Report of the Estate Planning, Trust and Probate Law Section
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To the Council of Delegates:
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The Estate Planning, Trust and Probate Law Section respectfully requests your favorable
consideration to the six following proposals:
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A. A proposal to add new Ohio Revised Code Section 5809.03.1 to modify a
trustee’s duties with respect to life insurance policies held as trust assets.
Proposal is attached as Exhibit A;
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B. A proposal to enact a new section R.C. 5808.18 of the Ohio Trust Code that
would authorize a trustee who has discretionary powers to distribute principal
of a trust to exercise its discretion by distributing all or part of the first trust
principal in further trust for the benefit of one or more beneficiaries of the
original trust, subject to certain conditions and limitations as set forth in the
proposed section, and to amend section 5801.10(I) by adding a new paragraph
(4) to coordinate the provisions of the two sections. Proposal is attached as
Exhibit B;
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C. A proposal to amend a provision of Ohio’s income tax on trusts so as to allow
a credit to “resident” Trusts for income taxes paid to other states. Proposal is
attached as Exhibit C;
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F. A proposal to enact R.C. 5810.14 relating to Titling of Assets in Trust Form
and R.C. 5301.071 (E) relating to the Validity of Instruments. Proposal is
attached as Exhibit F.
D. A proposal to make amend the anti-lapse statute, R.C. 2107.52 as it relates to
wills, to enact a statute to create an anti-lapse statute applicable to trusts, and
to add provisions to the Ohio Trust Code to grant statutory authority to a
trustee to make distributions directly to the heirs of a deceased trust
beneficiary, rather than through the deceased beneficiary’s estate. Proposal is
attached as Exhibit D;
E. A proposal to enact the Uniform Power of Attorney Act in Ohio, as
modified. Proposal is attached as Exhibit E; and
Respectfully submitted,
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William J. McGraw III, Troy
Chair
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EXHIBIT A
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5809.03.1. Duties of a trustee with respect to life insurance policies.
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(A) Unless otherwise provided by the terms of the trust, the duties of a trustee with
respect to the acquisition, retention or ownership of a life insurance policy as a trust
asset do not include a duty:
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(1) To determine whether any such policy is or remains a proper investment;
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(2) To diversify the investment in such policy relative to other such policies or
to any other trust assets;
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(3) To exercise or not any option, right or privilege available under such
policy, including the payment of premiums unless there are sufficient cash
or other readily marketable trust assets from which to pay such premiums,
or, if not, other trust assets that were designated by the settlor or other
person transferring such assets to the trust to be used for such purpose,
regardless of whether such exercise or non-exercise results in the lapse or
termination of such policy;
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(4) To investigate the financial strength or changes in the financial strength of
the life insurance company maintaining such policy; or
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(5) To inquire about changes in the health or financial condition of the insured
or insureds under such policy.
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(B) Neither the trustee, nor the attorney who drafted a trust, nor any person who
consulted with regard to the creation of a trust, shall, absent fraud, be liable to the
beneficiaries of the trust or to any other person for any loss arising from the absence
of these duties.
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(C) Unless otherwise provided by the terms of the trust, the provisions of this section
apply to a trust established before or after the effective date of this section and to a
life insurance policy acquired, retained or owned by a trustee before or after the
effective date of this section.
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Executive Summary
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The EPTPL Council believes that the Ohio Uniform Prudent Investor Act (ORC
Chapter 5809), as presently constituted, imposes duties upon trustees of trusts
holding life insurance policies as trust assets that in most cases neither the settlor nor
the trustee (whether institutional or individual) of the trust intended or wanted. The
EPTPL Council believes Ohio should join at least ten other states in adopting
specific legislation to modify these duties, while allowing the settlor to specifically
impose such duties in the trust instrument if so desired. To accomplish this goal, the
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EPTPL recommends that proposed ORC Section 5809.03.01 attached as Exhibit A
be enacted.
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Rationale for the Proposal
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The EPTPL Council has determined that the Ohio Trust Code, including Ohio’s
Uniform Prudent Investor Act, imposes overly onerous duties with respect to
trustees’ administration of life insurance policies, subjects trustees in such instances
to an unwarranted greater risk of liability, and unnecessarily increases costs of trust
administration, relief from all of which would be appropriate. Therefore, the EPTPL
Council recommends adopting a new statute exempting trustees from certain duties
prescribed by the Ohio Trust Code, including Ohio’s Uniform Prudent Investor Act,
with respect to life insurance policies held as trust assets.
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The enactment of Ohio’s Uniform Prudent Investor Act (ORC Chapter 5809)
codified and expanded the role and duties of Ohio trustees. Specifically, ORC §
5809.02 provides the default standard of care to which all trustees must adhere while
carrying out their fiduciary duties. This default standard reads as follows:
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5809.02 Standard of Care – Portfolio Strategy – Risk and Return Objectives
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(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.
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(B)
A trustee shall make a reasonable effort to verify facts relevant to the investment
and management of trust assets.
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(C)
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.
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(D)
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:
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(1)
The general economic conditions;
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(2)
The possible effect of inflation or deflation;
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(3)
The expected tax consequences of investment decisions or strategies;
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(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;
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(5)
The expected total return from income and appreciation of capital;
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(6)
Other resources of the beneficiaries;
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(7)
Needs for liquidity, regularity of income, and preservation or appreciation
of capital;
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(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.
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In examining the foregoing statute from the perspective of the ubiquitous traditional
irrevocable life insurance trust (a trust whose assets consist primarily of life insurance
contracts intended to exempt the death benefits of which from federal estate tax), the
EPTPL Council determined that such trustees would be required to engage in a more
involved and at times unnecessary annual review process that diverges from longstanding trust administration practices. For instance, in addition to the intended
duties of sending annual Crummey notices to trust beneficiaries to avoid adverse gift
tax consequences and paying the required policy premiums, the standard of ORC
§ 5809.02 potentially requires trustees of such trusts to perform at least the following
duties:
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1.
Determine whether investment of trust assets primarily, or often
solely, in life insurance policies violates the duty of investment
diversification.
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2.
Determine whether the duty of diversification required at a
minimum multiple life insurance policies rather than one sole
policy, and at a maximum whether non-life insurance assets must
also be included as trust investments;
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3.
Determine whether the policy or policies held in the trust were, and
continued to remain, proper investments, even though the trustee
was directed by the settlor to acquire such policy(ies);
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4.
Determine what to do when the settlor fails to properly fund the
trust to pay the current premium; e.g., borrow cash value to pay the
premium, surrender or partially surrender the policy, convert to
paid-up insurance, use other trust assets to pay the premium, reduce
the death benefit, etc.
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5.
Review and ensure that any given policy’s cash balance was
properly allocated and invested;
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6.
Ensure that the insurance company of each policy is and remains
financially stable enough to satisfy its claim obligations now and in
the future;
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7.
Determine whether the policy(ies) in the trust should be exchanged
for new polices that might offer the same or similar death benefit at
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a lower cost after accounting for acquisition expenses, surrender
charges, and potential loss of cash value; and
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8.
Review the health of the insured and make any necessary
adjustments based on sudden declines or improvements.
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These duties, and the increased liability they bring, threaten the overall utility of
traditional irrevocable life insurance trusts (“ILITs). Often non-institutional third
parties serve as ILIT trustees. In most instances such trustees lack the knowledge,
training and resources to fulfill the above duties, which are normally not even desired
by the settlor of the trust, or will become overwhelmed if they serve as trustee of
multiple ILITs. Institutional trustees, who have the sophistication to appreciate such
duties, must charge significant fees to be adequately compensated for performing
such (normally not desired) duties, or for taking the risk of the settlor being
uncooperative in allowing the trustee to perform them at all. The unfortunate and
foreseeable result is that ILIT administration is costly, risky and impractical, thus
giving informed potential trustees pause before accepting the role of trustee, and
uniformed trustees a minefield of potential liability to navigate.
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Although some relief from these problems theoretically could lie in ILIT trustees
delegating review and analysis duties to third parties pursuant to R.C. § 5808.07, or
relying on R.C. § 5809.02’s standard as written in hopes that an ILIT’s unique
characteristics would absolve the trustee from liability for failure to diversify, that
still leaves it to practitioners to draft around or out of Chapter 5809’s requirements as
permitted by R.C. § 5809.01(C). A far more practical solution, and the one
recommended by the EPTPL Council, is to enact a “savings statute” that specifically
exempts trustees from certain duties with regard to life insurance policies held as
trust assets, without concern as to whether such trust was an “ILIT”. The drafter of
the trust would be free to modify the limited trustee duties under the savings statute if
greater duties were desired.
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As of the date of this Report, the EPTPL Council is aware of ten other states that
have enacted such “savings” legislation that limits to varying degrees the duties owed
by trustees with respect to life insurance policies held as trust assets, and limits the
liability of such trustees to the trust beneficiaries and others due to the limitation on
such duties. Although each state’s legislation varies, there are several common
aspects: all apply automatically without election, and almost all provide that the
holding of certain life insurance policies are exempt from the trustee’s otherwise
required duties of investment diversification and suitability, and the determination as
to whether or not to exercise any available policy options. Attached to this Report as
Exhibit B is a chart comparing each state’s statute in terms of when the statute
applies, which policies fall within the statute’s scope, what specific acts of the ILIT
trustee are protected from liability, and whether the statute protects the trustee from
liability to beneficiaries for loss with respect to a policy.
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After reviewing the statutes passed by the other states, the EPTPL Council
recommends the adoption of ORC 5809.03.01 attached as Exhibit A. With respect
to the proposed new statute, the EPTPL Council makes the following comments:
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1.
The EPTPL Council has determined that the statute works better as
a part of the Ohio Uniform Prudent Investor Act (Chapter 5809)
than as a part of the Specific Powers of Trustee (ORC §5808.16).
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2.
The EPTPL Council has determined that the statute should only
apply to the insurance policies in the trust, not the underlying assets
comprising the cash value or funding of the policies, so there is no
extension of the relief from trustee duties with respect to such
underlying policy assets under the statute.
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3.
The EPTPL Council has determined that it is advisable to provide
relief from the duty to pay premiums in subdivision (A)(3), but
only if the trustee does not hold sufficient cash or readily
marketable assets with which to pay the premiums, or other
sufficient assets which were designated by the settlor or transferor
to be used for the purpose of premium payment.
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4.
Finally, the EPTPL Council has determined that the statute should
specify that relief from liability should only apply in the absence of
fraud.
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Comparison of Various States' ILIT Trustee Liability Statutes
Provision
Applies automatically
AL
DL
MD
ND
PA
SC
TN
VA
WV
WY
#
X
X
X
X
X
X
X
X1
X
X
10
X
X
X
X
5
X
?
Except as otherwise provided in the trust instrument
Applies to trusts in existence prior to the statute
X
X
Applies to trusts in existence prior to the statute if
Trustee gives notice
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X
?
X1
7
X2
X
X
X
3
Applies to any policy
Any policy contributed by settlor
X
1
1
Any policy purchased upon settlor's request
X
1
Does not apply to replacement policy purchased by
Trustee
Policy on settlor's life
Policy on settlor's spouse
Policy on settlor's children
Policy on settlor's grandchildren
Policy on settlor's parents
Trustee may
- acquire
- retain
- own
the policy without regard to
- lack of diversification
- the terms and conditions of the policy
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
7
7
4
3
3
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
9
9
3
X
X
X
X
X
X
X
X
X
X
10
X
- whether the policy is or remains a proper
investment
- financial strength or changed thereto of the life
ins. Company
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X
X
X
X
- determination of whether to exercise any policy
option available
X
- change in health or financial condition of the
insureds
- exercise nonforfeiture provisions available in
policy
"Trustee not liable to any beneficiary for loss"
X
X
X
X
X
X
X
X
X
X
2
X
X
X
X
X
X3
X
X
X
X
X
1
X
Only if acquired by gift - otherwise language must be included in trust instrument
And settlor does not object w/i 60 days
3
Except those essential to the continuation of the life insurance
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X
9
X
4
X
8
X
2
1
X
X
X
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EXHIBIT B
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§5808.18
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(A)
Unless the trust instrument expressly provides otherwise and subject to the
limitations set forth in this section:
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(1)
A trustee of a trust (the “first trust”) who has absolute power under the
terms of the first trust to make distributions of principal to one or more current
beneficiaries, may exercise the power by distributing all or any part of the principal
subject to the power, and all or any part of any income that is not otherwise currently
required to be distributed, to the trustee of another trust (the “second trust”) that is for the
benefit of one or more current beneficiaries of the first trust. The second trust may be a
trust under the same trust instrument or under a different governing instrument, including
a governing instrument created by the trustee of the first trust. A trustee of the first trust
who is authorized to make distributions to the trustee of a second trust pursuant to the
provisions of this division (A) may do so at any time, whether or not the trustee of the
first trust would otherwise have made a distribution at such time to, or for the benefit of,
any beneficiary pursuant to the terms of the first trust.
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(2)
In determining whether the trustee has absolute power to make
distributions of principal to any current beneficiary and the identity of the current
beneficiaries, the following provisions shall apply:
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(a)
An absolute power to distribute principal shall include any power
to make distributions of principal that is not limited by reasonably definite standards or
ascertainable standards, whether or not the word “absolute” is used.
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(b)
A power to make distributions of principal for purposes such as
best interests, welfare, comfort or happiness, or words of similar import, when not
otherwise limited by reasonably definite or ascertainable standards, shall constitute an
absolute power not limited by reasonably definite standards or ascertainable standards,
regardless of any requirement to take into account other resources of the current
beneficiary or beneficiaries to whom such distributions may be made.
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(c)
If the current beneficiaries of the first trust are defined, in whole or
in part, as a class of persons, such class shall include any person who falls within the
class of persons after the distribution to the second trust.
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(d)
A power to make distributions “for the benefit of” a beneficiary
shall be considered a power to make distributions “to” that beneficiary.
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(3)
If property is distributed pursuant to the authority described in this
division (A), the governing instrument for the second trust may, without limitation:
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(a)
grant a power of appointment to one or more of the beneficiaries
for whose benefit the property was so distributed, including a power to appoint trust
property to the power holder, the power holder’s creditors, the power holder’s estate, the
Trustee’s powers to distribute trust principal in further trust.
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creditors of the power holder’s estate or any other person, whether or not such person is a
beneficiary of the first trust or the second trust, and
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(b)
provide that, at a time or upon an event specified in such governing
instrument, the remaining trust property shall thereafter be held for the benefit of the
beneficiaries of the first trust upon terms and conditions that are substantially identical to
the terms and conditions of the trust instrument for the first trust, except that any current
beneficiary or beneficiaries for whose benefit the property could have been, but was not,
so distributed may be excluded.
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(c)
For purposes of this paragraph (3):
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(i)
the phrase “terms and conditions” shall refer only to those
terms and conditions which govern the interests of the beneficiaries; and
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(ii)
charitable organizations that are not expressly designated
in the first trust to receive distributions but to whom the trustee of the first trust may, in
the discretion of the trustee (or in the discretion of any other person directing the trustee
and acting in a fiduciary capacity), at any time make a distribution shall be
considered beneficiaries of the first trust.
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(B) Unless the trust instrument expressly provides otherwise and subject to the
limitations set forth in this section, a trustee of a trust (the “first trust”) who has authority,
other than absolute power as described in division (A) of this section, under the terms of
the first trust to make current distributions of principal to one or more current
beneficiaries may exercise the power by distributing all or any part of the principal
subject to the power, and all or any part of any income that is not otherwise required to be
distributed, to the trustee of another trust (the “second trust”). The second trust may be a
trust under the same trust instrument or under a different governing instrument, including
a governing instrument created by the trustee of the first trust. This power may be
exercised whether or not there is a current need to distribute trust principal under any
standard contained in the first trust. The exercise of a trustee’s power under this division
(B) shall be valid only if the governing instrument for the second trust does not materially
change the interests of the beneficiaries of the first trust. For purposes of this division
(B), a power to make distributions “for the benefit of” a beneficiary shall be considered a
power to make distributions “to” that beneficiary.
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(C)
The exercise of the power to distribute to a second trust under either
division (A) or (B) of this section shall be subject to the following additional limitations
in this division (C).
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(1)
The distribution to the trustee of the second trust shall not result in the
reduction, limitation or modification of any beneficiary’s (a) current right to a mandatory
distribution of income or principal of the first trust, (b) current mandatory annuity or
unitrust interest in the property of the first trust, or (c) right annually to withdraw a
percentage of the value of the first trust or a specified dollar amount, provided that such
mandatory or annual right has come into effect with respect to the beneficiary. For
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purposes of the foregoing sentence, a beneficiary’s current right to a distribution of
income shall not be considered to be mandatory if, under the terms of the first trust,
current distributions of principal may be made to any person other than such current
beneficiary.
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(2)
If any transfer to the first trust qualified (or, without regard to the
provisions of division (A) or (B) of this section, would have qualified) for a marital or
charitable deduction, for federal income, gift or estate tax purposes under the Internal
Revenue Code of 1986, as amended, or for purposes of any state income, gift, estate or
inheritance tax, the governing instrument for the second trust may not include or omit any
term which, if included in or omitted from the trust instrument for the first trust, would
have prevented the first trust from qualifying for such deduction, or would have reduced
the amount of such deduction, under the same provisions of the Internal Revenue Code of
1986, as amended, or under the same provisions of the applicable state law with respect
to which the transfer to the first trust so qualified.
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(3)
If any transfer to the first trust has (or, without regard to the provisions of
division (A) or (B) of this section, would have) been treated as a gift qualifying for the
exclusion from gift tax described in Section 2503(b) of the Internal Revenue Code of
1986, as amended, the governing instrument for the second trust may not include or omit
any term which, if included in or omitted from the trust instrument for the first trust,
would have prevented gifts to the first trust from so qualifying under the same provisions
of Section 2503 of the Internal Revenue Code of 1986, as amended, with respect to which
the transfer to the first trust so qualified.
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(4)
If the assets of the first trust include any shares of stock in an S
corporation as defined in Section 1361 of the Internal Revenue Code of 1986, as
amended, and the first trust is (or, without regard to the provisions of division (A) or (B)
of this section, would be) a permitted shareholder under the provisions of said Section
1361, the governing instrument for the second trust may not include or omit any term
which, if included in or omitted from the trust instrument for the first trust, would have
prevented the first trust from qualifying as a permitted shareholder of shares of stock in
an S corporation under the same provisions of such Section with respect to which the first
trust so qualified.
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(5)
If any transfer to the first trust has (or, without regard to the provisions of
division (A) or (B) of this section, would have) been treated as a gift qualifying for a zero
inclusion ratio for purposes of the federal generation skipping transfer tax under the
provisions of Section 2642(c) of the Internal Revenue Code of 1986, as amended, the
governing instrument for the second trust may not include or omit any term which, if
included in or omitted from the trust instrument for the first trust, would have prevented
the transfer to the first trust from so qualifying.
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(6)
If the assets of the first trust include any interest subject to the minimum
distribution rules of Section 401(a)(9) of the Internal Revenue Code of 1986, as amended,
and the Treasury Regulations issued thereunder, the governing instrument for the second
trust may not include or omit any term which, if included in or omitted from the trust
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instrument for the first trust, would have shortened the maximum distribution period
otherwise allowable under said Section 401(a)(9) and Treasury Regulations with respect
to such interest under the first trust.
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(7)
If the trust instrument for the first trust expressly indicates an intention to
qualify for any federal or state tax deduction, exemption, exclusion or other tax benefit
not otherwise listed in the provisions of this division (C) (any such deduction, exemption,
exclusion or other tax benefit being referred to in this subdivision as a “tax benefit”), or if
the terms of the trust instrument for the first trust are clearly designed to enable the first
trust to qualify for a tax benefit, and if the first trust did qualify (or, without regard to the
provisions of division (A) or (B) of this section, would have qualified) for any tax
benefit, the governing instrument for the second trust may not include or omit any term
which, if included in or omitted from the trust instrument for the first trust, would have
prevented the first trust from qualifying for such tax benefit.
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(8)
The distribution to the trustee of the second trust shall not result in any of
the following:
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(a)
an increase in, or a change in the method of determining, the
compensation of the trustee unless such increase in, or change in the method of
determining, the compensation of the trustee has been consented to by all of the persons,
other than the trustee of the second trust, who are current beneficiaries of the second trust
or is approved by the court having jurisdiction over the trust; provided, however, that an
increase in compensation arising solely because the duration of the second trust is longer
than the duration of the first trust shall not be considered an increase in, or change in the
method of determining, the compensation of the trustee; or
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(b)
a reduction in the standard of care applicable to the actions of the
trustee of the first trust or the second trust or an exoneration of the trustee of the first trust
or the second trust from liability for actions taken in bad faith or with willful disregard of
the duties of either such trustee, including by increasing the extent to which such trustee
is entitled to indemnification from the trust, as provided in the terms of the first trust and
under Ohio law.
