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As Passed by the House
122nd General Assembly
Regular Session
1997-1998 | Sub. H. B. No. 701 |
REPRESENTATIVES MASON-WOMER BENJAMIN-HARRIS-TERWILLEGER-
TAYLOR-GARCIA-EVANS-TIBERI-SALERNO-HAINES-HOUSEHOLDER-MILLER-
CORBIN-OLMAN-MEAD-MOTTLEY-WILSON-PATTON
A BILL
To amend sections 1111.13, 2109.37, and 2109.371; to amend, for purposes of
adopting a new section number as indicated in parentheses,
section 1339.60
(1339.68); and to enact new section 1339.60 and sections
1339.52, 1339.53,
1339.54, 1339.55, 1339.56, 1339.57, 1339.58,
1339.59, and 1339.61 of the
Revised Code to adopt the Uniform Prudent Investor Act of
the National
Conference of Commissioners on Uniform State
Laws.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 1111.13, 2109.37, and 2109.371 be amended, section
1339.60 (1339.68) be amended for the purpose of adopting a new section number
as indicated in parentheses, and new section 1339.60 and sections 1339.52,
1339.53, 1339.54, 1339.55, 1339.56, 1339.57, 1339.58, 1339.59, and 1339.61 of
the Revised Code be enacted to read as follows:
Sec. 1111.13. (A)(1) Except as provided in divisions
(A)(2) and (G) of this section or as otherwise provided by the
instrument creating the trust, a trust company acting as fiduciary under any
instrument and having funds of the
trust which are to be invested may, in addition to any other
investments authorized to a trust company by
law, invest them in any of the following:
(a) Forms of investments enumerated or described in, or
made eligible for investment by, sections 1339.44, 1339.52 TO
1339.61, 2109.37,
2109.371, and 2109.372 of the Revised Code, including, but not
limited to, securities, stocks, bonds, or certificates of deposit
issued by the trust company or any bank
owned or controlled by the bank holding company
that owns or controls the trust company. Investment authority granted under
division (A)(1)(a) of this section is subject to the limitations
on investments specified in division (B) of section 2109.371 of
the Revised Code.
(b) Any collective investment fund established and
maintained by the trust company or by
an affiliate of the trust company;
(c) The securities of any investment company, including
any affiliated investment company, whether or not the trust
company has invested other funds held by it in an agency or other
nonfiduciary capacity in the securities of the same investment
company or affiliated investment company.
(2) A trust company acting as fiduciary may
not invest its
trust funds in stock issued by the fiduciary itself except under
one of the following circumstances:
(a) In the case of a testamentary instrument, when
expressly permitted by the instrument creating the relationship
and authorized by court order;
(b) In the case of an inter vivos instrument, when
expressly permitted by the instrument or authorized by court
order and in either case, only when directed to purchase or
invest in the stock by a cofiduciary or other person other
than the trust company who has the right under the terms of the
instrument to direct the investment;
(c) When exercising rights to purchase its own stock or to
purchase or convert securities convertible into its own stock if
the rights were offered pro rata to the shareholders;
(d) To complement fractional shares acquired when the
exercise of rights or receipt of a stock dividend results in
fractional shareholdings.
(3) If the law or the instrument creating a trust
expressly permits investment in direct obligations of the United
States or an agency or instrumentality of the
United States, unless expressly prohibited by the
instrument, a trust company also may invest
in no front end load
money market mutual funds consisting exclusively of obligations
of the United States or an agency or instrumentality of the
United States and in repurchase
agreements, including those issued by the trust
company itself,
secured by obligations of the United States or an agency or
instrumentality of the United States, or in securities
of other no load money market mutual funds whose portfolios are similarly
restricted; and in collective investment funds established in accordance
with
section 1111.14 of the Revised Code or by an
affiliate of the trust company and consisting exclusively of any direct
obligations of the United States or
an agency or instrumentality of the United States,
notwithstanding division (A)(1)(c) of that section.
(B) A trust company acting in any fiduciary
capacity or under any instrument has the
right to retain any part of the trust or estate
it receives, whether from the creator of the trust or
the estate, at its inception or by later addition, or by addition by any other
person who is authorized to make additions to the trust or estate,
and any investments the
trust company makes.
(C) Except as otherwise expressly provided by the
instrument creating the fiduciary relationship, any trust company
may exercise all voting, consenting, and dissenting rights,
including the right to vote for the election of directors,
pertaining to stocks, bonds, or other securities held by it in
any fiduciary capacity, including rights pertaining to
stocks, bonds, or other securities issued by the trust
company in its individual corporate capacity and held by it in any
fiduciary
capacity, provided:
(1) In the case of any fiduciary relationship created
prior to January 1, 1968, voting rights pertaining to any shares
of a trust company's own stock held
by it in a fiduciary
relationship, if exercised, shall be exercised with respect to
the election of directors, only in accordance with any provisions
of law applicable to that election and without regard to the
first paragraph of division (C) and divisions (C)(2)(a), (b), and
(c) of this section, and those portions of division (C) of
this section shall not be construed to be determinative of
the
voting rights or to be declaratory of a public policy with respect to
the voting rights.
(2) In the case of any fiduciary relationship created on
or after January 1, 1968, voting rights pertaining to any shares
of a trust company's own stock held
by it in a fiduciary
relationship shall be exercised by it with respect to the
election of directors, only if and as directed in writing by any
person described in division (C)(2)(a), (b), or (c) of this
section, provided that the person may not be the trust
company, or a director, officer, or employee of
the trust company except
as to fiduciary relationships in which the director,
officer, or
employee is a settlor or beneficiary, or a nominee, agent,
attorney, or subsidiary of the trust company:
(a) Any person, including a settlor or beneficiary, who
has the right under the terms of the instrument under which
shares are held to determine the manner in which shares shall be
voted, or if there is no such person;
(b) Any person acting as cofiduciary under the instrument
under which such shares are held, or if there is no such
person;
(c) Any person, having the right of revocation or
amendment of the instrument under which the shares are
held.
