As Reported by the Senate Finance and Financial Institutions Committee 1
122nd General Assembly 4
Regular Session Sub. H. B. No. 701 5
1997-1998 6
REPRESENTATIVES MASON-WOMER BENJAMIN-HARRIS-TERWILLEGER- 8
TAYLOR-GARCIA-EVANS-TIBERI-SALERNO-HAINES-HOUSEHOLDER-MILLER- 9
CORBIN-OLMAN-MEAD-MOTTLEY-WILSON-PATTON- SENATORS 11
KEARNS-WHITE
_________________________________________________________________ 13
A B I L L
To amend sections 1111.13, 1339.60, 2109.37, 15
2109.371, 2131.08, and 2131.09; to amend, for 16
purposes of adopting a new section number as 17
indicated in parentheses, section 1339.60 18
(1339.68); and to enact new section 1339.60 and 19
sections 1339.18, 1339.52, 1339.53, 1339.54, 21
1339.55, 1339.56, 1339.57, 1339.58, 1339.59, and 22
1339.61 of the Revised Code to adopt the Uniform 23
Prudent Investor Act of the National Conference 25
of Commissioners on Uniform State Laws; to 27
require a disclosure of relationship, at least
annually by account statement, when a fiduciary 28
makes an investment of trust funds in securities 29
of an affiliated investment company; to specify 30
that absent an express agreement, attorneys of
certain fiduciaries have no duty to persons to 31
whom the fiduciary has a fiduciary obligation; 32
and to provide that the rule against perpetuities 33
does not apply to certain trusts or trust assets.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 35
Section 1. That sections 1111.13, 1339.60, 2109.37, 37
2109.371, 2131.08, and 2131.09 be amended, section 1339.60 39
(1339.68) be amended for the purpose of adopting a new section
2
number as indicated in parentheses, and new section 1339.60 and 40
sections 1339.18, 1339.52, 1339.53, 1339.54, 1339.55, 1339.56, 41
1339.57, 1339.58, 1339.59, and 1339.61 of the Revised Code be 42
enacted to read as follows:
Sec. 1111.13. (A)(1) Except as provided in divisions 51
(A)(2) and (G) of this section or as otherwise provided by the 52
instrument creating the trust, a trust company acting as 53
fiduciary under any instrument and having funds of the trust 55
which are to be invested may, in addition to any other
investments authorized to a trust company by law, invest them in 57
any of the following:
(a) Forms of investments enumerated or described in, or 59
made eligible for investment by, sections 1339.44, 1339.52 TO 60
1339.61, 2109.37, 2109.371, and 2109.372 of the Revised Code, 62
including, but not limited to, securities, stocks, bonds, or 63
certificates of deposit issued by the trust company or any bank 64
owned or controlled by the bank holding company that owns or 66
controls the trust company. Investment authority granted under
division (A)(1)(a) of this section is subject to the limitations 67
on investments specified in division (B) of section 2109.371 of 68
the Revised Code. 69
(b) Any collective investment fund established and 71
maintained by the trust company or by an affiliate of the trust 73
company;
(c) The securities of any investment company, including 75
any affiliated investment company, whether or not the trust 76
company has invested other funds held by it in an agency or other 77
nonfiduciary capacity in the securities of the same investment 78
company or affiliated investment company. 79
(2) A trust company acting as fiduciary may not invest its 82
trust funds in stock issued by the fiduciary itself except under 83
one of the following circumstances: 84
(a) In the case of a testamentary instrument, when 86
expressly permitted by the instrument creating the relationship 87
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and authorized by court order; 88
(b) In the case of an inter vivos instrument, when 90
expressly permitted by the instrument or authorized by court 91
order and in either case, only when directed to purchase or 92
invest in the stock by a cofiduciary or other person other than 94
the trust company who has the right under the terms of the
instrument to direct the investment; 95
(c) When exercising rights to purchase its own stock or to 97
purchase or convert securities convertible into its own stock if 98
the rights were offered pro rata to the shareholders; 99
(d) To complement fractional shares acquired when the 101
exercise of rights or receipt of a stock dividend results in 102
fractional shareholdings. 103
(3) If the law or the instrument creating a trust 105
expressly permits investment in direct obligations of the United 106
States or an agency or instrumentality of the United States, 108
unless expressly prohibited by the instrument, a trust company 109
also may invest in no front end load money market mutual funds 111
consisting exclusively of obligations of the United States or an 112
agency or instrumentality of the United States and in repurchase 113
agreements, including those issued by the trust company itself, 115
secured by obligations of the United States or an agency or 116
instrumentality of the United States, or in securities of other 118
no load money market mutual funds whose portfolios are similarly
restricted; and in collective investment funds established in 119
accordance with section 1111.14 of the Revised Code or by an 121
affiliate of the trust company and consisting exclusively of any 122
direct obligations of the United States or an agency or 124
instrumentality of the United States, notwithstanding division 125
(A)(1)(c) of that section.
(B) A trust company acting in any fiduciary capacity or 128
under any instrument has the right to retain any part of the 129
trust or estate it receives, whether from the creator of the 130
trust or the estate, at its inception or by later addition, or by 131
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addition by any other person who is authorized to make additions 132
to the trust or estate, and any investments the trust company 134
makes.
(C) Except as otherwise expressly provided by the 136
instrument creating the fiduciary relationship, any trust company 137
may exercise all voting, consenting, and dissenting rights, 138
including the right to vote for the election of directors, 139
pertaining to stocks, bonds, or other securities held by it in 140
any fiduciary capacity, including rights pertaining to stocks, 142
bonds, or other securities issued by the trust company in its 143
individual corporate capacity and held by it in any fiduciary 144
capacity, provided: 145
(1) In the case of any fiduciary relationship created 147
prior to January 1, 1968, voting rights pertaining to any shares 148
of a trust company's own stock held by it in a fiduciary 150
relationship, if exercised, shall be exercised with respect to 151
the election of directors, only in accordance with any provisions 152
of law applicable to that election and without regard to the 153
first paragraph of division (C) and divisions (C)(2)(a), (b), and 154
(c) of this section, and those portions of division (C) of this 156
section shall not be construed to be determinative of the voting 158
rights or to be declaratory of a public policy with respect to
the voting rights. 159
(2) In the case of any fiduciary relationship created on 161
or after January 1, 1968, voting rights pertaining to any shares 162
of a trust company's own stock held by it in a fiduciary 164
relationship shall be exercised by it with respect to the 165
election of directors, only if and as directed in writing by any 166
person described in division (C)(2)(a), (b), or (c) of this 167
section, provided that the person may not be the trust company, 169
or a director, officer, or employee of the trust company except 170
as to fiduciary relationships in which the director, officer, or 172
employee is a settlor or beneficiary, or a nominee, agent, 173
attorney, or subsidiary of the trust company: 174
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(a) Any person, including a settlor or beneficiary, who 176
has the right under the terms of the instrument under which 177
shares are held to determine the manner in which shares shall be 178
voted, or if there is no such person; 179
(b) Any person acting as cofiduciary under the instrument 181
under which such shares are held, or if there is no such person; 183
(c) Any person, having the right of revocation or 185
amendment of the instrument under which the shares are held. 187
(D) If there is more than one person having power to 189
direct voting under division (C)(2)(a), (b), or (c) of this 190
section and they fail to agree, each person shall have the right 192
to direct voting with respect to the election of directors as to 193
an equal number of shares.
