As Reported by House Civil and Commercial Law Committee 1
123rd General Assembly 4
Regular Session Sub. H. B. No. 59 5
1999-2000 6
REPRESENTATIVES WOMER BENJAMIN-MOTTLEY-PRINGLE-SALERNO 8
_________________________________________________________________ 9
A B I L L
To amend sections 1340.01, 1340.02, 1340.03, 11
1340.09, 1340.12, 2103.041, 2107.26, 2107.33, and 13
2109.67, to enact new section 2131.01 and section
1340.031, and to repeal section 2131.01 of the 15
Revised Code to revise the Probate Laws. 16
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 18
Section 1. That sections 1340.01, 1340.02, 1340.03, 20
1340.09, 1340.12, 2103.041, 2107.26, 2107.33, and 2109.67 be 22
amended and new section 2131.01 and section 1340.031 of the 23
Revised Code be enacted to read as follows: 24
Sec. 1340.01. As used in sections 1340.01 to 1340.13 of 33
the Revised Code: 34
(A) "Income beneficiary" means the person to whom income 36
is presently payable or for whom it is accumulated for 37
distribution as income. 38
(B) "Inventory value" means the cost of property purchased 40
by the trustee and the market value of other property at the time 41
it became subject to the trust, but, in the case of property 42
which THAT passes or has passed to the trust as the result of a 44
decedent's death, the trustee may use any value finally 45
determined for the purposes of an estate or inheritance tax. 46
(C) "Remainderman REMAINDERPERSON" means the person 48
entitled to principal, including income which THAT has been 49
accumulated and added to principal. 51
(D) "Trustee" means an inter vivos or testamentary trustee 53
and includes an original trustee and any successor or added 54
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trustee. 55
(E) "QUALIFIED BENEFICIARY" MEANS A BENEFICIARY WHO IS 57
ENTITLED OR ELIGIBLE TO RECEIVE A DISTRIBUTION OF INCOME OR 58
PRINCIPAL WHETHER PRESENTLY OR AT SOME FUTURE TIME THAT IS 60
PREDICATED UPON THE HAPPENING OF AN EVENT THAT IS CERTAIN. AN 61
EVENT THAT IS CERTAIN INCLUDES, BUT IS NOT LIMITED TO, THE
TERMINATION OF AN INTERVENING LIFE ESTATE. IF A TRUST IS SUBJECT 62
TO AMENDMENT OR REVOCATION BY THE GRANTOR, THEN ONLY THE GRANTOR 63
SHALL BE DEEMED TO BE A QUALIFIED BENEFICIARY. 64
(F) "LEGAL REPRESENTATIVE" INCLUDES, BUT IS NOT LIMITED 66
TO, A PARENT AS A NATURAL GUARDIAN OF A MINOR CHILD UNDER SECTION 67
2111.08 OF THE REVISED CODE, AN ATTORNEY-AT-LAW, A GUARDIAN 68
APPOINTED PURSUANT TO COURT ORDER, INCLUDING A GUARDIAN OF THE 69
PERSON OR A GUARDIAN OF THE ESTATE, OR A GUARDIAN AD LITEM. 70
Sec. 1340.02. (A) A trust shall be administered with due 79
regard to the respective interests of income beneficiaries and 80
remaindermen REMAINDERPERSONS. A trust is so administered with 81
respect to the allocation of receipts and expenditures if a 82
receipt is credited or an expenditure is charged to income or 83
principal or partly to each IN ONE OF THE FOLLOWING MANNERS: 84
(1) In accordance with the terms of the trust instrument, 86
notwithstanding contrary provisions of sections 1340.01 to 87
1340.13 of the Revised Code; 88
(2) In the absence of any contrary terms of the trust 90
instrument, in accordance with sections 1340.01 to 1340.13 of the 91
Revised Code; 92
(3) If neither of the preceding rules of administration is 94
applicable,. 95
(B) IN EXERCISING A DISCRETIONARY POWER OF ADMINISTRATION 98
REGARDING A MATTER WITHIN THE SCOPE OF SECTIONS 1340.01 TO 99
1340.13 OF THE REVISED CODE, WHETHER GRANTED BY THE TERMS OF THE 102
TRUST INSTRUMENT OR BY THOSE SECTIONS, A TRUSTEE SHALL ADMINISTER 103
THE TRUST in accordance with what is reasonable and equitable in 105
view of the interests of those entitled to income as well as
