

The Bill would modernize language in the Probate Code (for example, by removing exclusive use of the male pronouns and replacing terms such as “idiot” and “imbecile” with “incompetent”) and revise Revised Code §2111.10 to allow the appointment of a public agency or nonprofit corporation to serve as guardian of an estate or person.

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6. H.B. 411; Martin Introduced 1/19/2010 Referred to Civil and Commercial Law Committee

SUMMARY

The Bill would amend R. C. §3107.02 to allow an adult to be adopted if the adult is the child of the spouse of the adoption petitioner and the adult consents to the adoption Bill No./Sponsor Description Status

7. S.B. 189;

Goodman Introduced 10/20/2009

Referred to Judicial Civil Service Committee

SUMMARY

The Bill concerns adoption law, custody of an abused, neglected, or dependent child, and the elimination of acknowledgments of paternity. Bill No./Sponsor Description Status

8. H.B. 326;

Hottinger, Grossman

Introduced 10/21/2009 Referred to Ways & Means Committee; First Hearing 11/4/2009

SUMMARY

The Bill would reduce the estate tax by exempting taxable estates not exceeding $366,250 and by reducing the 6% and 7% tax brackets by 20%.

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III. BILLS ENACTED BY 127TH GENERAL ASSEMBLY (2007-2008) Bill No./Sponsor Description Status

1. H.B. 134; Seitz Permits Operating Agreement of

Limited Liability Company to Control Membership Rights at Death

Passed House 06/05/07 Passed Senate 06/27/07 Signed by Gov. 7/19/07 Effective 10/18/07

SUMMARY

This Bill overruled the result in Holdeman v. Epperson, 111 Ohio St. 3d 551 (2006),

in which the Ohio Supreme Court ruled that the Executrix of an estate succeeded to the membership rights held by a decedent, notwithstanding the terms of an Operating Agreement of a limited liability company (“LLC”) intended to control (and change) membership rights as applicable to a deceased member’s interest. Thus, this Bill re-established what most parties had believed Ohio law to be prior to the Holdeman case: pursuant to Section 1750.21(A), as revised, the terms of an Operating Agreement will control in defining membership rights exercisable (or not exercisable) with respect to a deceased member’s interest in an LLC.

Bill No./Sponsor Description Status 2. S.B. 134; Faber Execution and acknowledgment of

Memoranda of Trust Passed Senate 05/30/07 Passed House 10/3/07 Signed by Governor 10/18/07 Effective Date 1/17/08

SUMMARY

This Bill modifies Ohio Revised Code Sections 5301.01 and 5301.255 to require only

the Trustee to sign a Memorandum of Trust for recording (rather than the current statutory requirement of having both the Settlor and the Trustee sign, which is a problem if the Settlor is deceased or incapacitated).

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Bill No./Sponsor Description Status 3. H.B. 458; Uecker

Re-enacting 5701.11 references to Internal Revenue Code

Passed House 5/22/08 Passed Senate 12/10/08 Signed by Governor 12/30/08 Effective Date 12/30/08

SUMMARY

This Bill re-enacts Ohio Revised Code Section 5701.11, generally providing that references in Title LVII to the Internal Revenue Code, as amended, or to other laws of the United States shall mean such laws as they exist on the effective date. Bill No./Sponsor Description Status

4. H.B. 372; R. McGregor

Exemption from Probate Court costs for military deaths in a combat zone.

Introduced 10/30/07 Passed House 11/7/07 Introduced Senate 11/8/07 Passed Senate 12/12/07 Signed by Governor 12/20/07 Effective Date 3/24/08

SUMMARY

This Bill exempts estates of armed forces members who died while serving in a combat zone from probate fees, by enacting new Ohio Revised Code Section 2101.164.

Bill No./Sponsor Description Status 5. H.B. 160; Bubp Update of Disclaimer Statute Passed House 06/13/07

Passed Senate 1/30/08 Signed by Governor 3/21/08 Effective 6/20/08

SUMMARY

This Act updates Ohio’s disclaimer statute (Ohio Revised Code Section 5815.36; prior

to 2007, Section 1339.68). Language regarding disclaimers by fiduciaries is expanded and clarified, and the nine-month time limit (relevant only to federal “qualified disclaimers”) is eliminated. The Act contains several other technical improvements (for example, permitting persons over age 18 to disclaim, replacing outdated statutory references to age 21). In addition, it clarifies the LLC statute to make it clear that not-for-profit LLCs may be established.

- 7 -

Bill No./Sponsor Description Status 6. Sub. S.B. 157;

Buehrer Permit nomination of guardian for adult incompetent child

Passed Senate 6/19/07 Passed House 1/23/08 Signed by Governor 2/13/08 Effective 5/14/08

SUMMARY

This Act allows a parent of an adult incompetent child to nominate a guardian for

such adult incompetent child (prior law only permited such nominations to be made by a parent for his or her minor children). The Act also contains a narrow provision that eliminates the need to obtain a release or waiver of dower if a married person conveys an interest in real estate at a time when such person’s spouse is a “mentally ill person subject to hospitalization by court order.”

Description Status 7. S.B. 302; Goodman

Conscious presence test in Will execution

Passed Senate 4/30/08 Passed House 5/28/08 Signed by Governor 6/11/08 Effective 9/11/08

SUMMARY

The Act modifies O.R.C. Section 2107.03 and 2107.04 to permit a Will to be

witnessed in the “conscious presence” of the witnesses, to facilitate the execution of Wills when a Testator is contagious.

Description Status 8. H.B. 499; Oelslager

Ohio Trust Code Passed House 4/29/08 Passed Senate 5/28/08 Sent to Governor 6/5/08 Signed 6/12/08 Effective 9/12/08

SUMMARY

Provides clarifying and technical amendments to the Ohio Trust Code, including:

governing law issues; provisions regarding modification or termination; modifies the provisions on combining or dividing trusts. A full report by Professor Newman is available on the OSBA website. See Section Council's Minutes for Sept. 14-15, 2007, p. 13.