(E) As used in this section: 195
(1) "Affiliated investment company" means any investment 197
company that is any of the following: 198
(a) Sponsored by the trust company that is acting as 201
fiduciary or by a trust company, bank, bank subsidiary
corporation, or other corporation owned or controlled by the bank 202
holding company that owns or controls the trust company that is 203
acting as fiduciary; 204
(b) The result of any agreement with a trust company, 206
bank, bank subsidiary corporation, or other corporation owned or 208
controlled by the bank holding company that owns or controls the
trust company that is acting as fiduciary; 209
(c) Established exclusively for the customers or accounts 211
of the trust company that is acting as fiduciary or of a trust 213
company, bank, bank subsidiary corporation, or other corporation 214
owned or controlled by the bank holding company that owns or 215
controls the trust company that is acting as fiduciary; 217
(d) Provided with investment advisory, brokerage, transfer 219
agency, registrar, management, shareholder servicing, custodian, 220
or any related services by the trust company that is acting as 222
fiduciary or by a trust company, bank, bank subsidiary 223
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corporation, or other corporation owned or controlled by the bank 225
holding company that owns or controls the trust company that is 226
acting as fiduciary.
(2) "Cofiduciary" includes, but is not limited to, a 228
cotrustee, coexecutor, coadministrator, coguardian, co-agent, and 229
any person who, under the terms of the instrument creating the 230
fiduciary relationship, has the right or power to direct, approve 231
or consent to, or be consulted with respect to, the making, 232
retention, or sale of investments under the instrument. 233
(3) "Instrument" includes, but is not limited to, any 235
will, declaration of trust, agreement of trust, agency, or 236
custodianship, or court order creating a fiduciary relationship. 237
(4) "Reasonable fee" means compensation or payment, the 240
receipt of which would not constitute a breach of fiduciary duty 241
under section 36 of the "Investment Company Act of 1940," 54 242
Stat. 789, 15 U.S.C.A. 80a-35. 243
(F) Shares as to which the voting rights with respect to 245
the election of directors may not be exercised under this section 246
shall not be considered as outstanding for the purpose of 247
computing the voting power of the corporation or of its shares of 248
any class with respect to the election of directors. 249
(G) This section does not authorize a trust company acting 251
as a probate fiduciary to perform any act prohibited by section 253
2109.44 of the Revised Code, unless the act is authorized by the 255
instrument creating the trust.
(H) A trust company making an investment of trust funds in 257
an affiliated investment company, or a bank or other corporation 258
owned or controlled by the bank holding company that owns or 260
controls the trust company, may charge a reasonable fee for 261
investment advisory, brokerage, transfer agency, registrar, 262
management, shareholder servicing, custodian, or any related 263
services provided to an affiliated investment company. The fee 264
may be in addition to the compensation that the trust company is 265
otherwise entitled to receive from the trust, provided that the 267
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fee is charged as a percentage of either asset value or income
earned or actual amount charged and is disclosed at least 268
annually by prospectus, account statement, or any other written 269
means to all persons entitled to receive statements of account 270
activity. 271
(I) A trust company making an investment of trust funds in 273
the securities of an affiliated investment company pursuant to 274
division (A)(1)(c) of this section shall, when providing any 275
periodic account statements to the trust fund, report the net 276
asset value of the shares comprising the investment of the trust 277
fund in the affiliated investment company. 278
(J) If a trust company making an investment of trust funds 280
in the securities of an affiliated investment company pursuant to 281
division (A)(1)(c) of this section invests the funds in any 282
mutual fund, the trust company shall disclose, in at least 283
ten-point boldface type, by prospectus, account statement, or any 284
other written means to all persons entitled to receive statements 285
of account activity, that the mutual fund is not insured or 286
guaranteed by the federal deposit insurance corporation or by any 287
other government agency or government-sponsored agency of the 288
federal government or of this state. 289
Sec. 1339.18. (A) ABSENT AN EXPRESS AGREEMENT TO THE 292
CONTRARY, AN ATTORNEY WHO PERFORMS LEGAL SERVICES FOR A 293
FIDUCIARY, BY REASON OF THE ATTORNEY PERFORMING THOSE LEGAL
SERVICES FOR THE FIDUCIARY, HAS NO DUTY OR OBLIGATION IN 294
CONTRACT, TORT, OR OTHERWISE TO ANY THIRD PARTY TO WHOM THE 296
FIDUCIARY OWES FIDUCIARY OBLIGATIONS.
(B) AS USED IN THIS SECTION, "FIDUCIARY" MEANS A TRUSTEE 299
UNDER AN EXPRESS TRUST OR AN EXECUTOR OR ADMINISTRATOR OF A
DECEDENT'S ESTATE. 300
Sec. 1339.52. (A) AS USED IN SECTIONS 1339.52 TO 1339.61 302
OF THE REVISED CODE, "TRUSTEE" MEANS A TRUSTEE UNDER ANY 304
TESTAMENTARY, INTER VIVOS, OR OTHER TRUST.
(B) EXCEPT AS PROVIDED IN DIVISION (C) OR (D) OF THIS 307