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those entitled to principal, and in view of the manner in which 106
men PERSONS of ordinary prudence, discretion, and judgment would 107
act in the management of their own affairs. 108
(B)(C) If the trust instrument gives the trustee 110
discretion in crediting a receipt or charging an expenditure to 111
income or principal or partly to each, unless the terms of the 112
trust instrument otherwise expressly provide, the trustee shall 113
exercise such discretion in accordance with the principles of 114
sections 1340.01 to 1340.13 of the Revised Code, but in the event 115
of a bona fide doubt as to the applicability of sections 1340.01 116
to 1340.13 of the Revised Code, any allocation made by the 117
trustee in good faith shall be binding on all persons having any 118
interest in the trust NO INFERENCE OF IMPRUDENCE OR PARTIALITY 119
ARISES FROM THE FACT THAT THE TRUSTEE HAS MADE AN ALLOCATION 121
CONTRARY TO SECTIONS 1340.01 TO 1340.13 OF THE REVISED CODE. 124
(D) A FIDUCIARY MAY CREDIT A RECEIPT OR CHARGE AN 127
EXPENDITURE TO INCOME OR PRINCIPAL WITH RESPECT TO A TRUST, OR 128
PROPERTY PASSING TO A TRUST, THAT IS ELIGIBLE FOR A FEDERAL OR 129
OHIO ESTATE TAX MARITAL DEDUCTION OR ESTATE TAX CHARITABLE 130
DEDUCTION ONLY TO THE EXTENT THAT THE CREDIT OF THE RECEIPT OR 132
CHARGE OF THE EXPENDITURE WILL NOT CAUSE THE REDUCTION OR LOSS OF 133
THE DEDUCTION.
(E) AS USED IN THIS SECTION: 136
(1) "FEDERAL ESTATE TAX CHARITABLE DEDUCTION" MEANS THE 138
ESTATE TAX CHARITABLE DEDUCTION ALLOWED BY SUBTITLE B, CHAPTER 11 141
OF THE "INTERNAL REVENUE CODE OF 1986," 26 U.S.C.A. 2055, AS 146
AMENDED.
(2) "FEDERAL ESTATE TAX MARITAL DEDUCTION" MEANS THE 148
ESTATE TAX MARITAL DEDUCTION ALLOWED BY SUBTITLE B, CHAPTER 11 OF 151
THE "INTERNAL REVENUE CODE OF 1986," 26 U.S.C.A. 2056, AS 156
AMENDED.
(3) "OHIO ESTATE TAX CHARITABLE DEDUCTION" MEANS THE 159
ESTATE TAX CHARITABLE DEDUCTION ALLOWED BY DIVISION (A) OF 160
SECTION 5731.17 OF THE REVISED CODE. 162
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(4) "OHIO ESTATE TAX MARITAL DEDUCTION" MEANS THE ESTATE 165
TAX MARITAL DEDUCTION ALLOWED BY DIVISION (A) OF SECTION 5731.15 167
OF THE REVISED CODE. 168
Sec. 1340.03. (A) Income is the return in money or 177
property derived from the use of principal, including return as 178
FOLLOWS: 179
(1) Rent of real or personal property, including sums 181
received for cancellation or renewal of a lease; 182
(2) Interest on money lent, including sums received as 184
consideration for the privilege of prepayment of principal except 185
as provided in section 1340.06 of the Revised Code on bond 186
premium and bond discount; 187
(3) Income earned during administration of a decedent's 189
estate as provided in section 2109.67 of the Revised Code; 190
(4) Corporate distributions as provided in section 1340.05 192
of the Revised Code; 193
(5) Accrued increment on bonds or other obligations issued 195
at a discount as provided in section 1340.06 of the Revised Code; 196
(6) Receipts from business and farming operations as 198
provided in section 1340.07 of the Revised Code; 199
(7) Receipts from disposition of natural resources as 201
provided in sections 1340.08 and 1340.09 of the Revised Code; 202
(8) Receipts from other principal subject to depletion as 204
provided in section 1340.10 of the Revised Code; 205
(9) Receipts from disposition of underproductive property 207
as provided in section 1340.11 of the Revised Code. 208
(B) Principal is the property that has been set aside by 210
the owner or the person legally empowered so that it is held in 211
trust eventually to be delivered to a remainderman 212
