New Ohio Trust Code Means New Duties

The new Ohio Trust Code (OTC), which directly affects your revocable trust, became effective January 1, 2007. It was enacted to make Ohio’s trust provisions similar to the Uniform Trust Code adopted by many other states. The new rules potentially compromise the privacy of your trust since beneficiaries now have rights to access information and receive notifications about the trust. Keeping your trust information private may or may not be a high priority for you. However, it’s important to understand how the OTC affects your original trust provisions.

How does the new Ohio Trust Code affect your trust?

Once your trust becomes irrevocable upon your death, the OTC imposes greater obligations on the trustee to keep beneficiaries reasonably informed about the administration of the trust and about material facts necessary to protect their interests. Please find enclosed an article published in September/October’s Ohio Lawyer, the Ohio Bar Association’s member magazine, which explains the OTC’s new requirements. All but two of these new requirements can be waived in the trust instrument:

  1. You cannot waive the trustee’s duty to notify current beneficiaries age twenty-five (25) and over of the existence of the trust, the identity of the trustee, and the right to request trustee’s reports.
  2. You cannot waive the trustee’s duty to respond to the request of a current beneficiary age twenty-five (25) and over for trustee’s reports and other information reasonably related to the administration of the trust.

However, these rules can be modified by designating a “beneficiary surrogate” in your trust instrument to receive any notices/reports required to be provided to current beneficiaries. This beneficiary surrogate has a fiduciary duty to act in the best interest of all beneficiaries.

Should you waive the new duties imposed by the new OTC?

The new OTC simultaneously expands the rights of beneficiaries and the duties of the trustee. If keeping trust information private from your beneficiaries is not a high priority for you, then your trust does not need modification and the OTC’s notice requirements will take effect once your trust becomes irrevocable. Please keep in mind that such stringent reporting duties increase a trustee’s responsibilities, which in turn may lead to higher trustee fees. Therefore, if you want to keep trust information private and not increase your trustee’s duties, then our office can create a short amendment to your trust which will waive the requirements as permitted by law. Since your trust was executed after the law was passed on June 28, 2006, we will amend your trust at no charge. Please contact our office if you would like us to prepare the trust amendment.

The new OTC is complex and confusing, so I encourage you to contact us by email, or call our offices at (513) 731-6601 if you have questions about how the law applies to you and your trust.