(D) If there is more than one person having power to
direct voting under division (C)(2)(a), (b), or (c) of this
section and they fail to agree, each person shall have the
right to direct voting with respect to the election of directors
as to an equal number of shares.
(E) As used in this section:
(1) "Affiliated investment company" means any investment
company that is any of the following:
(a) Sponsored by the trust company that is
acting as fiduciary or by a trust company, bank, bank subsidiary
corporation, or other corporation owned or controlled by the bank
holding company that owns or controls the trust company that is acting as
fiduciary;
(b) The result of any agreement with a trust company, bank, bank subsidiary
corporation, or other corporation owned
or controlled by the bank holding company that owns or controls the
trust company that is acting as fiduciary;
(c) Established exclusively for the customers or accounts
of the trust company that is acting as
fiduciary or of a trust company, bank, bank
subsidiary corporation, or other corporation
owned or controlled by the bank holding company that owns or
controls the trust company that is acting as
fiduciary;
(d) Provided with investment advisory, brokerage, transfer
agency, registrar, management, shareholder servicing, custodian,
or any related services by the
trust company that is acting as fiduciary or
by a trust company, bank, bank subsidiary
corporation, or other corporation owned or
controlled by the bank holding company that owns or controls the trust
company that is acting as fiduciary.
(2) "Cofiduciary" includes, but is not limited to, a
cotrustee, coexecutor, coadministrator, coguardian, co-agent, and
any person who, under the terms of the instrument creating the
fiduciary relationship, has the right or power to direct, approve
or consent to, or be consulted with respect to, the making,
retention, or sale of investments under the instrument.
(3) "Instrument" includes, but is not limited to, any
will, declaration of trust, agreement of trust, agency, or
custodianship, or court order creating a fiduciary relationship.
(4) "Reasonable fee" means compensation or payment, the
receipt of which would not constitute a breach of fiduciary duty
under section 36 of the "Investment Company Act of 1940," 54
Stat. 789, 15 U.S.C.A. 80a-35.
(F) Shares as to which the voting rights with respect to
the election of directors may not be exercised under this section
shall not be considered as outstanding for the purpose of
computing the voting power of the corporation or of its shares of
any class with respect to the election of directors.
(G) This section does not authorize a trust company acting as a probate
fiduciary to perform any act prohibited by
section
2109.44 of the Revised Code, unless the act is authorized
by the instrument creating the trust.
(H) A trust company making an investment of trust funds in
an affiliated investment company, or a bank or other corporation owned or
controlled by the bank
holding company that owns or controls the trust company, may charge a
reasonable fee for investment advisory, brokerage,
transfer agency, registrar, management, shareholder servicing,
custodian, or any related services
provided to an affiliated investment company. The fee may be in
addition to the compensation that the trust company is
otherwise entitled to receive from the trust, provided that
the fee is charged as a percentage of either asset value or income
earned or actual amount charged and is disclosed at least
annually by prospectus, account statement, or any other written
means to all persons entitled to receive statements of account
activity.
(I) A trust company making an investment of trust funds in
the securities of an affiliated investment company pursuant to
division (A)(1)(c) of this section shall, when providing any
periodic account statements to the trust fund, report the net
asset value of the shares comprising the investment of the trust
fund in the affiliated investment company.
(J) If a trust company making an investment of trust funds
in the securities of an affiliated investment company pursuant to
division (A)(1)(c) of this section invests the funds in any
mutual fund, the trust company shall disclose, in at least
ten-point boldface type, by prospectus, account statement, or any
other written means to all persons entitled to receive statements
of account activity, that the mutual fund is not insured or
guaranteed by the federal deposit insurance corporation or by any
other government agency or government-sponsored agency of the
federal government or of this state.
Sec. 1339.52. (A) AS USED IN SECTIONS 1339.52 TO 1339.61 OF THE
REVISED CODE, "TRUSTEE" MEANS A TRUSTEE
UNDER ANY TESTAMENTARY, INTER VIVOS, OR OTHER TRUST.
(B) EXCEPT AS PROVIDED IN DIVISION (C) OR (D)
OF THIS SECTION, A TRUSTEE WHO INVESTS AND MANAGES TRUST ASSETS UNDER
SECTIONS 1339.52 TO 1339.61 OF THE
REVISED
CODE OWES A DUTY TO THE
BENEFICIARIES OF THE TRUST TO COMPLY WITH SECTIONS 1339.52 TO
1339.61 OF THE REVISED
CODE.
(C) SECTIONS 1339.52 TO
1339.61 OF THE REVISED
CODE MAY BE EXPANDED,
RESTRICTED, ELIMINATED, OR OTHERWISE ALTERED, WITHOUT EXPRESS
REFERENCE TO THESE SECTIONS BY THE INSTRUMENT CREATING A
TRUST.
(D) A TRUSTEE IS NOT LIABLE TO A BENEFICIARY OF A TRUST TO THE
EXTENT THE TRUSTEE ACTED IN REASONABLE RELIANCE ON THE PROVISIONS OF
THE TRUST.
Sec. 1339.53. (A) A TRUSTEE SHALL INVEST AND MANAGE TRUST ASSETS
AS A PRUDENT
INVESTOR WOULD, BY CONSIDERING THE PURPOSES, TERMS, DISTRIBUTION
REQUIREMENTS, AND OTHER CIRCUMSTANCES OF THE TRUST. IN
SATISFYING THIS REQUIREMENT, THE TRUSTEE SHALL EXERCISE
REASONABLE CARE, SKILL, AND CAUTION.
(B) A TRUSTEE SHALL MAKE
A REASONABLE EFFORT TO VERIFY FACTS RELEVANT TO THE INVESTMENT
AND MANAGEMENT OF TRUST ASSETS.