- 8 -

Description Status 9. Sub. H.B. 562; Hottinger

Capital and other appropriations Passed House 5/22/08 Passed Senate 5/28/08 Signed by Governor 6/24/08 Effective 9/23/08

SUMMARY

This Bill includes an amendment to O.R.C. Section 5745.02(D)(2), limiting the trust

income tax credit for taxes paid to another state on the trust’s accumulated non-business income to nonresident trusts.

Description Status 10. Sub. H.B. 529; Wachtman

Revised Uniform Anatomical Gift Act

Passed House 5/28/08 Introduced Senate 12/17/08 Signed by Governor 1/6/09 Effective Date 4/7/09

SUMMARY

This Bill adopted the 2006 version of the Revised Uniform Anatomical Gift Act, ORC

Sections 2108.01, et. seq.

Description Status 11. H.B. 522 Oelslager

Uniform Prudent Management of Institutional Funds Act (“UPMIFA”)

Passed House 5/20/08 Passed Senate 12/16/08 Signed by Governor 1/06/09 Effective 4/7/09 Portions effective 6/1/09

SUMMARY

The Bill adopted an Ohio version of UPMIFA, to update Ohio’s prior version of the

Uniform Management of Institutional Funds Act (old “UMIFA”) that dates back several decades (and predates the “modern portfolio theory” statutes, such as the Uniform Prudent Investor Act, that Ohio already has adopted for trusts). UPMIFA (like Ohio’s prior UMIFA) governs the management and expenditure of endowment funds by charitable institutions. Unlike the “Uniform” version of UPMIFA, the Ohio version of UPMIFA includes: (i) a “presumption of prudence” for annual expenditures from institutional endowment funds

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that did not exceed 5% of fund value; and (ii) a broad “self-help” provision that permits a charity (with advance notification to the Ohio Attorney General’s office, and subject to the continuing jurisdiction of the Ohio Attorney General) to release or modify a donor-imposed restriction on an institutional fund that has a total value less than $250,000 if (a) the charity determines in good faith that the restriction being modified or released has become unlawful, impracticable, impossible to achieve or wasteful; (b) more than 10 years have elapsed since the fund was established subject to such restriction; and (c) the charity uses the property in a manner consistent with the charitable purposes expressed in the gift instrument. Among other things, the presumption of prudence provision (and its “safe harbor” 5% spending rule) are designed to solve a predicament faced by so-called “underwater” endowment funds (funds that have declined in total dollar value relative to the original amounts gifted, usually due to short-term, adverse swings in equity values). Such a “safe harbor” spending rule makes it clear that expenditures continue to be permitted from such an “underwater” endowment fund. Under old UMIFA, which generally prohibits expenditures that would cause the value of an endowment fund to fall below the aggregate, historical dollar value contributed by donors to such fund, there are technical concerns about expenditures from funds that fall “underwater” (such as happened to many funds established in 2001 and 2002, just prior to a significant market downturn). The UPMIFA safe harbor provides a spending rule to help “smooth out” adverse market swings and allow charitable institutions to budget their annual endowment expenditures more effectively. See Section Council Minutes Fall 2009, p. 11.

Description Status 12. Sub. H.B. 525

Standard Format Requirement for Documents to be Recorded.

Passed House 11/13/08 Passed Senate 12/10/08 Signed by Governor 1/6/09 Effective 7/1/09

SUMMARY

This Bill creates format requirements for instruments to be accepted for

recording by a county recorder, O.R.C. Section 317.114.

Description Status 13. H.B. 7 Brinkman

Adoption Passed House 5/20/08 Passed Senate 12/17/08 Signed by Governor 1/6/09 Effective 4/7/09

SUMMARY

The Bill made changes to the Ohio adoption law, including allowing a foster

caregiver to seek adoption of a child, who has resided in the foster caregiver’s home for six

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months (previously twelve months), and allowing payment of certain living expenses of the birth mother by the agency (3107.055(C)(9)).

IV. BILLS INTRODUCED DURING 127TH GENERAL ASSEMBLY (2007-

2008), BUT NOT ENACTED.

A. Not Sponsored by Estate Planning, Trust, and Probate Law Section. Bill No./Sponsor Description Status

1. H.B. 3; Latta Repeal of Ohio estate tax, subject

to local option to impose “municipal” estate tax

Introduced 02/20/07 Assigned to House Ways and Means Committee

SUMMARY

Effective January 1, 2008, this Bill would repeal the state-level Ohio estate tax, and

“replace” it by authorizing townships and municipalities to impose their own “local” estate tax. For decedents dying in 2008, the Bill would require a minimum exemption of $400,000, with a maximum permitted local estate tax rate of 4.8% on taxable estate value in excess of $400,000. For decedents dying in 2009, the minimum exemption would be $500,000, and the minimum exemption would increase to $600,000 for decedents dying in 2010 or later. In 2009 and later, the maximum permitted “local” estate tax rate (on amounts in excess of the exemption) would be 5.6%.


2. H.B. 4; Wolpert Reduction of Ohio estate tax,

subject to local option to repeal Introduced 02/20/07 Assigned to House Ways and Means Committee

SUMMARY

Effective July 1, 2007, this Bill would increase the Ohio estate tax exemption

equivalent from $338,333 to $362,250, with the estate tax exemption to be indexed annually for inflation (with the first such annual inflation adjustment to take effect for decedents dying on or after January 1, 2009). Further, this Bill would allocate 100% of Ohio estate tax receipts to the Ohio township or municipality where decedent was domiciled at death, with a local option for each such township or municipality to repeal the Ohio estate tax as applied to individuals domiciled in such township or municipality.