REMAINDERPERSON while the return or use of the principal is in 213
the meantime taken or received by or held for accumulation for an 214
income beneficiary. Principal includes any of the following: 215
(1) Consideration received by the trustee on the sale or 217
other transfer of principal or on repayment of a loan or as a 218
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refund or replacement or change in the form of principal; 219
(2) Proceeds of property taken on eminent domain 221
proceedings; 222
(3) Proceeds of insurance upon property forming part of 224
the principal, except proceeds of insurance upon a separate 225
interest of an income beneficiary; 226
(4) Stock dividends, receipts on liquidation of a 228
corporation, and other corporate distributions as provided in 229
section 1340.05 of the Revised Code; 230
(5) Receipts from the disposition of corporate securities 232
as provided in section 1340.06 of the Revised Code; 233
(6) Royalties and other receipts from disposition of 235
natural resources as provided in sections 1340.08 and 1340.09 of 236
the Revised Code; 237
(7) Receipts from other principal subject to depletion as 239
provided in section 1340.10 of the Revised Code; 240
(8) Any profit resulting from any change in the form of 242
principal except as provided in section 1340.11 of the Revised 243
Code on underproductive property; 244
(9) Receipts from disposition of underproductive property 246
as provided in section 1340.11 of the Revised Code; 247
(10) Any allowances for depreciation established under 249
section 1340.07 and division (A)(2) of section 1340.12 of the 250
Revised Code. 251
(C) After determining income and principal in accordance 253
with the terms of the trust instrument or of sections 1340.01 to 254
1340.13 of the Revised Code, the trustee shall charge to income 255
or principal expenses and other charges as provided in section 256
1340.12 of the Revised Code. 257
Sec. 1340.031. (A) NOT MORE THAN ONCE EVERY SIX MONTHS, A 259
QUALIFIED BENEFICIARY OR, IF A QUALIFIED BENEFICIARY IS UNDER A 261
LEGAL DISABILITY, A LEGAL REPRESENTATIVE OF THE QUALIFIED 262
BENEFICIARY MAY REQUEST IN WRITING THAT AN INTER VIVOS TRUSTEE 263
FURNISH THE QUALIFIED BENEFICIARY OR LEGAL REPRESENTATIVE A 265
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REPORT OF THE MANAGEMENT OF THE INTER VIVOS TRUST AS PROVIDED IN 266
THIS SECTION. WITHIN THIRTY DAYS AFTER RECEIVING THE WRITTEN 267
REQUEST FOR A REPORT OF THE MANAGEMENT OF THE INTER VIVOS TRUST, 268
THE INTER VIVOS TRUSTEE SHALL FURNISH THE QUALIFIED BENEFICIARY 269
OR LEGAL REPRESENTATIVE THAT MADE THE REQUEST A REPORT THAT IS 270
CURRENT TO WITHIN FIVE MONTHS PRIOR TO THE DATE OF THE REQUEST 271
AND THAT SHOWS AN INVENTORY OF THE TRUST PROPERTY AND THE 272
RECEIPTS CREDITED AND EXPENDITURES CHARGED TO INCOME OR PRINCIPAL 274
WITH RESPECT TO THE INTER VIVOS TRUST. IF THE INTER VIVOS
TRUSTEE DOES NOT COMPLY WITH THE REQUEST FOR A REPORT UNDER THIS 276
SECTION, THE QUALIFIED BENEFICIARY OR LEGAL REPRESENTATIVE THAT 277
MADE THE REQUEST MAY FILE AN APPROPRIATE ACTION IN A COURT OF 278
COMPETENT JURISDICTION TO COMPEL THE INTER VIVOS TRUSTEE TO 279
FURNISH THE REPORT. 280
(B) A CURRENT REPORT FURNISHED BY AN INTER VIVOS TRUSTEE 282
UNDER THIS SECTION OR DURING THE USUAL COURSE OF BUSINESS HAS 283
BINDING LEGAL EFFECT REGARDING MATTERS DESCRIBED OR DISCLOSED IN 284
THE REPORT ON THE QUALIFIED BENEFICIARY WHO RECEIVED THE REPORT, 285
ON THE LEGAL REPRESENTATIVE WHO RECEIVED THE REPORT ON BEHALF OF 286
THE QUALIFIED BENEFICIARY WHO IS UNDER LEGAL DISABILITY, AND ON 287
THE HEIRS AND ASSIGNS OF THE QUALIFIED BENEFICIARY WHO RECEIVED 288
THE REPORT UNLESS, NOTWITHSTANDING SECTION 2305.22 OF THE REVISED 289