(C) A TRUSTEE WHO HAS
SPECIAL SKILLS OR EXPERTISE, OR IS NAMED TRUSTEE IN RELIANCE
UPON THE TRUSTEE'S REPRESENTATION THAT THE TRUSTEE HAS SPECIAL
SKILLS OR EXPERTISE, HAS A DUTY TO USE THOSE SPECIAL SKILLS OR
EXPERTISE.
(D) A TRUSTEE'S
INVESTMENT AND MANAGEMENT DECISIONS RESPECTING INDIVIDUAL TRUST
ASSETS SHALL NOT BE EVALUATED IN ISOLATION BUT IN THE CONTEXT OF
THE TRUST PORTFOLIO AS A WHOLE AND AS PART OF AN OVERALL
INVESTMENT STRATEGY HAVING RISK AND RETURN OBJECTIVES REASONABLY
SUITED TO THE TRUST.
(E) AMONG CIRCUMSTANCES
THAT A TRUSTEE SHALL CONSIDER IN INVESTING AND MANAGING TRUST
ASSETS ARE THE FOLLOWING AS ARE RELEVANT TO THE TRUST OR ITS
BENEFICIARIES:
(1) THE GENERAL ECONOMIC CONDITIONS;
(2) THE POSSIBLE EFFECT OF INFLATION OR DEFLATION;
(3) THE EXPECTED TAX CONSEQUENCES OF INVESTMENT DECISIONS
OR STRATEGIES;
(4) THE ROLE THAT EACH INVESTMENT OR COURSE OF ACTION
PLAYS WITHIN THE OVERALL TRUST PORTFOLIO, WHICH MAY INCLUDE
FINANCIAL ASSETS, INTERESTS IN CLOSELY HELD ENTERPRISES,
TANGIBLE AND INTANGIBLE PERSONAL PROPERTY, AND REAL
PROPERTY;
(5) THE EXPECTED TOTAL RETURN FROM INCOME AND APPRECIATION
OF CAPITAL;
(6) OTHER RESOURCES OF THE BENEFICIARIES;
(7) NEEDS FOR LIQUIDITY, REGULARITY OF INCOME, AND
PRESERVATION OR APPRECIATION OF CAPITAL;
(8) AN ASSET'S SPECIAL RELATIONSHIP OR SPECIAL VALUE, IF
ANY, TO THE PURPOSES OF THE TRUST OR TO ONE OR MORE OF THE
BENEFICIARIES.
Sec. 1339.54. (A) A TRUSTEE MAY INVEST IN ANY KIND OF PROPERTY OR
TYPE OF INVESTMENT PROVIDED THAT THE INVESTMENT IS CONSISTENT WITH THE
REQUIREMENTS AND STANDARDS OF SECTIONS 1339.52 TO 1339.61 OF THE
REVISED
CODE.
(B) A TRUSTEE SHALL
DIVERSIFY THE INVESTMENTS OF A TRUST UNLESS THE TRUSTEE
REASONABLY DETERMINES THAT, BECAUSE OF SPECIAL CIRCUMSTANCES,
THE PURPOSES OF THE TRUST ARE BETTER SERVED WITHOUT
DIVERSIFYING.
Sec. 1339.55. (A) A
TRUSTEE SHALL INVEST AND MANAGE THE TRUST ASSETS SOLELY IN THE
INTEREST OF THE BENEFICIARIES.
(B) IF A TRUST HAS TWO OR
MORE BENEFICIARIES, THE TRUSTEE SHALL ACT IMPARTIALLY IN
INVESTING AND MANAGING THE TRUST ASSETS TAKING INTO ACCOUNT ANY
DIFFERING INTERESTS OF THE BENEFICIARIES.
Sec. 1339.56. WITHIN A REASONABLE TIME AFTER ACCEPTING A
TRUSTEESHIP OR RECEIVING TRUST ASSETS, A TRUSTEE SHALL REVIEW
THE TRUST ASSETS AND MAKE AND IMPLEMENT DECISIONS CONCERNING THE
RETENTION AND DISPOSITION OF TRUST ASSETS IN ORDER TO BRING THE
TRUST PORTFOLIO INTO COMPLIANCE WITH THE PURPOSES, TERMS,
DISTRIBUTION REQUIREMENTS, AND OTHER CIRCUMSTANCES OF THE TRUST,
AND IN ORDER TO COMPLY WITH THE REQUIREMENTS AND STANDARDS OF
SECTIONS 1339.52 TO 1339.61 OF THE
REVISED
CODE.
Sec. 1339.57. EXCEPT AS OTHERWISE PERMITTED BY LAW, IN INVESTING AND
MANAGING TRUST ASSETS, A
TRUSTEE MAY ONLY INCUR COSTS THAT ARE APPROPRIATE AND REASONABLE
IN RELATION TO THE ASSETS, THE PURPOSES OF THE TRUST, AND THE
SKILLS OF THE TRUSTEE.
Sec. 1339.58. COMPLIANCE WITH SECTIONS 1339.52 TO 1339.61
OF THE REVISED
CODE SHALL BE DETERMINED IN
LIGHT OF THE FACTS AND CIRCUMSTANCES EXISTING AT THE TIME OF A
TRUSTEE'S DECISION OR ACTION AND NOT BY HINDSIGHT.
Sec. 1339.59. (A) A
TRUSTEE MAY DELEGATE INVESTMENT AND MANAGEMENT FUNCTIONS OF A
TRUST THAT A PRUDENT TRUSTEE HAVING COMPARABLE SKILLS COULD
PROPERLY DELEGATE UNDER THE CIRCUMSTANCES. IN ACCORDANCE WITH
THIS DIVISION, A TRUSTEE SHALL EXERCISE REASONABLE CARE, SKILL,
AND CAUTION IN DOING ALL OF THE FOLLOWING:
(1) SELECTING AN AGENT;
(2) ESTABLISHING THE SCOPE AND TERMS OF THE DELEGATION
CONSISTENT WITH THE PURPOSES AND TERMS OF THE TRUST;
(3) PERIODICALLY REVIEWING THE AGENT'S ACTIONS IN ORDER TO
MONITOR THE AGENT'S PERFORMANCE WITH THE TERMS OF THE
DELEGATION.