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Bill No./Sponsor Description Status 3. Am. H.B. 96;

Healy Waiver of probate costs for military deaths in combat zones

Introduced 03/06/07 Assigned to House Judiciary Committee & Amended by Committee 04/24/07

SUMMARY

This Bill would exempt from Probate Court filing fees (whether for a release from

administration, testate or intestate proceeding) the estate proceedings for any decedent, who died while in active military service as a result of wounds, disease or injury incurred while serving in a combat zone.


4. H.B. 255; Latta Reliance on real estate tax values

in probate inventory, and new limitations on doctor-patient privilege

Introduced 06/05/07 Assigned to House Judiciary Committee

SUMMARY

This Bill would permit estate fiduciaries to elect to report real estate values on

probate inventories at the county auditor’s property-tax-assessed market value, in lieu of having such real estate appraised. Such a provision would codify a practice that already has been adopted by many Probate Courts in Ohio (i.e., not requiring an appraisal of real estate if property-tax-assessed values are used). Also, this Bill includes a provision that would eliminate doctor-patient testimonial privilege (i.e., permitting a doctor or dentist to testify or to be compelled to testify) in certain types of proceedings. For example, the testimonial privilege would be abolished in involuntary commitment proceedings to determine whether continued inpatient treatment at a mental health facility is warranted, child or spousal abuse cases involving an investigation by Adult Protective Services, and cases involving investigation of allegations of abuse or neglect in a nursing home or mental health facility.

Description Status

5. H.B. 564; Stebelton

Probate Court fee increases Introduced 5/19/08 Reported by House Judiciary Committee 12/11/08

SUMMARY

This Bill increases the fee charges for most Probate Court filings.

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IV. LEGISLATIVE PROPOSALS.

A. Sponsored by the Estate Planning, Trust, and Probate Law Section and Approved by the Council of Delegates.

Description Status

1. Estate Tax Provisions Approved by Council of

Delegates

SUMMARY

The Council has approved five Board proposals involving the estate tax:

a. The Ohio Department of Taxation formerly required financial institutions to freeze accounts of more than $2,500.00 of a person who dies, pending the presentation of a Tax Release Form. The Department recently raised the threshold to $25,000.00 and eliminated 75% of the 300,000 releases currently obtained each year. The Council has approved a proposal to repeal O.R.C. 5731.39 requiring tax releases.

b. The Council has approved a proposal to amend O.R.C. 5731.15(B)(2) to conform Ohio law with Internal Revenue Code Section 2056(b)(7)(B)(v), which permits late QTIP elections.

c. The Council has approved a proposal to enact new O.R.C. 5731.132 to conform Ohio law to federal law by excluding Section 529 plans from a grantor’s gross estate for Ohio estate tax purposes.

d. The Council has approved a proposal to extend the estate tax pension exclusion to rollover IRAs (reversing Roberts case).

e. The Council has approved a proposal to increase the Ohio estate tax exemption.

Description Status

2. Uniform Multiple Party

Accounts Act Approved by Council of Delegates

SUMMARY

The proposal provides for the amendment, repeal, and enactment of a number of

sections of the Ohio Revised Code for purposes of adopting a modified version of the Uniform Multiple Party Accounts Act, which was approved by the National Conference of Commissioners on Uniform State Laws (“NCCUSL”) in 1989. In general, the Act addresses the issues involved in the accounts of financial institutions in which one or more persons

- 13 -

have an interest. According to NCCUSL, the Act deals separately with (i) ownership of accounts as between multiple owners, and the existence, validity, and revocability of survivors’ benefits, and (ii) financial institution protection. The proposal provides for the enactment of Chapter 1342 of the Ohio Revised Code along with corresponding changes in other parts of the Ohio Revised Code, including banking, savings and loan association, savings bank, and credit union law.

Description Status 3. Waivers of accounts and

inventories in estates Approved by Council of Delegates.

SUMMARY

The proposal provides for the amendment of Sections 2106.01, 2113.69, and 2115.02

of the Ohio Revised Code and the revision of the accounting and inventory filing requirements for estates.

This proposal provides that an Executor or Administrator would not be required to file a partial or final accounting or an inventory of the estate with the court if: (1) the sole beneficiary or heir of the estate also is the sole executor or administrator of the estate; or (2) all beneficiaries or heirs of the estate file written waivers of the filing of the accounting and/or the inventory within the time required for the filing of such document. A beneficiary or heir may withdraw such a waiver at any time before the approval of the final accounting or the filing of a certificate of termination. Also, the Probate Court may require the filing of an accounting and/or an inventory at the request of a creditor whose claim is allowed but unpaid, or on its own initiative. The Executor or Administrator still would be required to file a Certificate of Termination within 30 days after completing the administration of the estate. Finally, in estates for which the Executor or Administrator does not file an inventory with the Probate Court, the Court would issue the citation to the surviving spouse (to elect to take under the Will, or under O.R.C. 2105.06 of the Ohio Revised Code) after the filing of all of the waivers of the filing of the inventory.

The OSBA and Ohio Association of Probate Judges have been unable to find common ground. See, the Section Council’s Minutes of May 17, 1996, pp. 2-6, of September 25-26, 1997, p. 5 and May 13-14, 2005.

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Description Status

4. Statutory share of surviving

spouses Approved by Council of Delegates

SUMMARY

This proposes major revisions to spousal rights upon death. It would make changes

to Chapter 2106 of the Ohio Revised Code, which deals with a spouse’s elective share. It adopts a concept referred to as the “augmented estate”. The “augmented estate” concept would provide an Ohio surviving spouse with elective share rights based upon the view of marriage as an economic partnership. The calculation of the “augmented estate,” which requires a determination of the value of the married couple’s combined assets and not merely consideration of the decedent’s probate property. Next, there is a calculation of the surviving spouse’s elective share based upon “equitable share” principles designed to mirror the separate property and marital property concepts that apply under domestic relations law while both spouses are alive. Last, there is a determination of the assets that will be used to satisfy the elective share.