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SECTION, A TRUSTEE WHO INVESTS AND MANAGES TRUST ASSETS UNDER
SECTIONS 1339.52 TO 1339.61 OF THE REVISED CODE OWES A DUTY TO 310
THE BENEFICIARIES OF THE TRUST TO COMPLY WITH SECTIONS 1339.52 TO 311
1339.61 OF THE REVISED CODE. 313
(C) SECTIONS 1339.52 TO 1339.61 OF THE REVISED CODE MAY BE 317
EXPANDED, RESTRICTED, ELIMINATED, OR OTHERWISE ALTERED, WITHOUT 318
EXPRESS REFERENCE TO THESE SECTIONS BY THE INSTRUMENT CREATING A 319
TRUST. 320
(D) A TRUSTEE IS NOT LIABLE TO A BENEFICIARY OF A TRUST TO 322
THE EXTENT THE TRUSTEE ACTED IN REASONABLE RELIANCE ON THE 323
PROVISIONS OF THE TRUST. 324
Sec. 1339.53. (A) A TRUSTEE SHALL INVEST AND MANAGE TRUST 326
ASSETS AS A PRUDENT INVESTOR WOULD, BY CONSIDERING THE PURPOSES, 328
TERMS, DISTRIBUTION REQUIREMENTS, AND OTHER CIRCUMSTANCES OF THE 329
TRUST. IN SATISFYING THIS REQUIREMENT, THE TRUSTEE SHALL 330
EXERCISE REASONABLE CARE, SKILL, AND CAUTION. 331
(B) A TRUSTEE SHALL MAKE A REASONABLE EFFORT TO VERIFY 334
FACTS RELEVANT TO THE INVESTMENT AND MANAGEMENT OF TRUST ASSETS. 335
(C) A TRUSTEE WHO HAS SPECIAL SKILLS OR EXPERTISE, OR IS 338
NAMED TRUSTEE IN RELIANCE UPON THE TRUSTEE'S REPRESENTATION THAT 339
THE TRUSTEE HAS SPECIAL SKILLS OR EXPERTISE, HAS A DUTY TO USE 340
THOSE SPECIAL SKILLS OR EXPERTISE. 341
(D) A TRUSTEE'S INVESTMENT AND MANAGEMENT DECISIONS 344
RESPECTING INDIVIDUAL TRUST ASSETS SHALL NOT BE EVALUATED IN 345
ISOLATION BUT IN THE CONTEXT OF THE TRUST PORTFOLIO AS A WHOLE 346
AND AS PART OF AN OVERALL INVESTMENT STRATEGY HAVING RISK AND 347
RETURN OBJECTIVES REASONABLY SUITED TO THE TRUST. 348
(E) AMONG CIRCUMSTANCES THAT A TRUSTEE SHALL CONSIDER IN 351
INVESTING AND MANAGING TRUST ASSETS ARE THE FOLLOWING AS ARE 352
RELEVANT TO THE TRUST OR ITS BENEFICIARIES: 353
(1) THE GENERAL ECONOMIC CONDITIONS; 355
(2) THE POSSIBLE EFFECT OF INFLATION OR DEFLATION; 357
(3) THE EXPECTED TAX CONSEQUENCES OF INVESTMENT DECISIONS 359
OR STRATEGIES; 360
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(4) THE ROLE THAT EACH INVESTMENT OR COURSE OF ACTION 362
PLAYS WITHIN THE OVERALL TRUST PORTFOLIO, WHICH MAY INCLUDE 363
FINANCIAL ASSETS, INTERESTS IN CLOSELY HELD ENTERPRISES, TANGIBLE 365
AND INTANGIBLE PERSONAL PROPERTY, AND REAL PROPERTY; 366
(5) THE EXPECTED TOTAL RETURN FROM INCOME AND APPRECIATION 368
OF CAPITAL; 369
(6) OTHER RESOURCES OF THE BENEFICIARIES; 371
(7) NEEDS FOR LIQUIDITY, REGULARITY OF INCOME, AND 373
PRESERVATION OR APPRECIATION OF CAPITAL; 374
(8) AN ASSET'S SPECIAL RELATIONSHIP OR SPECIAL VALUE, IF 376
ANY, TO THE PURPOSES OF THE TRUST OR TO ONE OR MORE OF THE 377
BENEFICIARIES. 378
Sec. 1339.54. (A) A TRUSTEE MAY INVEST IN ANY KIND OF 380
PROPERTY OR TYPE OF INVESTMENT PROVIDED THAT THE INVESTMENT IS 381
CONSISTENT WITH THE REQUIREMENTS AND STANDARDS OF SECTIONS 382
1339.52 TO 1339.61 OF THE REVISED CODE. 384
(B) A TRUSTEE SHALL DIVERSIFY THE INVESTMENTS OF A TRUST 387
UNLESS THE TRUSTEE REASONABLY DETERMINES THAT, BECAUSE OF SPECIAL 388
CIRCUMSTANCES, THE PURPOSES OF THE TRUST ARE BETTER SERVED 389
WITHOUT DIVERSIFYING. 390
Sec. 1339.55. (A) A TRUSTEE SHALL INVEST AND MANAGE THE 393
TRUST ASSETS SOLELY IN THE INTEREST OF THE BENEFICIARIES. 394
(B) IF A TRUST HAS TWO OR MORE BENEFICIARIES, THE TRUSTEE 397
SHALL ACT IMPARTIALLY IN INVESTING AND MANAGING THE TRUST ASSETS 398
TAKING INTO ACCOUNT ANY DIFFERING INTERESTS OF THE BENEFICIARIES. 399
Sec. 1339.56. WITHIN A REASONABLE TIME AFTER ACCEPTING A 401
TRUSTEESHIP OR RECEIVING TRUST ASSETS, A TRUSTEE SHALL REVIEW THE 403
TRUST ASSETS AND MAKE AND IMPLEMENT DECISIONS CONCERNING THE
RETENTION AND DISPOSITION OF TRUST ASSETS IN ORDER TO BRING THE 404
TRUST PORTFOLIO INTO COMPLIANCE WITH THE PURPOSES, TERMS, 405
DISTRIBUTION REQUIREMENTS, AND OTHER CIRCUMSTANCES OF THE TRUST, 406
AND IN ORDER TO COMPLY WITH THE REQUIREMENTS AND STANDARDS OF 407
SECTIONS 1339.52 TO 1339.61 OF THE REVISED CODE. 410
Sec. 1339.57. EXCEPT AS OTHERWISE PERMITTED BY LAW, IN 412
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INVESTING AND MANAGING TRUST ASSETS, A TRUSTEE MAY ONLY INCUR 414
COSTS THAT ARE APPROPRIATE AND REASONABLE IN RELATION TO THE 415
ASSETS, THE PURPOSES OF THE TRUST, AND THE SKILLS OF THE TRUSTEE. 416
Sec. 1339.58. COMPLIANCE WITH SECTIONS 1339.52 TO 1339.61 418
OF THE REVISED CODE SHALL BE DETERMINED IN LIGHT OF THE FACTS AND 421
CIRCUMSTANCES EXISTING AT THE TIME OF A TRUSTEE'S DECISION OR 422
ACTION AND NOT BY HINDSIGHT.
Sec. 1339.59. (A) A TRUSTEE MAY DELEGATE INVESTMENT AND 425
MANAGEMENT FUNCTIONS OF A TRUST THAT A PRUDENT TRUSTEE HAVING 426
COMPARABLE SKILLS COULD PROPERLY DELEGATE UNDER THE 427
CIRCUMSTANCES. IN ACCORDANCE WITH THIS DIVISION, A TRUSTEE SHALL 428
EXERCISE REASONABLE CARE, SKILL, AND CAUTION IN DOING ALL OF THE 429
FOLLOWING:
(1) SELECTING AN AGENT; 431
(2) ESTABLISHING THE SCOPE AND TERMS OF THE DELEGATION 433
CONSISTENT WITH THE PURPOSES AND TERMS OF THE TRUST; 434
(3) PERIODICALLY REVIEWING THE AGENT'S ACTIONS IN ORDER TO 436
MONITOR THE AGENT'S PERFORMANCE WITH THE TERMS OF THE DELEGATION. 438
(B) IN PERFORMING INVESTMENT OR MANAGEMENT FUNCTIONS OF A 441
TRUST THAT ARE DELEGATED TO AN AGENT, AN AGENT OWES A DUTY TO THE 442
TRUST TO EXERCISE REASONABLE CARE TO COMPLY WITH THE TERMS OF THE 443
DELEGATION. 444
(C) A TRUSTEE WHO COMPLIES WITH DIVISION (A) OF THIS 448
SECTION IS NOT LIABLE TO THE BENEFICIARIES OF THE TRUST OR TO THE 449
TRUST FOR THE DECISIONS OR ACTIONS OF THE AGENT TO WHOM THE 450
FUNCTION WAS DELEGATED.