(B) IN PERFORMING
INVESTMENT OR MANAGEMENT FUNCTIONS OF A TRUST THAT ARE DELEGATED
TO AN AGENT, AN AGENT OWES A DUTY TO THE TRUST TO EXERCISE
REASONABLE CARE TO COMPLY WITH THE TERMS OF THE
DELEGATION.
(C) A TRUSTEE WHO
COMPLIES WITH DIVISION (A) OF
THIS SECTION IS NOT LIABLE TO THE BENEFICIARIES OF THE TRUST OR
TO THE TRUST FOR THE DECISIONS OR ACTIONS OF THE AGENT TO WHOM
THE FUNCTION WAS DELEGATED.
(D) BY ACCEPTING THE
DELEGATION OF INVESTMENT OR MANAGEMENT FUNCTIONS OF A TRUST THAT
IS SUBJECT TO THE LAWS OF THIS STATE, AN AGENT SUBMITS TO THE
JURISDICTION OF THIS STATE.
Sec. 1339.60. THE FOLLOWING TERMS OR COMPARABLE LANGUAGE
IN THE PROVISIONS OF A TRUST, UNLESS OTHERWISE LIMITED OR
MODIFIED, AUTHORIZES ANY INVESTMENT OR STRATEGY PERMITTED BY
SECTIONS 1339.52 TO 1339.61 of the Revised Code: "INVESTMENTS PERMISSIBLE BY LAW FOR
INVESTMENT OF
TRUST FUNDS"; "LEGAL INVESTMENTS"; "AUTHORIZED INVESTMENTS";
"USING THE JUDGMENT AND CARE UNDER THE CIRCUMSTANCES THEN
PREVAILING THAT PERSONS OF PRUDENCE, DISCRETION, AND
INTELLIGENCE EXERCISE IN THE MANAGEMENT OF THEIR OWN AFFAIRS,
NOT IN REGARD TO SPECULATION BUT IN REGARD TO THE PERMANENT
DISPOSITION OF THEIR FUNDS CONSIDERING THE PROBABLE INCOME AS
WELL AS THE PROBABLE SAFETY OF THEIR CAPITAL"; "PRUDENT MAN
RULE"; "PRUDENT TRUSTEE RULE"; "PRUDENT PERSON RULE"; AND
"PRUDENT INVESTOR RULE."
Sec. 1339.61. (A) SECTIONS 1339.52 TO 1339.61 OF THE
REVISED
CODE SHALL BE APPLIED AND
CONSTRUED TO EFFECTUATE THE GENERAL PURPOSE TO MAKE UNIFORM THE
LAW WITH RESPECT TO THE SUBJECT OF THESE SECTIONS AMONG THE
STATES ENACTING IT. THESE SECTIONS MAY BE CITED AS THE
"OHIO
UNIFORM
PRUDENT
INVESTOR
ACT."
(B) SECTIONS 1339.52 TO
1339.61 OF THE REVISED
CODE APPLY TO TRUSTS EXISTING
ON OR CREATED AFTER THE EFFECTIVE DATE OF THESE SECTIONS. AS
APPLIED TO TRUSTS EXISTING ON THE EFFECTIVE DATE OF THESE
SECTIONS, SECTIONS 1339.52 TO 1339.61 OF THE
REVISED
CODE GOVERN ONLY DECISIONS OR
ACTIONS OCCURRING AFTER THE EFFECTIVE DATE OF THESE
SECTIONS.
(C) THE TEMPORARY
INVESTMENT OF CASH OR FUNDS PURSUANT TO SECTION 1339.44 OR
2109.372 OF THE REVISED
CODE SHALL BE CONSIDERED A
PRUDENT INVESTMENT IN COMPLIANCE WITH SECTIONS 1339.52 TO
1339.61 OF THE REVISED
CODE.
Sec. 1339.60 1339.68. (A) As used in this section:
(1) "Disclaimant" means any person, any guardian or
personal representative of a person or estate of a person, or any
attorney-in-fact or agent of a person having a general or
specific authority to act granted in a written instrument, who is
any of the following:
(a) With respect to testamentary instruments and intestate
succession, an heir, next of kin, devisee, legatee, donee, person
succeeding to a disclaimed interest, surviving joint tenant,
surviving tenant by the entireties, surviving tenant of a tenancy
with a right of survivorship, beneficiary under a testamentary
instrument, or person designated to take pursuant to a power of
appointment exercised by a testamentary instrument;
(b) With respect to nontestamentary instruments, a
grantee, donee, person succeeding to a disclaimed interest,
surviving joint tenant, surviving tenant by the entireties,
surviving tenant of a tenancy with a right of survivorship,
beneficiary under a nontestamentary instrument, or person
designated to take pursuant to a power of appointment exercised
by a nontestamentary instrument;
(c) With respect to fiduciary rights, privileges, powers,
and immunities, a fiduciary under a testamentary or
nontestamentary instrument. This section does not authorize a
fiduciary to disclaim the rights of beneficiaries unless the
instrument creating the fiduciary relationship authorizes such a
disclaimer.
(d) Any person entitled to take an interest in property
upon the death of a person or upon the occurrence of any other
event.
(2) "Property" means all forms of property, real and
personal, tangible and intangible.
(B)(1) A disclaimant, other than a fiduciary under an
instrument who is not authorized by the instrument to disclaim
the interest of a beneficiary, may disclaim, in whole or in part,
the succession to any property by executing and by delivering,
filing, or recording a written disclaimer instrument in the
manner provided in this section.
(2) A disclaimant who is a fiduciary under an instrument
may disclaim, in whole or in part, any right, power, privilege,
or immunity, by executing and by delivering, filing, or recording
a written disclaimer instrument in the manner provided in this
section.
