OHIO STATE BAR ASSOCIATION ESTATE PLANNING, TRUST AND PROBATE LAW SECTION LEGISLATIVE REPORT. January 2015

Transcription

1 OHIO STATE BAR ASSOCIATION ESTATE PLANNING, TRUST AND PROBATE LAW SECTION LEGISLATIVE REPORT January 2015 Ohio Bills Enacted During 130 th General Assembly ( ) Ohio Bills Introduced, but Not Enacted, During 130 th General Assembly ( ) New and Proposed Rules and Legislation Affecting Section Members Prepared by John F. Furniss III Bricker & Eckler LLP Columbus, Ohio v3

2 TABLE OF CONTENTS Page I. BILLS ENACTED DURING 130TH GENERAL ASSEMBLY ( )...1 A. Sponsored by Estate Planning, Trust and Probate Law Section HB 126/ Kunze, Stinziano...1 B. Not Sponsored by Estate Planning, Trust and Probate Law Section SB 23/ Beagle, Burke SB 43/ Burke, Tavares; HB 104/ Ruhl, Stautberg SB 207/ Patton, Manning; HB 257/ Antonio, Schuring HB 483/ Amstutz...2 II. BILLS INTRODUCED, BUT NOT ENACTED, DURING 13OTH GENERAL ASSEMBLY ( ) HB 307/ Buchy HB 438/ Pelanda, Grossman SB 347/ Lehner; HB 588/ Huffman, Wachtmann HB 624/ Pelanda; SB 365/ Cafaro...3 III. LEGISLATIVE PROPOSALS....3 A. Sponsored by the Estate Planning, Trust, and Probate Law Section and Approved by the Council of Delegates Uniform Multiple Party Accounts Act Waivers of Accounts and Inventories in Estates Statutory Share of Surviving Spouses Tax Apportionment Deposit of Wills Assisted Reproductive Technologies Sale of Real Estate by Guardian Transfer-on-Death Real Estate Executor Commission on Non-Probate Property Arbitration of Trust Disputes Exempt Resource Status of Residence Owned by Trust Waiver of Initial Partial Account Watercraft Trailer for Surviving Spouse v3 i

3 B. Approved by the Estate Planning, Trust, and Probate Law Section Council Claims against Non-Probate Property Postnuptial Agreements Formula Clause Construction Trustee Compensation for Estate Settlement Services Safety Deposit Box Access v3 ii

4 I. BILLS ENACTED DURING 130TH GENERAL ASSEMBLY ( ) A. Sponsored by Estate Planning, Trust and Probate Law Section. 1. HB 126/ Kunze, Stinziano Updates to laws governing health care powers of attorney and living will declarations Introduced on 4/16/2013; Signed by Governor 12/19/2013; Effective 3/20/2014 This new law amends Ohio Revised Code ("R.C.") , , and to allow a person who creates a durable power of attorney for health care to authorize the attorney in fact to obtain health information about the person, to make an individual who is designated as an alternate attorney in fact ineligible to witness the instrument that creates a durable power of attorney for health care, to permit the principal to nominate a guardian in a durable power of attorney for health care, and to establish a presumption that a valid living will declaration revokes all prior declarations. B. Not Sponsored by Estate Planning, Trust and Probate Law Section 1. SB 23/ Access to adoption records Introduced in Senate on 2/12/2013; Beagle, Burke Signed by Governor 12/19/2013; Effective 3/20/2014 The new law creates one system for an adoptee to obtain information about his or her biological family. It requires ODH to keep a record of whether a biological parent or sibling desires contact with the adoptee and if contact is authorized, how that contact is to take place, directly or through intermediary. Further, it allows a biological parent to have his or her name redacted from information provided to an adopted child or the adopted child's lineal descendants. For this reason, access to the records is delayed until March SB 43/ Civil commitment of and treatment Introduced in Senate on 2/14/2013 Burke, Tavares; HB 104/ Ruhl, Stautberg provided to mentally ill persons and House on 3/19/2013; Signed by Governor on 6/17/2014; Effective 9/17/2014 The new law amends R.C. Chapter 5122 regarding court-ordered treatment of mentally ill persons subject to court order v3