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(D)
The exercise of the power to distribute trust income or principal to the
trustee of a second trust under either division (A) or (B) of this section shall be by an
instrument in writing, signed by the trustee and filed with the records of the first trust.
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(E)
The exercise of the power to distribute trust income or principal to the
trustee of a second trust under either division (A) or (B) of this section shall not be
exercised in a manner contrary to the provisions of Revised Code Section 2131.08 to the
extent applicable to the first trust, taking into account the provisions of Revised Code
Section 2131.09(B) to the extent applicable to the first trust. Solely for purposes of
applying the provisions of Revised Code Sections 2131.08 and 2131.09(B) under this
division (E), the exercise of the power to distribute trust income or principal to the trustee
of a second trust under either division (A) or (B) of this section shall be considered the
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exercise of a power of appointment other than a general power of appointment within the
meaning of Revised Code Section 2131.09(B)(4).
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(F)
The trustee of the first trust shall notify all current beneficiaries of the first
trust, in writing, of the intended distribution to the trustee of a second trust pursuant to
division (A) or (B) of this section no later than thirty (30) days prior to such distribution.
If all current beneficiaries waive the thirty (30) day period from receipt of notice, the
distribution may be made prior to the expiration of thirty (30) days from the date upon
which notice has been given to all current beneficiaries. The trustee’s giving of notice of
an intended distribution under this division (F) and the waiver or expiration of the thirty
(30) day period from receipt of notice shall not limit the right of any beneficiary to object
to the exercise of the trustee’s power to distribute trust principal as provided in other
applicable provisions of the Ohio Trust Code.
377
378
379
380
381
382
383
(G)
A person other than the trustee who has a power, exercisable in a fiduciary
capacity, to direct the trustee to make distributions of principal which, if held by the
trustee, would be described in either division (A) or (B) of this section, may exercise such
power by directing the trustee to make a distribution under division (A) or (B) of this
section, whichever of such divisions would be applicable if such person were the trustee,
subject to all of the limitations of this section that apply to a trustee’s exercise of such
power.
384
385
386
387
(H)
The exercise of the power to distribute trust income or principal to the
trustee of a second trust under division (A) or (B) is not prohibited by a spendthrift clause
or by a provision in the trust instrument that prohibits amendment or revocation of the
trust.
388
389
390
391
392
(I)
For purposes of Revised Code section 5808.14(A), a trustee who acts
reasonably and in good faith in exercising the power to distribute trust income or
principal to the trustee of a second trust in accordance with division (A) or (B) of this
section, shall be presumed to have acted in accordance with the terms and purposes of the
trust and the interests of the beneficiaries.
393
394
395
396
(J)
Nothing in this section is intended to create or imply a duty to exercise a
power to distribute income or principal of a trust and no inference of impropriety shall
arise as a result of a trustee not exercising the power to make distributions to the trustee
of a second trust under division (A) or (B) of this section.
397
398
399
400
401
(K)
If the first trust is a testamentary trust established under the will of a
testator who was domiciled in Ohio at the time of the testator’s death, the power to
distribute trust income or principal to the trustee of a second trust under either division
(A) or (B) of this section may be exercised only if approved by the court, if any, having
jurisdiction over the testamentary trust.
402
403
(L)
following:
Divisions (A) and (B) of this section shall not apply to either of the
64
404
405
(1)
any trust during any period that the trust may be revoked or amended by
its settlor; or
406
407
(2)
any trustee with respect to any portion of the first trust as to which such
trustee is also the settlor.
408
409
410
411
412
(M) If, and to the extent that, a trustee makes distributions pursuant to division
(A) or (B) of this section to the trustee of a second trust, then for purposes of section
5801.01(W) of the Revised Code, the governing instrument for the second trust shall be
deemed to be an amendment of the trust instrument signed by the settlor of the first trust,
even if such governing instrument is signed by a person other than such settlor.
413
414
415
416
417
418
419
420
421
422
423
(L)
The provisions of this section shall not be construed to limit the power of
any trustee to distribute trust property in further trust, whether such power arises under
the terms of the trust instrument, under any other section of this Title, under another
statute or under common law. The terms of a trust instrument may confer upon the
trustee the power, or upon any other person acting in a fiduciary capacity the power to
direct the trustee, to make distributions in further trust that are broader or more limited
than, or that conflict with, the provisions of this section, may provide for different
requirements for notice to beneficiaries of the trust of the trustee’s exercise of such
power, may waive any requirement of notice to the beneficiaries of the exercise of such
power and may otherwise include such terms and conditions governing the distribution in
further trust as the settlor of the trust shall determine.
424
425
426
427
428
429
430
431
(M) Division (A) of this section is intended to be a codification of the common
law of the State of Ohio in effect prior to the enactment of this section and shall apply to
distributions, whenever made, from any trust governed by Ohio law or having its
principal place of administration in Ohio, whether such trust was created before, on or
after the date of enactment. Division (B) of this section shall apply to distributions made
on or after the date of enactment from any trust governed by Ohio law or having its
principal place of administration in Ohio, whether such trust was created before, on or
after the date of enactment.
432
433
434
Also amend Revised Code Section 5801.10(I) by adding a new paragraph (4) at the
end of that section as follows:
435
(I)
436
....
437
438
Nothing in this section affects any of the following:
(4)
The power of the trustee to make distributions pursuant to
the provisions of section 5808.18 of the Revised Code.
439
Rationale for Proposal:
440
Overview and Background
65
441
442
443
444
445
446
447
448
449
450
451
452
453
454
455
The power of a trustee to exercise its discretion to make distributions of principal of a
trust to one or more current beneficiaries by distributing some or all of that principal to
another trust for the benefit of one or more of those current beneficiaries is commonly
referred to as “decanting.” This is a power that arguably exists under certain
circumstances at common law and there has been a movement around the country in the
last few years to codify such power and to expand the scope of it to facilitate its use. To
date, the following states have enacted so-called “decanting” statutes: New York,
Tennessee, Delaware, Alaska, South Dakota, Florida, New Hampshire, North Carolina,
Arizona. To our knowledge Missouri, South Carolina and Minnesota are each presently
working on such a statute and no doubt there are other states considering it. New York
first enacted its statute in 1992, primarily to facilitate planning with older trusts that
predate, and thus are not subject to, the federal generation skipping transfer tax. The
original New York statute recites that it is intended to be a codification of common law.
Florida’s statute is also intended to be a codification of common law. In New York, there
is a current proposal being prepared to revise its statute to make its applicability broader.
456
457
458
459
460
461
462
463
To our knowledge there is no case law in Ohio on the issue of whether a trustee’s
discretion to distribute trust principal may be exercised in further trust. Florida has long
had common law set forth in Phipps v. Palm Beach Trust, 142 Fla. 782 (1940) that
establishes the principle that a trustee with absolute discretion to distribute the principal
of a trust among a class of beneficiaries has the authority to distribute principal of the
trust into a new trust for one or more of those beneficiaries. New York also has case law
predating its statute that supports this principle. See Matter of Spear, 553 N.Y.S.2d 985
(Surrogate’s Ct. NY County 1990).
464
465
466
467
468
469
470
471
The assumption of the Estate Planning, Trust and Probate Section Council (the “Section
Council”) in proposing this statute is that the common law of Ohio would allow a trustee,
who has full discretion to distribute principal to a beneficiary or among a class of
beneficiaries, to make a distribution in further trust for the beneficiary or for one or more
members of the class of beneficiaries, without court approval or the consent of any
beneficiary, but subject to any applicable limitations on duration or vesting of interests in
trust and other limitations that would also be applicable to exercises of powers of
appointments.
472
473
474
475
476
477
478
479
480
481
482
483
484
One basis in common law for this assumption, some argue, is founded in the definition of
powers of appointment found in §11.1 of the Restatement 2d of Property (Donative
Transfers) (“Restatement 2d”) which provides “a power of appointment is authority,
other than as a incident of the beneficial ownership of property, to designate recipients of
beneficial interests in property.” Comment d. to that section specifically states that a
trustee’s unlimited discretionary power to make distributions to or for a beneficiary or a
group of beneficiaries is a power of appointment. The Restatement 2d further provides in
§19.3 that, absent a provision to the contrary in the instrument creating a power of
appointment, a power of appointment may be exercised in further trust for one or more
objects of the power. Under this analysis, all of the other principles governing, and
limitations on, exercises of powers of appointment would also apply to a trustee’s
exercise of its distribution power by distributing in further trust. Examples of such
principles and limitations are that a power may only be exercised in favor of objects of
66
485
486
487
488
the power and that the exercise of a power of appointment is valid only to the extent that
interests created by the power vest within any applicable perpetuities period. New
York’s current statute, in fact, treats a trustee’s broad discretion to distribute as a limited
power of appointment.
489
490
491
492
493
494
495
496
497
498
499
500
501
Using common law principles governing powers of appointment as a basis for a common
law decanting power is called into question by the upcoming publication of the
Restatement 3d of Property (Wills and Other Donative Transfers) (“Restatement 3d”)
which will provide at §17.1 that “a power of appointment is a power that enables the
donee of the power, acting in a non-fiduciary capacity, to designate recipients of the
beneficial ownership interests in the appointive property.” Comment g to that section
purports to distinguish fiduciary powers because they are subject to fiduciary standards,
while acknowledging that a fiduciary distribution power is subject to other principles
governing exercises of powers such as those mentioned above. The power of a trustee
with absolute discretion to distribute principal to a beneficiary or beneficiaries is,
nonetheless, always subject at least to the standard of good faith and usually to the
standard of reasonableness. In contrast, no good faith or reasonableness standards govern
the exercise of a limited power of appointment held in a non-fiduciary capacity.
502
503
504
505
506
507
508
509
Because of the lack of specific case authority in Ohio for the principle that the power to
distribute in further trust is inherent in a trustee’s broad discretionary power to make
distributions, it would be helpful to have statutory authority that specifically
acknowledges the trustee’s inherent authority to make such distributions. In addition, the
Section Council is proposing provisions making the statutory power of the trustee
somewhat broader than common law would allow while including in the statute, certain
limitations on the exercise of the power that will prevent the existence of the power from
having adverse tax consequences.
510
Statutes in Other States
511
512
513
514
515
516
517
518
519
520
521
522
The statutes of New York (currently) and Florida permit decanting only if the trustee has
absolute discretion to make principal distributions to the beneficiary or beneficiaries.
Florida’s statute uses the term absolute power, but treats standards such as “welfare,”
“comfort,” “best interests,” “happiness” and the like as giving the requisite amount of
discretion. Other states’ statutes, to a varying degree, allow a trustee whose discretion is
subject to standards (even strict ascertainable standards relating to the maintenance,
support, health and education of the beneficiaries), to make distributions in further trust,
in some cases with very little limitation. The Section Council has reviewed all of the
statutes passed to date and also the proposed revisions to the New York statute. We have
taken a fairly conservative approach relative to these statutes, have tried to incorporate
provisions that we believe are important and, we think, have improved upon many of the
provisions in the other statutes.
523
Issues Addressed in the Proposed Section
524
525
A number of issues have been considered in preparing the proposed statute. One
overriding goal is to allow trust to trust distributions at least to the extent we believe
67
526
527
528
529
530
531
those distributions would be permitted by common law. As a corollary to that principle,
the statute should validate prior trust to trust distributions that are consistent with the
principles of the statute or common law. We have attempted to achieve this by a recital
to the effect that the relevant parts of the statute are intended to be an enactment of the
common law of Ohio and shall apply to distributions, whenever made, from any trust
governed by Ohio law, whenever created.
532
533
534
535
536
The proposed statute also allows a trustee whose discretion is limited by standards to
make distributions in further trust, but only if such distributions do not materially change
the interests of the beneficiaries in the first trust. This limitation was considered by the
Section Council to be necessary to maintain the settlor’s intent where specific standards
for distribution are included in the terms of the trust.
537
538
539
540
541
542
543
544
The proposed statute puts limitations on the exercise the so-called decanting power that
will insure that the power will not prevent trusts from qualifying for certain tax benefits
under federal gift, estate, generation-skipping transfer and income tax laws or similar tax
laws of Ohio or other states whose taxes may apply to a trust. In addition, it prohibits the
exercise of the power from increasing the trustee’s compensation or lowering the
trustee’s standard of care with respect to the trust, from postponing the vesting of
interests beyond the vesting period required under the original trust and from expanding
the class of beneficiaries to whom the trustee may make distribution.
545
Conforming Amendment to Section 5801.10(I)
546
547
548
An amendment to section 5801.10(I) is proposed to make it clear that the provisions in
that section regarding private settlement agreements do not affect the powers of the
trustee granted in the proposed new section 5808.18.
549
EXHIBIT C
550
551
552
553
554
555
556
557
558
559
560
561
§ 5747.02(D)(2)
562
Rationale for Proposal:
563
564
When the Ohio trust income tax was enacted, effective in 2002, the provisions of ORC §
5747.02 included a credit for all trusts subject to the Ohio income tax to the extent the
(2) A nonresident resident trust may claim a credit against the tax
computed under division (D) of this section equal to the lesser of (1) the tax paid
to another state or the District of Columbia on the nonresident resident trust’s
modified nonbusiness income, other than the portion of the nonresident resident
trust’s nonbusiness income that is qualifying investment income as defined in
section 5747.012 [5747.01.2] of the Revised Code, or (2) the effective tax rate,
based on modified Ohio taxable income, multiplied by the nonresident resident
trust’s modified nonbusiness income other than the portion of the nonresident
resident trust’s nonbusiness income that is qualifying investment income. The
credit applies before any other applicable credits.
68
565
566
same trust’s “modified nonbusiness income” also was subject to income taxation in
another state.
567
568
569
570
571
572
573
574
575
In 2008, the language of ORC § 5747.02(D)(2) was changed to provide that the credit for
income tax paid to other states with respect to “modified nonbusiness income” would be
available only to nonresident Ohio trusts. This change made no sense from a basic tax
policy perspective. Generally, nonresident Ohio trusts are subject to income tax in Ohio
only on “modified nonbusiness income” generated by real estate or tangible personal
property situated in Ohio. Such Ohio-source “modified nonbusiness income” generated
by Ohio-situated property generally is not subject to income taxation in other states.
Accordingly, nonresident Ohio trusts ordinarily would have little or no use for the §
5747.02(D)(2) “credit”.
576
577
578
579
580
581
582
583
Conversely, the “modified nonbusiness income” of resident Ohio trusts generally
includes all nonbusiness income, without any limitation regarding such income being
“Ohio-sourced”. For example, a resident Ohio trust might have to include in its
“modified nonbusiness income” (and, therefore, might have to include in such trust’s
“modified Ohio taxable income” which is used to compute the trust’s Ohio income tax
liability) rents or royalties derived from nonbusiness real or personal property situated
outside of Ohio. It is precisely such non-Ohio-source nonbusiness income that would be
most susceptible to taxation outside of Ohio.
584
585
586
587
588
589
Thus, without a credit under ORC § 5747.02(D)(2), it is resident Ohio trusts, not
nonresident trusts, that bear the greatest risk of double-income-taxation on their
“modified nonbusiness income.” Accordingly, it is proposed that ORC § 5747.02(D)(2)
be amended once more to provide the credit to resident trusts for income tax paid to other
states (or the District of Columbia) with respect to any “modified nonbusiness income”
that also is being subjected to the Ohio trust income tax.
590
EXHIBIT D
591
§ 2107.52. Antilapse; failure of testamentary provision
592
(A) As used in this section:
593
594
595
(1) "Class member" includes an individual who fails to survive the testator
but who would have taken under a devise in the form of a class gift had the individual
survived the testator.
596
597
598
599
600
601
(2) “Descendant of a grandparent,” as used in division (B) of this section,
means an individual who qualifies as a descendant of a grandparent of the testator or of
the donor of a power of appointment under the (i) rules of construction applicable to a
class gift created in the testator’s will if the devise or exercise of the power is in the form
of a class gift or (ii) rules for intestate succession if the devise or exercise of the power is
not in the form of a class gift.
602
603
(3) “Descendants,” as used in the phrase “surviving descendants” of a
deceased devisee or class member in divisions (B)(1) and (2) of this section, mean the
69
604
605
descendants of a deceased devisee or class member who would take under a class gift
created in the testator’s will.
606
607
(4) "Devise" includes an alternative devise, a devise in the form of a class
gift, and an exercise of a power of appointment.
608
609
610
611
612
(5) "Devisee" includes (i) a class member if the devise is in the form of a
class gift, (ii) an individual or class member who was deceased at the time the testator
executed the testator’s will as well as an individual or class member who was then living
but who failed to survive the testator, and (iii) an appointee under a power of appointment
exercised by the testator's will.
613
614
615
616
(6) “Per stirpes” means that the shares of the descendants of a devisee who
does not survive the testator are determined in the same way they would have been
determined under section 2105.06(A) of the Revised Code if the devisee had died
intestate and unmarried on the date of the testator’s death.
617
618
(7) "Stepchild" means a child of the surviving, deceased, or former spouse
of the testator or of the donor of a power of appointment, and not of the testator or donor.
619
620
621
(8) “Surviving,” in the phrase “surviving devisees” or “surviving
descendants,” means devisees or descendants who survived the testator by at least one
hundred twenty hours.
622
623
(9) "Testator" includes the donee of a power of appointment if the power
is exercised in the testator's will.
624
625
626
627
(B) Unless a contrary intent appears in the will, if a devisee fails to survive the
testator and is a grandparent, a descendant of a grandparent, or a stepchild of either the
testator or the donor of a power of appointment exercised by the testator's will, the
following apply:
628
629
630
631
(1) If the devise is not in the form of a class gift and the deceased devisee
leaves surviving descendants, a substitute gift is created in the devisee's surviving
descendants. They take, per stirpes, the property to which the devisee would have been
entitled had the devisee survived the testator.
632
633
634
635
636
637
638
639
640
641
642
(2) If the devise is in the form of a class gift, other than a devise to "issue,"
"descendants," "heirs of the body," "heirs," "next of kin," "relatives," or "family," or a
class described by language of similar import, a substitute gift is created in the surviving
descendants of any deceased devisee. The property to which the devisees would have
been entitled had all of them survived the testator passes to the surviving devisees and the
surviving descendants of the deceased devisees. Each surviving devisee takes the share to
which the surviving devisee would have been entitled had the deceased devisees survived
the testator. Each deceased devisee's surviving descendants who are substituted for the
deceased devisee take, per stirpes, the share to which the deceased devisee would have
been entitled had the deceased devisee survived the testator. For the purposes of this
paragraph, "deceased devisee" means a class member who failed to survive the testator
70
643
by at least one hundred twenty hours and left one or more surviving descendants.
644
(C) In the application of this section, each of the following apply:
645
646
647
648
(1) Attaching the word “surviving” or “living” to a devise, such as a gift
“to my surviving (or living) children,” is not, in the absence of other language in the will
or other evidence to the contrary, a sufficient indication of intent to negate the application
of division (B) of this section.
649
650
651
652
(2) Attaching other words of survivorship to a devise, such as “to my
child, if my child survives me,” is, in the absence of other language in the will or other
evidence to the contrary, a sufficient indication of intent to negate the application of
division (B) of this section.
653
654
655
656
(3) A residuary clause is not a sufficient indication of an intent to negate
the application of division (B) of this section unless the will specifically provides that,
upon lapse or failure, the nonresiduary devise, or nonresiduary devises in general, pass
under the residuary clause.
657
658
659
660
(4) Unless the language creating a power of appointment expressly
excludes the substitution of the descendants of an appointee for the appointee, a surviving
descendant of a deceased appointee of a power of appointment can be substituted for the
appointee under this section, whether or not the descendant is an object of the power.
661
662
(D) Except as provided in divisions (A) through (C) of this section, each of the
following apply:
663
664
(1) A devise, other than a residuary devise, that fails for any reason
becomes a part of the residue.
665
666
667
668
(2) If the residue is devised to two or more persons, the share of a
residuary devisee that fails for any reason passes to the other residuary devisee, or to
other residuary devisees in proportion to the interest of each in the remaining part of the
residue.
