Sub. H. B. No. 83 As Reported by the Senate Judiciary--Civil Justice Committee

Representatives Hughes, Coley, Willamowski, Allen, Barrett, Blessing, Book, Brown, Carano, Cassell, Combs, DeBose, Domenick, Evans, C., Flowers, Gilb, Harwood, Key, McGregor, J., Oelslager, Otterman, Patton, T., Perry, Reidelbach, Smith, G., Strahorn, Williams, Woodard, Yuko

A BILL

To enact section 2109.361 of the Revised Code to 1
require the probate court, upon application by an 2
affected beneficiary, to determine the fairness of 3
an agreement requiring a fiduciary or beneficiary 4
to pay a percentage of an inheritance or a dollar 5
amount to any person other than the beneficiary 6
and to allow the probate court to approve, modify, 7
or disapprove the agreement. 8

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

       Section 1. That section 2109.361 of the Revised Code be 9
enacted to read as follows: 10

       Sec. 2109.361. (A) As used in this section, "third-party 11
distribution" means the distribution by a fiduciary of an estate 12
or trust of the assets of that estate or trust when both of the 13
following apply: 14

        (1) The fiduciary makes the distribution to either of the 15
following persons: 16

        (a) The transferee of a beneficiary; 17

        (b) Any person pursuant to an agreement, request, or 18
instruction of a beneficiary or pursuant to a legal claim against 19
a beneficiary. 20

        (2) The distribution is the subject of an agreement between a 21
beneficiary and any person that requires the fiduciary or 22
beneficiary to pay a percentage of an inheritance or a dollar 23
amount to any person other than the beneficiary. 24

       (B) Prior to making a third-party distribution, the affected 25
beneficiary or the affected beneficiary's guardian or other legal 26
representative of the beneficiary may file an application for the 27
approval of a third-party distribution with the probate court. An 28
application filed pursuant to this division shall identify the 29
person to whom the third-party distribution is to be made, 30
disclose the basis for making the third-party distribution, and 31
include a copy of any written agreement between the affected 32
beneficiary and the person to whom the third-party distribution is 33
to be made. 34

       (C) The probate court shall hold a hearing on an application 35
filed under division (B) of this section. The applicant shall 36
serve notice of the hearing on all interested parties at least 37
fifteen days prior to the hearing in accordance with Civil Rule 38
73. An interested party may waive notice of the hearing in 39
accordance with Civil Rule 73. 40

       (D) The probate court may approve the third-party 41
distribution in whole or in part, as the court determines is just 42
and equitable. To the extent that the application is approved, the 43
court shall determine whether the third-party distribution is 44
properly charged solely against the beneficiary's share of the 45
estate or trust or whether some or all of the third-party 46
distribution is properly charged against the residue of the 47
affected estate or trust. The court may consider any relevant 48
factors in evaluating the application, including, but not limited 49
to, any of the following: 50

       (1) The amount or percentage of the affected beneficiary's 51
share that would be the subject of the proposed third-party 52
distribution measured against the reasonable value of any goods or 53
services the person to whom the third-party distribution would be 54
made provided to the beneficiary or to the estate or trust; 55

       (2) Whether the agreement, request, or instructions of the 56
affected beneficiary were procured by duress, fraud, 57
misrepresentation, undue influence, or other unfair means; 58

       (3) Whether the amount of the proposed third-party 59
distribution is fixed or contingent under the terms of the 60
agreement between the affected beneficiary and the recipient of 61
the proposed third-party distribution; 62

       (4) Whether the beneficiary was represented by an attorney 63
during the pendency of the probate action, or the beneficiary 64
authorized the recipient of the proposed third-party distribution 65
to retain an attorney who is licensed to practice law in Ohio for 66
the beneficiary to formally represent the beneficiary in any 67
proceeding regarding the decedent's estate, and the recipient of 68
the proposed third-party distribution is responsible for paying 69
the attorney's fees; 70

       (5) The extent, if any, to which the recipient of the 71
proposed third-party distribution incurred expenses in connection 72
with the services provided to the affected beneficiary, estate, or 73
trust; 74

