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Sub. H. B. No. 509As Passed by the SenateAs Passed by the Senate
124th General Assembly | Regular Session | 2001-2002 |
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REPRESENTATIVES Womer Benjamin, Blasdel, Salerno, Allen, Schmidt, Seitz, Carey, Evans
SENATORS Prentiss, Carnes, Blessing
A BILL
To amend sections 2109.371 and 3107.15 and to enact section 1111.15 of the Revised Code to allow
a trust company, under certain circumstances, to
purchase products or services through or from the
trust company or an affiliate or from a syndicate
or selling group that includes the trust company
or
an affiliate, to expand the investment authority of fiduciaries under the Probate Fiduciaries Law, and to
restrict bequests and other property transfers to persons adopted
as adults, unless such persons are expressly included in
the
instrument of transfer.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 2109.371 and 3107.15 be amended and section 1111.15 of the Revised Code be
enacted to read as follows:
Sec. 1111.15. (A) A trust company acting in any fiduciary
capacity, including, but not limited to, the capacities described
in section 1111.11 of the Revised Code, may purchase any service
or product, including, but not
limited to, insurance or securities
underwritten or otherwise
distributed by the trust company or by
an affiliate, through or
directly from the trust company or an
affiliate or from a
syndicate or selling group that includes the
trust company or an
affiliate, provided that the purchase is
otherwise prudent under
sections 1339.52 to 1339.61 of the Revised
Code and the
compensation for the service or product is reasonable
and is not
prohibited by the instrument governing the fiduciary
relationship.
The compensation for the service or product may be
in addition to
the compensation that the trust company is
otherwise entitled to
receive from the fiduciary account. (B) A trust company shall disclose at least annually any
purchase authorized by this section that was made by the trust
company during that reporting period. The disclosure shall be
given, in writing or electronically, to all persons
entitled to
receive statements of account activity, and shall include any
capacities
in which the trust company or an affiliate acts for the
issuer of
the securities or the provider of the products or
services and the fact that
the trust company or an affiliate may
have an interest in the
products or services. (C) This section shall apply to the purchase of securities
made at the time of the initial offering of the securities or at
any time thereafter.
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;. Such
investments may be made regardless of the eligibility of the
underlying assets held by the fund portfolios of the 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; (4) Debt or equity securities of foreign corporations that
trade on recognized United States domiciled exchanges. (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.
The
fiduciary shall disclose the relationship between the
fiduciary
and the affiliated investment company, at least
annually by
account statement, whether or not the fee is
charged. (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"
and "reasonable fee" have the same meanings as in
division (E) of
section 1111.13 of the Revised Code.
Sec. 3107.15. (A) A final decree of adoption and an
interlocutory order of adoption that has become final as issued
by
a court of this state, or a decree issued by a jurisdiction
outside this
state as recognized pursuant to section 3107.18 of
the Revised Code, shall
have the following effects as to all
matters within the jurisdiction or before a court of this state,
whether issued before or after May 30, 1996: (1) Except with respect to a spouse of the petitioner and
relatives of the spouse, to relieve the biological or other legal
parents of the adopted person of all parental rights and
responsibilities, and to terminate all legal relationships
between
the adopted person and the adopted person's
relatives, including
the adopted person's biological or other legal parents,
so that
the adopted person thereafter is a stranger to the adopted
person's
former relatives for all purposes
including inheritance
and the interpretation or construction of
documents, statutes, and
instruments, whether executed before or
after the adoption is
decreed, which do not expressly include the
person by name or by
some designation not based on a parent and
child or blood
relationship; (2) To create the relationship of parent and child between
petitioner and the adopted person, as if the adopted person were
a
legitimate blood descendant of the petitioner, for all purposes
including inheritance and applicability of statutes, documents,
and instruments, whether executed before or after the adoption is
decreed, and whether executed or created before or after May 30,
1996, which do not
expressly exclude an adopted person
from their
operation or
effect; (3) Notwithstanding division (A)(2) of this section, a
person who is eighteen years of age or older at the time the
person is adopted, and the adopted person's lineal descendants,
are not included as recipients of gifts, devises, bequests, or
other transfers of property, including transfers in trust made to
a class of persons including, but not limited to, children,
grandchildren, heirs, issue, lineal descendants, and next of kin,
for purposes of inheritance and applicability of statutes,
documents, and instruments, whether executed or created before or
after May 30, 1996, unless the document or instrument expressly
includes the adopted person by name or expressly states that it
includes a person who is eighteen years of age or older at the
time the person is adopted. (B) Notwithstanding division (A) of this section, if a
parent of a child dies without the relationship of parent and
child having been previously terminated and a spouse of the
living
parent thereafter adopts the child, the child's rights
from or
through the deceased parent for all purposes, including
inheritance and applicability or construction of documents,
statutes, and instruments, are not restricted or curtailed by the
adoption.
(C) Notwithstanding division (A) of this section, if the
relationship of parent and child has not been terminated between a
parent and that parent's child and a spouse of the other parent of
the child adopts the child, a grandparent's or relative's right to
companionship or visitation pursuant to section 3109.11 of the
Revised Code is not restricted or curtailed by the adoption. (D) An interlocutory order of adoption, while it is in
force, has the same legal effect as a final decree of adoption.
If an interlocutory order of adoption is vacated, it shall be as
though void from its issuance, and the rights, liabilities, and
status of all affected persons that have not become vested are
governed accordingly.
Section 2. That existing sections 2109.371 and 3107.15 of the Revised
Code are hereby repealed.
Section 3. No liability shall arise against any one of the
following that, prior to the effective date of this
section,
authorized or was otherwise responsible for a
distribution or
other payment or a transfer of property that is
inconsistent with
division (A)(3) of section 3107.15 of the
Revised Code, as amended
by this act: (1) A fiduciary under a trust instrument, will, or other
document; (2) A bank, savings and loan association, credit union, or
society for savings, in connection with written contracts
described in sections 2131.10 and 2131.11 of the Revised Code;
(3) A registering entity, as defined in division (H) of
section 1709.01 of the Revised Code, for a transfer-on-death made
pursuant to Chapter 1709. of the Revised Code.
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