669
670
(3) If a residuary devise fails for any reason in its entirety, the residue
passes by intestate succession.
671
672
673
(E) This section applies only to outright devises and appointments. Devises and
appointments in trust, including to a testamentary trust, are subject to section ___ of the
Revised Code.
674
675
(F) The amendment to this section applies to wills of decedents who die after
____ [insert effective date of statute].
676
677
The existing statute in the Ohio Revised Code that is recommend to be replaced in its
entirety reads as follows:
71
678
§2107.52 Death of devisee or legatee.
679
680
681
(A) As used in this section, "relative" means an individual who is related to a testator
by consanguinity and an heir at law designated pursuant to section 2105.15 of the
Revised Code.
682
683
684
685
686
687
688
689
690
691
692
693
(B) Unless a contrary intention is manifested in the will, if a devise of real property or
a bequest of personal property is made to a relative of a testator and the relative was dead
at the time the will was made or dies after that time, leaving issue surviving the testator,
those issue shall take by representation the devised or bequeathed property as the devisee
or legatee would have done if he had survived the testator. If the testator devised or
bequeathed a residuary estate or the entire estate after debts, other general or specific
devises and bequests, or an interest less than a fee or absolute ownership to that devisee
or legatee and relatives of the testator and if that devisee or legatee leaves no issue, the
estate devised or bequeathed shall vest in the other devisees or legatees surviving the
testator in such proportions as the testamentary share of each devisee or legatee in the
devised or bequeathed property bears to the total of the shares of all of the surviving
devisees or legatees, unless a different disposition is made or required by the will.
694
Rationale for proposal:
695
696
697
698
699
700
701
702
703
704
Ohio courts have interpreted the existing Will anti-lapse statute differently based on the
determination of whether a “contrary intention is manifested in the Will.” The proposed
revised statute, specifically section C, provides additional guidance to the courts in
interpreting the Will and applying this anti-lapse statute. As a rule of construction, the
scrivener of the Will can clearly draft around the application of the statute by including
specific language regarding the distribution of certain assets if the intended beneficiary
does not survive the testator. Further, with the addition of the proposed anti-lapse statute
applicable to trusts, that statute must be more complex to apply to more circumstances
than present with Wills, so this proposed revised Will statute conforms with the new
proposed trust statute.
705
706
Sec. _____. Survivorship with respect to future interests under terms of trust;
substitute takers
707
(A) As used in this section:
708
709
(1) “Beneficiary” means the beneficiary of a future interest and includes a
class member if the future interest is in the form of a class gift.
710
711
712
713
(2) “Class member” includes an individual who fails to survive the
distribution date by at least one hundred twenty hours but who would have taken under a
future interest in the form of a class gift had the individual survived the distribution date
by at least one hundred twenty hours.
714
715
(3) “Descendant of a grandparent of the transferor” means a person who
would qualify as a descendant of a grandparent of the transferor under the rules of
72
716
717
construction that would be applicable to a class gift under the transferor’s will to the
transferor’s grandparent’s descendants.
718
719
720
721
(4) “Descendants,” in the phrase “surviving descendants” of a deceased
beneficiary or class member in divisions (B)(2)(a) and (B)(2)(b) of this section, mean the
descendants of a deceased beneficiary or class member who would take under a class gift
created in the trust.
722
723
724
725
(5) “Distribution date,” with respect to a future interest, means the time
when the future interest is to take effect in possession or enjoyment. The distribution date
need not occur at the beginning or end of a calendar day, but can occur at a time during
the course of a day.
726
727
(6) “Future interest” includes an alternative future interest and a future
interest in the form of a class gift.
728
729
730
731
(7) “Future interest under the terms of a trust” means a future interest that
was created by a transfer creating a trust or to an existing trust, or by an exercise of a
power of appointment to an existing trust, directing the continuance of an existing trust,
designating a beneficiary of an existing trust, or creating a trust.
732
733
734
735
736
(8) “Per stirpes” means that the shares of the descendants of a beneficiary
who does not survive the distribution date by at least one hundred twenty hours are
determined in the same way they would have been determined under section 2105.06(A)
of the Revised Code if the beneficiary had died intestate and unmarried on the
distribution date.
737
738
739
740
741
742
(9) “Revocable trust” means a trust that was revocable immediately before
the settlor’s death by the settlor alone or by the settlor with the consent of any person
other than a person holding an adverse interest. A trust’s characterization as revocable is
not affected by the settlor’s lack of capacity to exercise the power of revocation,
regardless of whether an agent of the settlor under a power of attorney, or a guardian of
the person or estate of the settlor, was serving.
743
744
(10) “Stepchild” means a child of the surviving, deceased, or former
spouse of the transferor and not of the transferor.
745
746
747
(11) “Surviving,” in the phrase “surviving beneficiaries” or “surviving
descendants” in divisions (B)(2)(a) and (B)(2)(b) of this section, means beneficiaries or
descendants who survived the distribution date by at least one hundred twenty hours.
748
749
750
751
(12) “Transferor” means (i) the donor and donee of a power of
appointment, if the future interest was in property as a result of the exercise of a power of
appointment; (ii) the testator, if the future interest was devised by will; or (iii) the settlor,
if the future interest was conveyed by inter vivos trust.
752
753
(B) Unless a contrary intent appears in the instrument creating a future interest
under the terms of a trust, each of the following applies:
73
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755
(1) A future interest under the terms of a trust is contingent on the
beneficiary's surviving the distribution date by at least one hundred twenty hours.
756
757
758
759
(2) If a beneficiary of a future interest under the terms of a trust does not
survive the distribution date by at least one hundred twenty hours, and if the beneficiary
was a grandparent of the transferor, a descendant of a grandparent of the transferor, or a
stepchild of the transferor, the following apply:
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761
762
763
764
(a) If the future interest is not in the form of a class gift and the deceased
beneficiary leaves surviving descendants, a substitute gift is created in the beneficiary's
surviving descendants. They take, per stirpes, the property to which the beneficiary
would have been entitled had the beneficiary survived the distribution date by at least one
hundred twenty hours.
765
766
767
768
769
770
771
772
773
774
775
776
777
778
779
(b) If the future interest is in the form of a class gift, other than a future
interest to “issue,” “descendants,” “heirs of the body,” “heirs,” “next of kin,” “relatives,”
or “family,” or a class described by language of similar import, a substitute gift is created
in the deceased beneficiary’s or beneficiaries' surviving descendants. The property to
which the beneficiaries would have been entitled had all of them survived the distribution
date by at least one hundred twenty hours passes to the surviving beneficiaries and the
surviving descendants of the deceased beneficiaries. Each surviving beneficiary takes the
share to which the surviving beneficiary would have been entitled had the deceased
beneficiaries survived the distribution date by at least one hundred twenty hours. Each
deceased beneficiary's surviving descendants who are substituted for the deceased
beneficiary take, per stirpes, the share to which the deceased beneficiary would have been
entitled had the deceased beneficiary survived the distribution date by at least one
hundred twenty hours. For the purposes of this paragraph, “deceased beneficiary” means
a class member who failed to survive the distribution date by at least one hundred twenty
hours and who left one or more surviving descendants.
780
(C) In the application of this section, each of the following apply:
781
782
783
784
785
(1) Describing a class of beneficiaries as “surviving” or “living,” without
specifying when the beneficiaries must be surviving or living, such as a gift “for my
spouse for life, then to my surviving (or living) children,” is not, in the absence of other
language in the trust instrument or other evidence to the contrary, a sufficient indication
of intent to negate the application of division (B)(2) of this section.
786
787
788
789
790
791
792
793
794
(2) Subject to division (C)(1) of this section, attaching words of
survivorship to a future interest under the terms of a trust, such as (i) “for my spouse for
life, then to my children who survive my spouse,” or (ii) “for my spouse for life, then to
my then living children” is, in the absence of other language in the trust instrument or
other evidence to the contrary, a sufficient indication of intent to negate the application of
division (B)(2) of this section. Words of survivorship include words of survivorship that
relate to the distribution date or to an earlier or an unspecified time, whether those words
of survivorship are expressed in condition-precedent, condition subsequent, or any other
form.
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795
796
797
798
799
800
801
(3) A residuary clause in a will is not a sufficient indication of an intent
contrary to the application of this section, whether or not the will specifically provides
that lapsed or failed devises are to pass under the residuary clause. A residuary clause in a
revocable trust instrument is not a sufficient indication of an intent contrary to the
application of this section unless the distribution date is the date of the settlor’s death and
the revocable trust instrument specifically provides that, upon lapse or failure, the
nonresiduary devise, or nonresiduary devises in general, pass under the residuary clause.
802
803
804
(D) If, after the application of divisions (B) and (C) of this section, there is no
surviving taker, and a contrary intent does not appear in the instrument creating the future
interest, the property passes in the following order:
805
806
807
(1) If the future interest was created by the exercise of a power of
appointment, the property passes under the donor’s gift-in-default clause, if any, which
clause is treated as creating a future interest under the terms of a trust.
808
809
810
811
812
(2) If no taker is produced by the application of division (D)(1) of this
section and the trust was created in a nonresiduary devise in the transferor's will or in a
codicil to the transferor's will, the property passes under the residuary clause in the
transferor's will. For purposes of this division (D)(2), the residuary clause is treated as
creating a future interest under the terms of a trust.
813
814
815
816
817
818
(3) If no taker is produced by the application of division (D)(1) or division
(D)(2) of this section, the transferor is deceased, and the trust was created in a
nonresiduary gift under the terms of a revocable trust of the transferor, the property
passes under the residuary clause in the transferor’s revocable trust instrument. For
purposes of this division (D)(3), the residuary clause in the transferor's revocable trust
instrument is treated as creating a future interest under the terms of a trust.
819
820
821
822
823
824
825
(4) If no taker is produced by the application of divisions (D)(1) through
(D)(3) of this section, the property passes to those persons and in such shares as would
succeed to the transferor’s intestate estate under the intestate succession law of the
transferor’s domicile if the transferor died on the distribution date. Notwithstanding
division (A)(12) of this section, for purposes of this division (D)(4), if the future interest
was created by the exercise of a power of appointment, “transferor” means the donor if
the power was a nongeneral power or the donee if the power was a general power.
826
827
828
829
(E) This section applies to all trusts that became irrevocable on or after ____
[insert effective date of statute]. This section does not apply to any trust that was
irrevocable before ____ [insert effective date of statute], even if property was added to
the trust on or after ____ [insert effective date of statute].
830
Rationale for proposal:
831
832
833
834
Trusts have become more and more prevalent part of the average Ohio resident’s estate
plan. As a testamentary instrument to distribute assets at death, it has become a common
“will-substitute.” Consequently, it is appropriate to make the same anti-lapse rule of
construction apply to trusts as applies to Wills. It is believed that most Ohio attorneys
75
835
836
837
838
839
840
841
842
already think that anti-lapse rules apply to deceased trust beneficiaries in the same
manner as in Wills. A majority of Ohio residents would prefer that a gift to a child would
be distributed to the child’s children (the trust settlor’s grandchildren) should the child
die before his parent. Under current Ohio common law, the trust gift would be distributed
to the deceased child’s probate estate and distributed pursuant to the terms of the child’s
Will, if any, otherwise pursuant to the intestacy statute, which includes the deceased
child’s surviving spouse. Again, most trust settlers would prefer to have assets distributed
to descendants rather than sons-in-law and daughters-in-law.
843
844
845
846
847
848
849
850
Unlike a Will that applies at the death of a testator, a trust can create a future interest to
benefit someone after the death of another beneficiary. For example, if a husband creates
a trust for the lifetime benefit of his surviving wife, then upon the wife’s death to his
three children in equal shares. If all three children are alive when their father dies, but one
of the children dies during their father’s wife’s life, then most trust settlors would prefer
to have one-third of the trust distributed to the deceased child’s children (settlor’s
grandchildren) rather than to the deceased child’s probate estate. That probate estate may
pass to a spouse who has long since remarried.
851
852
853
854
855
856
857
However, because the current Ohio common law treats that remainder interest in the child
as a vested remainder, the proposed trust anti-lapse statute cannot divest those deceased
beneficiary’s rights for irrevocable trusts that exist prior to the enactment of the statute.
Consequently, there will be trusts that exist after the statute for which trustees must
distribute to the deceased trust beneficiary’s estate. The third and final proposed statute
adds discretionary authority to a trustee to make distributions to the deceased trust
beneficiary’s identifiable heirs.
858
Sec. 5808.17 Distribution upon termination
859
860
861
862
863
(A) Upon termination or partial termination of a trust, the trustee may send to the
beneficiaries a proposal for distribution. The right of any beneficiary to object to the
proposed distribution terminates if the beneficiary does not notify the trustee of an
objection within thirty days after the proposal was sent but only if the proposal informed
the beneficiary of the right to object and of the time allowed for objection.
864
865
866
867
(B) Upon the occurrence of an event terminating or partially terminating a trust,
the trustee shall proceed expeditiously to distribute the trust property to the persons
entitled to it, subject to the right of the trustee to retain a reasonable reserve for the
payment of debts, expenses, and taxes.
868
869
870
871
(C) A release by a beneficiary of a trustee from liability for breach of trust is
invalid to the extent that it was induced by improper conduct of the trustee or that the
beneficiary, at the time of the release, did not know of the beneficiary's rights or of the
material facts relating to the breach.
872
873
874
(D) If a beneficiary who was entitled to receive a distribution is deceased, the
beneficiary’s death did not terminate the beneficiary’s right to receive the distribution,
and an administration of the beneficiary’s estate is open, the trustee shall make the
76
875
876
877
878
879
880
881
distribution to the personal representative of the beneficiary’s estate. If a beneficiary who
was entitled to receive a distribution is deceased, the beneficiary’s death did not terminate
the beneficiary’s right to receive the distribution, and an administration of the
beneficiary’s estate is not open, the trustee may, without liability, make the distribution
directly to the beneficiary’s heirs or devisees, without requiring the opening or reopening of estate administration proceedings, if the trustee does not know of an adverse
claim to the distribution and one of the following applies:
882
883
884
885
886
887
888
889
890
891
(1) The beneficiary’s estate was administered as an intestate estate in the
jurisdiction in which the beneficiary was domiciled at death and the trustee (i) distributes
the personal property included in the distribution to the person or persons who were
determined to be the heirs of the beneficiary in that administration, in the same manner
that the personal property would have been distributed if it had been part of the
beneficiary’s intestate estate, and (ii) distributes the real property included in the
distribution to the person or persons the trustee reasonably determines were the
beneficiary’s heirs under the statutes of descent and distribution, in effect at the time of
the beneficiary’s death, of the jurisdiction or jurisdictions in which the real property is
located.
892
893
894
895
896
897
898
899
900
(2) The beneficiary’s estate was administered as a testate estate in the
jurisdiction in which the deceased beneficiary was domiciled at death and the trustee (i)
distributes the personal property included in the distribution to the residuary devisee or
devisees under the beneficiary’s will, in the same manner that the personal property
would have been distributed in that administration if it had been part of the beneficiary’s
testate estate, and (ii) distributes the real property included in the distribution to the
person or persons the trustee reasonably determines would have received the real
property under the law of the jurisdiction or jurisdictions in which the real property is
located.
901
902
903
(3) Neither division (D)(1) nor division (D)(2) of this section applies, the
beneficiary’s death occurred at least six months before the trustee makes the distribution,
and each of the following applies:
904
905
(a) the trustee determines that the beneficiary had created a trust
during the beneficiary’s life that remained in existence at the beneficiary’s death;
906
907
(b) the beneficiary had executed a will that the trustee reasonably
determines would have been admitted to probate if it had been offered for probate;
908
909
910
(c) the beneficiary’s will described in division (D)(3)(b) of this
section devised the residue of the beneficiary’s estate to the trustee of the trust described
in division (D)(3)(a) of this section to be held under the terms of that trust; and
911
912
(d) the trustee makes the distribution to the trustee of the trust
described in division (D)(3)(a) of this section.
913
914
(4) Neither division (D)(1), division (D)(2), nor division (D)(3) of this
section applies, the beneficiary’s death occurred at least six months before the trustee
77
915
makes the distribution, and each of the following applies:
916
917
918
(a) the trustee, exercising reasonable diligence, determines that an
administration of the beneficiary’s estate has not been commenced in the jurisdiction in
which the trustee reasonably determines the beneficiary was domiciled at death;
919
920
(b) the trustee does not know of an administration of the
beneficiary’s estate having been commenced in any other jurisdiction;
921
922
(c) the trustee does not know of a purported last will and testament
of the beneficiary; and
923
924
925
926
927
928
929
930
931
(d) the trustee (i) distributes the personal property included in the
distribution to the person or persons the trustee reasonably determines were the
beneficiary’s heirs under the statutes of descent and distribution, in effect at the time of
the beneficiary’s death, of the jurisdiction in which the trustee reasonably determines the
beneficiary was domiciled at death and (ii) distributes the real property included in the
distribution to the person or persons the trustee reasonably determines were the
beneficiary’s heirs under the statutes of descent and distribution, in effect at the time of
the beneficiary’s death, of the jurisdiction or jurisdictions in which the real property is
located.
932
933
934
(E) The trustee’s protection from liability for making distributions under division
(D) of this section shall have no effect on the ability of third parties to pursue claims
against the recipients of such distributions.
935
Rationale for Proposal:
936
937
938
939
940
Most Ohio residents want to avoid probate administration at their death, so trusts are
becoming the primary instrument for testamentary distribution of assets. The above
proposed statute applies to trusts that become irrevocable after the date the statute is
enacted. Therefore, there needs to be a statute that applies to the irrevocable trusts that
exist prior to the effective date of the statute.
941
942
943
944
945
Exhibit C above is the proposed amendment to add new divisions (D) and (E) to trust
distribution statute (R.C. §5808.17) to allow trustees to make distributions for a deceased
beneficiary directly to his or her estate beneficiaries, if an estate administration is not
open, instead of requiring the opening or reopening of an administration of the
beneficiary’s estate.
946
947
If there is an open administration of the beneficiary’s estate, the trustee must make the
distribution to the personal representative of the estate.
948
949
950
If there is not an open estate administration, the trustee may safely make the distribution
to the heirs or devisees of the deceased beneficiary as long as the trustee does not know
of an adverse claim, and subdivision (D)(1), (D)(2), (D)(3), or (D)(4) applies.
951
Divisions (D)(1) and (2) address cases in which the deceased beneficiary’s estate had
78
952
been administered as an intestate estate ((D)(1)) or as a testate estate ((D)(2)).
953
954
Division (D)(3) addresses cases in which there was a funded revocable trust with a pour
over will that did not need to be probated.
955
956
957
958
959
960
Division (D)(4) addresses cases in which there has not been an administration of the
deceased beneficiary’s estate and the trustee does not know of a purported will of the
deceased beneficiary. Both divisions (D)(3) and (4) require that six months have elapsed
since the beneficiary’s death before the trustee safely can make the distribution to the
trustee of the funded revocable trust or on the basis of the beneficiary having died
intestate without his or her estate having been administered.
961
EXHIBIT E
962
963
964
[NOTE: The underscoring and strikethroughs show the modifications to UPOAA
recommended by the Estate Planning, Trust and Probate Law Section. NCCUSL’s
official comments and legislative notes have been deleted for purposes of brevity.]
965
OHIO UNIFORM POWER OF ATTORNEY ACT
966
[ARTICLE] 1
967
GENERAL PROVISIONS
968
969
SECTION 101. SHORT TITLE. This [act] may be cited as the Uniform Power
of Attorney Act.
970
SECTION 102. DEFINITIONS. In this [act]:
971
972
973
974
(1) “Agent” means a person granted authority to act for a principal under a power
of attorney, whether denominated an agent, attorney-in-fact, or otherwise. The term
includes an original agent, coagent, successor agent, and a person to which an agent’s
authority is delegated.
975
976
(2) “Durable,” with respect to a power of attorney, means not terminated by the
principal’s incapacity.
977
978
(3) “Electronic” means relating to technology having electrical, digital, magnetic,
wireless, optical, electromagnetic, or similar capabilities.
979
(4) “Good faith” means honesty in fact.
980
981
(5) “Incapacity” means inability of an individual to manage property or business
affairs because the individual:
982
983
(A) has an impairment in the ability to receive and evaluate information
or make or communicate decisions even with the use of technological assistance; or
984
(B) is:
79
985
(i) missing;
986
(ii) detained, including incarcerated in a penal system; or
987
(iii) outside the United States and unable to return.