(D) BY ACCEPTING THE DELEGATION OF INVESTMENT OR MANAGEMENT 453
FUNCTIONS OF A TRUST THAT IS SUBJECT TO THE LAWS OF THIS STATE, 454
AN AGENT SUBMITS TO THE JURISDICTION OF THIS STATE. 455
Sec. 1339.60. THE FOLLOWING TERMS OR COMPARABLE LANGUAGE 457
IN THE PROVISIONS OF A TRUST, UNLESS OTHERWISE LIMITED OR 458
MODIFIED, AUTHORIZES ANY INVESTMENT OR STRATEGY PERMITTED BY 459
SECTIONS 1339.52 TO 1339.61 OF THE REVISED CODE: "INVESTMENTS 460
PERMISSIBLE BY LAW FOR INVESTMENT OF TRUST FUNDS"; "LEGAL 462
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INVESTMENTS"; "AUTHORIZED INVESTMENTS"; "USING THE JUDGMENT AND 463
CARE UNDER THE CIRCUMSTANCES THEN PREVAILING THAT PERSONS OF 464
PRUDENCE, DISCRETION, AND INTELLIGENCE EXERCISE IN THE MANAGEMENT 465
OF THEIR OWN AFFAIRS, NOT IN REGARD TO SPECULATION BUT IN REGARD 466
TO THE PERMANENT DISPOSITION OF THEIR FUNDS CONSIDERING THE 467
PROBABLE INCOME AS WELL AS THE PROBABLE SAFETY OF THEIR CAPITAL"; 468
"PRUDENT MAN RULE"; "PRUDENT TRUSTEE RULE"; "PRUDENT PERSON 469
RULE"; AND "PRUDENT INVESTOR RULE." 470
Sec. 1339.61. (A) SECTIONS 1339.52 TO 1339.61 OF THE 473
REVISED CODE SHALL BE APPLIED AND CONSTRUED TO EFFECTUATE THE 475
GENERAL PURPOSE TO MAKE UNIFORM THE LAW WITH RESPECT TO THE 476
SUBJECT OF THESE SECTIONS AMONG THE STATES ENACTING IT. THESE 477
SECTIONS MAY BE CITED AS THE "OHIO UNIFORM PRUDENT INVESTOR ACT." 482
(B) SECTIONS 1339.52 TO 1339.61 OF THE REVISED CODE APPLY 486
TO TRUSTS EXISTING ON OR CREATED AFTER THE EFFECTIVE DATE OF 487
THESE SECTIONS. AS APPLIED TO TRUSTS EXISTING ON THE EFFECTIVE 488
DATE OF THESE SECTIONS, SECTIONS 1339.52 TO 1339.61 OF THE 490
REVISED CODE GOVERN ONLY DECISIONS OR ACTIONS OCCURRING AFTER THE 492
EFFECTIVE DATE OF THESE SECTIONS. 493
(C) THE TEMPORARY INVESTMENT OF CASH OR FUNDS PURSUANT TO 496
SECTION 1339.44 OR 2109.372 OF THE REVISED CODE SHALL BE 498
CONSIDERED A PRUDENT INVESTMENT IN COMPLIANCE WITH SECTIONS 499
1339.52 TO 1339.61 OF THE REVISED CODE. 501
Sec. 1339.60 1339.68. (A) As used in this section: 510
(1) "Disclaimant" means any person, any guardian or 512
personal representative of a person or estate of a person, or any 513
attorney-in-fact or agent of a person having a general or 514
specific authority to act granted in a written instrument, who is 515
any of the following: 516
(a) With respect to testamentary instruments and intestate 518
succession, an heir, next of kin, devisee, legatee, donee, person 519
succeeding to a disclaimed interest, surviving joint tenant, 520
surviving tenant by the entireties, surviving tenant of a tenancy 521
with a right of survivorship, beneficiary under a testamentary 522
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instrument, or person designated to take pursuant to a power of 523
appointment exercised by a testamentary instrument; 524
(b) With respect to nontestamentary instruments, a 526
grantee, donee, person succeeding to a disclaimed interest, 527
surviving joint tenant, surviving tenant by the entireties, 528
surviving tenant of a tenancy with a right of survivorship, 529
beneficiary under a nontestamentary instrument, or person 530
designated to take pursuant to a power of appointment exercised 531
by a nontestamentary instrument; 532
(c) With respect to fiduciary rights, privileges, powers, 534
and immunities, a fiduciary under a testamentary or 535
nontestamentary instrument. This section does not authorize a 536
fiduciary to disclaim the rights of beneficiaries unless the 537
instrument creating the fiduciary relationship authorizes such a 538
disclaimer. 539
(d) Any person entitled to take an interest in property 541
upon the death of a person or upon the occurrence of any other 542
event. 543
(2) "Property" means all forms of property, real and 545
personal, tangible and intangible. 546
(B)(1) A disclaimant, other than a fiduciary under an 548
instrument who is not authorized by the instrument to disclaim 549
the interest of a beneficiary, may disclaim, in whole or in part, 550
the succession to any property by executing and by delivering, 551
filing, or recording a written disclaimer instrument in the 552
manner provided in this section. 553
(2) A disclaimant who is a fiduciary under an instrument 555
may disclaim, in whole or in part, any right, power, privilege, 556
or immunity, by executing and by delivering, filing, or recording 557
a written disclaimer instrument in the manner provided in this 558
section. 559
(3) The written instrument of disclaimer shall be signed 561
and acknowledged by the disclaimant and shall contain all of the 562
following: 563
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(a) A reference to the donative instrument; 565
(b) A description of the property, part of property, or 567
interest disclaimed, and of any fiduciary right, power, 568
privilege, or immunity disclaimed; 569
(c) A declaration of the disclaimer and its extent. 571
(4) The guardian of the estate of a minor or an 573
incompetent, or the personal representative of a deceased person, 574
with the consent of the probate division of the court of common 575
pleas, may disclaim, in whole or in part, the succession to any 576
property, or interest in property, that the ward, if an adult and 577
competent, or the deceased, if living, might have disclaimed. The 579
guardian or personal representative, or any interested person may 580
file an application with the probate division of the court of
common pleas that has jurisdiction of the estate, asking that the 581
court order the guardian or personal representative to execute 582
and deliver, file, or record the disclaimer on behalf of the ward 583
or estate. The court shall order the guardian or personal 584
representative to execute and deliver, file, or record the 585
disclaimer if the court finds, upon hearing after notice to 586
interested parties and such other persons as the court shall 587
direct, that: 588
(a) It is in the best interests of those interested in the 590
estate of the person and of those who will take the disclaimed 591
interest; 592
(b) It would not materially, adversely affect the minor or 594
incompetent, or the beneficiaries of the estate of the decedent, 595
taking into consideration other available resources and the age, 596
probable life expectancy, physical and mental condition, and 597
present and reasonably anticipated future needs of the minor or 598
incompetent or the beneficiaries of the estate of the decedent. 599
A written instrument of disclaimer ordered by the court 601
under this division shall be executed and be delivered, filed, or 602
recorded within the time and in the manner in which the person 603
could have disclaimed if he THE PERSON were living, an adult, and 605
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competent.
(C) A partial disclaimer of property that is subject to a 607
burdensome interest created by the donative instrument is not 608
effective unless the disclaimed property constitutes a gift that 609
is separate and distinct from undisclaimed gifts. 610
(D) The disclaimant shall deliver, file, or record the 612
disclaimer, or cause the same to be done, not later than nine 613
months after the latest of the following dates: 614
(1) The effective date of the donative instrument if both 616
the taker and his THE TAKER'S interest in the property are 617
finally ascertained on that date; 619
(2) The date of the occurrence of the event upon which 621
both the taker and his THE TAKER'S interest in the property 622
become finally ascertainable; 624
(3) The date on which the disclaimant attains twenty-one 626
years of age or is no longer an incompetent, without tendering or 627
repaying any benefit received while the disclaimant was under 628
twenty-one years of age or an incompetent, and even if a guardian 629
of a minor or incompetent had filed an application pursuant to 630
division (B)(4) of this section and the probate division of the 631
court of common pleas involved did not consent to the guardian 632
executing a disclaimer. 633
(E) No disclaimer instrument is effective under this 635
section if either of the following applies under the terms of the 636
disclaimer instrument: 637
(1) The disclaimant has power to revoke the disclaimer; 639
(2) The disclaimant may transfer, or direct to be 641
transferred, to himself SELF the entire legal and equitable 642
ownership of the property subject to the disclaimer instrument. 644
(F)(1) If the interest disclaimed is created by a 646
nontestamentary instrument, the disclaimer instrument shall be 647
delivered personally or by certified mail to the trustee or other 648
person who has legal title to, or possession of, the property 649
disclaimed. 650
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(2) If the interest disclaimed is created by a 652