CODE, THE QUALIFIED BENEFICIARY, THE LEGAL REPRESENTATIVE OF THE 291
QUALIFIED BENEFICIARY, OR ANY OF THE HEIRS OR ASSIGNS OF THE
QUALIFIED BENEFICIARY INSTITUTES AN ACTION REGARDING MATTERS 292
DESCRIBED OR DISCLOSED IN THE REPORT AGAINST THE INTER VIVOS 293
TRUSTEE WITHIN TWO YEARS FROM THE DATE THE REPORT IS FURNISHED TO 295
THE QUALIFIED BENEFICIARY OR LEGAL REPRESENTATIVE OF THE
QUALIFIED BENEFICIARY. 296
(C) NO PROVISION IN THIS SECTION ELIMINATES ANY OTHER 298
RIGHTS OR CAUSES OF ACTION THAT A QUALIFIED BENEFICIARY OF AN 299
INTER VIVOS TRUST, A LEGAL REPRESENTATIVE OF A QUALIFIED 300
BENEFICIARY OF AN INTER VIVOS TRUST, OR ANY OF THE HEIRS OR 301
ASSIGNS OF A QUALIFIED BENEFICIARY OF AN INTER VIVOS TRUST MAY 302
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HAVE AGAINST THE INTER VIVOS TRUSTEE UNDER ANY OTHER SECTION OF 303
THE REVISED CODE.
Sec. 1340.09. If any part of the principal consists of 312
land from which merchantable timber may be removed, the receipts 313
from taking the timber from the land shall be allocated in 314
accordance with division (A)(3)(B) of section 1340.02 of the 316
Revised Code.
Sec. 1340.12. (A) The following charges shall be made 325
against income: 326
(1) Ordinary expenses incurred in connection with the 328
administration, management, or preservation of the trust 329
property, including regularly recurring taxes assessed against 330
any portion of the principal, water rates, premiums on insurance 331
taken upon the interests of the income beneficiary, remainderman 332
REMAINDERPERSON, or trustee, interest paid by the trustee, and 333
ordinary repairs; 334
(2) A reasonable allowance for depreciation on property 336
subject to depreciation under generally accepted accounting 337
principles, but no allowance shall be made for depreciation of 338
that portion of any real property used by a beneficiary as a 339
residence or for depreciation of any property held by the trustee 340
on the effective date of this section OCTOBER 20, 1987, for which 342
the trustee is not then making an allowance for depreciation; 343
(3) Not less than half of court costs, attorney's fees, 345
and other fees on periodic judicial accounting, unless the court 346
directs otherwise; 347
(4) Court costs, attorney's fees, and other fees on other 349
accountings or judicial proceedings if the matter primarily 350
concerns the income interest, unless the court directs otherwise; 351
(5) Not less than half of the trustee's regular 353
compensation, whether based on a percentage of principal or 354
income, and all expenses reasonably incurred for current 355
management of principal and application of income, unless a court 356
otherwise directs; 357
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(6) Any tax levied upon receipts defined as income under 359
sections 1340.01 to 1340.13 of the Revised Code or the trust 360
instrument and payable by the trustee. 361
(B) If charges against income are of unusual amount, the 363
trustee may, by means of reserves or other reasonable means, MAY 365
charge them over a reasonable period of time and withhold from 366
distribution sufficient sums to regularize distributions. 367
(C) The following charges shall be made against principal: 369
(1) Trustee's compensation not chargeable to income under 371
divisions (A)(4) and (5) of this section, special compensation of 372
trustees, expenses reasonably incurred in connection with 373
principal, court costs and attorney's fees primarily concerning 374
matters of principal, and trustee's compensation computed on 375
principal as an acceptance, distribution, or termination fee; 376
(2) Charges not provided for in division (A) of this 378