988
989
990
991
(6) “Person” means an individual, corporation, business trust, estate, trust,
partnership, limited liability company, association, joint venture, public corporation,
government or governmental subdivision, agency, or instrumentality, or any other legal
or commercial entity.
992
993
994
(7) “Power of attorney” means a writing or other record that grants authority to
an agent to act in the place of the principal, whether or not the term power of attorney is
used.
995
996
997
998
999
1000
1001
1002
1003
(8) “Presently exercisable general power of appointment,” with respect to
property or a property interest subject to a power of appointment, means power
exercisable at the time in question to vest absolute ownership in the principal
individually, the principal’s estate, the principal’s creditors, or the creditors of the
principal’s estate. The term includes a power of appointment not exercisable until the
occurrence of a specified event, the satisfaction of an ascertainable standard, or the
passage of a specified period only after the occurrence of the specified event, the
satisfaction of the ascertainable standard, or the passage of the specified period. The term
does not include a power exercisable in a fiduciary capacity or only by will.
1004
1005
(9) “Principal” means an individual who grants authority to an agent in a power
of attorney.
1006
1007
(10) “Property” means anything that may be the subject of ownership, whether
real or personal, or legal or equitable, or any interest or right therein.
1008
1009
(11) “Record” means information that is inscribed on a tangible medium or that is
stored in an electronic or other medium and is retrievable in perceivable form.
1010
1011
(12) “Sign” means, with present intent to authenticate or adopt a record:
(A) to execute or adopt a tangible symbol; or
1012
1013
(B) to attach to or logically associate with the record an electronic sound,
symbol, or process.
1014
1015
1016
(13) “State” means a state of the United States, the District of Columbia, Puerto
Rico, the United States Virgin Islands, or any territory or insular possession subject to the
jurisdiction of the United States.
1017
1018
1019
(14) “Stocks and bonds” means stocks, bonds, mutual funds, and all other types of
securities and financial instruments, whether held directly, indirectly, or in any other
manner. The term does not include commodity futures contracts and call or put options
80
1020
on stocks or stock indexes.
1021
1022
1023
except:
1024
1025
1026
(1) a power to the extent it is coupled with an interest in the subject of the power,
including a power given to or for the benefit of a creditor in connection with a credit
transaction;
1027
SECTION 103. APPLICABILITY. This [act] applies to all powers of attorney
(2) a power to make health-care decisions;
1028
1029
(3) a proxy or other delegation to exercise voting rights or management rights
with respect to an entity; and
1030
1031
(4) a power created on a form prescribed by a government or governmental
subdivision, agency, or instrumentality for a governmental purpose.
1032
1033
1034
SECTION 104. POWER OF ATTORNEY IS DURABLE. A power of
attorney created under this [act] is durable unless it expressly provides that it is
terminated by the incapacity of the principal.
1035
1036
1037
1038
1039
1040
SECTION 105. EXECUTION OF POWER OF ATTORNEY. A power of
attorney must be signed by the principal or in the principal’s conscious presence by
another individual directed by the principal to sign the principal’s name on the power of
attorney. A signature on a power of attorney is presumed to be genuine if the principal
acknowledges the signature before a notary public or other individual authorized by law
to take acknowledgments.
1041
SECTION 106. VALIDITY OF POWER OF ATTORNEY.
1042
1043
(a) A power of attorney executed in this state on or after [the effective date of this
[act]] is valid if its execution complies with Section 105.
1044
1045
1046
(b) A power of attorney executed in this state before [the effective date of this
[act]] is valid if its execution complied with the law of this state as it existed at the time
of execution.
1047
1048
(c) A power of attorney executed other than in this state is valid in this state if,
when the power of attorney was executed, the execution complied with:
1049
1050
(1) the law of the jurisdiction that determines the meaning and effect of
the power of attorney pursuant to Section 107; or
1051
1052
(2) the requirements for a military power of attorney pursuant to 10
U.S.C. Section 1044b [, as amended].
81
1053
1054
1055
(d) Except as otherwise provided by statute other than this [act], a photocopy or
electronically transmitted copy of an original power of attorney has the same effect as the
original.
1056
1057
Legislative note: The brackets in subsections (a) and (b) of this section indicate where
an enacting jurisdiction may elect to insert the actual effective date of the Act.
1058
1059
1060
1061
1062
SECTION 107. MEANING AND EFFECT OF POWER OF ATTORNEY.
The meaning and effect of a power of attorney is determined by the law of the
jurisdiction indicated in the power of attorney and, in the absence of an indication of
jurisdiction, by the law of the jurisdiction in which the power of attorney was executed.
1063
1064
SECTION 108. NOMINATION OF [CONSERVATOR OR GUARDIAN];
RELATION OF AGENT TO COURT-APPOINTED FIDUCIARY.
1065
1066
1067
1068
1069
1070
1071
1072
1073
1074
1075
1076
1077
1078
1079
1080
1081
1082
1083
(a) In a power of attorney, a principal may nominate a [conservator or guardian]
of the principal’s person, estate, or both and may nominate a guardian of the person, the
estate, or both of one or more of the principal’s minor children, whether born at the time
of the execution of the durable power of attorney or afterward. The nomination is for
consideration by a court if proceedings for the appointment of a guardian for the
principal’s person, estate, or both or if proceedings for the appointment of a guardian of
the person, the estate, or both of one or more of the principal’s minor children are
commenced at a later time. The principal may authorize in a power of attorney of that
nature the person nominated as guardian or the agent attorney in fact to nominate a
successor guardian for consideration by a court .estate or [guardian] of the principal’s
person for consideration by the court if protective proceedings for the principal’s estate or
person are begun after the principal executes the power of attorney. [Except for good
cause shown or disqualification, the court shall make its appointment in accordance with
the principal's most recent nomination.] Nomination of a person as a guardian or
successor guardian of the person, the estate, or both of one or more of the principal’s
minor children under this division, and any subsequent appointment of the guardian or
successor guardian as guardian under section 2111.02 of the Revised Code, does not
vacate the jurisdiction of any other court that previously may have exercised jurisdiction
over the person of the minor. [added text is from R.C. 1337.09(D)]
1084
1085
1086
(b) The principal may direct, in a power of attorney of that nature, that bond be
waived for a person nominated as guardian or in it or nominated as a successor guardian
in accordance with an authorization in it. [from R.C. 1337.09]
1087
1088
1089
1090
1091
1092
(c) If, after a principal executes a power of attorney, a court appoints a
[conservator or guardian] of the principal’s estate or other fiduciary charged with the
management of some or all of the principal's property, the agent is accountable to the
fiduciary as well as to the principal. [The power of attorney is not terminated and the
agent’s authority continues unless limited, suspended, or terminated by the court] after
notice to the agent and upon a finding that limitation, suspension, or termination would
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1093
be in the best interest of the principal.]
1094
1095
1096
1097
1098
(d) A The durable power of attorney as described in division (a) of this section
that contains the nomination of a person to be the guardian of the person, the estate, or
both of one or more of the principal’s minor children under this division may be filed
with the probate court for safekeeping, and the probate court shall designate the
nomination as the nomination of a standby guardian. [from R.C. 1337.09(D)].
1099
1100
SECTION 109. WHEN POWER OF ATTORNEY EFFECTIVE.
1101
1102
1103
(a) A power of attorney is effective when executed unless the principal provides
in the power of attorney that it becomes effective at a future date or upon the occurrence
of a future event or contingency.
1104
1105
1106
1107
(b) If a power of attorney becomes effective upon the occurrence of a future
event or contingency, the principal, in the power of attorney, may authorize one or more
persons to determine in a writing or other record that the event or contingency has
occurred.
1108
1109
1110
1111
1112
(c) If a power of attorney becomes effective upon the principal’s incapacity and
the principal has not authorized a person to determine whether the principal is
incapacitated, or the person authorized is unable or unwilling to make the determination,
the power of attorney becomes effective upon a determination in a writing or other record
by:
1113
1114
1115
(1) a physician who has examined the principal [or licensed psychologist]
who has evaluated the principal [or licensed psychologist] that the principal is
incapacitated within the meaning of Section 102(5)(A); or
1116
1117
(2) an attorney at law, a judge, or an appropriate governmental official
that the principal is incapacitated within the meaning of Section 102(5)(B).
1118
1119
1120
1121
1122
1123
(d) A person authorized by the principal in the power of attorney to determine
that the principal is incapacitated may act as the principal’s personal representative
pursuant to the Health Insurance Portability and Accountability Act, Sections 1171
through 1179 of the Social Security Act, 42 U.S.C. Section 1320d, [as amended,] and
applicable regulations, to obtain access to the principal’s health-care information and
communicate with the principal’s health-care provider.
1124
1125
1126
1127
SECTION 110. TERMINATION OF POWER OF ATTORNEY OR
AGENT’S AUTHORITY.
(a) A power of attorney terminates when:
83
1128
1129
1130
(1) the principal dies;
(2) the principal becomes incapacitated, if the power of attorney is not
durable;
1131
(3) the principal revokes the power of attorney;
1132
(4) the power of attorney provides that it terminates;
1133
(5) the purpose of the power of attorney is accomplished; or
1134
1135
1136
(6) the principal revokes the agent’s authority or the agent dies, becomes
incapacitated, or resigns, and the power of attorney does not provide for another agent to
act under the power of attorney.
1137
(b) An agent’s authority terminates when:
1138
(1) the principal revokes the authority;
1139
(2) the agent dies, becomes incapacitated, or resigns;
1140
1141
1142
1143
(3) an action is filed for the divorce, [dissolution], or annulment of the
agent’s marriage to the principal or their legal separation, unless the power of attorney
otherwise provides; or
(4) the power of attorney terminates.
1144
1145
1146
(c) Unless the power of attorney otherwise provides, an agent’s authority is
exercisable until the authority terminates under subsection (b), notwithstanding a lapse of
time since the execution of the power of attorney.
1147
1148
1149
1150
(d) Termination of an agent’s authority or of a power of attorney is not effective
as to the agent or another person that, without actual knowledge of the termination, acts
in good faith under the power of attorney. An act so performed, unless otherwise invalid
or unenforceable, binds the principal and the principal’s successors in interest.
1151
1152
1153
1154
1155
(e) Incapacity of the principal of a power of attorney that is not durable does not
revoke or terminate the power of attorney as to an agent or other person that, without
actual knowledge of the incapacity, acts in good faith under the power of attorney. An
act so performed, unless otherwise invalid or unenforceable, binds the principal and the
principal’s successors in interest.
1156
1157
1158
1159
(f) The execution of a power of attorney does not revoke a power of attorney
previously executed by the principal unless the subsequent power of attorney provides
that the previous power of attorney is revoked or that all other powers of attorney are
revoked.
1160
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1161
SECTION 111. COAGENTS AND SUCCESSOR AGENTS.
1162
1163
1164
(a) A principal may designate two or more persons to act as coagents. Unless the
power of attorney otherwise provides, each coagent may exercise its authority
independently.
1165
1166
1167
1168
1169
(b) A principal may designate one or more successor agents to act if an agent
resigns, dies, becomes incapacitated, is not qualified to serve, or declines to serve. A
principal may grant authority to designate one or more successor agents to an agent or
other person designated by name, office, or function. Unless the power of attorney
otherwise provides, a successor agent:
1170
(1) has the same authority as that granted to the original agent; and
1171
1172
(2) may not act until all predecessor agents have resigned, died, become
incapacitated, are no longer qualified to serve, or have declined to serve.
1173
1174
1175
1176
(c) Except as otherwise provided in the power of attorney and subsection (d), an
agent that does not participate in or conceal a breach of fiduciary duty committed by
another agent, including a predecessor agent, is not liable for the actions of the other
agent.
1177
1178
1179
1180
1181
1182
(d) An agent that has actual knowledge of a breach or imminent breach of
fiduciary duty by another agent shall notify the principal and, if the principal is
incapacitated, take any action reasonably appropriate in the circumstances to safeguard
the principal’s best interest. An agent that fails to notify the principal or take action as
required by this subsection is liable for the reasonably foreseeable damages that could
have been avoided if the agent had notified the principal or taken such action.
1183
1184
1185
1186
SECTION 112. REIMBURSEMENT AND COMPENSATION OF AGENT.
Unless the power of attorney otherwise provides, an agent is entitled to reimbursement of
expenses reasonably incurred on behalf of the principal and to compensation that is
reasonable under the circumstances.
1187
1188
1189
1190
SECTION 113. AGENT’S ACCEPTANCE. Except as otherwise provided in
the power of attorney, a person accepts appointment as an agent under a power of
attorney by exercising authority or performing duties as an agent or by any other
assertion or conduct indicating acceptance.
1191
SECTION 114. AGENT’S DUTIES.
1192
1193
(a) Notwithstanding provisions in the power of attorney, an agent that has
accepted appointment shall:
1194
1195
(1) act in accordance with the principal’s reasonable expectations to the
extent actually known by the agent and, otherwise, in the principal’s best interest;
1196
(2) act in good faith; and
85
1197
(3) act only within the scope of authority granted in the power of attorney.
1198
1199
1200
(4) attempt to preserve the principal’s estate plan, to the extent actually
known by the agent, if preserving the plan is consistent with the principal’s best interest
based on all relevant factors, including:
1201
(A) the value and nature of the principal’s property;
1202
1203
(B)
maintenance;
1204
1205
(C) minimization of taxes, including income, estate, inheritance,
generation-skipping transfer, and gift taxes; and
1206
1207
(D) eligibility for a benefit, a program, or assistance under a
statute or regulation.
1208
1209
(b) Except as otherwise provided in the power of attorney, an agent that has
accepted appointment shall:
the principal’s foreseeable obligations and need for
(1) act loyally for the principal’s benefit;
1210
1211
1212
(2) act so as not to create a conflict of interest that impairs the agent’s
ability to act impartially in the principal’s best interest;
1213
1214
(3) act with the care, competence, and diligence ordinarily exercised by
agents in similar circumstances;
1215
1216
(4) keep a record of all receipts, disbursements, and transactions made on
behalf of the principal; and
1217
1218
1219
(5) cooperate with a person that has authority to make health-care
decisions for the principal to carry out the principal’s reasonable expectations to the
extent actually known by the agent and, otherwise, act in the principal’s best interest; and
1220
1221
1222
(6) attempt to preserve the principal’s estate plan, to the extent actually
known by the agent, if preserving the plan is consistent with the principal’s best interest
based on all relevant factors, including:
1223
(A) the value and nature of the principal’s property;
1224
1225
(B)
maintenance;
1226
1227
(C) minimization of taxes, including income, estate, inheritance,
generation-skipping transfer, and gift taxes; and
1228
1229
(D) eligibility for a benefit, a program, or assistance under a
the principal’s foreseeable obligations and need for
statute or regulation.
86
1230
1231
(c) An agent that acts in good faith is not liable to any beneficiary of the
principal’s estate plan for failure to preserve the plan.
1232
1233
1234
(d) An agent that acts with care, competence, and diligence for the best interest of
the principal is not liable solely because the agent also benefits from the act or has an
individual or conflicting interest in relation to the property or affairs of the principal.
1235
1236
1237
1238
1239
(e) If an agent is selected by the principal because of special skills or expertise
possessed by the agent or in reliance on the agent’s representation that the agent has
special skills or expertise, the special skills or expertise must be considered in
determining whether the agent has acted with care, competence, and diligence under the
circumstances.
1240
1241
(f) Absent a breach of duty to the principal, an agent is not liable if the value of
the principal’s property declines.
1242
1243
1244
1245
(g) An agent that exercises authority to delegate to another person the authority
granted by the principal or that engages another person on behalf of the principal is not
liable for an act, error of judgment, or default of that person if the agent exercises care,
competence, and diligence in selecting and monitoring the person.
1246
1247
1248
1249
1250
1251
1252
1253
1254
(h) Except as otherwise provided in the power of attorney, an agent is not
required to disclose receipts, disbursements, or transactions conducted on behalf of the
principal unless ordered by a court or requested by the principal, a guardian, a
conservator, another fiduciary acting for the principal, a governmental agency having
authority to protect the welfare of the principal, or, upon the death of the principal, by the
personal representative or successor in interest of the principal’s estate. If so requested,
within 30 days the agent shall comply with the request or provide a writing or other
record substantiating why additional time is needed and shall comply with the request
within an additional 30 days.
1255
1256
1257
SECTION 115. EXONERATION OF AGENT. A provision in a power of
attorney relieving an agent of liability for breach of duty is binding on the principal and
the principal’s successors in interest except to the extent the provision:
1258
1259
1260
(1) relieves the agent of liability for breach of duty committed dishonestly, with
an improper motive, or with reckless indifference to the purposes of the power of
attorney or the best interest of the principal; or
1261
1262
(2) was inserted as a result of an abuse of a confidential or fiduciary relationship
with the principal.
1263
1264
1265
1266
SECTION 116. JUDICIAL RELIEF.
(a) The following persons may petition a court to construe a power of attorney or
review the agent’s conduct, and grant appropriate relief:
(1) the principal or the agent;
87
1267
1268
(2) a guardian, conservator, or other fiduciary acting for the principal,
including an executor or administrator of the estate of a deceased principal;
1269
(3) a person authorized to make health-care decisions for the principal;
1270
(4) the principal’s spouse, parent, or descendant;
1271
1272
principal;
1273
1274
1275
(6) a person named as a beneficiary to receive any property, benefit, or
contractual right on the principal’s death or as a beneficiary of a trust created by or for
the principal that has a financial interest in the principal’s estate;
1276
1277
(7) a governmental agency having regulatory authority to protect the
welfare of the principal;
1278
1279
(8) the principal’s caregiver or another person that demonstrates sufficient
interest in the principal’s welfare; and
1280
(5)
an individual who would qualify as a presumptive heir of the
(9) a person asked to accept the power of attorney.
1281
1282
1283
(b) Upon motion by the principal, the court shall dismiss a petition filed under
this section, unless the court finds that the principal lacks capacity to revoke the agent’s
authority or the power of attorney.
1284
1285
SECTION 117. AGENT’S LIABILITY. An agent that violates this [act] is
liable to the principal or the principal’s successors in interest for the amount required to:
1286
1287
(1) restore the value of the principal’s property to what it would have been had
the violation not occurred; and
1288
1289
(2) reimburse the principal or the principal’s successors in interest for the
attorney’s fees and costs paid on the agent’s behalf.
1290
1291
1292
SECTION 118. AGENT’S RESIGNATION; NOTICE. Unless the power of
attorney provides a different method for an agent’s resignation, an agent may resign by
giving notice to the principal and, if the principal is incapacitated:
1293
1294
(1) to the the [conservator or guardian], if one has been appointed for the
principal, and a coagent or successor agent; or
1295
1296
1297
1298
(2) if there is no person described in paragraph (1), to:
(A) the principal’s caregiver;
(B) another person reasonably believed by the agent to have sufficient
interest in the principal’s welfare; or
88
1299
1300
principal.
1301
1302
SECTION 119. ACCEPTANCE OF AND RELIANCE UPON ACKNOWLEDGED
POWER OF ATTORNEY.
1303
1304
1305
(a) For purposes of this section and Section 120, “acknowledged” means
purportedly verified before a notary public or other individual authorized to take
acknowledgements.
1306
1307
1308
(b) A person that in good faith accepts an acknowledged power of attorney
without actual knowledge that the signature is not genuine may rely upon the
presumption under Section 105 that the signature is genuine.
1309
1310
1311
1312
1313
1314
1315
(c) A person that in good faith accepts an acknowledged power of attorney
without actual knowledge that the power of attorney is void, invalid, or terminated, that
the purported agent’s authority is void, invalid, or terminated, or that the agent is
exceeding or improperly exercising the agent’s authority may rely upon the power of
attorney as if the power of attorney were genuine, valid and still in effect, the agent’s
authority were genuine, valid and still in effect, and the agent had not exceeded and had
properly exercised the authority.
1316
1317
(d) A person that is asked to accept an acknowledged power of attorney may
request, and rely upon, without further investigation:
1318
1319
(1) an agent’s certification under penalty of perjury of any factual matter
concerning the principal, agent, or power of attorney;
1320
1321
(2) an English translation of the power of attorney if the power of attorney
contains, in whole or in part, language other than English; and
1322
1323
1324
(3) an opinion of counsel as to any matter of law concerning the power of
attorney if the person making the request provides in a writing or other record the reason
for the request.
1325
1326
1327
(e) An English translation or an opinion of counsel requested under this section
must be provided at the principal’s expense unless the request is made more than seven
business days after the power of attorney is presented for acceptance.