At its May 14-15, 2004 meeting, the Section’s Board of Governors endorsed a change to the augmented estate/spousal elective share previously approved by the Board and the Council. The changes are as follows: (1) the approximation system to determine the augmented estate should be replaced by the deferred equitable division approach, adopting separate property and marital property concepts from domestic relations law; (2) provisions regarding the impact of disclaimers on income interests created under marital trusts should be revised; (3) the Ohio rules of evidence should be amended to permit testimony regarding statements of a decedent from parties other than the Executor; and (4) any other related problems should be addressed. The Committee prepared a revised draft of legislation which was approved by the Section at its May 13,-14, 2005 meeting Council of Delegates. See, the Section Council’s Minutes of May 14-15, 2004, May 13-14, 2005, and Sept. 16-17, 2005, p. 6 (and status report attached as Exhibit F). A preliminary draft of the new statutory language was attached to the Sept. 10-11, 2004 Minutes of the Section’s Council.

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Description Status

5. Estate Tax Apportionment Act Approved by Council of

Delegates

SUMMARY

The EPTPL Council formed a committee to study the Uniform Estate Tax Apportionment Act, which contains a pure equitable apportionment approach. At its Sept. 10-11, 2004 meeting with a straw vote, the Council rejected the Uniform Act Equitable apportionment approach. The Committee presented a report rejecting the pure equitable apportionments scheme under the Uniform Estate Tax Apportionment Act. The Committee has proposed a new subsection three (3) to existing Section 2113.86(C) of the Ohio Revised Code. The new section provides that a provision in a Will or other governing instrument that apportions tax to an interest that qualifies for a marital or charitable deduction is ineffective unless it refers to such deduction and expressly and unambiguously acknowledges and accepts any resultant loss of the deduction. Certain other technical changes were made with Council members favoring prospective application. See, Section’s Council’s Minutes for Sept. 5-6, 2003, p. 25; Sept. 10-11, 2004; May 13-14, 2005; and Sept. 16-17, 2005, p. 10, and May 16-17, 2008, p. 14.

Description Status 6. Joint and survivor accounts Approved by Council of

Delegates

SUMMARY

Currently, under Wright v. Bloom (1994), 69 Ohio St.3d 596, the opening of a joint and survivorship account, in the absence of fraud, duress, undue influence or lack of capacity on the part of the decedent, is conclusive evidence of the intention to transfer to the surviving party a survivorship interest in the account. The Committee on Joint and Survivor Accounts was charged with pursuing a legislative overrule of the holding in Wright v. Bloom. In addition, the Committee was instructed to renew efforts to enact the Uniform Multiple Party Accounts Act, or, in the alternative, to develop a questionnaire by which prospective account holders would indicate their intentions with regard to the account’s ownership and survivorship provisions. The Committee has drafted, and the Board has approved, legislation that would create O.R.C. Section 2131.12, which would provide for such a questionnaire.

This provision would require banks to ascertain depositors’ intentions by asking, “Do you want [the named co-owner(s)] to get the account at your death?” If the answer to the question is consistent with the survivorship features of the account, it would be irrebuttably presumed that the depositor intended to create a survivorship interest in the absence of fraud, duress, undue influence, or lack of capacity. If the question is not answered, or if the

- 16 -

answers are not consistent, the sums would pass to the surviving party or parties on the account in the absence of fraud, duress, undue influence, or lack of capacity, unless a preponderance of the evidence establishes a different intent. The proposal was approved by the Council of Delegates with minor wording changes in paragraph 3 of the proposed legislation to make it clear that it will apply only prospectively after passage. This change was made at the suggestion of the Ohio Bankers Association. See, II.A.6, above. We are seeking a sponsor for this legislation. The EPTL Section Council continues to exchange ideas with the Ohio Bankers League, who has objections to the Bill as approved by the Council of Delegates. The EPTPL Section Committee continues to see common ground the hopes of producing a unified proposal with the Ohio Banker’s League. At its May 13 – 14, 2005 meeting, the EPTPL Section Council voted to direct the committee to redraft the Banker’s proposal to require that the “clear and conspicuous” notice be on some document that is signed by the depositor, such as a signature card or an account application. See, Section Council’s Minutes of September 13-14, 2002, p. 10, Minutes of September 5–6, 2003, p. 12, Minutes of May 13-14, 2005 and Sept. 16-17, 2005, p. 7.

The Council voted to disband this Committee at its September 14, 2007, meeting.

Description Status 7. Decanting of Trusts Approved by Council of

Delegates 11/06/09

SUMMARY

The Section’s Council has on September 11-12, 2009, approved an Ohio law regarding the “decanting” of Trusts (making distributions from one trust to a new trust under a different governing instrument). See, Section Council Minutes Jan. 12-13, 2007, p. 19; Sept. 14-15, 2007, p.12; Jan. 11-12, 2008, p. 14, May 16-17, 2008, p. 13, Sept. 12-13, 2008, p. 12; January 23-24,2009; and May 15-16, 2009, p. 18; Fall 2009, p. 9 and Exhibits J and K. See also Section V(A)(13) of this Report.

Description Status 8. Protection of Trustees Approved by Council of

Delegates 11/06/09

SUMMARY

The Section’s Council has on September 11-12, 2009 approved a new statute (Revised Code §5809.031) to modify a trustee’s duties with respect to life insurance policies held as trust property. See Section Council Minutes of Fall 2009, p. 6 and Exhibit H. See also Section V(A)(13) of this Report.

