SENATORS Prentiss, Carnes, Blessing

To amend sections 2109.371 and 3107.15 and to enact

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section 1111.15 of the Revised Code to allow a

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trust company, under certain circumstances, to

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purchase products or services through or from the

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trust company or an affiliate or from a syndicate

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or selling group that includes the trust company or

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an affiliate, to expand the investment authority of

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fiduciaries under the Probate Fiduciaries Law, and

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to restrict bequests and other property transfers

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to persons adopted as adults, unless such persons

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are expressly included in the instrument of

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transfer.

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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 2109.371 and 3107.15 be amended and	13
section 1111.15 of the Revised Code be enacted to read as follows:	14

Sec. 1111.15. (A) A trust company acting in any fiduciary	15
capacity, including, but not limited to, the capacities described	16
in section 1111.11 of the Revised Code, may purchase any service	17
or product, including, but not limited to, insurance or securities	18
underwritten or otherwise distributed by the trust company or by	19
an affiliate, through or directly from the trust company or an	20
affiliate or from a syndicate or selling group that includes the	21
trust company or an affiliate, provided that the purchase is	22
otherwise prudent under sections 1339.52 to 1339.61 of the Revised	23
Code and the compensation for the service or product is reasonable	24
and is not prohibited by the instrument governing the fiduciary	25
relationship. The compensation for the service or product may be	26
in addition to the compensation that the trust company is	27
otherwise entitled to receive from the fiduciary account.	28

(B) A trust company shall disclose at least annually any	29
purchase authorized by this section that was made by the trust	30
company during that reporting period. The disclosure shall be	31
given, in writing or electronically, to all persons entitled to	32
receive statements of account activity, and shall include any	33
capacities in which the trust company or an affiliate acts for the	34
issuer of the securities or the provider of the products or	35
services and the fact that the trust company or an affiliate may	36
have an interest in the products or services.	37

(C) This section shall apply to the purchase of securities	38
made at the time of the initial offering of the securities or at	39
any time thereafter.	40

Sec. 2109.371.  (A) In addition to those investments made	41
eligible by section 2109.37 or 2109.372 of the Revised Code,	42
investments may be made by a fiduciary other than a guardian under	43
sections 5905.01 to 5905.19 of the Revised Code, and subject to	44
the restriction placed on an administrator or executor by division	45
(B) of section 2109.37 of the Revised Code, in any of the	46
following kinds and classes of securities, provided that it may be	47
lawfully sold in Ohio and investment is made only in such	48
securities as would be acquired by prudent persons of discretion	49
and intelligence in such matters who are seeking a reasonable	50
income and the preservation of their capital:	51

(1) Securities of corporations organized and existing under	52
the laws of the United States, the District of Columbia, or any	53
state of the United States including, but not limited to, bonds,	54
debentures, notes, equipment trust obligations, or other evidences	55
of indebtedness, and shares of common and preferred stocks of such	56
corporations;	57

(2) Subject to division (C) of this section, collective	58
investment funds established in accordance with section 1111.14 of	59
the Revised Code or securities of any investment company,	60
including any affiliated investment company, whether or not the	61
fiduciary has invested other funds held by it in an agency or	62
other nonfiduciary capacity in the securities of the same	63
investment company or affiliated investment company;. Such	64
investments may be made regardless of the eligibility of the	65
underlying assets held by the fund portfolios of the investment	66
company.	67

(3) Bonds or other interest-bearing obligations of any state	68
or territory of the United States, or of any county, city,	69
village, school district, or other legally constituted political	70
taxing subdivision of any state or territory of the United States,	71
not otherwise eligible under division (A)(2) or (3) of section	72
2109.37 of the Revised Code;	73

(4) Debt or equity securities of foreign corporations that	74
trade on recognized United States domiciled exchanges.	75

(B) No investment shall be made pursuant to this section	76
which, at the time such investment is made, causes the aggregate	77
market value of the investments, not made eligible by section	78
2109.37 or 2109.372 of the Revised Code, to exceed sixty per cent	79
of the aggregate market value at that time of all the property of	80
the fund held by the fiduciary. No sale or other liquidation of	81
any investment shall be required solely because of any change in	82
the relative market value of those investments made eligible by	83
this section and those made eligible by section 2109.37 or	84
2109.372 of the Revised Code; provided that, in the event of a	85
sale of investments authorized by this section, the proceeds from	86
the sale may be reinvested in the kinds and classes of securities	87
authorized by this section without regard to the percentage	88
limitation provided in this division. In determining the	89
aggregate market value of the property of a fund and the	90
percentage of a fund to be invested under this section, a	91
fiduciary may rely upon published market quotations as to those	92
investments for which such quotations are available and upon such	93
valuations of other investments as, in the fiduciary's best	94
judgment, seem fair and reasonable according to available	95
information.	96

(C)(1)(a) A fiduciary making an investment of trust funds in	97
securities of an affiliated investment company, or a bank	98
subsidiary corporation or other corporation owned or controlled by	99
the bank holding company that owns or controls the fiduciary, may	100
charge a reasonable fee for investment advisory, brokerage,	101
transfer agency, registrar, management, or other similar services	102
provided to an affiliated investment company. The fee may be in	103
addition to the compensation to which the fiduciary is otherwise	104
entitled to receive from the trust, provided that the fee is	105
charged as a percentage of either asset value or income earned or	106
actual amount charged and is disclosed at least annually by	107
prospectus, account statement, or any other written means to all	108
persons entitled to receive statements of account activity. The	109
fiduciary shall disclose the relationship between the fiduciary	110
and the affiliated investment company, at least annually by	111
account statement, whether or not the fee is charged.	112