1328
1329
1330
1331
(f) For purposes of this section and Section 120, a person that conducts activities
through employees is without actual knowledge of a fact relating to a power of attorney, a
principal, or an agent if the employee conducting the transaction involving the power of
attorney is without actual knowledge of the fact.
1332
1333
1334
(C) a governmental agency having authority to protect the welfare of the
Alternative A
SECTION 120.
LIABILITY FOR
ACKNOWLEDGED POWER OF ATTORNEY.
89
REFUSAL
TO
ACCEPT
1335
(a) Except as otherwise provided in subsection (b):
1336
1337
1338
(1) a person shall either accept an acknowledged power of attorney or
request a certification, a translation, or an opinion of counsel under Section 119(d) no
later than seven business days after presentation of the power of attorney for acceptance;
1339
1340
1341
(2) if a person requests a certification, a translation, or an opinion of
counsel under Section 119(d), the person shall accept the power of attorney no later than
five business days after receipt of the certification, translation, or opinion of counsel; and
1342
1343
(3) a person may not require an additional or different form of power of
attorney for authority granted in the power of attorney presented.
1344
(b) A person is not required to accept an acknowledged power of attorney if:
1345
1346
(1) the person is not otherwise required to engage in a transaction with the
principal in the same circumstances;
1347
1348
(2) engaging in a transaction with the agent or the principal in the same
circumstances would be inconsistent with federal law;
1349
1350
(3) the person has actual knowledge of the termination of the agent’s
authority or of the power of attorney before exercise of the power;
1351
1352
(4) a request for a certification, a translation, or an opinion of counsel
under Section 119(d) is refused;
1353
1354
1355
1356
(5) the person in good faith believes that the power is not valid or that the
agent does not have the authority to perform the act requested, whether or not a
certification, a translation, or an opinion of counsel under Section 119(d) has been
requested or provided; or
1357
1358
1359
1360
(6) the person makes, or has actual knowledge that another person has
made, a report to the [local adult protective services office] stating a good faith belief that
the principal may be subject to physical or financial abuse, neglect, exploitation, or
abandonment by the agent or a person acting for or with the agent.
1361
1362
(c) A person that refuses in violation of this section to accept an
acknowledged power of attorney is subject to:
1363
1364
1365
1366
(1) a court order mandating acceptance of the power of attorney; and
(2) liability for reasonable attorney’s fees and costs incurred in any action
or proceeding that confirms the validity of the power of attorney or mandates acceptance
of the power of attorney.
1367
90
1368
Alternative B
1369
1370
SECTION 120.
LIABILITY FOR REFUSAL TO
ACKNOWLEDGED STATUTORY FORM POWER OF ATTORNEY.
1371
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1373
(a) In this section, “statutory form power of attorney” means a power of attorney
substantially in the form provided in Section 301 or that meets the requirements for a
military power of attorney pursuant to 10 U.S.C. Section 1044b [, as amended].
1374
ACCEPT
(b) Except as otherwise provided in subsection (c):
1375
1376
1377
1378
(1) a person shall either accept an acknowledged statutory form power of
attorney or request a certification, a translation, or an opinion of counsel under Section
119(d) no later than seven business days after presentation of the power of attorney for
acceptance;
1379
1380
1381
1382
(2) if a person requests a certification, a translation, or an opinion of
counsel under Section 119(d), the person shall accept the statutory form power of
attorney no later than five business days after receipt of the certification, translation, or
opinion of counsel; and
1383
1384
(3) a person may not require an additional or different form of power of
attorney for authority granted in the statutory form power of attorney presented.
1385
1386
(c) A person is not required to accept an acknowledged statutory form power of
attorney if:
1387
1388
(1) the person is not otherwise required to engage in a transaction with the
principal in the same circumstances;
1389
1390
(2) engaging in a transaction with the agent or the principal in the same
circumstances would be inconsistent with federal law;
1391
1392
(3) the person has actual knowledge of the termination of the agent’s
authority or of the power of attorney before exercise of the power;
1393
1394
(4) a request for a certification, a translation, or an opinion of counsel
under Section 119(d) is refused;
1395
1396
1397
1398
(5) the person in good faith believes that the power is not valid or that the
agent does not have the authority to perform the act requested, whether or not a
certification, a translation, or an opinion of counsel under Section 119(d) has been
requested or provided; or
1399
1400
1401
1402
(6) the person makes, or has actual knowledge that another person has
made, a report to the [local adult protective services office] stating a good faith belief that
the principal may be subject to physical or financial abuse, neglect, exploitation, or
abandonment by the agent or a person acting for or with the agent.
91
1403
1404
(d) A person that refuses in violation of this section to accept an acknowledged
statutory form power of attorney is subject to:
1405
1406
1407
1408
(1) a court order mandating acceptance of the power of attorney; and
(2) liability for reasonable attorney’s fees and costs incurred in any action
or proceeding that confirms the validity of the power of attorney or mandates acceptance
of the power of attorney.
1409
1410
End of Alternatives
1411
1412
SECTION 121. PRINCIPLES OF LAW AND EQUITY. Unless displaced by
a provision of this [act], the principles of law and equity supplement this [act].
1413
1414
1415
SECTION 122. LAWS APPLICABLE TO FINANCIAL INSTITUTIONS
AND ENTITIES. This [act] does not supersede any other law applicable to financial
institutions or other entities, and the other law controls if inconsistent with this [act].
1416
1417
1418
SECTION 123. REMEDIES UNDER OTHER LAW. The remedies under
this [act] are not exclusive and do not abrogate any right or remedy under the law of this
state other than this [act].
1419
[ARTICLE] 2
1420
AUTHORITY
1421
1422
1423
SECTION 201. AUTHORITY THAT REQUIRES SPECIFIC GRANT;
GRANT OF GENERAL AUTHORITY.
1424
1425
1426
1427
1428
1429
1430
(a) An agent under a power of attorney may do the following on behalf of the
principal or with the principal’s property only if the power of attorney expressly grants
the agent the authority and exercise of the authority is not otherwise prohibited by
another agreement or instrument to which the authority or property is subject, and, with
respect to a revocable trust of which the principal was the settlor, the trust agreement
expressly authorizes the agent to exercise the principal’s powers with respect to the
revocation, amendment or distribution:
1431
1432
(1) create, amend, revoke, or terminate an inter vivos trust to the extent
permitted by the Ohio Trust Code, including R. C. Sec. 5801.05;
1433
(2) make a gift;
1434
(3) create or change rights of survivorship;
1435
(4) create or change a beneficiary designation;
92
1436
(5) delegate authority granted under the power of attorney;
1437
1438
(6) waive the principal’s right to be a beneficiary of a joint and survivor
annuity, including a survivor benefit under a retirement plan; [or]
1439
1440
or
1441
(7) exercise fiduciary powers that the principal has authority to delegate[;
(8) disclaim property, including a power of appointment].
1442
1443
1444
1445
1446
1447
(b) Notwithstanding a grant of authority to do an act described in subsection (a),
unless the power of attorney otherwise provides, an agent that is not an ancestor, spouse,
or descendant of the principal, may not exercise authority under a power of attorney to
create in the agent, or in an individual to whom the agent owes a legal obligation of
support, an interest in the principal’s property, whether by gift, right of survivorship,
beneficiary designation, disclaimer, or otherwise.
1448
1449
1450
(c) Subject to subsections (a), (b), (d), and (e), if a power of attorney grants to an
agent authority to do all acts that a principal could do, the agent has the general authority
described in Sections 204 through 216.
1451
1452
(d) Unless the power of attorney otherwise provides, a grant of authority to make
a gift is subject to Section 217.
1453
1454
(e) Subject to subsections (a), (b), and (d), if the subjects over which authority is
granted in a power of attorney are similar or overlap, the broadest authority controls.
1455
1456
1457
1458
(f) Authority granted in a power of attorney is exercisable with respect to property
that the principal has when the power of attorney is executed or acquires later, whether or
not the property is located in this state and whether or not the authority is exercised or the
power of attorney is executed in this state.
1459
1460
1461
(g) An act performed by an agent pursuant to a power of attorney has the same
effect and inures to the benefit of and binds the principal and the principal’s successors in
interest as if the principal had performed the act.
1462
1463
SECTION 202. INCORPORATION OF AUTHORITY.
1464
1465
1466
(a) An agent has authority described in this [article] if the power of attorney
refers to general authority with respect to the descriptive term for the subjects stated in
Sections 204 through 217 or cites the section in which the authority is described.
1467
1468
1469
1470
(b) A reference in a power of attorney to general authority with respect to the
descriptive term for a subject in Sections 204 through 217 or a citation to a section of
Sections 204 through 217 incorporates the entire section as if it were set out in full in the
power of attorney.
93
1471
(c) A principal may modify authority incorporated by reference.
1472
1473
1474
1475
1476
SECTION 203. CONSTRUCTION OF AUTHORITY GENERALLY.
Except as otherwise provided in the power of attorney, by executing a power of attorney
that incorporates by reference a subject described in Sections 204 through 217 or that
grants to an agent authority to do all acts that a principal could do pursuant to Section
201(c), a principal authorizes the agent, with respect to that subject, to:
1477
1478
1479
1480
(1) demand, receive, and obtain by litigation or otherwise, money or another
thing of value to which the principal is, may become, or claims to be entitled, and
conserve, invest, disburse, or use anything so received or obtained for the purposes
intended;
1481
1482
1483
1484
(2) contract in any manner with any person, on terms agreeable to the agent, to
accomplish a purpose of a transaction and perform, rescind, cancel, terminate, reform,
restate, release, or modify the contract or another contract made by or on behalf of the
principal;
1485
1486
1487
1488
(3) execute, acknowledge, seal, deliver, file, or record any instrument or
communication the agent considers desirable to accomplish a purpose of a transaction,
including creating at any time a schedule listing some or all of the principal’s property
and attaching it to the power of attorney;
1489
1490
1491
(4) initiate, participate in, submit to alternative dispute resolution, settle, oppose,
or propose or accept a compromise with respect to a claim existing in favor of or against
the principal or intervene in litigation relating to the claim;
1492
1493
(5) seek on the principal’s behalf the assistance of a court or other governmental
agency to carry out an act authorized in the power of attorney;
1494
1495
(6) engage, compensate, and discharge an attorney, accountant, discretionary
investment manager, expert witness, or other advisor;
1496
1497
(7) prepare, execute, and file a record, report, or other document to safeguard or
promote the principal’s interest under a statute or regulation;
1498
1499
(8) communicate with any representative or employee of a government or
governmental subdivision, agency, or instrumentality, on behalf of the principal;
1500
1501
(9) access communications intended for, and communicate on behalf of the
principal, whether by mail, electronic transmission, telephone, or other means; and
1502
1503
(10) do any lawful act with respect to the subject and all property related to the
subject.
1504
1505
1506
SECTION 204. REAL PROPERTY. Unless the power of attorney otherwise
provides, language in a power of attorney granting general authority with respect to real
property authorizes the agent to:
94
1507
1508
1509
(1) demand, buy, lease, receive, accept as a gift or as security for an extension of
credit, or otherwise acquire or reject an interest in real property or a right incident to real
property;
1510
1511
1512
1513
1514
1515
1516
(2) sell; exchange; convey with or without covenants, representations, or
warranties; quitclaim; release; surrender; retain title for security; encumber; partition;
consent to partitioning; subject to an easement or covenant; subdivide; apply for zoning
or other governmental permits; plat or consent to platting; develop; grant an option
concerning; lease; sublease; contribute to an entity in exchange for an interest in that
entity; or otherwise grant or dispose of an interest in real property or a right incident to
real property;
1517
1518
1519
(3) pledge or mortgage an interest in real property or right incident to real
property as security to borrow money or pay, renew, or extend the time of payment of a
debt of the principal or a debt guaranteed by the principal;
1520
1521
1522
(4) release, assign, satisfy, or enforce by litigation or otherwise a mortgage, deed
of trust, conditional sale contract, encumbrance, lien, or other claim to real property
which exists or is asserted;
1523
1524
(5) manage or conserve an interest in real property or a right incident to real
property owned or claimed to be owned by the principal, including:
1525
(A) insuring against liability or casualty or other loss;
1526
1527
(B) obtaining or regaining possession of or protecting the interest or right
by litigation or otherwise;
1528
1529
(C) paying, assessing, compromising, or contesting taxes or assessments
or applying for and receiving refunds in connection with them; and
1530
1531
(D) purchasing supplies, hiring assistance or labor, and making repairs or
alterations to the real property;
1532
1533
1534
(6) use, develop, alter, replace, remove, erect, or install structures or other
improvements upon real property in or incident to which the principal has, or claims to
have, an interest or right;
1535
1536
1537
1538
(7) participate in a reorganization with respect to real property or an entity that
owns an interest in or right incident to real property and receive, and hold, and act with
respect to stocks and bonds or other property received in a plan of reorganization,
including:
1539
1540
1541
(A) selling or otherwise disposing of them;
(B) exercising or selling an option, right of conversion, or similar right
with respect to them; and
95
1542
1543
(C) exercising any voting rights in person or by proxy;
(8) change the form of title of an interest in or right incident to real property; and
1544
1545
(9) dedicate to public use, with or without consideration, easements or other real
property in which the principal has, or claims to have, an interest.
1546
1547
1548
SECTION 205. TANGIBLE PERSONAL PROPERTY. Unless the power of
attorney otherwise provides, language in a power of attorney granting general authority
with respect to tangible personal property authorizes the agent to:
1549
1550
1551
(1) demand, buy, receive, accept as a gift or as security for an extension of credit,
or otherwise acquire or reject ownership or possession of tangible personal property or an
interest in tangible personal property;
1552
1553
1554
1555
(2) sell; exchange; convey with or without covenants, representations, or
warranties; quitclaim; release; surrender; create a security interest in; grant options
concerning; lease; sublease; or, otherwise dispose of tangible personal property or an
interest in tangible personal property;
1556
1557
1558
(3) grant a security interest in tangible personal property or an interest in tangible
personal property as security to borrow money or pay, renew, or extend the time of
payment of a debt of the principal or a debt guaranteed by the principal;
1559
1560
1561
(4) release, assign, satisfy, or enforce by litigation or otherwise, a security
interest, lien, or other claim on behalf of the principal, with respect to tangible personal
property or an interest in tangible personal property;
1562
1563
(5) manage or conserve tangible personal property or an interest in tangible
personal property on behalf of the principal, including:
1564
(A) insuring against liability or casualty or other loss;
1565
1566
(B) obtaining or regaining possession of or protecting the property or
interest, by litigation or otherwise;
1567
1568
(C) paying, assessing, compromising, or contesting taxes or assessments
or applying for and receiving refunds in connection with taxes or assessments;
1569
(D) moving the property from place to place;
1570
(E) storing the property for hire or on a gratuitous bailment; and
1571
1572
(F)
using and making repairs, alterations, or improvements to the
property; and
1573
(6) change the form of title of an interest in tangible personal property.
1574
SECTION 206.
STOCKS AND BONDS.
96
Unless the power of attorney
1575
1576
otherwise provides, language in a power of attorney granting general authority with
respect to stocks and bonds authorizes the agent to:
1577
(1) buy, sell, and exchange stocks and bonds;
1578
1579
bonds;
1580
1581
(3) pledge stocks and bonds as security to borrow, pay, renew, or extend the time
of payment of a debt of the principal;
1582
1583
(4) receive certificates and other evidences of ownership with respect to stocks
and bonds; and
1584
1585
(5) exercise voting rights with respect to stocks and bonds in person or by proxy,
enter into voting trusts, and consent to limitations on the right to vote.
1586
1587
1588
SECTION 207. COMMODITIES AND OPTIONS. Unless the power of
attorney otherwise provides, language in a power of attorney granting general authority
with respect to commodities and options authorizes the agent to:
1589
1590
1591
(1) buy, sell, exchange, assign, settle, and exercise commodity futures contracts
and call or put options on stocks or stock indexes traded on a regulated option exchange;
and
1592
(2) establish, continue, modify, or terminate an account with respect to stocks and
(2) establish, continue, modify, and terminate option accounts.
1593
1594
1595
1596
SECTION 208. BANKS AND OTHER FINANCIAL INSTITUTIONS.
Unless the power of attorney otherwise provides, language in a power of attorney
granting general authority with respect to banks and other financial institutions authorizes
the agent to:
1597
1598
(1) continue, modify, and terminate an account or other banking arrangement
made by or on behalf of the principal;
1599
1600
1601
(2) establish, modify, and terminate an account or other banking arrangement
with a bank, trust company, savings and loan association, credit union, thrift company,
brokerage firm, or other financial institution selected by the agent;
1602
1603
(3) contract for services available from a financial institution, including renting a
safe deposit box or space in a vault;
1604
1605
(4) withdraw, by check, order, electronic funds transfer, or otherwise, money or
property of the principal deposited with or left in the custody of a financial institution;
1606
1607
(5) receive statements of account, vouchers, notices, and similar documents from
a financial institution and act with respect to them;
97
1608
(6) enter a safe deposit box or vault and withdraw or add to the contents;
1609
1610
1611
(7) borrow money and pledge as security personal property of the principal
necessary to borrow money or pay, renew, or extend the time of payment of a debt of the
principal or a debt guaranteed by the principal;
1612
1613
1614
1615
1616
(8) make, assign, draw, endorse, discount, guarantee, and negotiate promissory
notes, checks, drafts, and other negotiable or nonnegotiable paper of the principal or
payable to the principal or the principal’s order, transfer money, receive the cash or other
proceeds of those transactions, and accept a draft drawn by a person upon the principal
and pay it when due;
1617
1618
1619
(9) receive for the principal and act upon a sight draft, warehouse receipt, or
other document of title whether tangible or electronic, or other negotiable or
nonnegotiable instrument;
1620
1621
1622
(10) apply for, receive, and use letters of credit, credit and debit cards, electronic
transaction authorizations, and traveler’s checks from a financial institution and give an
indemnity or other agreement in connection with letters of credit; and
1623
1624
(11) consent to an extension of the time of payment with respect to commercial
paper or a financial transaction with a financial institution.
1625
1626
1627
1628
1629
SECTION 209. OPERATION OF ENTITY OR BUSINESS. Subject to the
terms of a document or an agreement governing an entity or an entity ownership interest,
and unless the power of attorney otherwise provides, language in a power of attorney
granting general authority with respect to operation of an entity or business authorizes the
agent to:
1630
(1) operate, buy, sell, enlarge, reduce, or terminate an ownership interest;
1631
1632
(2) perform a duty or discharge a liability and exercise in person or by proxy a
right, power, privilege, or option that the principal has, may have, or claims to have;
1633
(3) enforce the terms of an ownership agreement;
1634
1635
1636
(4) initiate, participate in, submit to alternative dispute resolution, settle, oppose,
or propose or accept a compromise with respect to litigation to which the principal is a
party because of an ownership interest;
1637
1638
1639
(5) exercise in person or by proxy, or enforce by litigation or otherwise, a right,
power, privilege, or option the principal has or claims to have as the holder of stocks and
bonds;
1640
1641
1642
(6) initiate, participate in, submit to alternative dispute resolution, settle, oppose,
or propose or accept a compromise with respect to litigation to which the principal is a
party concerning stocks and bonds;
98
1643
1644
1645
1646
1647
(7) with respect to an entity or business owned solely by the principal:
(A) continue, modify, renegotiate, extend, and terminate a contract made
by or on behalf of the principal with respect to the entity or business before execution of
the power of attorney;
(B) determine:
1648
(i) the location of its operation;
1649
(ii) the nature and extent of its business;
1650
1651
1652
(iii) the methods of manufacturing, selling, merchandising,
financing, accounting, and advertising employed in its operation;
(iv) the amount and types of insurance carried; and
1653
1654
(v) the mode of engaging, compensating, and dealing with its
employees and accountants, attorneys, or other advisors;
1655
1656
1657
(C) change the name or form of organization under which the entity or
business is operated and enter into an ownership agreement with other persons to take
over all or part of the operation of the entity or business; and
1658
1659
1660
(D) demand and receive money due or claimed by the principal or on the
principal’s behalf in the operation of the entity or business and control and disburse the
money in the operation of the entity or business;
1661
1662
(8) put additional capital into an entity or business in which the principal has an
interest;
1663
1664
(9) join in a plan of reorganization, consolidation, conversion, domestication, or
merger of the entity or business;
1665
(10) sell or liquidate all or part of an entity or business;
1666
1667
(11) establish the value of an entity or business under a buy-out agreement to
which the principal is a party;
1668
1669
(12) prepare, sign, file, and deliver reports, compilations of information, returns,
or other papers with respect to an entity or business and make related payments; and
1670
1671
1672
1673
1674
(13) pay, compromise, or contest taxes, assessments, fines, or penalties and
perform any other act to protect the principal from illegal or unnecessary taxation,
assessments, fines, or penalties, with respect to an entity or business, including attempts
to recover, in any manner permitted by law, money paid before or after the execution of
the power of attorney.