testamentary instrument or by intestate succession, the 653
disclaimer instrument shall be filed in the probate division of 654
the court of common pleas in the county in which proceedings for 655
the administration of the decedent's estate have been commenced, 656
and an executed copy of the disclaimer instrument shall be 657
delivered personally or by certified mail to the personal 658
representative of the decedent's estate. 659
(3) If no proceedings for the administration of the 661
decedent's estate have been commenced, the disclaimer instrument 662
shall be filed in the probate division of the court of common 663
pleas in the county in which proceedings for the administration 664
of the decedent's estate might be commenced according to law. The 666
disclaimer instrument shall be filed and indexed, and fees
charged, in the same manner as provided by law for an application 667
to be appointed as personal representative to administer the 668
decedent's estate. The disclaimer is effective whether or not 669
proceedings thereafter are commenced to administer the decedent's 670
estate. If proceedings thereafter are commenced for the 671
administration of the decedent's estate, they shall be filed 672
under, or consolidated with, the case number assigned to the 673
disclaimer instrument. 674
(4) If an interest in real estate is disclaimed, an 676
executed copy of the disclaimer instrument also shall be recorded 677
in the office of the recorder of the county in which the real 678
estate is located. The disclaimer instrument shall include a 679
description of the real estate with sufficient certainty to 680
identify it, and shall contain a reference to the record of the 681
instrument that created the interest disclaimed. If title to the 682
real estate is registered under Chapters 5309. and 5310. of the 683
Revised Code, the disclaimer interest shall be entered as a 684
memorial on the last certificate of title. A spouse of a 685
disclaimant has no dower or other interest in the real estate 686
disclaimed. 687
16
(G) Unless the donative instrument expressly provides 689
that, if there is a disclaimer, there shall not be any 690
acceleration of remainders or other interests, the property, part 691
of property, or interest in property disclaimed, and any future 692
interest that is to take effect in possession or enjoyment at or 693
after the termination of the interest disclaimed, shall descend, 694
be distributed, or otherwise be disposed of, and shall be 695
accelerated, in the following manner: 696
(1) If intestate or testate succession is disclaimed, as 698
if the disclaimant had predeceased the decedent; 699
(2) If the disclaimant is one designated to take pursuant 701
to a power of appointment exercised by a testamentary instrument, 702
as if the disclaimant had predeceased the donee of the power; 703
(3) If the donative instrument is a nontestamentary 705
instrument, as if the disclaimant had died before the effective 706
date of the nontestamentary instrument; 707
(4) If the disclaimer is of a fiduciary right, power, 709
privilege, or immunity, as if the right, power, privilege, or 710
immunity was never in the donative instrument. 711
(H) A disclaimer pursuant to this section is effective as 713
of, and relates back for all purposes to, the date upon which the 714
taker and his THE TAKER'S interest have been finally ascertained. 716
(I) A disclaimant who has a present and future interest in 718
property, and disclaims his THE DISCLAIMANT'S present interest in 720
whole or in part, is considered to have disclaimed his THE 721
DISCLAIMANT'S future interest to the same extent, unless a 723
contrary intention appears in the disclaimer instrument or the 724
donative instrument. A disclaimant is not precluded from 725
receiving, as an alternative taker, a beneficial interest in the 726
property disclaimed, unless a contrary intention appears in the 727
disclaimer instrument or in the donative instrument. 728
(J) The disclaimant's right to disclaim under this section 730
is barred if, before the expiration of the period within which he 731
THE DISCLAIMANT may disclaim the interest, he THE DISCLAIMANT 733
17
does any of the following: 734
(1) Assigns, conveys, encumbers, pledges, or transfers, or 736
contracts to assign, convey, encumber, pledge, or transfer, the 737
property or any interest in it; 738
(2) Waives in writing his THE DISCLAIMANT'S right to 740
disclaim and executes and delivers, files, or records the waiver 742
in the manner provided in this section for a disclaimer 743
instrument;
(3) Accepts the property or an interest in it; 745
(4) Permits or suffers a sale or other disposition of the 747
property pursuant to judicial action against him THE DISCLAIMANT. 749
(K) A fiduciary's application for appointment or 751
assumption of duties as a fiduciary does not waive or bar his THE 752
DISCLAIMANT'S right to disclaim a right, power, privilege, or 754
immunity.
(L) The right to disclaim under this section exists 756
irrespective of any limitation on the interest of the disclaimant 757
in the nature of a spendthrift provision or similar restriction. 758
(M) A disclaimer instrument or written waiver of the right 760
to disclaim that has been executed and delivered, filed, or 761
recorded as required by this section is final and binding upon 762
all persons. 763
(N) The right to disclaim and the procedures for 765
disclaimer established by this section are in addition to, and do 766
not exclude or abridge, any other rights or procedures existing 767
under any other section of the Revised Code or at common law to 768
assign, convey, release, refuse to accept, renounce, waive, or 769
disclaim property. 770
(O)(1) No person is liable for distributing or disposing 772
of property in a manner inconsistent with the terms of a valid 773
disclaimer if the distribution or disposition is otherwise proper 774
and the person has no actual knowledge of the disclaimer. 775
(2) No person is liable for distributing or disposing of 777
property in reliance upon the terms of a disclaimer that is 778
18
invalid because the right of disclaimer has been waived or barred 779
if the distribution or disposition is otherwise proper and the 780
person has no actual knowledge of the facts that constitute a 781
waiver or bar to the right to disclaim. 782
(P)(1) A disclaimant may disclaim pursuant to this section 785
any interest in property that is in existence on September 27, 786
1976, if either the interest in the property or the taker of the 787
interest in the property is not finally ascertained on that date. 788
(2) No disclaimer executed pursuant to this section 790
destroys or diminishes an interest in property that exists on 791
September 27, 1976, in any person other than the disclaimant. 792
Sec. 2109.37. (A) Except as otherwise provided by law, 801
INCLUDING DIVISION (D) OF THIS SECTION, or by the instrument 803
creating the trust, a fiduciary having funds belonging to a trust 804
which are to be invested may invest them in the following: 805
(1) Bonds or other obligations of the United States or of 807
this state; 808
(2) Bonds or other interest-bearing obligations of any 810
county, municipal corporation, school district, or other legally 811
constituted political taxing subdivision within the state, 812
provided that such county, municipal corporation, school 813
district, or other subdivision has not defaulted in the payment 814
of the interest on any of its bonds or interest-bearing 815
obligations, for more than one hundred twenty days during the ten 816
years immediately preceding the investment by such THE fiduciary 817
in such THE bonds or other obligations, and provided that such 819
county, municipal corporation, school district, or other 821
subdivision, is not, at the time of such THE investment, in 822
default in the payment of principal or interest on any of its 824
bonds or other interest-bearing obligations; 825
(3) Bonds or other interest-bearing obligations of any 827
other state of the United States which, within twenty years prior 828
to the making of such investment, has not defaulted for more than 829
ninety days in the payment of principal or interest on any of its 830
19
bonds or other interest-bearing obligations; 831
(4) Any bonds issued by or for federal land banks and any 833
debentures issued by or for federal intermediate credit banks 834
under the "Federal Farm Loan Act of 1916," 39 Stat. 360, 12 835
U.S.C.A. 641, as amended; or any debentures issued by or for 836
banks for cooperatives under the "Farm Credit Act of 1933," 48 837
Stat. 257, 12 U.S.C.A. 131, as amended; 838
(5) Notes which are: (a) secured by a first mortgage on 840
real estate held in fee and located in the state, improved by a 841
unit designed principally for residential use for not more than 842