section, including the cost of investing and reinvesting 379
principal; the payment on principal of an indebtedness, including 380
a mortgage amortized by periodic payments of principal; expenses 381
for preparation of property for rental or sale; and, unless the 382
court directs otherwise, expenses incurred in maintaining or 383
defending any action to construe the trust or, TO protect it THE 385
TRUST or the TRUST property, or TO assure the title of any trust 386
property; 387
(3) Extraordinary repairs or expenses incurred in making a 389
capital improvement to principal, including special assessments, 390
but a trustee may establish an allowance for depreciation out of 391
income to the extent permitted by division (A)(2) of this section 392
and by section 1340.07 of the Revised Code; 393
(4) Any tax levied upon profit, gain, or other receipts 395
allocated to principal, notwithstanding denomination of the tax 396
as an income tax by the taxing authority; 397
(5) If an estate or inheritance tax is levied in WITH 399
respect of TO a trust in which both an income beneficiary and a 400
remainderman REMAINDERPERSON have an interest, any amount 402
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apportioned to the trust, including penalties, even though the 404
income beneficiary also has rights in the principal. 405
(D) Regularly recurring charges payable from income shall 407
be apportioned to the same extent and in the same manner that 408
income is apportioned under section 1340.04 of the Revised Code. 409
Sec. 2103.041. In any action involving the judicical 418
JUDICIAL sale of real property for the purpose of satisfying the 419
claims of creditors of an owner of an interest in the property, 420
the spouse of the owner may be made a party to the action, and 421
the dower interest of the spouse, whether inchoate or otherwise, 422
may be subjected to the sale without the consent of the spouse. 423
The court shall determine the present value and priority of the 424
dower interest, using the American experience table of mortality 425
as the basis for determining the value, IN ACCORDANCE WITH 426
SECTION 2131.01 OF THE REVISED CODE and shall award the spouse a 427
sum of money equal to the present value of the dower interest, to 428
be paid out of the proceeds of the sale according to the priority 429
of the interest. To the extent that the owner and his THE 430
OWNER'S spouse are both liable for the indebtedness, the dower 432
interest of the spouse is subordinate to the claims of their 433
common creditors.
Sec. 2107.26. When an original will is lost, spoliated, or 442
destroyed subsequent to BEFORE OR AFTER the death of a testator, 443
or before the death of such testator if the testator's lack of 445
knowledge of such loss, spoliation, or destruction can be proved 446
by clear and convincing testimony, or after he became incapable
of making a will by reason of insanity, and such will cannot be 447
produced in the probate court in as complete a manner as the 448
originals of last wills and testaments which are actually 449
produced therein for probate, the PROBATE court may SHALL admit 451
such THE lost, spoliated, or destroyed will to probate, if such 452
court is satisfied the will was executed according to the law in 453
force at the time of its execution and not revoked at the death 454
of the testator BOTH OF THE FOLLOWING APPLY: 455
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(A) THE PROPONENT OF THE WILL ESTABLISHES BY CLEAR AND 458
CONVINCING EVIDENCE BOTH OF THE FOLLOWING: 459
(1) THE WILL WAS EXECUTED WITH THE FORMALITIES REQUIRED AT 462
THE TIME OF EXECUTION BY THE JURISDICTION IN WHICH IT WAS 463
EXECUTED.