1675
SECTION 210.
INSURANCE AND ANNUITIES.
99
Unless the power of
1676
1677
attorney otherwise provides, language in a power of attorney granting general authority
with respect to insurance and annuities authorizes the agent to:
1678
1679
1680
1681
(1) continue, pay the premium or make a contribution on, modify, exchange,
rescind, release, or terminate a contract procured by or on behalf of the principal which
insures or provides an annuity to either the principal or another person, whether or not the
principal is a beneficiary under the contract;
1682
1683
1684
(2) procure new, different, and additional contracts of insurance and annuities for
the principal and the principal’s spouse, children, and other dependents, and select the
amount, type of insurance or annuity, and mode of payment;
1685
1686
(3) pay the premium or make a contribution on, modify, exchange, rescind,
release, or terminate a contract of insurance or annuity procured by the agent;
1687
1688
1689
1690
1691
1692
(4) apply for and receive a loan secured by a contract of insurance or annuity;
(5) surrender and receive the cash surrender value on a contract of insurance or
annuity;
(6) exercise an election;
(7)
annuity;
exercise investment powers available under a contract of insurance or
1693
(8) change the manner of paying premiums on a contract of insurance or annuity;
1694
1695
(9) change or convert the type of insurance or annuity with respect to which the
principal has or claims to have authority described in this section;
1696
1697
(10) apply for and procure a benefit or assistance under a statute or regulation to
guarantee or pay premiums of a contract of insurance on the life of the principal;
1698
1699
(11) collect, sell, assign, hypothecate, borrow against, or pledge the interest of the
principal in a contract of insurance or annuity;
1700
1701
(12) select the form and timing of the payment of proceeds from a contract of
insurance or annuity; and
1702
1703
1704
1705
(13) pay, from proceeds or otherwise, compromise or contest, and apply for
refunds in connection with, a tax or assessment levied by a taxing authority with respect
to a contract of insurance or annuity or its proceeds or liability accruing by reason of the
tax or assessment.
1706
1707
SECTION 211.
INTERESTS.
1708
ESTATES, TRUSTS, AND OTHER BENEFICIAL
(a) In this section, “estate, trust, or other beneficial interest” means a trust,
100
1709
1710
probate estate, guardianship, conservatorship, escrow, or custodianship or a fund from
which the principal is, may become, or claims to be, entitled to a share or payment.
1711
1712
1713
(b) Unless the power of attorney otherwise provides, language in a power of
attorney granting general authority with respect to estates, trusts, and other beneficial
interests authorizes the agent to:
1714
1715
(1) accept, receive, receipt for, sell, assign, pledge, or exchange a share in
or payment from an estate, trust, or other beneficial interest;
1716
1717
1718
(2) demand or obtain money or another thing of value to which the
principal is, may become, or claims to be, entitled by reason of an estate, trust, or other
beneficial interest, by litigation or otherwise;
1719
1720
(3) exercise for the benefit of the principal a presently exercisable general
power of appointment held by the principal;
1721
1722
1723
1724
(4) initiate, participate in, submit to alternative dispute resolution, settle,
oppose, or propose or accept a compromise with respect to litigation to ascertain the
meaning, validity, or effect of a deed, will, declaration of trust, or other instrument or
transaction affecting the interest of the principal;
1725
1726
1727
(5) initiate, participate in, submit to alternative dispute resolution, settle,
oppose, or propose or accept a compromise with respect to litigation to remove,
substitute, or surcharge a fiduciary;
1728
1729
purpose; [and]
1730
1731
1732
(7) transfer an interest of the principal in real property, stocks and bonds,
accounts with financial institutions or securities intermediaries, insurance, annuities, and
other property to the trustee of a revocable trust created by the principal as settlor [; and
1733
1734
(8) reject, renounce, disclaim, release, or consent to a reduction in or
modification of a share in or payment from an estate, trust, or other beneficial interest].
(6) conserve, invest, disburse, or use anything received for an authorized
1735
1736
1737
1738
SECTION 212. CLAIMS AND LITIGATION. Unless the power of attorney
otherwise provides, language in a power of attorney granting general authority with
respect to claims and litigation authorizes the agent to:
1739
1740
1741
1742
1743
(1) assert and maintain before a court or administrative agency a claim, claim for
relief, cause of action, counterclaim, offset, recoupment, or defense, including an action
to recover property or other thing of value, recover damages sustained by the principal,
eliminate or modify tax liability, or seek an injunction, specific performance, or other
relief;
101
1744
1745
(2) bring an action to determine adverse claims or intervene or otherwise
participate in litigation;
1746
1747
1748
(3) seek an attachment, garnishment, order of arrest, or other preliminary,
provisional, or intermediate relief and use an available procedure to effect or satisfy a
judgment, order, or decree;
1749
1750
1751
(4) make or accept a tender, offer of judgment, or admission of facts, submit a
controversy on an agreed statement of facts, consent to examination, and bind the
principal in litigation;
1752
1753
(5) submit to alternative dispute resolution, settle, and propose or accept a
compromise;
1754
1755
1756
1757
1758
1759
1760
1761
(6) waive the issuance and service of process upon the principal, accept service
of process, appear for the principal, designate persons upon which process directed to the
principal may be served, execute and file or deliver stipulations on the principal’s behalf,
verify pleadings, seek appellate review, procure and give surety and indemnity bonds,
contract and pay for the preparation and printing of records and briefs, receive, execute,
and file or deliver a consent, waiver, release, confession of judgment, satisfaction of
judgment, notice, agreement, or other instrument in connection with the prosecution,
settlement, or defense of a claim or litigation;
1762
1763
1764
1765
(7) act for the principal with respect to bankruptcy or insolvency, whether
voluntary or involuntary, concerning the principal or some other person, or with respect
to a reorganization, receivership, or application for the appointment of a receiver or
trustee which affects an interest of the principal in property or other thing of value;
1766
1767
(8) pay a judgment, award, or order against the principal or a settlement made in
connection with a claim or litigation; and
1768
1769
(9) receive money or other thing of value paid in settlement of or as proceeds of a
claim or litigation.
1770
SECTION 213. PERSONAL AND FAMILY MAINTENANCE.
1771
1772
1773
(a) Unless the power of attorney otherwise provides, language in a power of
attorney granting general authority with respect to personal and family maintenance
authorizes the agent to:
1774
1775
1776
(1) perform the acts necessary to maintain the customary standard of
living of the principal, the principal’s spouse, and the following individuals, whether
living when the power of attorney is executed or later born:
(A) the principal’s children;
1777
1778
1779
(BA) other individuals legally entitled to be supported by the
principal; and
102
1780
1781
(CB) the individuals whom the principal has customarily
supported or indicated the intent to support;
1782
1783
1784
(2) make periodic payments of child support and other family maintenance
required by a court or governmental agency or an agreement to which the principal is a
party;
1785
1786
(3) provide living quarters for the individuals described in paragraph (1)
1787
by:
(A) purchase, lease, or other contract; or
1788
1789
1790
(B) paying the operating costs, including interest, amortization
payments, repairs, improvements, and taxes, for premises owned by the principal or
occupied by those individuals;
1791
1792
1793
1794
(4) provide normal domestic help, usual vacations and travel expenses,
and funds for shelter, clothing, food, appropriate education, including postsecondary and
vocational education, and other current living costs for the individuals described in
paragraph (1);
1795
1796
(5) pay expenses for necessary health care and custodial care on behalf of
the individuals described in paragraph (1);
1797
1798
1799
1800
1801
1802
(6) act as the principal’s personal representative pursuant to the Health
Insurance Portability and Accountability Act, Sections 1171 through 1179 of the Social
Security Act, 42 U.S.C. Section 1320d, [as amended,] and applicable regulations, in
making decisions related to the past, present, or future payment for the provision of
health care consented to by the principal or anyone authorized under the law of this state
to consent to health care on behalf of the principal;
1803
1804
1805
(7) continue any provision made by the principal for automobiles or other
means of transportation, including registering, licensing, insuring, and replacing them, for
the individuals described in paragraph (1);
1806
1807
(8) maintain credit and debit accounts for the convenience of the
individuals described in paragraph (1) and open new accounts; and
1808
1809
1810
(9) continue payments incidental to the membership or affiliation of the
principal in a religious institution, club, society, order, or other organization or to
continue contributions to those organizations.
1811
1812
1813
(b) Authority with respect to personal and family maintenance is neither
dependent upon, nor limited by, authority that an agent may or may not have with respect
to gifts under this [act].
1814
1815
SECTION 214. BENEFITS FROM GOVERNMENTAL PROGRAMS OR
CIVIL OR MILITARY SERVICE.
103
1816
1817
1818
(a) In this section, “benefits from governmental programs or civil or military
service” means any benefit, program or assistance provided under a statute or regulation
including Social Security, Medicare, and Medicaid.
1819
1820
1821
(b) Unless the power of attorney otherwise provides, language in a power of
attorney granting general authority with respect to benefits from governmental programs
or civil or military service authorizes the agent to:
1822
1823
1824
1825
1826
(1) execute vouchers in the name of the principal for allowances and
reimbursements payable by the United States or a foreign government or by a state or
subdivision of a state to the principal, including allowances and reimbursements for
transportation of the individuals described in Section 213(a)(1), and for shipment of their
household effects;
1827
1828
1829
1830
(2) take possession and order the removal and shipment of property of the
principal from a post, warehouse, depot, dock, or other place of storage or safekeeping,
either governmental or private, and execute and deliver a release, voucher, receipt, bill of
lading, shipping ticket, certificate, or other instrument for that purpose;
1831
1832
(3) enroll in, apply for, select, reject, change, amend, or discontinue, on
the principal’s behalf, a benefit or program;
1833
1834
1835
(4) prepare, file, and maintain a claim of the principal for a benefit or
assistance, financial or otherwise, to which the principal may be entitled under a statute
or regulation;
1836
1837
1838
1839
(5) initiate, participate in, submit to alternative dispute resolution, settle,
oppose, or propose or accept a compromise with respect to litigation concerning any
benefit or assistance the principal may be entitled to receive under a statute or regulation;
and
1840
1841
(6) receive the financial proceeds of a claim described in paragraph (4)
and conserve, invest, disburse, or use for a lawful purpose anything so received.
1842
SECTION 215. RETIREMENT PLANS.
1843
1844
1845
1846
(a) In this section, “retirement plan” means a plan or account created by an
employer, the principal, or another individual to provide retirement benefits or deferred
compensation of which the principal is a participant, beneficiary, or owner, including a
plan or account under the following sections of the Internal Revenue Code:
1847
1848
(1) an individual retirement account under Internal Revenue Code Section
408, 26 U.S.C. Section 408 [, as amended];
1849
1850
(2) a Roth individual retirement account under Internal Revenue Code
Section 408A, 26 U.S.C. Section 408A [, as amended];
1851
(3) a deemed individual retirement account under Internal Revenue Code
104
1852
Section 408(q), 26 U.S.C. Section 408(q) [, as amended];
1853
1854
(4) an annuity or mutual fund custodial account under Internal Revenue
Code Section 403(b), 26 U.S.C. Section 403(b) [, as amended];
1855
1856
1857
(5) a pension, profit-sharing, stock bonus, or other retirement plan
qualified under Internal Revenue Code Section 401(a), 26 U.S.C. Section 401(a) [, as
amended];
1858
1859
(6) a plan under Internal Revenue Code Section 457(b), 26 U.S.C. Section
457(b) [, as amended]; and
1860
1861
(7) a nonqualified deferred compensation plan under Internal Revenue
Code Section 409A, 26 U.S.C. Section 409A [, as amended].
1862
1863
1864
(b) Unless the power of attorney otherwise provides, language in a power of
attorney granting general authority with respect to retirement plans authorizes the agent
to:
1865
1866
(1) select the form and timing of payments under a retirement plan and
withdraw benefits from a plan;
1867
1868
(2) make a rollover, including a direct trustee-to-trustee rollover, of
benefits from one retirement plan to another;
1869
(3) establish a retirement plan in the principal’s name;
1870
(4) make contributions to a retirement plan;
1871
(5) exercise investment powers available under a retirement plan; and
1872
(6) borrow from, sell assets to, or purchase assets from a retirement plan.
1873
1874
1875
SECTION 216. TAXES. Unless the power of attorney otherwise provides,
language in a power of attorney granting general authority with respect to taxes
authorizes the agent to:
1876
1877
1878
1879
1880
1881
1882
1883
(1) prepare, sign, and file federal, state, local, and foreign income, gift, payroll,
property, Federal Insurance Contributions Act, and other tax returns, claims for refunds,
requests for extension of time, petitions regarding tax matters, and any other tax-related
documents, including receipts, offers, waivers, consents, including consents and
agreements under Internal Revenue Code Section 2032A, 26 U.S.C. Section 2032A, [as
amended,] closing agreements, and any power of attorney required by the Internal
Revenue Service or other taxing authority with respect to a tax year upon which the
statute of limitations has not run and the following 25 tax years;
1884
1885
(2) pay taxes due, collect refunds, post bonds, receive confidential information,
and contest deficiencies determined by the Internal Revenue Service or other taxing
105
1886
authority;
1887
1888
(3) exercise any election available to the principal under federal, state, local, or
foreign tax law; and
1889
1890
(4) act for the principal in all tax matters for all periods before the Internal
Revenue Service, or other taxing authority.
1891
SECTION 217. GIFTS.
1892
1893
1894
1895
(a) In this section, a gift “for the benefit of” a person includes a gift to a trust, an
account under the Uniform Transfers to Minors Act, and a tuition savings account or
prepaid tuition plan as defined under Internal Revenue Code Section 529, 26 U.S.C.
Section 529 [, as amended].
1896
1897
(b) Unless the power of attorney otherwise provides, language in a power of
attorney granting general authority with respect to gifts authorizes the agent only to:
1898
1899
1900
1901
1902
1903
1904
1905
(1) make outright to, or for the benefit of, a person, a gift of any of the
principal’s property, including by the exercise of a presently exercisable general power of
appointment held by the principal, in an amount per donee not to exceed the annual dollar
limits of the federal gift tax exclusion under Internal Revenue Code Section 2503(b), 26
U.S.C. Section 2503(b), [as amended,] without regard to whether the federal gift tax
exclusion applies to the gift, or if the principal’s spouse agrees to consent to a split gift
pursuant to Internal Revenue Code Section 2513, 26 U.S.C. 2513, [as amended,] in an
amount per donee not to exceed twice the annual federal gift tax exclusion limit; and
1906
1907
1908
(2) consent, pursuant to Internal Revenue Code Section 2513, 26 U.S.C.
Section 2513, [as amended,] to the splitting of a gift made by the principal’s spouse in an
amount per donee not to exceed the aggregate annual gift tax exclusions for both spouses.
1909
1910
1911
1912
1913
(c) An agent may make a gift of the principal’s property, outright or by
amending, creating, or funding a trust, only as the agent determines is consistent with the
principal’s objectives if actually known by the agent and, if unknown, as the agent
determines is consistent with the principal’s best interest based on all relevant factors,
including:
1914
(1) the value and nature of the principal’s property;
1915
(2) the principal’s foreseeable obligations and need for maintenance;
1916
1917
(3)
minimization of taxes, including income, estate, inheritance,
generation-skipping transfer, and gift taxes;
1918
1919
(4) eligibility for a benefit, a program, or assistance under a statute or
regulation; and
1920
(5) the principal’s personal history of making or joining in making gifts.
106
1921
1922
1923
1924
1925
1926
1927
1928
1929
SECTION 218.
[NOTE: See footnote 5 in the accompanying
report.] References to an agent’s statutory powers in Powers of Attorney executed after
March 28, 2006 and before __________ [effective date of Ohio’s UPOAA] using the
former statutory power of attorney form contained in repealed Section 1337.18, and nonstatutory powers of attorney executed after March 28, 2006 and before ______________
[effective date of Ohio’s UPOAA] that incorporated by reference any one or more of the
powers contained in repealed Section 1337.20 shall refer to the powers set forth in
Section 1337.20 as of March 29, 2006.
[ARTICLE] 3
1930
STATUTORY FORMS
1931
1932
1933
1934
Legislative Note: An enacting jurisdiction should review its respective statutory
requirements for acknowledgments and for the recording of documents and amend,
where necessary for conformity with those requirements, the statutory forms provided in
Sections 301 and 302.
1935
1936
1937
1938
SECTION 301. STATUTORY FORM POWER OF ATTORNEY. A
document substantially in the following form may be used to create a statutory form
power of attorney that has the meaning and effect prescribed by this [act].
1939
[INSERT NAME OF JURISDICTION]
1940
STATUTORY FORM POWER OF ATTORNEY
1941
IMPORTANT INFORMATION
1942
1943
1944
1945
1946
This power of attorney authorizes another person (your agent) to make decisions
concerning your property for you (the principal). Your agent will be able to make
decisions and act with respect to your property (including your money) whether or not
you are able to act for yourself. The meaning of authority over subjects listed on this
form is explained in the Uniform Power of Attorney Act [insert citation].
1947
1948
This power of attorney does not authorize the agent to make health-care decisions for
you.
1949
1950
1951
You should select someone you trust to serve as your agent. Unless you specify
otherwise, generally the agent’s authority will continue until you die or revoke the power
of attorney or the agent resigns or is unable to act for you.
1952
1953
Your agent is entitled to reasonable compensation unless you state otherwise in the
Special Instructions.
1954
1955
This form provides for designation of one agent. If you wish to name more than one
agent you may name a coagent in the Special Instructions. Coagents are not required to
107
1956
act together unless you include that requirement in the Special Instructions.
1957
1958
If your agent is unable or unwilling to act for you, your power of attorney will end unless
you have named a successor agent. You may also name a second successor agent.
1959
1960
This power of attorney becomes effective immediately unless you state otherwise in the
Special Instructions.
1961
ACTIONS REQUIRING EXPRESS AUTHORITY
1962
1963
Unless expressly authorized and initialed by me in the Special Instructions, this power of
attorney does not grant authority to my agent to do any of the following:
1964
1965
1966
(1) create a trust;
(2) amend, revoke, or terminate an inter vivos trust, even if specific
authority to do so is granted to the agent in the trust agreement
1967
(3) make a gift;
1968
(4) create or change rights of survivorship;
1969
(5) create or change a beneficiary designation;
1970
(6) delegate authority granted under the power of attorney;
1971
1972
(7) waive the principal’s right to be a beneficiary of a joint and survivor
annuity, including a survivor benefit under a retirement plan; [or]
1973
(8) exercise fiduciary powers that the principal has authority to delegate
1974
1975
1976
CAUTION: Granting any of the above eight powers will give your agent the authority to
take actions that could significantly reduce your property or change how your property is
distributed at your death.
1977
1978
If you have questions about the power of attorney or the authority you are granting
to your agent, you should seek legal advice before signing this form.
1979
DESIGNATION OF AGENT
1980
I ___________________________________________________ name the following
1981
(Name of Principal)
1982
person as my agent:
1983
Name of Agent:
_________________________________________________
1984
Agent’s Address:
_________________________________________________
108
1985
1986
Agent’s Telephone Number:___________________________________________
DESIGNATION OF SUCCESSOR AGENT(S) (OPTIONAL)
1987
If my agent is unable or unwilling to act for me, I name as my successor agent:
1988
Name of Successor Agent:
1989
Successor Agent’s Address: __________________________________________
1990
Successor Agent’s Telephone Number:_____________________________________
1991
1992
If my successor agent is unable or unwilling to act for me, I name as my second successor
agent:
1993
Name of Second Successor Agent:
1994
Second Successor Agent’s Address: ______________________________________
1995
Second Successor Agent’s Telephone Number: _________________________________
1996
GRANT OF GENERAL AUTHORITY
1997
1998
I grant my agent and any successor agent general authority to act for me with respect to
the following subjects as defined in the Uniform Power of Attorney Act [insert citation]:
1999
2000
2001
(INITIAL each subject you want to include in the agent’s general authority. If you wish
to grant general authority over all of the subjects you may initial “All Preceding
Subjects” instead of initialing each subject.)