(b) A fiduciary making an investment of trust funds in	113
securities of an affiliated investment company pursuant to	114
division (A)(2) of this section shall, when providing any periodic	115
account statements to the trust fund, report the net asset value	116
of the shares comprising the investment of the trust funds in the	117
affiliated investment company.	118

(c) If a fiduciary making an investment of trust funds in	119
securities of an affiliated investment company pursuant to	120
division (A)(2) of this section invests such funds in any mutual	121
fund, the fiduciary shall disclose, in at least ten-point boldface	122
type, by prospectus, account statement, or any other written means	123
to all persons entitled to receive statements of account activity,	124
that the mutual fund is not insured or guaranteed by the federal	125
deposit insurance corporation or by any other government-sponsored	126
agency of the federal government or of this state.	127

(2) Unless the investment of trust funds in securities of an	128
affiliated investment company can be made under the terms of the	129
instrument creating the trust, an exception to the investment of	130
trust funds in securities of an affiliated investment company may	131
be filed with the probate court. Any exception filed pursuant to	132
this division must be signed by all persons who would, at the time	133
the exception is filed, be permitted to file an exception to an	134
account pursuant to section 2109.33 of the Revised Code and must	135
state that all such persons request that the current investment of	136
trust funds in securities of an affiliated investment company be	137
terminated within a reasonable time. If the probate court	138
determines that the exception complies with the requirements of	139
this division, the probate court shall establish a schedule for	140
disposing of any current investments in securities of an	141
affiliated investment company, and the fiduciary shall cause the	142
trust to dispose of the investments in accordance with the	143
schedule. The fiduciary shall not be liable for any loss incurred	144
by the trust as a result of complying with division (C)(2) of this	145
section.	146

(D) As used in this section, "affiliated investment company"	147
and "reasonable fee" have the same meanings as in division (E) of	148
section 1111.13 of the Revised Code.	149

Sec. 3107.15.  (A) A final decree of adoption and an	150
interlocutory order of adoption that has become final as issued by	151
a court of this state, or a decree issued by a jurisdiction	152
outside this state as recognized pursuant to section 3107.18 of	153
the Revised Code, shall have the following effects as to all	154
matters within the jurisdiction or before a court of this state,	155
whether issued before or after May 30, 1996:	156

(1) Except with respect to a spouse of the petitioner and	157
relatives of the spouse, to relieve the biological or other legal	158
parents of the adopted person of all parental rights and	159
responsibilities, and to terminate all legal relationships between	160
the adopted person and the adopted person's relatives, including	161
the adopted person's biological or other legal parents, so that	162
the adopted person thereafter is a stranger to the adopted	163
person's former relatives for all purposes including inheritance	164
and the interpretation or construction of documents, statutes, and	165
instruments, whether executed before or after the adoption is	166
decreed, which do not expressly include the person by name or by	167
some designation not based on a parent and child or blood	168
relationship;	169

(2) To create the relationship of parent and child between	170
petitioner and the adopted person, as if the adopted person were a	171
legitimate blood descendant of the petitioner, for all purposes	172
including inheritance and applicability of statutes, documents,	173
and instruments, whether executed before or after the adoption is	174
decreed, and whether executed or created before or after May 30,	175
1996, which do not expressly exclude an adopted person from their	176
operation or effect;	177

(3) Notwithstanding division (A)(2) of this section, a	178
person who is eighteen years of age or older at the time the	179
person is adopted, and the adopted person's lineal descendants,	180
are not included as recipients of gifts, devises, bequests, or	181
other transfers of property, including transfers in trust made to	182
a class of persons including, but not limited to, children,	183
grandchildren, heirs, issue, lineal descendants, and next of kin,	184
for purposes of inheritance and applicability of statutes,	185
documents, and instruments, whether executed or created before or	186
after May 30, 1996, unless the document or instrument expressly	187
includes the adopted person by name or expressly states that it	188
includes a person who is eighteen years of age or older at the	189
time the person is adopted.	190

(B) Notwithstanding division (A) of this section, if a	191
parent of a child dies without the relationship of parent and	192
child having been previously terminated and a spouse of the living	193
parent thereafter adopts the child, the child's rights from or	194
through the deceased parent for all purposes, including	195
inheritance and applicability or construction of documents,	196
statutes, and instruments, are not restricted or curtailed by the	197
adoption.	198

(C) Notwithstanding division (A) of this section, if the	199
relationship of parent and child has not been terminated between a	200
parent and that parent's child and a spouse of the other parent of	201
the child adopts the child, a grandparent's or relative's right to	202
companionship or visitation pursuant to section 3109.11 of the	203
Revised Code is not restricted or curtailed by the adoption.	204

(D) An interlocutory order of adoption, while it is in	205
force, has the same legal effect as a final decree of adoption.	206
If an interlocutory order of adoption is vacated, it shall be as	207
though void from its issuance, and the rights, liabilities, and	208
status of all affected persons that have not become vested are	209
governed accordingly.	210

Section 2.  That existing sections 2109.371 and 3107.15 of	211
the Revised Code are hereby repealed.	212

Section 3.  No liability shall arise against any one of the	213
following that, prior to the effective date of this section,	214
authorized or was otherwise responsible for a distribution or	215
other payment or a transfer of property that is inconsistent with	216
division (A)(3) of section 3107.15 of the Revised Code, as amended	217
by this act:	218

(1) A fiduciary under a trust instrument, will, or other	219
document;	220

(2) A bank, savings and loan association, credit union, or	221
society for savings, in connection with written contracts	222
described in sections 2131.10 and 2131.11 of the Revised Code;	223

(3) A registering entity, as defined in division (H) of	224
section 1709.01 of the Revised Code, for a transfer-on-death made	225
pursuant to Chapter 1709. of the Revised Code.	226