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           

                                                          3      


                                                                 
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          

                                                          4      


                                                                 
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          

                                                          5      


                                                                 
      (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          

                                                          6      


                                                                 
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          

                                                          7      


                                                                 
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          

                                                          8      


                                                                 
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          

                                                          9      


                                                                 
      (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          

                                                          10     


                                                                 
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          

                                                          11     


                                                                 
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          

                                                          12     


                                                                 
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          

                                                          13     


                                                                 
      (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          

                                                          14     


                                                                 
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          

                                                          15     


                                                                 
      (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.