2002
(___) Real Property
2003
(___) Tangible Personal Property
2004
(___) Stocks and Bonds
2005
(___) Commodities and Options
2006
(___) Banks and Other Financial Institutions
2007
(___) Operation of Entity or Business
2008
(___) Insurance and Annuities
2009
(___) Estates, Trusts, and Other Beneficial Interests
2010
(___) Claims and Litigation
2011
(___) Personal and Family Maintenance
____________________________________________
_______________________________________
109
2012
(___) Benefits from Governmental Programs or Civil or Military Service
2013
(___) Retirement Plans
2014
(___) Taxes
2015
(___) All Preceding Subjects
2016
GRANT OF SPECIFIC AUTHORITY (OPTIONAL)
2017
2018
My agent MAY NOT do any of the following specific acts for me UNLESS I have
INITIALED the specific authority listed below:
2019
2020
2021
2022
(CAUTION: Granting any of the following will give your agent the authority to take
actions that could significantly reduce your property or change how your property is
distributed at your death. INITIAL ONLY the specific authority you WANT to give your
agent.)
2023
(___) Create, amend, revoke, or terminate an inter vivos trust
2024
2025
2026
(___) Make a gift, subject to the limitations of the Uniform Power of Attorney Act
[insert citation to Section 217 of the act] and any special instructions in this power
of attorney
2027
(___) Create or change rights of survivorship
2028
(___) Create or change a beneficiary designation
2029
2030
(___) Authorize another person to exercise the authority granted under this power of
attorney
2031
2032
(___) Waive the principal’s right to be a beneficiary of a joint and survivor annuity,
including a survivor benefit under a retirement plan
2033
(___) Exercise fiduciary powers that the principal has authority to delegate
2034
[(___) Disclaim or refuse an interest in property, including a power of appointment]
2035
LIMITATION ON AGENT’S AUTHORITY
2036
2037
2038
An agent that is not my ancestor, spouse, or descendant MAY NOT use my property to
benefit the agent or a person to whom the agent owes an obligation of support unless I
have included that authority in the Special Instructions.
2039
SPECIAL INSTRUCTIONS (OPTIONAL)
2040
You may give special instructions on the following lines:
2041
________________________________________________________________________
110
2042
2043
2044
2045
2046
2047
2048
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________
2049
EFFECTIVE DATE
2050
2051
This power of attorney is effective immediately unless I have stated otherwise in the
Special Instructions.
2052
NOMINATION OF [CONSERVATOR OR GUARDIAN] (OPTIONAL)
2053
2054
If it becomes necessary for a court to appoint a [conservator or guardian] of my estate or
[guardian] of my person, I nominate the following person(s) for appointment:
2055
Name of Nominee for [conservator or guardian] of my estate:
2056
___________________________________________________________________
2057
Nominee’s Address:_______________________________________________
2058
Nominee’s Telephone Number:________________________________________
2059
Name of Nominee for [guardian] of my person:
2060
_____________________________________________________________________
2061
Nominee’s Address:_______________________________________________
2062
Nominee’s Telephone Number:_________________________________________
2063
RELIANCE ON THIS POWER OF ATTORNEY
2064
2065
Any person, including my agent, may rely upon the validity of this power of attorney or a
copy of it unless that person knows it has terminated or is invalid.
2066
SIGNATURE AND ACKNOWLEDGMENT
2067
____________________________________________
2068
Your Signature
2069
____________________________________________
2070
Your Name Printed
________________
Date
111
2071
____________________________________________
2072
____________________________________________
2073
Your Address
2074
________________________________________
2075
Your Telephone Number
2076
State of ____________________________
2077
[County] of___________________________
2078
This document was acknowledged before me on __________________________,
2079
(Date)
2080
2081
by______________________________________.
(Name of Principal)
2082
____________________________________________
2083
Signature of Notary
2084
My commission expires: ________________________
2085
[This document prepared by:
2086
_____________________________________________________________________
2087
_____________________________________________________________________
2088
(Seal, if any)
IMPORTANT INFORMATION FOR AGENT
2089
Agent’s Duties
2090
2091
2092
2093
When you accept the authority granted under this power of attorney, a special legal
relationship is created between you and the principal. This relationship imposes upon
you legal duties that continue until you resign or the power of attorney is terminated or
revoked. You must:
2094
2095
2096
2097
(1)
do what you know the principal reasonably expects you to do with the principal’s
property or, if you do not know the principal’s expectations, act in the principal’s
best interest;
2098
(2)
act in good faith;
112
2099
(3)
do nothing beyond the authority granted in this power of attorney; and
2100
2101
(4)
attempt to preserve the principal’s estate plan if you know the plan and preserving
the plan is consistent with the principal’s best interest; and
2102
2103
2104
(5)
disclose your identity as an agent whenever you act for the principal by writing or
printing the name of the principal and signing your own name as “agent” in the
following manner:
(Principal’s Name) by (Your Signature) as Agent
2105
2106
Unless the Special Instructions in this power of attorney state otherwise, you must also:
2107
2108
(1)
act loyally for the principal’s benefit;
2109
(2)
avoid conflicts that would impair your ability to act in the principal’s best interest;
2110
(3)
act with care, competence, and diligence;
2111
2112
(4)
keep a record of all receipts, disbursements, and transactions made on behalf of
the principal; and
2113
2114
2115
(5)
cooperate with any person that has authority to make health-care decisions for the
principal to do what you know the principal reasonably expects or, if you do not
know the principal’s expectations, to act in the principal’s best interest; and .
2116
2117
(6)
attempt to preserve the principal’s estate plan if you know the plan and preserving
the plan is consistent with the principal’s best interest.
2118
Termination of Agent’s Authority
2119
2120
2121
You must stop acting on behalf of the principal if you learn of any event that terminates
this power of attorney or your authority under this power of attorney. Events that
terminate a power of attorney or your authority to act under a power of attorney include:
2122
(1)
death of the principal;
2123
(2)
the principal’s revocation of the power of attorney or your authority;
2124
(3)
the occurrence of a termination event stated in the power of attorney;
2125
(4)
the purpose of the power of attorney is fully accomplished; or
2126
2127
2128
(5)
if you are married to the principal, a legal action is filed with a court to end your
marriage, or for your legal separation, unless the Special Instructions in this
power of attorney state that such an action will not terminate your authority.
113
2129
Liability of Agent
2130
2131
2132
2133
The meaning of the authority granted to you is defined in the Uniform Power of Attorney
Act [insert citation]. If you violate the Uniform Power of Attorney Act [insert citation] or
act outside the authority granted, you may be liable for any damages caused by your
violation.
2134
2135
If there is anything about this document or your duties that you do not understand,
you should seek legal advice.
2136
2137
SECTION 302. AGENT’S CERTIFICATION. The following optional form
may be used by an agent to certify facts concerning a power of attorney.
2138
2139
AGENT’S CERTIFICATION AS TO THE VALIDITY OF
ATTORNEY AND AGENT’S AUTHORITY
2140
State of _____________________________
2141
[County] of___________________________]
2142
2143
2144
2145
I, _____________________________________________ (Name of Agent), [certify]
under penalty of perjury that __________________________________________(Name
of Principal) granted me authority as an agent or successor agent in a power of attorney
dated ________________________.
2146
I further [certify] that to my knowledge:
2147
2148
2149
(1) the Principal is alive and has not revoked the Power of Attorney or my
authority to act under the Power of Attorney and the Power of Attorney and my authority
to act under the Power of Attorney have not terminated;
POWER OF
2150
2151
2152
(2) if the Power of Attorney was drafted to become effective upon the happening
of an event or contingency, the event or contingency has occurred;
2153
2154
2155
(3) if I was named as a successor agent, the prior agent is no longer able or willing
to serve; and
2156
2157
2158
2159
2160
2161
(4)
_____________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(Insert other relevant statements)
114
2162
SIGNATURE AND ACKNOWLEDGMENT
2163
____________________________________________
2164
Agent’s Signature
2165
____________________________________________
2166
Agent’s Name Printed
2167
____________________________________________
2168
____________________________________________
2169
Agent’s Address
2170
____________________________________________
2171
Agent’s Telephone Number
2172
This document was acknowledged before me on __________________________,
Date
2173
2174
2175
_______________________
(Date)
by______________________________________.
(Name of Agent)
2176
____________________________________________
2177
Signature of Notary
2178
My commission expires: ________________________
2179
[This document prepared by:
2180
2181
________________________________________________________________________
]
2182
[ARTICLE] 4
2183
MISCELLANEOUS PROVISIONS
2184
2185
2186
2187
SECTION
401.
UNIFORMITY
OF
APPLICATION
AND
CONSTRUCTION. In applying and construing this uniform act, consideration must be
given to the need to promote uniformity of the law with respect to its subject matter
among the states that enact it.
2188
SECTION 402.
(Seal, if any)
RELATION TO ELECTRONIC SIGNATURES IN
115
2189
2190
2191
2192
2193
GLOBAL AND NATIONAL COMMERCE ACT. This [act] modifies, limits, and
supersedes the federal Electronic Signatures in Global and National Commerce Act,15
U.S.C. Section 7001 et seq., but does not modify, limit, or supersede Section 101(c) of
that act, 15 U.S.C. Section 7001(c), or authorize electronic delivery of any of the notices
described in Section 103(b) of that act, 15 U.S.C. Section 7003(b).
2194
2195
SECTION 403. EFFECT ON EXISTING POWERS OF ATTORNEY.
Except as otherwise provided in this [act], on [the effective date of this [act]]:
2196
2197
(1) this [act] applies to a power of attorney created before, on, or after [the
effective date of this [act]];
2198
2199
(2) this [act] applies to a judicial proceeding concerning a power of attorney
commenced on or after [the effective date of this [act]];
2200
2201
2202
2203
2204
(3) this [act] applies to a judicial proceeding concerning a power of attorney
commenced before [the effective date of this [act]] unless the court finds that application
of a provision of this [act] would substantially interfere with the effective conduct of the
judicial proceeding or prejudice the rights of a party, in which case that provision does
not apply and the superseded law applies; and
2205
(4) an act done before [the effective date of this [act]] is not affected by this [act].
2206
SECTION 404. REPEAL. The following are repealed:
2207
(1) [Uniform Durable Power of Attorney Act]
2208
(2) [Uniform Statutory Form Power of Attorney Act]
2209
(3) [Article 5, Part 5 of the Uniform Probate Code]
2210
SECTION 405. EFFECTIVE DATE. This [act] takes effect ______________.
2211
116
2212
1337.09 Durable power of attorney.
2213
2214
2215
2216
2217
2218
2219
2220
(A) Whenever a principal designates another as attorney in fact by a power of attorney in
writing and the writing contains the words “This power of attorney shall not be affected
by disability of the principal,” “this power of attorney shall not be affected by disability
of the principal or lapse of time,” or words of similar import, the authority of the attorney
in fact is exercisable by the attorney in fact as provided in the written instrument
notwithstanding the later disability, incapacity, or adjudged incompetency of the principal
and, unless it states a time of termination, notwithstanding the lapse of time since the
execution of the instrument.
2221
2222
2223
2224
2225
2226
2227
2228
2229
(B) Whenever a principal designates another the principal’s attorney in fact by a power of
attorney in writing and the writing expressly states that the power of attorney shall
become effective at a later time or upon the occurrence of a specified event, including,
but not limited to, the disability, incapacity, or adjudged incompetency of the principal,
the attorney in fact may exercise the authority provided to the attorney in fact in the
written instrument at the later time or upon the occurrence of the specified event
notwithstanding the later disability, incapacity, or adjudged incompetency of the principal
and, unless the instrument states a time of termination, notwithstanding the lapse of time
since its execution.
2230
2231
2232
2233
2234
2235
2236
2237
2238
(C) All acts done by an attorney in fact pursuant to an instrument as described in division
(A) or (B) of this section during any period of disability, incapacity, or adjudged
incompetency of the principal shall have the same effect and inure to the benefit of and
bind the principal or the principal’s heirs, devisees, and personal representatives as if the
principal were competent and not disabled or incapacitated. If a guardian thereafter is
appointed for the principal and the guardian is not the attorney in fact, the attorney in
fact, during the continuance of the appointment, shall account to the guardian rather than
the principal. The guardian has the same power the principal would have had if not
incompetent, to revoke all or any part of the power and authority of the attorney in fact.
2239
2240
2241
2242
2243
2244
2245
2246
2247
2248
2249
(D) In a durable power of attorney as described in division (A) or (B) of this section, a
principal may nominate the attorney in fact or any other person to be the guardian of the
principal’s person, estate, or both and may nominate the attorney in fact or any other
person to be the guardian of the person, the estate, or both of one or more of the
principal’s minor children, whether born at the time of the execution of the durable power
of attorney or afterward. The nomination is for consideration by a court if proceedings for
the appointment of a guardian for the principal’s person, estate, or both or if proceedings
for the appointment of a guardian of the person, the estate, or both of one or more of the
principal’s minor children are commenced at a later time. The principal may authorize in
a power of attorney of that nature the person nominated as guardian or the attorney in fact
to nominate a successor guardian for consideration by a court.
2250
2251
2252
The principal may direct, in a power of attorney of that nature, that bond be waived for a
person nominated as guardian in it or nominated as a successor guardian in accordance
with an authorization in it.
117
2253
2254
2255
2256
2257
Nomination of a person as a guardian or successor guardian of the person, the estate, or
both of one or more of the principal’s minor children under this division, and any
subsequent appointment of the guardian or successor guardian as guardian under section
2111.02 of the Revised Code, does not vacate the jurisdiction of any other court that
previously may have exercised jurisdiction over the person of the minor.
2258
2259
2260
2261
2262
The durable power of attorney as described in division (A) or (B) of this section that
contains the nomination of a person to be the guardian of the person, the estate, or both of
one or more of the principal’s minor children under this division may be filed with the
probate court for safekeeping, and the probate court shall designate the nomination as the
nomination of a standby Date: 01-14-1997
2263
1337.091 Effect of executing power of attorney.
2264
2265
2266
2267
2268
2269
(A) The death or adjudged incompetency of any principal who has executed a power of
attorney in writing does not revoke the power and authority of the attorney in fact who,
without actual knowledge of the death or adjudged incompetency of the principal, acts in
good faith under the power of attorney. Any action so taken, unless otherwise invalid or
unenforceable, inures to the benefit of and binds the principal and the principal’s heirs,
devisees, and personal representatives.
2270
2271
2272
2273
(B)(A)(1) An affidavit that is executed by the attorney in fact is, in the absence of fraud,
conclusive proof of the nonrevocation of the power of attorney at the time of the attorney
in fact doing an act pursuant to the power of attorney if the affidavit contains the
following:
2274
2275
2276
(a) A statement that the attorney in fact, at the time of doing an act pursuant to the power
of attorney, had no actual knowledge of the revocation of the power of attorney by the
principal;
2277
2278
2279
(b) A statement that the attorney in fact, at the time of doing an act pursuant to the power
of attorney, had no actual knowledge of the revocation of the power of attorney by death
or adjudged incompetency of the principal;
2280
(c) One of the following statements, whichever is applicable:
2281
(i) The attorney in fact was never married to the principal.
2282
2283
2284
(ii) The attorney in fact was married to the principal, the marriage has been terminated,
and the power of attorney states that the power of attorney is not revoked by reason of
law due to the termination of the marriage between the principal and the attorney in fact.
2285
2286
2287
2288
(iii) The attorney in fact is married to the principal, a separation agreement has been
entered into between the principal and the attorney in fact in which they intend to fully
and finally settle each spouse’s prospective property rights in the property of the other,
and the power of attorney states that the power of attorney is not revoked by reason of
118
2289
2290
law due to the existence of a separation agreement of that nature entered into between the
principal and the attorney in fact.
2291
2292
2293
2294
(2) If the exercise of the power of attorney requires the execution and delivery of any
instrument that is recordable, the affidavit that is executed under division (B)(A)(1) of
this section, if acknowledged before a notary public in the same manner as a deed, is
likewise recordable.
2295
2296
2297
2298
2299
2300
(C) This section shall not be construed to alter or affect any provision for revocation
contained in any power of attorney. This section shall not be construed to affect any
provision of a power of attorney that indicates, consistent with section 1337.09 of the
Revised Code, that the authority of the attorney in fact is exercisable by the attorney in
fact as provided in the power of attorney notwithstanding the later disability, incapacity,
or adjudged incompetency of the principal.
2301
1337.18 Form creating power of attorney.
2302
(A) The following form may be used to create a power of attorney:
2303
Power of Attorney
2304
2305
2306
2307
2308
[The powers granted by this document are broad and sweeping. They are explained in
Ohio Revised Code section 1337.20. If you have any questions about these powers,
obtain legal advice. You can use any different form of power of attorney you may desire.
This document does not authorize anyone to make health-care decisions for you. You can
revoke this power of attorney at any time.]
2309
Principal (Person Granting the Power)
2310
Name:
2311
Address:
2312
Telephone:
2313
1. Notice to Principal.
2314
2315
2316
2317
As the principal, you are using this document to give authority to another person, known
as your agent or attorney-in-fact, to make decisions regarding your money and property.
Your agent will have the powers that you indicate below to make decisions about your
money and property without advance notice to you or approval by you.
2318
2319
Unless expressly authorized in the power of attorney, a power of attorney does not grant
authority to an agent to do any of the following:
2320
(a) Create, modify, or revoke a trust;
119
2321
2322
(b) Fund with your property a trust not created by you or a person authorized to create a
trust for your benefit;
2323
(c) Make or revoke a gift of your property in trust or otherwise;
2324
2325
(d) Create or change rights of survivorship in your property or in property in which you
may have an interest;
2326
2327
(e) Designate or change the designation of a beneficiary to receive any property, benefit,
or contractual right on your death, such as insurance benefits and retirement benefits;
2328
2329
(f) Create in the agent or a person to whom the agent owes a legal duty of support the
right to receive property, a benefit, or a contractual right in which you have an interest;
2330
(g) Delegate the powers granted under the power of attorney to another person.
2331
2332
2333
2334
2335
2336
(h) Elect or change a retirement allowance plan of payment on your behalf under Ohio
Revised Code Chapter 145., 742., 3305., 3307., 3309., or 5505., other than a joint and
survivor annuity leaving one-half to your spouse if you are married, a single life annuity
if you are single, or any plan that includes a partial lump sum option; except that no
express authority is necessary to elect a plan that meets the minimum requirements of a
court order to elect a plan that will pay a lifetime benefit to a former spouse.
2337
2338
(i) If authorized under Ohio Revised Code section 145.814, change an election made
under Ohio Revised Code section 145.19 or 145.191.
2339
2340
2341
2342
(j) Terminate your membership in the public employees retirement system, state teachers
retirement system, school employees retirement system, Ohio police and fire pension
fund, or state highway patrol retirement system by withdrawing your accumulated
employee contributions.
2343
2344
2345
The powers that you give to your agent are explained more fully in Ohio Revised Code
sections 1337.19 and 1337.20. If you have any questions about this document or the
powers that you are giving to your agent, you should obtain legal advice.
2346
2. Notice to Agent.
2347
2348
2349
2350
Once you accept designation as the agent under this document or exercise authority
granted to you by the principal, a fiduciary relationship is created between you and the
principal. Unless otherwise modified in this power of attorney, your duties include the
duty to do all of the following:
2351
(a) Act in good faith, with reasonable care for the best interests of the principal;
2352
(b) Take no action beyond the scope of the authority given to you in this document;
120
2353
2354
(c) Keep complete record of all receipts, disbursements, and transactions conducted for
the principal.
2355
2356
2357
If you violate the terms of this document or the fiduciary duties created by this
relationship, you will be liable to the principal or the principal’s successors for loss or
damage caused by your violation.
2358
2359
If there is anything about this document or your duties that you do not understand, you
should obtain legal advice.
2360
3. Designation of Agent(s).
2361
2362
2363
I, the above-named principal, hereby appoint and designate the following as my
Attorney(s)-in-Fact. (Insert the name(s), address(es), and telephone number(s) of your
agent(s) below. If more space is needed, you may attach additional sheets.)
2364
Name: Name:
2365
Address: Address:
2366
Telephone: Telephone:
2367
4. Designation of Successor Agent(s).
2368
(Optional: acts if any named Agent dies, resigns, or is otherwise unable to act or serve.)
2369
2370
I, the above-named principal, hereby appoint and designate the following as my successor
Agent(s).