       (6) Whether the beneficiary was required to advance any 75
payments for fees or expenses to the recipient of the proposed 76
third-party distribution. 77

       (E) Division (D)(4) of this section does not prohibit the 78
beneficiary from retaining the beneficiary's own legal counsel. 79

        (F) This section does not apply to third-party distributions 80
to an attorney who represents a beneficiary and does not affect 81
any other provision of law regarding the compensation of 82
attorneys. 83

Section 1. That section 2109.361 of the Revised Code be	9
enacted to read as follows:	10

Sec. 2109.361. (A) As used in this section, "third-party	11
distribution" means the distribution by a fiduciary of an estate	12
or trust of the assets of that estate or trust when both of the	13
following apply:	14

(1) The fiduciary makes the distribution to either of the	15
following persons:	16

(b) Any person pursuant to an agreement, request, or	18
instruction of a beneficiary or pursuant to a legal claim against	19
a beneficiary.	20

(2) The distribution is the subject of an agreement between a	21
beneficiary and any person that requires the fiduciary or	22
beneficiary to pay a percentage of an inheritance or a dollar	23
amount to any person other than the beneficiary.	24

(B) Prior to making a third-party distribution, the affected	25
beneficiary or the affected beneficiary's guardian or other legal	26
representative of the beneficiary may file an application for the	27
approval of a third-party distribution with the probate court. An	28
application filed pursuant to this division shall identify the	29
person to whom the third-party distribution is to be made,	30
disclose the basis for making the third-party distribution, and	31
include a copy of any written agreement between the affected	32
beneficiary and the person to whom the third-party distribution is	33
to be made.	34

(C) The probate court shall hold a hearing on an application	35
filed under division (B) of this section. The applicant shall	36
serve notice of the hearing on all interested parties at least	37
fifteen days prior to the hearing in accordance with Civil Rule	38
73. An interested party may waive notice of the hearing in	39
accordance with Civil Rule 73.	40

(D) The probate court may approve the third-party	41
distribution in whole or in part, as the court determines is just	42
and equitable. To the extent that the application is approved, the	43
court shall determine whether the third-party distribution is	44
properly charged solely against the beneficiary's share of the	45
estate or trust or whether some or all of the third-party	46
distribution is properly charged against the residue of the	47
affected estate or trust. The court may consider any relevant	48
factors in evaluating the application, including, but not limited	49
to, any of the following:	50

(1) The amount or percentage of the affected beneficiary's	51
share that would be the subject of the proposed third-party	52
distribution measured against the reasonable value of any goods or	53
services the person to whom the third-party distribution would be	54
made provided to the beneficiary or to the estate or trust;	55

(2) Whether the agreement, request, or instructions of the	56
affected beneficiary were procured by duress, fraud,	57
misrepresentation, undue influence, or other unfair means;	58

(3) Whether the amount of the proposed third-party	59
distribution is fixed or contingent under the terms of the	60
agreement between the affected beneficiary and the recipient of	61
the proposed third-party distribution;	62

(4) Whether the beneficiary was represented by an attorney	63
during the pendency of the probate action, or the beneficiary	64
authorized the recipient of the proposed third-party distribution	65
to retain an attorney who is licensed to practice law in Ohio for	66
the beneficiary to formally represent the beneficiary in any	67
proceeding regarding the decedent's estate, and the recipient of	68
the proposed third-party distribution is responsible for paying	69
the attorney's fees;	70

(5) The extent, if any, to which the recipient of the	71
proposed third-party distribution incurred expenses in connection	72
with the services provided to the affected beneficiary, estate, or	73
trust;	74

(6) Whether the beneficiary was required to advance any	75
payments for fees or expenses to the recipient of the proposed	76
third-party distribution.	77

(E) Division (D)(4) of this section does not prohibit the	78
beneficiary from retaining the beneficiary's own legal counsel.	79

(F) This section does not apply to third-party distributions	80
to an attorney who represents a beneficiary and does not affect	81
any other provision of law regarding the compensation of	82
attorneys.	83