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Description Status 9. Ohio income tax on trusts Approved by Council of

Delegates 11/06/09

SUMMARY

The Section’s Council has on September 11-12, 2009 approved a change to Revised Code §5747.02(D)(2) to allow a credit to “resident” (rather than “nonresident”) trusts for income taxes paid to other states. See Section Council Minutes of May 15-16, 2009, page 12; and Fall 2009, p. 6. See also Section V(A)(13) of this Report.

Description Status 10. Uniform power of attorney Approved by Council of

Delegates 11/06/09

SUMMARY

The Section’s Council has on September 11-12, 2009 approved adoption of a new Uniform Power of Attorney Act. See, Section Council Minutes May 15-16, 2009, p. 9 and Exhibit I; and Fall 2009, p. 5 and Exhibit G. See also Section V(A)(13) of this Report.

Description Status 11. Anti-lapse statute for trusts Approved by Council of

Delegates 11/06/09

SUMMARY

The Section’s Council has on September 11-12, 2009 approved adoption of a revision to Revised Code §2107.52 relating to anti-lapse of will bequests and adoption for a new set of statutes that would create an anti-lapse statute for revocable and irrevocable trusts that would supersede FirstNational Bank v. Tenney, 165 Ohio St. 513 (1956) and that would allow a trustee to distribute to the heirs of a deceased trust beneficiary rather than to the beneficiary’s estate. See Section Council Minutes Fall 2009, Page 4 and Exhibit F.

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Description Status

12. Titling Trust property Approved by Council of

Delegates 11/06/09

SUMMARY

The Section’s Council has on September 11-12, 2009 approved a proposal to enact Revised Code §5810.14 relating to titling of property in trust form and Revised Code §5301.071(E) relating to the validity of various instruments. See, Section Council Minutes Jan. 12-13, 2007; p. 19; Sept. 14-15, 2007, p.8; Jan. 11-12, 2008, p. 12; May 16-17, 2008, p.17; and Sept. 12-13, 2008, p. 16. See also Section V(A)(13) of this Report.


Seitz 13. Omnibus Probate Bill Expected introduction after

March 15, 2010

SUMMARY The Bill would: (i) add a new R. C. §5809.031 to modify a trustee’s duties with respect to life insurance policies held as trust property; (ii) add a new R. C. §5808.18 to authorize a trustee with discretionary powers to distribute property of one trust to a the trustee of a second trust for the benefit of the same beneficiaries; (iii) amend the income tax on trusts to allow a credit to resident trusts for income tax paid to other states; (iv) enact a modified version of the Uniform Power of Attorney Act; (v) add a new R. C. §5810.14 relating to titling of property in trust form; (vi) add a new R. C. §5301.071(E) relating to the validity of instruments; and (vii) make changes to the private settlement agreement statute (R. C. §5801.10), judicial trust reformation statute (R. C. §5804.12) and create a new R. C. §5815.49 to provide means of dealing with, and interpreting, federal estate and generation-skipping tax clauses in a will or trust if the testator or settlor dies during repeal of those taxes.

B. Approved by the Estate Planning, Trust, and Probate Law Section Council.

Description Status

1. Claims against non-probate

property To Council of Delegates

SUMMARY

The Committee prepared a legislative proposal based on the uniform laws adopted

by NCCUSL that would subject non-probate transfers to the claims of creditors. Under the

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proposal, life insurance and the exercise or non-exercise of a general power of appointment created by another person would not be subject to creditors’ claims. See, Section’s Board of Governors’ Minutes of January 24-25, 1997, p. 14, June 6-7, 1997, p. 16; January 29-30, 1999, pp. 4-5 and Appendix 4; and May 14-15, 1999, p. 9 and Appendix 9.

The proposal was presented to the Family Law, Elder Law and Real Property Law sections of the OSBA and to the Ohio Bankers Association for comment. One substantive change was made to O.R.C. 2117.51 before the proposal was again presented to the Screening Committee. Language was inserted to ensure that a nominal power of consent over a trust would not defeat creditors’ rights. See, Section’s Board of Governors’ Minutes of September 8, 2000, p. 9. Nonetheless, the proposal did not pass the Council of Delegates on a voice vote of approximately 37 to 27. The Board voted to re-submit the proposal to the Council of Delegates for consideration. See, Section’s Board of Governors’ Minutes of September 13-14, 2002, p. 8. On resubmission, the Council again disapproved the proposal.

Description Status 2. Postnuptial agreements To council of Delegates

SUMMARY

The EPTPL Section Council has approved a proposal to amend R.C. 2106.26 and R.C.

3103.06 to allow postnuptial agreements for the limited purpose of waiving spousal rights at the time of death. The statute incorporates safeguards similar to the rules for prenuptial agreements. The Council of Delegates did not adopt the proposal in a vote on October 24, 2008.

Description Status 3. Formula clause construction To council of Delegates

SUMMARY

The EPTPL Section Council has approved a proposal to allow private settlement

agreements or judicial actions to construe a settlor’s intent in dividing a trust premised on federal estate or generation-skipping transfer tax principles if the settlor dies when there is no federal estate tax in effect and to provide for such a construction in the absence of a private settlement agreement or judicial intervention.

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C. Under Study by the Estate Planning, Trust, and Probate Law Section.

Description Status

1. Anti-ademption statute

applicable to Trusts Under study by committee

SUMMARY

The Council has formed a committee to study whether to apply the principles of anti-

ademption to Trusts. Presently O.R.C. Section 2107.501 applies only to Wills. The committee will study whether or not to apply the principles of the anti-ademption statute to assets sold by a Trustee prior to the death of the Grantor.