four families or by a combination of such dwelling unit and 843
business property, the area designed or used for nonresidential 844
purposes not to exceed fifty per cent of the total floor area; 845
(b) secured by a first mortgage on real estate held in fee and 846
located in the state, improved with a building designed for 847
residential use for more than four families or with a building 848
used primarily for business purposes, if the unpaid principal of 849
the notes secured by such mortgage does not exceed ten per cent 850
of the value of the estate or trust or does not exceed five 851
thousand dollars, whichever is greater; or (c) secured by a first 852
mortgage on an improved farm held in fee and located in the 853
state, provided that such mortgage requires that the buildings on 854
the mortgaged property shall be well insured against loss by 855
fire, and so kept, for the benefit of the mortgagee, until the 856
debt is paid, and provided that the unpaid principal of the notes 857
secured by the mortgage shall not exceed fifty per cent of the 858
fair value of the mortgaged real estate at the time such THE 859
investment is made, and such THE notes shall be payable not more 860
than five years after the date on which the investment in them is 862
made; except that the unpaid principal of such THE notes may 863
equal sixty per cent of the fair value of the mortgaged real 865
estate at the time such THE investment is made, and may be 866
payable over a period of fifteen years following the date of the 867
investment by the fiduciary if regular installment payments are 868
20
required sufficient to amortize four per cent or more of the 869
principal of the outstanding notes per annum and if the unpaid 870
principal and interest become due and payable at the option of 871
the holder upon any default in the payment of any installment of 872
interest or principal upon the notes, or of taxes, assessments, 873
or insurance premiums upon the mortgaged premises or upon the 874
failure to cure any such default within any grace period provided 875
therein not exceeding ninety days in duration; 876
(6) Life, endowment, or annuity contracts of legal reserve 878
life insurance companies regulated by sections 3907.01 to 879
3907.21, 3909.01 to 3909.17, 3911.01 to 3911.24, 3913.01 to 880
3913.10, 3915.01 to 3915.15, and 3917.01 to 3917.05 of the 881
Revised Code, and licensed by the superintendent of insurance to 882
transact business within the state, provided that the purchase of 883
contracts authorized by this division shall be limited to 884
executors or the successors to their powers when specifically 885
authorized by will and to guardians and trustees, which contracts 886
may be issued on the life of a ward, a beneficiary of a trust 887
fund, or according to a will, or upon the life of a person in 888
whom such ward or beneficiary has an insurable interest and such 889
THE contracts shall be drawn by the insuring company so that the 891
proceeds shall be the sole property of the person whose funds are 892
so invested; 893
(7) Notes or bonds secured by mortgages and insured by the 895
federal housing administrator or debentures issued by such 896
administrator; 897
(8) Obligations issued by a federal home loan bank created 899
under the "Federal Home Loan Bank Act of 1932," 47 Stat. 725, 12 900
U.S.C.A. 1421, as amended; 901
(9) Shares and certificates or other evidences of deposits 903
issued by a federal savings and loan association organized and 904
incorporated under the "Home Owners' Loan Act of 1933," 48 Stat. 905
128, 12 U.S.C.A. 1461, as amended, to the extent and only to the 906
extent that those shares or certificates or other evidences of 907
21
deposits are insured pursuant to the "Financial Institutions 908
Reform, Recovery, and Enforcement Act of 1989," 103 Stat. 183, 12 909
U.S.C.A. 1811, as amended; 910
(10) Bonds issued by the home owners' loan corporation 912
created under the "Home Owners' Act of 1933," 48 Stat. 128, 12 913
U.S.C.A. 1461, as amended; 914
(11) Obligations issued by the national mortgage 916
association created under the "National Housing Act," 48 Stat. 917
1246 (1934), 12 U.S.C.A. 1701, as amended; 918
(12) Shares and certificates or other evidences of 920
deposits issued by a domestic savings and loan association 921
organized under the laws of the state, which association has 922
obtained insurance of accounts pursuant to the "Financial 923
Institutions Reform, Recovery, and Enforcement Act of 1989," 103 924
Stat. 183, 12 U.S.C.A. 1811, as amended, or as may be otherwise 925
provided by law, only to the extent that such evidences of 926
deposits are insured under that act, as amended; 927
(13) Shares and certificates or other evidences of 929
deposits issued by a domestic savings and loan association 930
organized under the laws of the state, provided that no fiduciary 931
may invest such deposits except with the approval of the probate 932
court, and then in an amount not to exceed the amount which the 933
fiduciary is permitted to invest under division (A)(12) of this 934
section; 935
(14) In savings accounts in, or certificates or other 937
evidences of deposits issued by, a national bank located in the 938
state or a state bank located in and organized under the laws of 939
the state by depositing such THE funds in the bank, and such 940
national or state bank when itself acting in a fiduciary capacity 942
may deposit such THE funds in savings accounts in, or 943
certificates or other evidences of deposits issued by, its own 945
savings department or any bank subsidiary corporation owned or 946
controlled by the bank holding company that owns or controls such 947
national or state bank; provided that no deposit shall be made by 948
22
any fiduciary, individual, or corporate, unless the deposits of 949
the depository bank are insured by the federal deposit insurance 950
corporation created under the "Federal Deposit Insurance 951
Corporation Act of 1933," 48 Stat. 162, 12 U.S.C. 264, as 952
amended, and provided that the deposit of the funds of any one 953
trust in any such savings accounts in, or certificates or other 954
evidences of deposits issued by, any one bank shall not exceed 955
the sum insured under that act, as amended; 956
(15) Obligations consisting of notes, bonds, debentures, 958
or equipment trust certificates issued under an indenture, which 959
are the direct obligations, or in the case of equipment trust 960
certificates are secured by direct obligations, of a railroad or 961
industrial corporation, or a corporation engaged directly and 962
primarily in the production, transportation, distribution, or 963
sale of electricity or gas, or the operation of telephone or 964
telegraph systems or waterworks, or in some combination of them; 965
provided that the obligor corporation is one which is 966
incorporated under the laws of the United States, any state, or 967
the District of Columbia, and the obligations are rated at the 968
time of purchase in the highest or next highest classification 969
established by at least two standard rating services selected 970
from a list of the standard rating services which shall be 971
prescribed by the superintendent of financial institutions; 972
provided that every such list shall be certified by such THE 974
superintendent to the clerk of each probate court in the state, 976
and shall continue in effect until a different list is prescribed 977
and certified as provided in this division; 978
(16) Obligations issued, assumed, or guaranteed by the 981
international finance corporation or by the international bank 983
for reconstruction and development, the Asian development bank, 984
the inter-American development bank, the African development 985
bank, or other similar development bank in which the president, 986
as authorized by congress and on behalf of the United States, has 987
accepted membership, provided that the obligations are rated at 988
23
the time of purchase in the highest or next highest 989
classification established by at least one standard rating 990
service selected from a list of standard rating services which 991
shall be prescribed by the superintendent of financial
institutions;
(17) Securities of any investment company, as defined in 993
and registered under sections 3 and 8 of the "Investment Company 994
Act of 1940," 54 Stat. 789, 15 U.S.C.A. 80a-3 and 80a-8, that are 995
invested exclusively in forms of investment or in instruments 996
that are fully collateralized by forms of investment in which the 997
fiduciary is permitted to invest pursuant to divisions (A)(1) to 998
(16) of this section, provided that, in addition to such forms of 999
investment, such THE investment company may, for the purpose of 1,000
reducing risk of loss or of stabilizing investment returns, 1,001