(3) The written instrument of disclaimer shall be signed
and acknowledged by the disclaimant and shall contain all of the
following:
(a) A reference to the donative instrument;
(b) A description of the property, part of property, or
interest disclaimed, and of any fiduciary right, power,
privilege, or immunity disclaimed;
(c) A declaration of the disclaimer and its extent.
(4) The guardian of the estate of a minor or an
incompetent, or the personal representative of a deceased person,
with the consent of the probate division of the court of common
pleas, may disclaim, in whole or in part, the succession to any
property, or interest in property, that the ward, if an adult and
competent, or the deceased, if living, might have disclaimed.
The guardian or personal representative, or any interested person
may file an application with the probate division of the court of
common pleas that has jurisdiction of the estate, asking that the
court order the guardian or personal representative to execute
and deliver, file, or record the disclaimer on behalf of the ward
or estate. The court shall order the guardian or personal
representative to execute and deliver, file, or record the
disclaimer if the court finds, upon hearing after notice to
interested parties and such other persons as the court shall
direct, that:
(a) It is in the best interests of those interested in the
estate of the person and of those who will take the disclaimed
interest;
(b) It would not materially, adversely affect the minor or
incompetent, or the beneficiaries of the estate of the decedent,
taking into consideration other available resources and the age,
probable life expectancy, physical and mental condition, and
present and reasonably anticipated future needs of the minor or
incompetent or the beneficiaries of the estate of the decedent.
A written instrument of disclaimer ordered by the court
under this division shall be executed and be delivered, filed, or
recorded within the time and in the manner in which the person
could have disclaimed if he THE PERSON were living, an adult,
and competent.
(C) A partial disclaimer of property that is subject to a
burdensome interest created by the donative instrument is not
effective unless the disclaimed property constitutes a gift that
is separate and distinct from undisclaimed gifts.
(D) The disclaimant shall deliver, file, or record the
disclaimer, or cause the same to be done, not later than nine
months after the latest of the following dates:
(1) The effective date of the donative instrument if both
the taker and his THE TAKER'S interest in the property are
finally
ascertained on that date;
(2) The date of the occurrence of the event upon which
both the taker and his THE TAKER'S interest in the property
become finally
ascertainable;
(3) The date on which the disclaimant attains twenty-one
years of age or is no longer an incompetent, without tendering or
repaying any benefit received while the disclaimant was under
twenty-one years of age or an incompetent, and even if a guardian
of a minor or incompetent had filed an application pursuant to
division (B)(4) of this section and the probate division of the
court of common pleas involved did not consent to the guardian
executing a disclaimer.
(E) No disclaimer instrument is effective under this
section if either of the following applies under the terms of the
disclaimer instrument:
(1) The disclaimant has power to revoke the disclaimer;
(2) The disclaimant may transfer, or direct to be
transferred, to himself SELF the entire legal and equitable
ownership
of the property subject to the disclaimer instrument.
(F)(1) If the interest disclaimed is created by a
nontestamentary instrument, the disclaimer instrument shall be
delivered personally or by certified mail to the trustee or other
person who has legal title to, or possession of, the property
disclaimed.
(2) If the interest disclaimed is created by a
testamentary instrument or by intestate succession, the
disclaimer instrument shall be filed in the probate division of
the court of common pleas in the county in which proceedings for
the administration of the decedent's estate have been commenced,
and an executed copy of the disclaimer instrument shall be
delivered personally or by certified mail to the personal
representative of the decedent's estate.
(3) If no proceedings for the administration of the
decedent's estate have been commenced, the disclaimer instrument
shall be filed in the probate division of the court of common
pleas in the county in which proceedings for the administration
of the decedent's estate might be commenced according to law.
The disclaimer instrument shall be filed and indexed, and fees
charged, in the same manner as provided by law for an application
to be appointed as personal representative to administer the
decedent's estate. The disclaimer is effective whether or not
proceedings thereafter are commenced to administer the decedent's
estate. If proceedings thereafter are commenced for the
administration of the decedent's estate, they shall be filed
under, or consolidated with, the case number assigned to the
disclaimer instrument.
(4) If an interest in real estate is disclaimed, an
executed copy of the disclaimer instrument also shall be recorded
in the office of the recorder of the county in which the real
estate is located. The disclaimer instrument shall include a
description of the real estate with sufficient certainty to
identify it, and shall contain a reference to the record of the
instrument that created the interest disclaimed. If title to the
real estate is registered under Chapters 5309. and 5310. of the
Revised Code, the disclaimer interest shall be entered as a
memorial on the last certificate of title. A spouse of a
disclaimant has no dower or other interest in the real estate
disclaimed.
(G) Unless the donative instrument expressly provides
that, if there is a disclaimer, there shall not be any
acceleration of remainders or other interests, the property, part
of property, or interest in property disclaimed, and any future
interest that is to take effect in possession or enjoyment at or
after the termination of the interest disclaimed, shall descend,
be distributed, or otherwise be disposed of, and shall be
accelerated, in the following manner:
(1) If intestate or testate succession is disclaimed, as
if the disclaimant had predeceased the decedent;
(2) If the disclaimant is one designated to take pursuant
to a power of appointment exercised by a testamentary instrument,
as if the disclaimant had predeceased the donee of the power;
(3) If the donative instrument is a nontestamentary
instrument, as if the disclaimant had died before the effective
date of the nontestamentary instrument;
(4) If the disclaimer is of a fiduciary right, power,
privilege, or immunity, as if the right, power, privilege, or
immunity was never in the donative instrument.
(H) A disclaimer pursuant to this section is effective as
of, and relates back for all purposes to, the date upon which the
taker and his THE TAKER'S interest have been finally
ascertained.
(I) A disclaimant who has a present and future interest in
property, and disclaims his THE DISCLAIMANT'S present interest
in whole or in part,
is considered to have disclaimed his THE DISCLAIMANT'S future
interest to the same
extent, unless a contrary intention appears in the disclaimer
instrument or the donative instrument. A disclaimant is not
precluded from receiving, as an alternative taker, a beneficial
interest in the property disclaimed, unless a contrary intention
appears in the disclaimer instrument or in the donative
instrument.