Description Status 2. Asset Protection Trusts Under study by committee

SUMMARY

The Section’s Council has formed a committee to study the possibility of allowing for the creation of an asset protection trust in Ohio.

Description Status 3. Bequests of tangibles Under study by committee

SUMMARY

The Section’s Council has formed a committee to study whether Ohio should adopt a

statute permitting a “memorandum or similar writing” regarding the disposition of tangible personal property to be binding if so indicated in a testator’s will, even if created after the will.

Description Status 4. Business entities Under study by committee

SUMMARY

The Section’s Council has formed a standing committee to monitor developments in the area of business entities, as such developments relate to estate planning and probate. See, Section Council Minutes Jan. 12-13, 2007, pp. 18-19. At the September 10-11, 2009

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Council meetings, the committee was charged with considering suggestions by John Sullivan at the Pliskin Institute pertaining to wholly discretionary trusts and the limited liability company statute.

Description Status 5. Claims against non-probate

property Under study by committee

SUMMARY

The Section’s Council formed a committee to consider the claims of creditors with

respect to non-probate transfers. The committee proposed legislation, and the Council approved it. See, IV.B.1 above.

Description Status 6. Community Property Under study by committee

SUMMARY

The Section’s Council has formed a committee to study the possibility of allowing Ohio couples to elect to have property treated as community property.

Description Status 7. Creditors’ Access to IRAs Under study by committee

SUMMARY

The EPTPL Council formed a committee to address the need for legislative action with respect to creditors’ access to IRAs. The Council favors eliminating the “reasonably necessary for support” limitation on creditor access to pensions, annuities, or similar plans or contracts contained in Section 2329.66 of the Ohio Revised Code. The Council also favors a two-year safe harbor, whereby funds are considered exempt when deposited in an individual retirement account, individual retirement annuity, Roth IRA, education individual retirement account, Keogh or H.R. 10 plan more than two years prior to filing a bankruptcy petition or two years prior to the date of entry of a Civil Rule 58 judgment or order against the depositor. The Committee is studying the impact of the decision of the United States Court of Appeals for the Sixth Circuit in Lampkins v. Golden, No. 00-1443 (6th Cir. 2002).

The committee has drafted a legislative proposal. This proposal will (a) amend R.C. 2329.66 by removing the “reasonably necessary for support” language and including the

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two-year safe harbor rule; (b) attempt to protect IRAs from the Lampkins decision; (c) establish predictability and certainty as to which retirement funds are exempt from creditor claims and which are not; (d) foster consistency of interpretation; and (e) clarify the language of the statute. The committee’s proposal has been forwarded to the Banking, Commercial Law, and Bankruptcy Committee for consideration. See, Section Council’s Minutes of May 9-10, 2003, pp. 6-7 and Minutes of September 5–6, 2003.

Description Status 8. Creditors’ access to IRC Section

529 Plans Under study by committee

SUMMARY

The Section’s Council has formed a committee to study Ohio law regarding creditors’

access to IRC Section 529 Plans. See, Section Council Minutes Sept. 16-17, 2005, p.14; and Sept. 8-9, 2006, p. 13. Description Status 9. Death or incapacity of a lawyer Under study by committee

SUMMARY

The Section’s Council has formed a committee to review the issues faced when a lawyer (particularly, a sole practitioner) dies. See, Section Council Minutes Jan. 12-13, 2007, p. 18.

Description Status 10. Disentailment statute

simplification Under study by committee

SUMMARY

The EPTPL Council has formed a committee to examine the disentailment statute

and its possible constitutional problems. The Council appointed a special task force to work with the real estate section on this matter. See, September 10-11, 2004 Section Council Minutes.

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Description Status 11. Dynasty Trust Under study by committee

SUMMARY

The Council has formed a committee to study O.R.C. Section 2131.09, which is the Ohio statute that allows the Grantor of a Trust to opt-out of the application of the rule against perpetuities. The committee is focusing on three particular concerns. First, it is considering the effective prohibition against a Settlor’s granting limited powers of appointment to every generation. Second, it is considering whether the appointment of a Trust Advisor contradicts the Trustee’s unlimited power requirement under O.R.C. Section 2131.09(B)(1). Third, it is considering an effective date for O.R.C. Section 2131.09 that is tied to the date of the Settlor’s death, or the date the Trust became irrevocable, rather than to the effective date of the statute. Fourth, it is considering what power the Trustee has to terminate the Trust. Fifth, it is examining powers related to business interests and the Section 2041 Delaware Tax Trap where a limited power of appointment is converted inadvertently to a general power of appointment. See, Section Council’s Minutes of May 9-10, 2003, pp. 9-10, Sept. 5–6, 2003 pp. 14-15; and Sept. 10-11, 2004.

Description Status 12. General partnerships Under study by committee

SUMMARY

The Section Council has formed a committee to examine Ohio’s general partnership law and its provisions regarding termination on the death of a partner. See, Section Council’s Minutes of September 13-14, 2002, p. 5.

Description Status 13. Illegitimate children Under study by committee

SUMMARY

The Section’s Council has formed a committee to consider various issues and

uncertainties concerning Ohio law as it pertains to children born out of wedlock. See Section Council Minutes Fall 2009, p. 9 and Exhibit L.

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Description Status 14. Inheritance rights Under study by committee

SUMMARY

The Section’s Council has formed a committee to study the inheritance rights of children born by artificial reproduction technologies.

Description Status

15. Insurable interests in life

insurance Under study by committee

SUMMARY

The Section’s Council has formed a committee to study Ohio law regarding insurable

interests under life insurance policies. See, Section Council Minutes Sept. 16-17, 2005, p.14; and Sept. 8-9, 2006, pp. 12-13. See also H.B. 404, effective September 11, 2008.