5 3. SB 207/ Inheritance rights of parent Introduced in Senate on 10/16/2013 Patton, Manning; HB 257/ Antonio, Schuring convicted of rape or sexual battery and House on 9/4/2013; Signed by Governor on 12/19/2014; Effective 3/23/2015 The new law amends R.C , , , and and enacts R.C , , , , , , , , , and regarding the rights of a person who was convicted of, or pleaded guilty to, rape or sexual battery, including rights under the statute of descent and distribution. Specifically, new R.C provides: "As used in this section, 'relative' includes a parent, grandparent, great-grandparent, stepparent, child, grandchild, aunt, uncle, cousin, sibling, and half sibling. The parent, or a relative of the parent, of a child who was conceived as the result of the parent's violation of section or of the Revised Code shall not inherit the real property, personal property, or inheritance of the child or the child's lineal descendants as provided under section of the Revised Code." The provisions of R.C are amended to refer to new R.C HB 483/ Establishment of Franklin County Introduced in House on 3/18/2014; Amstutz guardianship service Signed by Governor on 6/19/2014; Effective 9/15/2014 The new law amends R.C to provide for the establishment of a Franklin County guardianship service by creating a Franklin County Guardianship Board and authorizing the hiring of a director. The law provides that the Board and the director may receive appointments from the Franklin County Probate Court to serve as guardians of both the person and estate of wards. II. BILLS INTRODUCED, BUT NOT ENACTED, DURING 13OTH GENERAL ASSEMBLY ( ) 1. HB 307/ Parentage and adoption. Not enacted Buchy This legislation would have (i) shortened the period following a child's birth from thirty days to seven days in which a putative father must register with the Ohio Putative Father Registry, (ii) permitted a pregnant mother who has decided for adoption to give written notice of decision to any putative father who must reply in writing within thirty days or give up right to object to adoption, and (iii) shortened the period from one year to sixty days after which an adoption decree cannot be challenged. It was not enacted by the 130 th General Assembly v3 2

6 2. HB 438/ Authorize temporary physical care Not enacted Pelanda, Grossman power of attorney for child This legislation would have provided for temporary physical care powers of attorney for children. It was not enacted by the 130 th General Assembly. 3. SB 347/ Life sustaining treatment Not enacted Lehner; HB 588/ Huffman, Wachtmann This legislation would have established procedures for the use of medical orders for lifesustaining treatment and changed laws regarding DNR identification and orders. It was not enacted by the 130 th General Assembly. 4. HB 624/ Ward's bill of rights Not enacted Pelanda; SB 365/ Cafaro This legislation would have provided a ward's bill of rights and required that a guardian receive the Ohio Guardianship Guide prepared by the Ohio Attorney General. It was not enacted by the 130 th General Assembly. III. LEGISLATIVE PROPOSALS. A. Sponsored by the Estate Planning, Trust, and Probate Law Section and Approved by the Council of Delegates. 1. Uniform Multiple Party Accounts Act. The proposal would adopt 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 In general, the Act addresses the issues involved in the accounts of financial institutions in which one or more persons have an interest. According to NCCUSL, the Act deals separately with (i) ownership of accounts as between multiple owners, and the v3 3

7 existence, validity, and revocability of survivors' benefits, and (ii) financial institution protection. The proposal provides for the enactment of R.C. Chapter 1342 along with corresponding changes in other parts of the R.C., including banking, savings and loan association, savings bank, and credit union law. 2. Waivers of Accounts and Inventories in Estates. The proposal would amend R.C , , and and revise 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 R.C ) 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 on this proposal. 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; and September 20-21, Statutory Share of Surviving Spouses. This proposal would result in major revisions to spousal rights upon death. It would make changes to R.C. Chapter 2106, 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 v3 4