(J) The disclaimant's right to disclaim under this section
is barred if, before the expiration of the period within which he
THE DISCLAIMANT
may disclaim the interest, he THE DISCLAIMANT does any of the
following:
(1) Assigns, conveys, encumbers, pledges, or transfers, or
contracts to assign, convey, encumber, pledge, or transfer, the
property or any interest in it;
(2) Waives in writing his THE DISCLAIMANT'S right to disclaim
and executes
and delivers, files, or records the waiver in the manner provided
in this section for a disclaimer instrument;
(3) Accepts the property or an interest in it;
(4) Permits or suffers a sale or other disposition of the
property pursuant to judicial action against him THE
DISCLAIMANT.
(K) A fiduciary's application for appointment or
assumption of duties as a fiduciary does not waive or bar his THE
DISCLAIMANT'S
right to disclaim a right, power, privilege, or immunity.
(L) The right to disclaim under this section exists
irrespective of any limitation on the interest of the disclaimant
in the nature of a spendthrift provision or similar restriction.
(M) A disclaimer instrument or written waiver of the right
to disclaim that has been executed and delivered, filed, or
recorded as required by this section is final and binding upon
all persons.
(N) The right to disclaim and the procedures for
disclaimer established by this section are in addition to, and do
not exclude or abridge, any other rights or procedures existing
under any other section of the Revised Code or at common law to
assign, convey, release, refuse to accept, renounce, waive, or
disclaim property.
(O)(1) No person is liable for distributing or disposing
of property in a manner inconsistent with the terms of a valid
disclaimer if the distribution or disposition is otherwise proper
and the person has no actual knowledge of the disclaimer.
(2) No person is liable for distributing or disposing of
property in reliance upon the terms of a disclaimer that is
invalid because the right of disclaimer has been waived or barred
if the distribution or disposition is otherwise proper and the
person has no actual knowledge of the facts that constitute a
waiver or bar to the right to disclaim.
(P)(1) A disclaimant may disclaim pursuant to this
section any interest in property that is in existence on
September 27, 1976, if either the interest in the property or the
taker of the interest in the property is not finally ascertained
on that date.
(2) No disclaimer executed pursuant to this section
destroys or diminishes an interest in property that exists on
September 27, 1976, in any person other than the disclaimant.
Sec. 2109.37. (A) Except as otherwise provided by law, INCLUDING
DIVISION (D) OF THIS SECTION, or
by the instrument creating the trust, a fiduciary having funds
belonging to a trust which are to be invested may invest them in
the following:
(1) Bonds or other obligations of the United States or of
this state;
(2) Bonds or other interest-bearing obligations of any
county, municipal corporation, school district, or other legally
constituted political taxing subdivision within the state,
provided that such county, municipal corporation, school
district, or other subdivision has not defaulted in the payment
of the interest on any of its bonds or interest-bearing
obligations, for more than one hundred twenty days during the ten
years immediately preceding the investment by such THE fiduciary
in
such THE bonds or other obligations, and provided that such
county,
municipal corporation, school district, or other subdivision, is
not, at the time of such THE investment, in default in the
payment of
principal or interest on any of its bonds or other
interest-bearing obligations;
(3) Bonds or other interest-bearing obligations of any
other state of the United States which, within twenty years prior
to the making of such investment, has not defaulted for more than
ninety days in the payment of principal or interest on any of its
bonds or other interest-bearing obligations;
(4) Any bonds issued by or for federal land banks and any
debentures issued by or for federal intermediate credit banks
under the "Federal Farm Loan Act of 1916," 39 Stat. 360, 12
U.S.C.A. 641, as amended; or any debentures issued by or for
banks for cooperatives under the "Farm Credit Act of 1933," 48
Stat. 257, 12 U.S.C.A. 131, as amended;
(5) Notes which are: (a) secured by a first mortgage on
real estate held in fee and located in the state, improved by a
unit designed principally for residential use for not more than
four families or by a combination of such dwelling unit and
business property, the area designed or used for nonresidential
purposes not to exceed fifty per cent of the total floor area;
(b) secured by a first mortgage on real estate held in fee and
located in the state, improved with a building designed for
residential use for more than four families or with a building
used primarily for business purposes, if the unpaid principal of
the notes secured by such mortgage does not exceed ten per cent
of the value of the estate or trust or does not exceed five
thousand dollars, whichever is greater; or (c) secured by a first
mortgage on an improved farm held in fee and located in the
state, provided that such mortgage requires that the buildings on
the mortgaged property shall be well insured against loss by
fire, and so kept, for the benefit of the mortgagee, until the
debt is paid, and provided that the unpaid principal of the notes
secured by the mortgage shall not exceed fifty per cent of the
fair value of the mortgaged real estate at the time such THE
investment is made, and such THE notes shall be payable not more
than
five years after the date on which the investment in them is
made; except that the unpaid principal of such THE notes may
equal
sixty per cent of the fair value of the mortgaged real estate at
the time such THE investment is made, and may be payable over a
period of fifteen years following the date of the investment by
the fiduciary if regular installment payments are required
sufficient to amortize four per cent or more of the principal of
the outstanding notes per annum and if the unpaid principal and
interest become due and payable at the option of the holder upon
any default in the payment of any installment of interest or
principal upon the notes, or of taxes, assessments, or insurance
premiums upon the mortgaged premises or upon the failure to cure
any such default within any grace period provided therein not
exceeding ninety days in duration;
(6) Life, endowment, or annuity contracts of legal reserve
life insurance companies regulated by sections 3907.01 to
3907.21, 3909.01 to 3909.17, 3911.01 to 3911.24, 3913.01 to
3913.10, 3915.01 to 3915.15, and 3917.01 to 3917.05 of the
Revised Code, and licensed by the superintendent of insurance to
transact business within the state, provided that the purchase of
contracts authorized by this division shall be limited to
executors or the successors to their powers when specifically
authorized by will and to guardians and trustees, which contracts
may be issued on the life of a ward, a beneficiary of a trust
fund, or according to a will, or upon the life of a person in
whom such ward or beneficiary has an insurable interest and such
THE
contracts shall be drawn by the insuring company so that the
proceeds shall be the sole property of the person whose funds are
so invested;
(7) Notes or bonds secured by mortgages and insured by the
federal housing administrator or debentures issued by such
administrator;
(8) Obligations issued by a federal home loan bank created
under the "Federal Home Loan Bank Act of 1932," 47 Stat. 725, 12
U.S.C.A. 1421, as amended;
(9) Shares and certificates or other evidences of deposits
issued by a federal savings and loan association organized and
incorporated under the "Home Owners' Loan Act of 1933," 48 Stat.