engage in hedging transactions. 1,002
(B) No administrator or executor may invest funds 1,004
belonging to an estate in any asset other than a direct 1,005
obligation of the United States that has a maturity date not 1,006
exceeding one year from the date of such investment, or other 1,007
than in a short-term investment fund that is invested exclusively 1,008
in obligations of the United States or of its agencies, or 1,009
primarily in such obligations and otherwise only in variable 1,010
demand notes, corporate money market instruments including, but 1,011
not limited to, commercial paper, or fully collateralized 1,012
repurchase agreements or other evidences of indebtedness that are 1,013
payable on demand or generally have a maturity date not exceeding 1,014
ninety-one days from the date of investment, except with the 1,015
approval of the probate court or with the permission of the 1,016
instruments creating the trust. 1,017
(C)(1) In addition to the investments allowed by this 1,019
section, a guardian or trustee, with the approval of the court, 1,020
may invest funds belonging to the trust in productive real estate 1,021
located within the state, provided that neither the guardian nor 1,022
the trustee nor any member of the family of either has any 1,023
24
interest in such real estate or in the proceeds of the purchase 1,024
price. The title to any real estate so purchased by a guardian 1,025
must be taken in the name of the ward. 1,026
(2) Notwithstanding the provisions of division (C)(1) of 1,028
this section, the court may permit the funds to be used to 1,029
purchase or acquire a home for the ward or an interest in a home 1,030
for the ward in which a member of the ward's family may have an 1,031
interest. 1,032
(D) IF THE FIDUCIARY IS A TRUSTEE APPOINTED BY AND 1,034
ACCOUNTABLE TO THE PROBATE COURT, THE FIDUCIARY SHALL INVEST THE 1,036
TRUST'S ASSETS PURSUANT TO THE REQUIREMENTS AND STANDARDS SET
FORTH IN SECTIONS 1339.52 TO 1339.61 OF THE REVISED CODE. 1,037
Sec. 2109.371. (A) In addition to those investments made 1,046
eligible by section 2109.37 or 2109.372 of the Revised Code, 1,047
investments may be made by a fiduciary other than a guardian 1,048
under sections 5905.01 to 5905.19 of the Revised Code, and 1,049
subject to the restriction placed on an administrator or executor 1,050
by division (B) of section 2109.37 of the Revised Code, in any of 1,051
the following kinds and classes of securities, provided that it 1,052
may be lawfully sold in Ohio and investment is made only in such 1,053
securities as would be acquired by prudent persons of discretion 1,055
and intelligence in such matters who are seeking a reasonable
income and the preservation of their capital: 1,056
(1) Securities of corporations organized and existing 1,058
under the laws of the United States, the District of Columbia, or 1,059
any state of the United States including, but not limited to, 1,060
bonds, debentures, notes, equipment trust obligations, or other 1,061
evidences of indebtedness, and shares of common and preferred 1,062
stocks of such corporations; 1,063
(2) Subject to division (C) of this section, collective 1,065
investment funds established in accordance with section 1111.14 1,066
of the Revised Code or securities of any investment company, 1,067
including any affiliated investment company, whether or not the 1,068
fiduciary has invested other funds held by it in an agency or 1,069
25
other nonfiduciary capacity in the securities of the same 1,070
investment company or affiliated investment company;
(3) Bonds or other interest-bearing obligations of any 1,072
state or territory of the United States, or of any county, city, 1,073
village, school district, or other legally constituted political 1,074
taxing subdivision of any state or territory of the United 1,075
States, not otherwise eligible under division (A)(2) or (3) of 1,076
section 2109.37 of the Revised Code. 1,077
(B) No investment shall be made pursuant to this section 1,079
which, at the time such investment is made, causes the aggregate 1,080
market value of the investments, not made eligible by section 1,081
2109.37 or 2109.372 of the Revised Code, to exceed sixty per cent 1,082
of the aggregate market value at that time of all the property of 1,083
the fund held by the fiduciary. No sale or other liquidation of 1,084
any investment shall be required solely because of any change in 1,085
the relative market value of those investments made eligible by 1,086
this section and those made eligible by section 2109.37 or 1,087
2109.372 of the Revised Code; provided that, in the event of a 1,088
sale of investments authorized by this section, the proceeds from 1,089
the sale may be reinvested in the kinds and classes of securities 1,090
authorized by this section without regard to the percentage 1,091
limitation provided in this division. In determining the 1,092
aggregate market value of the property of a fund and the 1,093
percentage of a fund to be invested under this section, a 1,094
fiduciary may rely upon published market quotations as to those 1,095
investments for which such quotations are available and upon such 1,096
valuations of other investments as, in the fiduciary's best 1,097
judgment, seem fair and reasonable according to available 1,098
information.
(C)(1)(a) A fiduciary making an investment of trust funds 1,101
in securities of an affiliated investment company, or a bank 1,102
subsidiary corporation or other corporation owned or controlled
by the bank holding company that owns or controls the fiduciary, 1,103
may charge a reasonable fee for investment advisory, brokerage, 1,104
26
transfer agency, registrar, management, or other similar services 1,105
provided to an affiliated investment company. The fee may be in 1,106
addition to the compensation to which the fiduciary is otherwise 1,108
entitled to receive from the trust, provided that the fee is
charged as a percentage of either asset value or income earned or 1,109
actual amount charged and is disclosed at least annually by 1,110
prospectus, account statement, or any other written means to all 1,111
persons entitled to receive statements of account activity. THE 1,113
FIDUCIARY SHALL DISCLOSE THE RELATIONSHIP BETWEEN THE FIDUCIARY 1,114
AND THE AFFILIATED INVESTMENT COMPANY, AT LEAST ANNUALLY BY 1,115
ACCOUNT STATEMENT, WHETHER OR NOT THE FEE IS CHARGED. 1,116
(b) A fiduciary making an investment of trust funds in 1,118
securities of an affiliated investment company pursuant to 1,119
division (A)(2) of this section shall, when providing any 1,121
periodic account statements to the trust fund, report the net
asset value of the shares comprising the investment of the trust 1,122
funds in the affiliated investment company. 1,123
(c) If a fiduciary making an investment of trust funds in 1,125
securities of an affiliated investment company pursuant to 1,126
division (A)(2) of this section invests such funds in any mutual 1,128
fund, the fiduciary shall disclose, in at least ten-point
boldface type, by prospectus, account statement, or any other 1,129
written means to all persons entitled to receive statements of 1,130
account activity, that the mutual fund is not insured or 1,131
guaranteed by the federal deposit insurance corporation or by any 1,132
other government-sponsored agency of the federal government or of
this state. 1,133
(2) Unless the investment of trust funds in securities of 1,135
an affiliated investment company can be made under the terms of 1,136
the instrument creating the trust, an exception to the investment 1,137
of trust funds in securities of an affiliated investment company 1,138
may be filed with the probate court. Any exception filed 1,139
pursuant to this division must be signed by all persons who
would, at the time the exception is filed, be permitted to file 1,140
27
an exception to an account pursuant to section 2109.33 of the 1,142
Revised Code and must state that all such persons request that 1,143
the current investment of trust funds in securities of an 1,144
affiliated investment company be terminated within a reasonable 1,145
time. If the probate court determines that the exception
complies with the requirements of this division, the probate 1,146
court shall establish a schedule for disposing of any current 1,147
investments in securities of an affiliated investment company, 1,148
and the fiduciary shall cause the trust to dispose of the 1,149
investments in accordance with the schedule. The fiduciary shall 1,150
not be liable for any loss incurred by the trust as a result of
complying with division (C)(2) of this section. 1,151
(D) As used in this section, "affiliated investment 1,153
company," "investment company," and "reasonable fee" have the 1,154
same meanings as in division (E) of section 1109.10 1111.13 of 1,155
the Revised Code.