Description Status 16. Joint Trusts Under study by committee

SUMMARY

The Section’s Council has formed a committee to monitor developments in the use of

joint trusts. See Section Council Minutes, Fall 2009, p. 8 and Exhibit I.

Description Status 17. Jury instructions in probate

Litigation Under study by committee

SUMMARY

The Section’s Council has formed a committee to assist the OSBA with rewriting

portions of the treatise, Ohio Jury Instructions, which pertain to jury instructions in probate litigation. See Section Council Minutes Fall 2009, p. 10.

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Description Status 18. Living Wills/Central Location Under study by committee

SUMMARY

The committee will consider means by which there can be ready access to necessary

medical information from a central source. See, Section Council’s Minutes of January 9-10, 1998, p. 14.

Description Status 19. Lump sum life insurance

payments Under study by committee

SUMMARY

The Section’s Council has formed a committee to study problems with beneficiaries

electing the lump sum payment option on life insurance policies.

Description Status 20. Ohio estate tax Under Study by Committee

SUMMARY

The Committee is studying the gift in contemplation of death exemption contained in

Ohio Revised Code Section 5731.05 to parallel the increase in the federal gift tax annual exclusion from $10,000.00 to $12,000.00. Presently O.R.C. Section 5731.05 contains a $10,000.00 exemption.

Description Status 21. Ohio income tax Under study by committee

SUMMARY

The Section’s Council has formed a committee to monitor developments with the

Ohio income tax on Trusts. See, Section Council’s Minutes of May 9-10, 2003, p. 18; Sept. 5–6, 2003 p. 17; Sept. 10-11, 2004; Sept. 16-17, 2005, p.15; and Sept. 8-9, 2006, pp. 14-15. The Ohio income tax on trusts was reinstated as a “permanent” tax as part of House Bill 66 (Omnibus Budget Bill), effective as of January 1, 2005. See, Minutes of January 23-24, 2009; and May 15-16, 2009, pp. 11-12.

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Description Status

22. Ohio Principal and Income Act Under study by committee

SUMMARY

The 124th General Assembly enacted House Bill 522, which adopted Ohio’s version of the revised Uniform Principal and Income Act of 1997. H.B. 522 was supported by the Board. The committee will monitor the implementation of H.B. 522. See, Section Council’s Minutes of January 10-11, 2003, p. 21; and Minutes of Fall 2009, p. 8.

Description Status 23. Partnership inventories Under study by committee

SUMMARY

The Board has formed a committee to consider issues relating to partnership inventories.

Description Status 24. Privacy of probate pleadings Under study by committee

SUMMARY

The Section Council has formed a committee to study how public or private probate

filings should be with particular emphasis on internet access to Probate Court documents. The Ohio Supreme Court has established an Advisory Committee on technology in the courts. The privacy subcommittee of the Supreme Court Committee will report its findings. The EPTPL Section Council and Ohio Banker’s League have strong concerns about disclosure of information in a Probate Court context which most clients would want to be confidential. The Council will continue to study this matter after the Supreme Court Subcommittee on privacy reports its finds. See, Section Council’s Minutes of September 10-11, 2004, May 13-14, 2005, Sept. 12-13, 2008, p.6, and January 23-24, 2009.

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Description Status

25. Private Settlement

Agreements Under study by committee

SUMMARY

The Section’s Council has formed a committee to study five aspects of private

settlement agreements authorized under R. C. §5801.10: (1) the prospect of changing the threshold of modifying trusts by court order of private settlement agreement to align with the Restatement of Trusts, (2) the prospect of using private settlement agreements to change beneficial interests or terminate trusts, (3) the prospect of allowing the Attorney General to represent charitable beneficiaries in a private settlement agreement, (4) the prospect of allowing a private settlement agreement where less than all beneficiaries of a trust are parties, and (5) to clarify whether the private settlement agreement was in derogation of pre-existing law as to methods of modifying a trust.

Description Status 26. Probate Code Review Under study by committee

SUMMARY

The Section’s Council has formed a committee to review Ohio’s Probate Code with a

view toward (1) modernizing provisions and (2) harmonizing provisions with the Ohio Trust Code.

Description Status

27. Probate Court Jurisdiction Under study by committee

SUMMARY

The Section’s Council has formed a committee to study enhancing the probate court’s jurisdiction so that it extends to will substitutes, such as transfer and payable on death, joint and survivorship and beneficiary designations.

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Description Status 28. Probate reform Under study by committee

SUMMARY

The Section’s Council has formed a committee to study the probate process in Ohio.

For the January 2010 meetings, the items raised were: (i) whether a non-resident relative could serve as administrator with the posting of bond, (ii) whether a less formal probate proceeding could be engaged by consent of beneficiaries, (iii) whether hearings in insolvent estates should be eliminated unless a creditor requests it, (iv) whether there should be a procedure to accelerate the transfer of tangible personal property, and (v) whether judicial consent for sale of certain items should be made unnecessary.

Description Status 29. Rules of Superintendence Under study by committee

SUMMARY

The Section’s Council has formed a committee to examine and monitor the Rules of Superintendence.

Description Status 30. Safe deposit box procedures Under study by committee

SUMMARY

The Ohio Department of Taxation has eliminated the requirement that a financial

institution must deny access to a safe deposit box when its owner dies until the county auditor has conducted an inventory of its contents. In response, some concern has been expressed over the access to, and security of Wills kept in safe deposit boxes after the death of the owner. The EPTPL Council has formed a committee to study the matter. The committee is drafting a proposal to address these problems the committee is looking at the model California statute and will report its findings at a future council meeting. See, Section Council’s Minutes of January 10-11, 2003, p. 22; Sept. 5–6, 2003, p. 23; Sept. 10-11, 2004, January 21-22, 2005; May 13-14, 2005; and Sept. 8-9, 2006, pp. 10-11.