8 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. See the Section Council's Minutes of May 14-15, 2004, May 13-14, 2005, and Sept , 2005, at p. 6 and Ex. F. A preliminary draft of the new statutory language was attached to the Sept , 2004 Minutes of the Section's Council. 4. Tax Apportionment. This proposal would amend R.C by adding a new subsection (C)(3) to prevent estate tax from being apportioned against deductible interests in a will or other governing instrument and thereby causing an unintentional increase in the estate taxes owed by a decedent's estate. The Council of Delegate approved this proposal in November Deposit of Wills. This proposal would amend R.C and to facilitate (and ultimately require) the prompt deposit of wills in probate court. The new language in R.C would establish that a deposited will is not a public record, thereby ensuring the privacy of deposited wills until and unless a will is filed for probate. The new language in R.C would clarify the results of disinheritance for a beneficiary who intentionally conceals the existence of a will and fails to file the will for probate within one year after a testator's death. The Council of Delegates approved this proposal in November Assisted Reproductive Technologies. This proposal would accommodate so-called "assisted reproductive technologies" ("ART") and update Ohio law to recognize and clarify the inheritance rights of children born as a result of ART. In so doing, it proposes to amend various provisions of Ohio's Parentage Act (R.C. Chapter 3111) and to amend Ohio's laws of inheritance with respect to after-born children by amending R.C and R.C and adding new R.C The Council of Delegates approved this proposal in May Sale of Real Estate by Guardian. The Committee proposed new R.C that would allow a guardian to sell real estate by consent of the ward's next of kin. The Council of Delegates approved this proposal in May Transfer-on-Death Real Estate. This proposal would provide that a "transfer on death" ("TOD") designation in favor of a titleholder's spouse shall be revoked by operation of law if the titleholder and such spouse are later divorced, or if they obtain a dissolution or annulment of their marriage. The Council of Delegates approved this proposal in May v3 5

9 9. Executor Commission on Non-Probate Property. This proposal would amend R.C (B) to change the basis for computing the executor's commission on non-probate property from 1% of property includable for the purpose of computing the Ohio estate tax to 1% of property includable for computing the federal gross estate, except joint and survivorship property, proceeds of life insurance payable to a beneficiary other than the decedent's estate, and real estate located outside the state of Ohio. The Council of Delegates approved this proposal in November Arbitration of Trust Disputes. This proposal would add a new R.C to clarify and confirm when the terms of a trust may direct that the trustee and/or beneficiaries must settle disputes by arbitration. The Council of Delegates approved this proposal in April Exempt Resource Status of Residence Owned by Trust. This proposal would amend R.C (E) to add a new paragraph which provides that a residence is considered an exempt resource in accordance with Federal Medicaid law even if the residence is owned in a revocable trust. The Council of Delegates approved this proposal in November Waiver of Initial Partial Account. This proposal would amend R.C to clarify that the first partial accounting of an administrator or executor can be waived. The Council of Delegates approved this proposal in November Watercraft Trailer for Surviving Spouse. This proposal would amend R.C to allow a watercraft trailer to pass to a surviving spouse in addition to the associated watercraft. The Council of Delegates approved this proposal in November B. Approved by the Estate Planning, Trust, and Probate Law Section Council. 1. Claims against Non-Probate Property. The EPTPL Section Counsel approved a legislative proposal based on the uniform laws adopted by NCCUSL that would subject non-probate transfers to the claims of creditors. Under the 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 before the proposal was again presented to the Screening v3 6

10 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. 2. Postnuptial Agreements. The EPTPL Section Council has approved a proposal to amend R.C and R.C 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, Formula Clause Construction. 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. See Section's Council Minutes of January 22-23, 2010, p Trustee Compensation for Estate Settlement Services. The EPTPL Section Council approved a proposal that would add a new R.C (C) to clarify that reasonable compensation for a trustee, within the meaning of R.C (A), includes reasonable compensation for estate settlement services performed by a trustee by reason of the death of the settlor or beneficiary of a trust that are customarily performed by an executor or administrator, whether or not an executor or administrator has been appointed for the decedent's estate. At its November 2013 meeting, the Council of Delegates declined to approve the proposal and returned the proposal to the Section for further development. At its meeting in January 2014, the Section's Council voted not to pursue this proposal. See Section's Council Minutes of January 24-25, 2014, pp Safety Deposit Box Access. The EPTPL Section Council approved a proposal that would add new R.C , and to provide access to a decedent's safe deposit box without a court order solely to remove wills, trust agreements, deeds to burial plots, insurance policies and instructions for the disposition of the decedent's remains. These new provisions would require the creation of a record of such removed documents and the delivery of such removed documents to the decedent's designated executor or to the probate court. At its November 2014 meeting, the Council of Delegates did not approve the proposal, and returned the proposal to the Section for further development v3 7