Sec. 2131.08. (A) No SUBJECT TO SECTIONS 1746.14, 1,164
1747.09, AND 2131.09 OF THE REVISED CODE, NO interest in real or 1,165
personal property shall be good unless it must vest, if at all, 1,167
not later than twenty-one years after a life or lives in being at 1,168
the creation of the interest. All estates given in tail, by deed 1,169
or will, in lands or tenements lying within this state, shall be 1,170
and remain an absolute estate in fee simple to the issue of the 1,171
first donee in tail. It is the intention by the adoption of this 1,172
section to make effective in Ohio THIS STATE what is generally 1,173
known as the common law rule against perpetuities, except as set 1,175
forth in divisions (B) and (C) of this section. 1,176
(B) For the purposes of this section AND SUBJECT TO 1,178
SECTIONS 1746.14, 1747.09, AND 2131.09 OF THE REVISED CODE, the 1,179
time of the creation of an interest in real or personal property 1,181
subject to a power reserved by the grantor to revoke or terminate 1,182
the interest shall be the time at which the reserved power 1,183
expires, either by reason of the death of the grantor or, by 1,184
release of the power, or otherwise. 1,186
28
(C) Any interest in real or personal property that would 1,188
violate the rule against perpetuities, under division (A) of this 1,189
section, shall be reformed, within the limits of the rule, to 1,190
approximate most closely the intention of the creator of the 1,191
interest. In determining whether an interest would violate the 1,192
rule and in reforming an interest, the period of perpetuities 1,193
shall be measured by actual rather than possible events. 1,194
(D) Divisions (B) and (C) of this section shall be 1,196
effective with respect to interests in real or personal property 1,197
created by wills of decedents dying after December 31, 1967, with 1,198
respect to interests in real or personal property created by 1,199
inter vivos instruments executed after December 31, 1967, and 1,200
with respect to interests in real or personal property created by 1,201
inter vivos instruments executed on or before December 31, 1967, 1,202
that by reason of division (B) of this section will be treated as 1,203
interests created after December 31, 1967. Divisions (B) and (C) 1,204
of this section shall be effective with respect to interests in 1,205
real or personal property created by the exercise of a power of 1,206
appointment if divisions (B) and (C) of this section apply to the 1,207
instrument that exercises the power, whether or not divisions (B) 1,208
and (C) of this section apply to the instrument that creates the 1,209
power. 1,210
Sec. 2131.09. (A) A trust of real or personal property 1,219
created by an employer as part of a stock bonus plan, pension 1,222
plan, disability or death benefit plan, or profit-sharing plan, 1,223
for the benefit of some or all of the employees, to which
contributions are made by such THE employer or employees, or 1,224
both, for the purpose of distributing to such THE employees or 1,226
their beneficiaries the earnings or the principal, or both 1,228
earnings and principal, of the fund so held in trust, is not 1,230
invalid as violating the rule against perpetuities, any other
existing law against perpetuities, or any law restricting or 1,231
limiting the duration of trusts; but such THE trust may continue 1,232
for such THE time as THAT is necessary to accomplish the purposes 1,234
29
for which it was created.
The income arising from any trust within the 1,236
classifications mentioned in this section DIVISION may be 1,237
accumulated in accordance with the terms of such THE trust for as 1,238
long a time as is necessary to accomplish the purposes for which 1,239
the same TRUST was created, notwithstanding any law limiting the 1,241
period during which trust income may be accumulated. 1,242
No rule of law against perpetuities or the suspension of 1,244
the power of alienation of the title to property invalidates any 1,245
such trust WITHIN THE CLASSIFICATIONS MENTIONED IN THIS DIVISION 1,246
unless such THE trust is terminated by decree of a court in a 1,249
suit instituted within two years after June 25, 1951. 1,250
(B)(1) NO RULE OF LAW AGAINST PERPETUITIES OR SUSPENSION 1,253
OF THE POWER OF ALIENATION OF THE TITLE TO PROPERTY, ANY OTHER 1,254
EXISTING LAW AGAINST PERPETUITIES, OR ANY LAW RESTRICTING OR 1,255
LIMITING THE DURATION OF TRUSTS SHALL APPLY WITH RESPECT TO ANY 1,256
INTEREST IN REAL OR PERSONAL PROPERTY HELD IN TRUST IF THE 1,257
INSTRUMENT CREATING THE TRUST SPECIFICALLY STATES THAT THE RULE 1,258
AGAINST PERPETUITIES OR THE PROVISIONS OF DIVISION (B) OF SECTION 1,259
2131.08 OF THE REVISED CODE SHALL NOT APPLY TO THE TRUST AND IF 1,262
EITHER THE TRUSTEE OF THE TRUST HAS UNLIMITED POWER TO SELL ALL 1,263
TRUST ASSETS OR IF ONE OR MORE PERSONS, ONE OF WHOM MAY BE THE 1,264
TRUSTEE, HAS THE UNLIMITED POWER TO TERMINATE THE ENTIRE TRUST. 1,265
(2) DIVISION (B) OF THIS SECTION SHALL APPLY TO THE 1,268
INTERPRETATION OF A TESTAMENTARY OR INTER VIVOS TRUST INSTRUMENT 1,269
THAT CREATES AN INTEREST IN REAL OR PERSONAL PROPERTY IN RELATION 1,270
TO WHICH ONE OR MORE OF THE FOLLOWING CONDITIONS APPLIES: 1,271
(a) THE TESTAMENTARY OR INTER VIVOS TRUST IS EXECUTED IN 1,274
THIS STATE.
(b) THE SOLE TRUSTEE OR ONE OF THE TRUSTEES IS DOMICILED 1,277
IN THIS STATE.
(c) THE TESTAMENTARY OR INTER VIVOS TRUST IS ADMINISTERED 1,280
IN THIS STATE OR THE SITUS OF A SUBSTANTIAL PORTION OF THE ASSETS 1,281
SUBJECT TO THE TESTAMENTARY PORTION OF THE TESTAMENTARY OR INTER 1,282
30
VIVOS TRUST IS IN THIS STATE, EVEN THOUGH SOME PART OR ALL OF 1,283
THOSE ASSETS ARE PHYSICALLY DEPOSITED FOR SAFEKEEPING IN A STATE 1,284
OTHER THAN THIS STATE. 1,285
(d) THE INSTRUMENT CREATING THE TESTAMENTARY OR INTER 1,288
VIVOS TRUST STATES THAT THE LAW OF THIS STATE IS TO APPLY. 1,289
(3) DIVISION (B) OF THIS SECTION SHALL BE EFFECTIVE WITH 1,292
RESPECT TO ALL OF THE FOLLOWING:
(a) AN INTEREST IN REAL OR PERSONAL PROPERTY IN TRUST 1,295
CREATED BY WILLS OF DECEDENTS DYING ON OR AFTER THE EFFECTIVE 1,296
DATE OF THIS AMENDMENT;
(b) AN INTEREST IN REAL OR PERSONAL PROPERTY CREATED BY AN 1,299
INTER VIVOS OR TESTAMENTARY TRUST INSTRUMENT EXECUTED ON OR AFTER
THE EFFECTIVE DATE OF THIS AMENDMENT; 1,300
(c) AN INTEREST IN REAL OR PERSONAL PROPERTY IN TRUST 1,303
CREATED BY THE EXERCISE OF A GENERAL POWER OF APPOINTMENT ON OR 1,304
AFTER THE EFFECTIVE DATE OF THIS AMENDMENT.
(4) DIVISION (B) OF THIS SECTION SHALL NOT APPLY TO THE 1,307
EXERCISE OF A POWER OF APPOINTMENT OTHER THAN A GENERAL POWER OF 1,308
APPOINTMENT.
(C) FOR PURPOSES OF THIS SECTION, "GENERAL POWER OF 1,311
APPOINTMENT" MEANS A POWER THAT IS EXERCISABLE IN FAVOR OF THE 1,312
INDIVIDUAL POSSESSING THE POWER, THE PERSON'S ESTATE, THE 1,313
PERSON'S CREDITORS, OR THE CREDITORS OF THE PERSON'S ESTATE. 1,314
Section 2. That existing sections 1111.13, 1339.60, 1,316
2109.37, 2109.371, 2131.08, and 2131.09 of the Revised Code are 1,318
hereby repealed.
Section 3. If, on the effective date of this act, a trust 1,322
meets all of the following conditions, it is not subject to this 1,323
act until January 1, 2000:
(A) The trust assets are invested and managed by a 1,325
non-corporate trustee.
(B) The trust cannot be terminated by the grantor. 1,327
(C) The value of the trust, as of December 31, 1998, is 1,329
less than $100,000.
31
Section 4. Section 2109.371 of the Revised Code is 1,332
presented in this act as a composite of the section as amended by 1,333
both Am. Sub. H.B. 538 and Sub. S.B. 129 of the 121st General 1,334
Assembly, with the new language of neither of the acts shown in 1,336
capital letters. This is in recognition of the principle stated 1,337
in division (B) of section 1.52 of the Revised Code that such 1,338
amendments are to be harmonized where not substantively 1,339
irreconcilable and constitutes a legislative finding that such is 1,340
the resulting version in effect prior to the effective date of 1,341
this act.