(2) THE CONTENTS OF THE WILL. 465
(B) NO PERSON OPPOSING THE ADMISSION OF THE WILL TO 468
PROBATE ESTABLISHES BY A PREPONDERANCE OF THE EVIDENCE THAT THE 469
TESTATOR HAD REVOKED THE WILL. 470
Sec. 2107.33. (A) A will shall be revoked by IN THE 479
FOLLOWING MANNERS: 480
(1) BY the testator by tearing, canceling, obliterating, 483
or destroying it with the intention of revoking it, or by; 484
(2) BY some person, AT THE REQUEST OF THE TESTATOR AND in 487
the testator's presence, or by TEARING, CANCELING, OBLITERATING, 489
OR DESTROYING IT WITH THE INTENTION OF REVOKING IT; 490
(3) BY SOME PERSON TEARING, CANCELING, OBLITERATING, OR 492
DESTROYING IT PURSUANT TO the testator's express written 494
direction, or by;
(4) BY some other written will or codicil, executed as 497
prescribed by sections 2107.01 to 2107.62 of the Revised Code, or 498
by THIS CHAPTER; 499
(5) BY some other writing that is signed, attested, and 502
subscribed in the manner provided by those sections THIS CHAPTER. 503
A
(B) A will that has been declared valid and is in the 506
possession of a probate judge may also MAY be revoked according 508
to division (C) of section 2107.084 of the Revised Code. 509
(B)(C) If a testator removes a will that has been declared 511
valid and is in the possession of a probate judge pursuant to 512
section 2107.084 of the Revised Code from the possession of the 513
judge, the declaration of validity that was rendered no longer 514
has any effect. 515
(C)(D) If after executing a will, a testator is divorced, 517
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obtains a dissolution of marriage, has his THE TESTATOR'S 518
marriage annulled, or, upon actual separation from his THE 520
TESTATOR'S spouse, enters into a separation agreement pursuant to 522
which the parties intend to fully and finally settle their 523
prospective property rights in the property of the other, whether 524
by expected inheritance or otherwise, any disposition or 525
appointment of property made by the will to the former spouse or 526
to a trust with powers created by or available to the former 527
spouse, any provision in the will conferring a general or special 528
power of appointment on the former spouse, and any nomination in 529
the will of the former spouse as executor, trustee, or guardian, 530
shall be revoked unless the will expressly provides otherwise. 531
(D)(E) Property prevented from passing to a former spouse 533
or to a trust with powers created by or available to the former 534
spouse because of revocation by this section shall pass as if the 535
former spouse failed to survive the decedent, and other 536
provisions conferring some power or office on the former spouse 537
shall be interpreted as if the spouse failed to survive the 538
decedent. If provisions are revoked solely by this section, they 539
shall be deemed to be revived by the testator's remarriage with 540
the former spouse or upon the termination of a separation 541
agreement executed by them. 542
(E)(F) A bond, agreement, or covenant made by a testator, 544
for a valuable consideration, to convey property previously 545
devised or bequeathed in a will, does not revoke the devise or 546
bequest. The property passes by the devise or bequest, subject to 547
the remedies on the bond, agreement, or covenant, for a specific 548
performance or otherwise, against the devisees or legatees, that 549
might be had by law against the heirs of the testator, or his THE 550
TESTATOR'S next of kin, if the property had descended to them. 552
(F)(G) A TESTATOR'S REVOCATION OF A WILL SHALL BE VALID 555
ONLY IF THE TESTATOR, AT THE TIME OF THE REVOCATION, HAS THE SAME 556
CAPACITY AS THE LAW REQUIRES FOR THE EXECUTION OF A WILL. 557
(H) As used in this section: 559
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(1) "Trust with powers created by or available to the 561
former spouse" means a trust that is revocable by the former 562
spouse, with respect to which the former spouse has a power of 563
withdrawal, or with respect to which the former spouse may take a 564
distribution that is not subject to an ascertainable standard but 565
does not mean a trust in which those powers of the former spouse 566
are revoked by section 1339.62 of the Revised Code or similar 567
provisions in the law of another state. 568
(2) "Ascertainable standard" means a standard that is 570
related to a trust beneficiary's health, maintenance, support, or 571
education. 572
Sec. 2109.67. (A) Unless the will otherwise provides and 581
subject to division (B) of this section, all expenses incurred in 582
connection with the settlement of a decedent's estate, including 583