128, 12 U.S.C.A. 1461, as amended, to the extent and only to the
extent that those shares or certificates or other evidences of
deposits are insured pursuant to the "Financial Institutions
Reform, Recovery, and Enforcement Act of 1989," 103 Stat. 183, 12
U.S.C.A. 1811, as amended;
(10) Bonds issued by the home owners' loan corporation
created under the "Home Owners' Act of 1933," 48 Stat. 128, 12
U.S.C.A. 1461, as amended;
(11) Obligations issued by the national mortgage
association created under the "National Housing Act," 48 Stat.
1246 (1934), 12 U.S.C.A. 1701, as amended;
(12) Shares and certificates or other evidences of
deposits issued by a domestic savings and loan association
organized under the laws of the state, which association has
obtained insurance of accounts pursuant to the "Financial
Institutions Reform, Recovery, and Enforcement Act of 1989," 103
Stat. 183, 12 U.S.C.A. 1811, as amended, or as may be otherwise
provided by law, only to the extent that such evidences of
deposits are insured under that act, as amended;
(13) Shares and certificates or other evidences of
deposits issued by a domestic savings and loan association
organized under the laws of the state, provided that no fiduciary
may invest such deposits except with the approval of the probate
court, and then in an amount not to exceed the amount which the
fiduciary is permitted to invest under division (A)(12) of this
section;
(14) In savings accounts in, or certificates or other
evidences of deposits issued by, a national bank located in the
state or a state bank located in and organized under the laws of
the state by depositing such THE funds in the bank, and such
national
or state bank when itself acting in a fiduciary capacity may
deposit such THE funds in savings accounts in, or certificates
or
other evidences of deposits issued by, its own savings department
or any bank subsidiary corporation owned or controlled by the
bank holding company that owns or controls such national or state
bank; provided that no deposit shall be made by any fiduciary,
individual, or corporate, unless the deposits of the depository
bank are insured by the federal deposit insurance corporation
created under the "Federal Deposit Insurance Corporation Act of
1933," 48 Stat. 162, 12 U.S.C. 264, as amended, and provided that
the deposit of the funds of any one trust in any such savings
accounts in, or certificates or other evidences of deposits
issued by, any one bank shall not exceed the sum insured under
that act, as amended;
(15) Obligations consisting of notes, bonds, debentures,
or equipment trust certificates issued under an indenture, which
are the direct obligations, or in the case of equipment trust
certificates are secured by direct obligations, of a railroad or
industrial corporation, or a corporation engaged directly and
primarily in the production, transportation, distribution, or
sale of electricity or gas, or the operation of telephone or
telegraph systems or waterworks, or in some combination of them;
provided that the obligor corporation is one which is
incorporated under the laws of the United States, any state, or
the District of Columbia, and the obligations are rated at the
time of purchase in the highest or next highest classification
established by at least two standard rating services selected
from a list of the standard rating services which shall be
prescribed by the superintendent of financial institutions;
provided that every
such list shall be certified by such THE superintendent to the
clerk
of each probate court in the state, and shall continue in effect
until a different list is prescribed and certified as provided in
this division;
(16) Obligations issued, assumed, or guaranteed
by the international finance
corporation or by the
international bank for reconstruction and development, the Asian
development bank, the inter-American development bank, the
African development bank, or other similar development bank in
which the president, as authorized by congress and on behalf of
the United States, has accepted membership, provided that the
obligations are rated at the time of purchase in the highest or
next highest classification established by at least one standard
rating service selected from a list of standard rating services
which shall be prescribed by the superintendent of financial institutions;
(17) Securities of any investment company, as defined in
and registered under sections 3 and 8 of the "Investment Company
Act of 1940," 54 Stat. 789, 15 U.S.C.A. 80a-3 and 80a-8, that are
invested exclusively in forms of investment or in instruments
that are fully collateralized by forms of investment in which the
fiduciary is permitted to invest pursuant to divisions (A)(1) to
(16) of this section, provided that, in addition to such forms of
investment, such THE investment company may, for the purpose of
reducing risk of loss or of stabilizing investment returns,
engage in hedging transactions.
(B) No administrator or executor may invest funds
belonging to an estate in any asset other than a direct
obligation of the United States that has a maturity date not
exceeding one year from the date of such investment, or other
than in a short-term investment fund that is invested exclusively
in obligations of the United States or of its agencies, or
primarily in such obligations and otherwise only in variable
demand notes, corporate money market instruments including, but
not limited to, commercial paper, or fully collateralized
repurchase agreements or other evidences of indebtedness that are
payable on demand or generally have a maturity date not exceeding
ninety-one days from the date of investment, except with the
approval of the probate court or with the permission of the
instruments creating the trust.
(C)(1) In addition to the investments allowed by this
section, a guardian or trustee, with the approval of the court,
may invest funds belonging to the trust in productive real estate
located within the state, provided that neither the guardian nor
the trustee nor any member of the family of either has any
interest in such real estate or in the proceeds of the purchase
price. The title to any real estate so purchased by a guardian
must be taken in the name of the ward.