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Description Status

31. Statutory share of surviving

spouses; postnuptial agreements

Approved by Council of Delegates

SUMMARY

The proposal provides for major revisions to spousal rights upon death. It would

make changes to Chapter 2106 of the Ohio Revised Code, which deals with a spouse’s elective share. It adopts a concept referred to as the “augmented estate.” The “augmented estate” concept provides an Ohio surviving spouse with elective share rights based upon the view of marriage as an economic partnership. The calculation of a surviving spouse’s elective share requires a three-step analysis. First, there is a determination of the “augmented estate,” which requires a determination of the value of the married couple’s combined assets and not merely consideration of the decedent’s probate property. Next, there is a calculation of the surviving spouse’s elective share based upon the length of the marriage. Last, there is a determination of the assets that will be used to satisfy the elective share. At its January 30, 2004 meeting, the Section Council approved in principle a substantive change to the property to which an elective share right would attach by adopting the domestic relations marital property/separate property concept. The elective share right would attach only to marital property. This change was made in lieu of the increasing percent of a spouse’s elective right based on years of marriage. The Committee was instructed to bring back precise wording changes, fix a disclaimer issue in the statute and propose clarifications to the rules of evidence which would allow testimony concerning decedent’s intent regarding martial property and separate property. After approval by the Section Council, changes were re-submitted and approved by the Council of Delegates, and this legislation failed to pass in the 126th General Assembly (House Bill 439). See, Section Council Minutes January 30-31, 2004; May 15-16, 2005; Sept. 16-17, 2005; and Sept. 8-9, 2006, p. 7. The Committee is now considering simply permitting post-nuptial agreements in Ohio. See Section Council Minutes, September 14-15, 2007, p.15, January 11-12, 2008, p. 17; May 16-17, 2008, p. 17; Sept. 12-13, 2008, p. 19; and January 23-24, 2009.

Description Status 32. Successor custodians Under study by committee

SUMMARY

Ohio adopted a revised version of the Uniform Transfers to Minors Act (UTMA) in 1986. The UTMA and most state statutes include provisions for an appointment of a successor custodian by the current custodian. Ohio, however, deviates from UTMA. Ohio does not permit a custodian to designate a successor custodian prior to his or her actual resignation, and requires specific steps be taken in order to transfer the custodial property to the successor custodian successfully. Ohio places a great deal of emphasis on the

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mechanics of transferring custodial property to the successor custodian. The EPTPL Council has formed a committee to consider alternatives for naming successor custodians.

Description Status 33. Summary sale procedures

update Under Study by Committee

SUMMARY

The EPTPL Council formed a committee to review the dollar limitations in the

summary sale procedures applicable to real estate and to other summary sale proceedings. For example, presently O.R.C. Section 2127.11 contains a summary sale procedure for real estate valued at $3,000.00 or less. The Committee reviewed whether or not this dollar amount should be increased and reviewed other summary sale proceedings. The committee recommends no changes and the committee was disbanded. See, Section Council Minutes of Sept. 10-11, 2004.

Description Status 34. Tortious interference Under study by committee

SUMMARY

The Section’s Council has formed a committee to consider the applicability of the will

contest statute in light of Shriners Hospital v. Bauman (Illinois App. 2008).

Description Status 35. Transfer on Death Real Estate Enacted; see S. B. 124

SUMMARY

Model affidavits have been presented to be used in light of the new statutes effective

December 28, 2009.

Description Status

36. Trust Code Technical Changes Under study by committee

SUMMARY

The Section’s Council has formed a committee to study possible technical modifications to the Trust Code.

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Description Status 37. Trust withholding for non-

resident beneficiaries Under study by committee

SUMMARY

Am. Sub. H.B. 215, generally effective January 1, 1998, is intended to impose Ohio

withholding tax obligations on pass-through entities such as S corporations, partnerships, limited liability companies, and “qualifying trusts” which have non-Ohio equity holders or beneficiaries. The direct impact of the Ohio withholding tax on estate planning practitioners arises in at least two common fact situations: (i) Ohio trusts with non-Ohio beneficiaries and (ii) pass-through business entities with non-Ohio equity holders.

The committee has indicated that the tax has no application to an electing small business trust. Instead, the tax appears applicable when the income from an Ohio-based business activity is reported out by a trust with a non-Ohio beneficiary and is intended as a means to collect the tax that legitimately would be applicable to such non-resident if he or she was the direct owner of the trust interest. The committee is charged with monitoring the implementation of the legislation in the event that problems arise. See, Section Council’s Minutes of January 9-10, 1998, p. 12; May 8-9, 1998, p. 11, and Appendix 13; and September 17-18, 1999, p. 15.

Description Status 38. Unauthorized practice of law Under study by committee

SUMMARY

The Section’s Council has formed a committee to consider and counter the

unauthorized practice of law. The committee also will consider the use of public information to counter the unauthorized practice of law.

Description Status

39. Uniform Conservation

Easement Act Under study by committee

SUMMARY

At least 20 states have adopted the Uniform Conservation Easement Act, which

allows third party enforcement of easements. Third-party easement enforcement is currently unavailable in Ohio. The EPTPL Council has formed a committee to review and comment on the Uniform Conservation Easement Act. See, Section Council’s Minutes for January 7-8, 2000, p. 8.

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Description Status

40. Uniform International Wills

Act Disbanded

SUMMARY

The Section’s Council has formed a committee to study the Uniform International

Wills Act, which has been disbanded. See, Section Council Minutes for May 16-17, 2008, p. 15.

Estate Planning, Trust &

Probate Law Section

A publication of the Ohio State

Bar Association Estate Planning,

Trust & Probate Law Section

PO Box 16562

Columbus, OH 43216-6562

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