debts, funeral expenses, estate taxes, penalties concerning 584
taxes, allowances to a surviving spouse, minor children, or both, 585
including, but not limited to, the allowance for support under 586
section 2106.13 of the Revised Code, fees of attorneys and 587
personal representatives, and court costs shall be charged 588
against the principal of the estate. 589
(B) Unless the will otherwise provides, income from the 591
assets of a decedent's estate after the death of the testator and 592
before distribution, including income from property used to 593
discharge liabilities, shall be determined in accordance with the 594
rules applicable to a trustee under Chapter 1340. of the Revised 595
Code and distributed as follows: 596
(1) To specific legatees and devisees, the income from the 598
property bequeathed or devised to them respectively, less 599
property taxes, ordinary repairs, interest, and other expenses of 600
management and operation of the property, and an appropriate 601
portion of taxes imposed on income, excluding taxes on capital 602
gains, income in respect of a decedent, and other items allocable 603
to principal, which accrue during the period of administration; 604
(2)(a) To all other legatees, except as provided in 606
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division (B)(3)(2)(b) of this section, the balance of the income, 607
less the balance of property taxes, ordinary repairs, interest, 608
and other expenses of management and operation of all property 609
from which the estate is entitled to income, and taxes imposed on 610
income, excluding taxes on capital gains, income in respect of a 611
decedent, and other items allocable to principal, which accrue 612
during the period of administration, in proportion to their 613
respective interests in the undistributed assets of the estate, 614
computed at times of distribution on the basis of inventory 615
value; 616
(3)(b) A legatee, other than the testator's surviving 618
spouse, of a pecuniary legacy not in trust shall not be paid 619
interest on the legacy, and the legacy shall not be entitled to 620
receive any part of the income received by the estate during the 621
period of administration as income on the legacy. A legacy to 622
the testator's surviving spouse of a pecuniary amount shall carry 623
with it a proportionate part of the income of the estate from the 624
testator's death to the date of satisfaction, determined in 625
accordance with division (B)(2)(a) of this section. 626
(C) IF A WILL OR TRUST INSTRUMENT GIVES THE FIDUCIARY 628
DISCRETION IN CREDITING A RECEIPT OR CHARGING AN EXPENDITURE TO 629
INCOME OR PRINCIPAL OR PARTLY TO EACH, NO INFERENCE OF IMPRUDENCE 631
OR PARTIALITY ARISES FROM THE FACT THAT THE FIDUCIARY HAS MADE AN 632
ALLOCATION CONTRARY TO THIS SECTION, SECTION 2109.66, OR SECTIONS 633
1340.01 TO 1340.13 OF THE REVISED CODE. 634
(D) A FIDUCIARY MAY CREDIT A RECEIPT OR CHARGE AN 636
EXPENDITURE TO INCOME OR PRINCIPAL WITH RESPECT TO A DECEDENT'S 637
ESTATE, A TRUST UNDER A WILL, OR PROPERTY PASSING TO A TRUST 639
UNDER A WILL, THAT IS ELIGIBLE FOR A FEDERAL OR OHIO ESTATE TAX 640
MARITAL DEDUCTION OR ESTATE TAX CHARITABLE DEDUCTION ONLY TO THE
EXTENT THAT THE CREDIT OF THE RECEIPT OR CHARGE OF THE 642
EXPENDITURE WILL NOT CAUSE THE REDUCTION OR LOSS OF THE 643
DEDUCTION.
(E) AS USED IN THIS SECTION, "FEDERAL ESTATE TAX 645
14
CHARITABLE DEDUCTION," "FEDERAL ESTATE TAX MARITAL DEDUCTION," 646
"OHIO ESTATE TAX CHARITABLE DEDUCTION," AND "OHIO ESTATE TAX 647
MARITAL DEDUCTION" HAVE THE SAME MEANINGS AS IN SECTION 1340.02 648
OF THE REVISED CODE. 649
Sec. 2131.01. PRESENT VALUES FOR PROBATE MATTERS SHALL BE 651
THE VALUES DETERMINED FOR OHIO ESTATE TAX PURPOSES PURSUANT TO 652
DIVISION (B) OF SECTION 5731.01 OF THE REVISED CODE. 655
Section 2. That existing sections 1340.01, 1340.02, 657
1340.03, 1340.09, 1340.12, 2103.041, 2107.26, 2107.33, and 658
2109.67 and section 2131.01 of the Revised Code are hereby 659
repealed.
Section 3. It is the intent of the General Assembly in 661
amending section 1340.02 of the Revised Code in this act to limit 662
the application of the holding of the Ohio Supreme Court in 663
Sherman v. Sherman (1966), 5 Ohio St.2d 27. 664
Section 4. Except as otherwise provided in this section, 666
section 1340.031 of the Revised Code, as enacted by this act, 667
applies to inter vivos trusts that are in existence or are 668
created on or after the effective date of this act. Division (B) 669
of section 1340.031 of the Revised Code, as enacted by this act, 670
applies to reports furnished by an inter vivos trustee as 671
provided in that section on or after the effective date of this 672
act.