(2) Notwithstanding the provisions of division (C)(1) of
this section, the court may permit the funds to be used to
purchase or acquire a home for the ward or an interest in a home
for the ward in which a member of the ward's family may have an
interest.
(D) IF THE FIDUCIARY IS A TRUSTEE APPOINTED BY AND ACCOUNTABLE TO
THE PROBATE COURT, THE FIDUCIARY SHALL
INVEST THE TRUST'S ASSETS PURSUANT TO THE REQUIREMENTS AND STANDARDS SET FORTH
IN SECTIONS 1339.52 TO 1339.61 OF THE REVISED CODE.
Sec. 2109.371. (A) In addition to those investments made
eligible by section 2109.37 or 2109.372 of the Revised Code,
investments may be made by a fiduciary other than a guardian
under sections 5905.01 to 5905.19 of the Revised Code, and
subject to the restriction placed on an administrator or executor
by division (B) of section 2109.37 of the Revised Code, in any of
the following kinds and classes of securities, provided that it
may be lawfully sold in Ohio and investment is made only in such
securities as would be acquired by prudent persons of
discretion and intelligence in such matters who are seeking a reasonable
income and the preservation of their capital:
(1) Securities of corporations organized and existing
under the laws of the United States, the District of Columbia, or
any state of the United States including, but not limited to,
bonds, debentures, notes, equipment trust obligations, or other
evidences of indebtedness, and shares of common and preferred
stocks of such corporations;
(2) Subject to division (C) of this section, collective investment funds
established in accordance with section 1111.14 of the Revised Code
or securities of any investment company, including any affiliated
investment company, whether or not the fiduciary has invested other funds held
by it in an agency or other nonfiduciary capacity in the securities of the
same investment company or affiliated investment company;
(3) Bonds or other interest-bearing obligations of any
state or territory of the United States, or of any county, city,
village, school district, or other legally constituted political
taxing subdivision of any state or territory of the United
States, not otherwise eligible under division (A)(2) or (3) of
section 2109.37 of the Revised Code.
(B) No investment shall be made pursuant to this section
which, at the time such investment is made, causes the aggregate
market value of the investments, not made eligible by section
2109.37 or 2109.372 of the Revised Code, to exceed sixty per cent
of the aggregate market value at that time of all the property of
the fund held by the fiduciary. No sale or other liquidation of
any investment shall be required solely because of any change in
the relative market value of those investments made eligible by
this section and those made eligible by section 2109.37 or
2109.372 of the Revised Code; provided that, in the event of a
sale of investments authorized by this section, the proceeds from
the sale may be reinvested in the kinds and classes of securities
authorized by this section without regard to the percentage
limitation provided in this division. In determining the
aggregate market value of the property of a fund and the
percentage of a fund to be invested under this section, a
fiduciary may rely upon published market quotations as to those
investments for which such quotations are available and upon such
valuations of other investments as, in the fiduciary's best
judgment, seem fair and reasonable according to available information.
(C)(1)(a) A fiduciary making an
investment of trust funds in securities of an affiliated investment company,
or a bank subsidiary corporation or other corporation owned or controlled by
the bank holding company that owns or controls the fiduciary, may charge a
reasonable fee for investment advisory, brokerage, transfer agency, registrar,
management, or other similar services provided to an affiliated investment
company. The fee may be in addition to the compensation to which the
fiduciary
is otherwise entitled to receive from the trust, provided that the fee is
charged as a percentage of either asset value or income earned or actual
amount charged and is disclosed at least annually by prospectus, account
statement, or any other written means to all persons entitled to receive
statements of account activity.
(b) A fiduciary making an investment of trust funds in securities
of an affiliated investment company pursuant to division
(A)(2) of this section shall, when providing
any periodic account statements to the trust fund, report the net asset value
of the shares comprising the investment of the trust funds in the affiliated
investment company.
(c) If a fiduciary making an investment of trust funds in
securities of an affiliated investment company pursuant to division
(A)(2) of this section invests such funds in
any mutual fund, the fiduciary shall disclose, in at least ten-point boldface
type, by prospectus, account statement, or any other written means to all
persons entitled to receive statements of account activity, that the mutual
fund is not insured or guaranteed by the federal deposit insurance corporation
or by any other government-sponsored agency of the federal government or of
this state.
(2) Unless the investment of trust funds in securities of an affiliated
investment company can be made under the terms of the instrument creating the
trust, an exception to the investment of trust funds in securities of an
affiliated investment company may be filed with the probate court. Any
exception filed pursuant to this division must be signed by all persons who
would, at the time the exception is filed, be permitted to file an exception
to
an account pursuant to section 2109.33 of the Revised Code
and must state that all such persons request that the current investment of
trust funds in securities of an affiliated investment company be terminated
within a reasonable time. If the probate court determines that the exception
complies with the requirements of this division, the probate court shall
establish a schedule for disposing of any current investments in securities of
an affiliated investment company, and the fiduciary shall cause the trust to
dispose of the investments in accordance with the schedule. The fiduciary
shall not be liable for any loss incurred by the trust as a result of
complying with division (C)(2) of this section.
(D) As used in this section, "affiliated investment company,"
"investment company," and "reasonable fee" have the same meanings as in
division (E) of section 1109.10 1111.13 of the Revised Code.
Section 2. That existing sections 1111.13, 1339.60, 2109.37, and 2109.371 of
the Revised Code are hereby repealed.
Section 3. Section 2109.371 of the Revised Code is presented in this act
as a composite of the section as amended by both
Am. Sub. H.B. 538 and Sub. S.B. 129 of the 121st General Assembly, with the
new language of
neither of the acts shown in capital letters. This is in
recognition of the principle stated in division (B) of section
1.52 of the Revised Code that such amendments are to be
harmonized where not substantively irreconcilable and constitutes
a legislative finding that such is the resulting version in
effect prior to the effective date of this act.
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