2371
First Successor: Second Successor:
2372
Name: Name:
2373
Address: Address:
2374
Telephone: Telephone:
2375
2376
[If more than one Agent is designated, check the box in front of one of the following
statements.]
2377
[ ] Each Agent may independently exercise the powers granted.
2378
[ ] All Agents must jointly exercise the powers granted.
2379
[ ] A majority in number of Agents must jointly exercise the powers granted.
121
2380
2381
2382
Any person can rely on a statement by a successor Agent that he or she is properly acting
under this document and may rely conclusively on any action or decision made by that
successor Agent. That person does not have to make any further investigation or inquiry.
2383
5. Grant of Power.
2384
2385
2386
I, the above-named Principal hereby appoint the above named Agent(s) to act as my
agent(s) in any way that I could act with respect to the following matters, as each of them
is defined in Ohio Revised Code section 1337.20:
2387
2388
2389
2390
[To grant all of the following powers, initial the line in front of (W) and ignore the lines
in front of the other powers. To grant one or more, but fewer than all, of the following
powers, initial the line in front of each power you are granting. To withhold a power, do
not initial the line in front of it. You may, but need not, cross out each power withheld.]
2391
Initial
2392
(A) Real property transactions
2393
(B)Tangible personal property transactions
2394
(C) Stock and bond transactions
2395
(D) Commodity and option transactions
2396
(E) Banking and other financial institution transactions
2397
(F) Business operating transactions
2398
(G) Proprietary interests and materials transactions
2399
(H) Insurance and annuity transactions
2400
(I) Retirement plan transactions
2401
(J) Safe deposit box transactions
2402
(K) Estate, trust, and other beneficiary transactions
2403
(L) Borrowing transactions
2404
(M) Fiduciary transactions
2405
(N) Personal relationships and affairs
122
2406
2407
(O) Benefits from Social Security, Medicare, Medicaid, and other governmental
programs, or military service
2408
(P) Records, reports, and statements
2409
(Q) Tax matters
2410
(R) Licenses
2411
(S) Access to documents
2412
(T) Employment of agents
2413
(U) Power to delegate
2414
(V) Claims and litigation
2415
(W) All powers listed above
2416
Special Instructions:
2417
2418
[On the following lines or on additional pages you may give special instructions limiting
or extending the powers granted to your Agent.]
2419
6. Commencement and Duration of Power.
2420
This power of attorney is effective:
2421
2422
[Check the appropriate box below to the left of your choice. If you do not check any box,
this power of attorney will become effective when you sign it.]
2423
[ ] Immediately.
2424
2425
[ ] Upon my incapacity as determined by the following person or persons and set forth in
an affidavit:
2426
[ ] Upon my incapacity as determined by two physicians and set forth in an affidavit.
2427
[ ] Upon the following future date or event:
2428
This power of attorney shall terminate:
2429
2430
[Check the appropriate box below to the left of your choice. If you do not check any box,
this power of attorney will terminate upon your death.]
2431
[ ] Upon my death.
123
2432
2433
[ ] Upon my incapacity as determined by the following person or persons and set forth in
an affidavit:
2434
[ ] Upon my incapacity as determined by two physicians and set forth in an affidavit.
2435
[ ] Upon the following future date or event:
2436
7. Durability of Power.
2437
2438
2439
[The authority granted in this power of attorney can be effective even during a period of
disability. Check the appropriate box below if you want this power of attorney to be
effective or to not be effective during any period of disability.]
2440
2441
[ ] This power of attorney will continue in force and effect even during any period in
which I am disabled.
2442
2443
[ ] This power of attorney will not be in force and will have no effect during any period in
which I am disabled.
2444
8. Obtaining Personal Health Information.
2445
2446
2447
[ ] My Agent shall be treated as my personal representative for all purposes relating to my
Personal Health Information as provided in 45 CFR 164.502(g)(2) and for the Health
Insurance Portability and Accountability Act of 1996.
2448
2449
2450
[ ] My Agent shall not be treated as my personal representative for any purposes relating
to my Personal Health Information as provided in 45 CFR 164.502(g)(2) and for the
Health Insurance Portability and Accountability Act of 1996.
2451
9. Compensation of Agent.
2452
2453
2454
[Your Agent will be reimbursed for all reasonable expenses incurred in acting under this
power of attorney. Check the appropriate box below to indicate whether you want your
Agent also to be reasonably paid or not to be paid for services rendered as Agent.]
2455
2456
[ ] My Agent is entitled to reasonable compensation for services rendered as Agent under
this power of attorney.
2457
2458
[ ] My Agent shall not receive any compensation for services rendered as Agent under
this power of attorney.
2459
10. Exoneration of Agent(s).
2460
2461
2462
My Agent is released from any liability to me and my estate arising out of the acts or
failures to act of my Agent, except for willful misconduct or gross negligence. I agree to
indemnify and hold my Agent harmless against any liability or expense, including
124
2463
2464
2465
attorney’s fees, that my Agent may incur as the result of acting or failing to act under this
instrument, except for liability and expense resulting from willful misconduct or gross
negligence.
2466
11. Exoneration of Third Parties.
2467
2468
2469
2470
I agree that any third party who receives a copy of this document may act under it.
Revocation of the power of attorney is not effective as to a third party until the third party
learns of the revocation. I agree to indemnify the third party for any claims that arise
against the third party because of reliance on this power of attorney.
2471
12. Self-Dealing.
2472
2473
[With respect to the Agent’s right to or not to enter into transactions with you, check the
box in front of one of the following statements.]
2474
2475
2476
[ ] My Agent can enter into transactions with me or in my behalf in which my Agent is
personally interested as long as the terms of the transaction are fair to me,
notwithstanding any law prohibiting acts of self-dealing.
2477
2478
[ ] My Agent cannot enter into transactions with me or in my behalf in which my Agent is
personally interested.
2479
13. Property to Which this Instrument Applies.
2480
2481
2482
2483
[Your Agent will have authority over some or all of your property. Check the appropriate
box below to indicate whether your Agent’s authority is over all of your property or over
only some of your property. If your Agent’s authority is over only some of your property,
identify the property not subject to this power of attorney.]
2484
[ ] This instrument will apply to all of my property, real or personal, wherever located.
2485
2486
[ ] This instrument will apply to all of my property, real or personal, wherever located
except for the following:
2487
2488
[On the following lines or on additional pages you may list property not subject to this
power of attorney.]
2489
14. Amending and Revocation.
2490
2491
2492
2493
2494
2495
I may amend or revoke this power of attorney at any time by a signed instrument
delivered to my Agent. If this instrument has been filed or recorded in public records,
then any amendment or revocation also will be similarly filed or recorded, but a similar
filing or recording of the amendment or revocation will not be necessary to effectuate the
amendment or revocation with respect to my Agent and to all persons who have actual
knowledge of the amendment or revocation.
125
2496
15. Nomination of Guardian.
2497
2498
[With respect to your right to nominate a guardian of your person or estate, or both, check
the box in front of one of the following statements.]
2499
2500
2501
2502
2503
[ ] If a guardian or conservator is ever needed for my estate, I nominate my Agent or any
other person that my Agent nominates as my guardian or conservator. This nomination
revokes any other nomination I may have made in any other document dated prior to the
date of this power of attorney, including any nomination set forth in a Health Care
Durable Power of Attorney.
2504
2505
2506
2507
[ ] If a guardian or conservator is ever needed for my estate, I nominate ….................... as
my guardian or conservator. This nomination revokes any other nomination I may have
made in any other document dated prior to the date of this power of attorney, including
any nomination set forth in a Health Care Durable Power of Attorney.
2508
2509
[ ] I do not nominate any person as the guardian or conservator of my estate under this
instrument.
2510
16. Governing Law.
2511
2512
The laws of the State of Ohio will govern all questions pertaining to the validity and
construction of this power of attorney.
2513
IN WITNESS WHEREOF, I have signed this Power of Attorney on [Date] ............
2514
(Principal’s Signature)
2515
2516
[This instrument should be notarized or witnessed, or both, as applicable law may require
or as may be desired.]
2517
2518
2519
2520
2521
On …................ [Date], this instrument was signed by ….................... [Name of
Principal] in our presence and was acknowledged and declared by the Principal to be the
Principal’s Power of Attorney. Immediately thereafter, at the Principal’s request, in the
Principal’s presence, and in the presence of each other, we signed this instrument as
subscribing witnesses.
2522
(Witness)
2523
(Witness)
2524
2525
2526
This document was acknowledged before me …................ [Date] by …......................
[Name of Principal] who is known to me or from whom I have obtained adequate proof
of identity.
2527
(Signature of notarial officer)
126
2528
(Seal, if any)
2529
(Title and Rank)
2530
[My commission expires: ]
2531
2532
2533
(B) Except as otherwise required by the Revised Code, a person may create a power of
attorney using the form set forth in division (A) of this section or any other form that is
valid under the common law of this state.
2534
2535
2536
(C) A power of attorney may incorporate by reference any one or more powers set forth
in section 1337.20 of the Revised Code by referencing the appropriate division of that
section and the power or powers to be incorporated.
2537
Effective Date: 03-29-2006
2538
1337.19 Powers of attorney in fact.
2539
2540
2541
2542
2543
By executing a power of attorney in the form set forth in division (A) of section 1337.18
of the Revised Code or any other power of attorney that incorporates by reference a
power set forth in section 1337.20 of the Revised Code, the principal, except as modified
in the power of attorney, authorizes the attorney in fact with respect to that power to do
all of the following:
2544
2545
2546
(A) Demand, receive, and obtain by litigation or otherwise money or any other thing of
value to which the principal is, may become, or claims to be entitled and conserve, invest,
disburse, or use anything so received for the purposes intended;
2547
2548
2549
(B) Contract in any manner with any person, on terms agreeable to the attorney in fact, to
accomplish a purpose of a transaction, and perform, rescind, reform, release, or modify
the contract or another contract made by or for the principal;
2550
2551
2552
2553
(C) Execute, acknowledge, seal, and deliver a deed, revocation, mortgage, security
interest, lease, notice, check, promissory note, electronic funds transfer, release, or other
instrument or communication the attorney in fact considers desirable to accomplish a
purpose of a transaction;
2554
2555
2556
(D) Prosecute, defend, submit to arbitration, settle, or propose or accept a compromise
with respect to a claim existing in favor of or against the principal or intervene in
litigation relating to the claim;
2557
2558
(E) Seek on the principal’s behalf the assistance of a court to carry out an act authorized
by the power of attorney;
2559
2560
(F) Engage, compensate, and discharge an attorney, accountant, expert witness, or other
assistant;
127
2561
2562
(G) Keep appropriate records of each transaction, including an accounting of receipts and
disbursements;
2563
2564
2565
(H) Prepare, execute, and file a record, report, or other document the attorney in fact
considers desirable to safeguard or promote the principal’s interest under a statute or
governmental regulation;
2566
2567
(I) Reimburse the attorney in fact for expenditures properly made by the attorney in fact
in exercising the powers granted by the power of attorney;
2568
(J) Do any other lawful act with respect to the power of attorney.
2569
1337.20 Construction of powers of attorney in fact.
2570
2571
2572
Except as modified by the principal, a power of attorney created by use of the form set
forth in section 1337.18 of the Revised Code or any other power of attorney that
incorporates by reference any of the powers set forth below shall be construed as follows:
2573
2574
(A) Language in a power of attorney that grants power with respect to transactions
concerning real property authorizes the attorney in fact to do all of the following:
2575
2576
2577
(1) Accept as a gift or as security for a loan, reject, demand, buy, lease, receive, or
otherwise acquire an interest in real property, a right incident to real property, or real
property held in an undisclosed trust;
2578
2579
2580
2581
2582
(2) Sell, exchange, convey with or without covenants, quitclaim, release, surrender,
mortgage, encumber, partition, consent to partitioning, subdivide, apply for zoning,
rezoning, or other governmental permits, plat or consent to platting, develop, grant
options concerning, lease, sublease, or otherwise dispose of an interest in real property or
a right incident to real property;
2583
2584
(3) Release, assign, satisfy, and enforce by litigation or otherwise a mortgage, deed of
trust, encumbrance, lien, or other claim to real property that exists or is asserted;
2585
2586
2587
(4) Do any act of management or of conservation with respect to an interest in real
property, or a right incident to real property, owned or claimed to be owned by the
principal, including, but not limited to, all of the following:
2588
(a) Insure against a casualty, liability, or loss;
2589
(b) Obtain or regain possession or protect, by litigation or otherwise;
2590
2591
(c) Pay, compromise, or contest taxes or assessments or apply for and receive refunds in
connection with taxes or assessments;
2592
(d) Purchase supplies, hire assistance or labor, and make repairs or alterations;
128
2593
2594
2595
(5) Use, develop, alter, replace, remove, erect, or install structures or other improvements
upon real property in or incident to which the principal has, or claims to have, an interest
or right;
2596
2597
2598
2599
(6) Participate in a reorganization with respect to real property or a legal entity that owns
an interest in or right incident to real property and receive and hold, directly or indirectly,
shares of stock or obligations received in a plan of reorganization, and act with respect to
them, including, but not limited to, all of the following:
2600
(a) Sell or otherwise dispose of the shares or obligations;
2601
2602
(b) Exercise or sell an option, conversion, or similar right with respect to the shares or
obligations;
2603
(c) Vote shares in person or by proxy;
2604
2605
(7) If specifically authorized in the power of attorney, change the form of title of an
interest in or right incident to real property;
2606
2607
(8) Dedicate to public use, with or without consideration, easements or other real
property in which the principal has, or claims to have, an interest.
2608
2609
2610
(B) Language in a power of attorney granting power with respect to transactions
concerning tangible personal property authorizes the attorney in fact to do all of the
following:
2611
2612
2613
(1) Accept as a gift or as security for a loan, reject, demand, buy, receive, or otherwise
acquire ownership or possession of tangible personal property or an interest in tangible
personal property;
2614
2615
2616
(2) Sell, exchange, convey with or without covenants, release, surrender, create a security
interest in, grant options concerning, lease, sublease to others, or otherwise dispose of
tangible personal property or an interest in tangible personal property;
2617
2618
2619
(3) Release, assign, satisfy, or enforce, by litigation or otherwise, a security interest, lien,
or other claim with respect to tangible personal property or an interest in tangible
personal property;
2620
2621
2622
(4) Do an act of management or conservation with respect to tangible personal property
or an interest in tangible personal property, including, but not limited to, all of the
following:
2623
(a) Insure against casualty, liability, or loss;
2624
(b) Obtain or regain possession, or protect, by litigation or otherwise;
129
2625
2626
(c) Pay, compromise, or contest taxes or assessments or apply for and receive refunds in
connection with taxes or assessments;
2627
(d) Move from place to place;
2628
(e) Store for hire or on a gratuitous bailment;
2629
(f) Use, alter, and make repairs or alterations;
2630
2631
(5) If specifically authorized in the power of attorney, change the form of title of an
interest in or right incident to tangible personal property.
2632
2633
(C)Language in a power of attorney granting power with respect to transactions
concerning stocks and bonds authorizes the attorney in fact to do all of the following:
2634
2635
2636
(1) Buy, sell, and exchange stocks, bonds, mutual funds, and all other types of securities
and financial instruments, whether held directly or indirectly, except commodity futures
contracts and call and put options on stocks and stock indexes;
2637
(2) Receive certificates and other evidences of ownership with respect to securities;
2638
(3) Exercise voting rights with respect to securities in person, in writing, or by proxy;
2639
(4) Enter into voting trusts;
2640
(5) Consent to limitations on the right to vote.
2641
2642
2643
(D) Language in a power of attorney granting power with respect to transactions
concerning commodities and options authorizes the attorney in fact to do all of the
following:
2644
2645
(1) Buy, sell, exchange, assign, settle, and exercise commodity futures contracts and call
and put options on stocks and stock indexes traded on a regulated option exchange;
2646
(2) Establish, continue, modify, and terminate option accounts with a broker.
2647
2648
(E) Language granting power with respect to transactions concerning banks and other
financial institutions authorizes the attorney in fact to do all of the following:
2649
2650
(1) Continue, modify, and terminate an account or other banking arrangement made by or
for the principal;
2651
2652
2653
(2) Establish, modify, and terminate an account or other banking arrangement with a
bank, trust company, savings and loan association, credit union, thrift company,
brokerage firm, or other financial institution selected by the attorney in fact;
130
2654
2655
(3) Contract to procure other services available from a financial institution as the attorney
in fact considers desirable;
2656
2657
(4) Withdraw by check, order, or otherwise money or property of the principal deposited
with or left in the custody of a financial institution;
2658
2659
(5) Receive bank statements, vouchers, notices, and similar documents from a financial
institution and act with respect to them;
2660
2661
2662
(6) Borrow money at an interest rate agreeable to the attorney in fact and pledge as
security personal property of the principal necessary in order to borrow, pay, renew, or
extend the time of payment of a debt of the principal;
2663
2664
2665
2666
2667
(7) Make, assign, draw, endorse, discount, guarantee, and negotiate promissory notes,
checks, drafts, and other negotiable or nonnegotiable paper of the principal, or payable to
the principal or the principal’s order, make funds transfers, receive the cash or other
proceeds of those transactions, and accept and pay when due a draft drawn by a person
upon the principal;
2668
2669
(8) Receive and act upon a sight draft, warehouse receipt, or other negotiable or
nonnegotiable instrument;
2670
2671
2672
(9) Apply for and receive letters of credit, credit and debit cards, and traveler’s checks
from a financial institution, and give an indemnity or other agreement in connection with
letters of credit;
2673
2674
(10) Consent to an extension of the time of payment with respect to commercial paper or
a financial transaction with a financial institution.
2675
2676
(F) Language in a power of attorney granting power with respect to operating a business
authorizes the attorney in fact to do all of the following:
2677
(1) Operate, buy, sell, enlarge, reduce, or terminate a business interest;
2678
2679
(2) Subject to the terms of a partnership agreement or operating agreement, do all of the
following:
2680
2681
2682
(a) Perform a duty or discharge a liability and exercise a right, power, privilege, or option
that the principal has, may have, or claims to have, under the partnership agreement or
operating agreement;
2683
2684
(b) Enforce the terms of the partnership agreement or operating agreement by litigation or
otherwise;
2685
2686
(c) Defend, submit to arbitration, settle, or compromise litigation to which the principal is
a party because of membership in a partnership or limited liability company;
131
2687
2688
2689
2690
2691
(3) Exercise in person or by proxy, or enforce by litigation or otherwise, a right, power,
privilege, or option the principal has or claims to have as the holder of a bond, share, or
other instrument of similar character and defend, submit to arbitration, settle, or
compromise litigation to which the principal is a party because of a bond, share, or
similar instrument;
2692
(4) With respect to a business controlled by the principal, do all of the following:
2693
2694
2695
(a) Continue, modify, renegotiate, extend, and terminate a contract made with an
individual or a legal entity by or for the principal with respect to the business before
execution of the power of attorney;
2696
(b) Determine all of the following:
2697
(i) The location of its operation;
2698
(ii) The nature and extent of its business;
2699
2700
(iii) The methods of manufacturing, selling, merchandising, financing, accounting, and
advertising employed in its operation;
2701
(iv) The amount and types of insurance carried;
2702
2703
(v) The mode of engaging, compensating, and dealing with its accountants, attorneys, and
other attorneys in fact and employees;
2704
2705
2706
2707
(c) Change the name or form of organization under which the business is operated and
enter into a partnership agreement or operating agreement with other persons or organize
a corporation or other business entity to take over all or part of the operation of the
business;
2708
2709
2710
(d) Demand and receive money due or claimed by the principal or on the principal’s
behalf in the operation of the business, and control and disburse the money in the
operation of the business;
2711
(5) Put additional capital into a business in which the principal has an interest;
2712
(6) Join in a plan of reorganization, consolidation, or merger of the business;
2713
2714
(7) Sell or liquidate a business or part of it at the time and upon the terms the attorney in
fact considers desirable;
2715
2716
(8) Establish the value of a business under a buy-out agreement to which the principal is a
party;
132
2717
2718
2719
(9) Prepare, sign, file, and deliver reports, compilations of information, returns, or other
papers with respect to a business that are required by a governmental agency or
instrumentality or that the attorney in fact considers desirable and make related payments;
2720
2721
2722
2723
2724
(10) Pay, compromise, or contest taxes or assessments and do any other act that the
attorney in fact considers desirable to protect the principal from illegal or unnecessary
taxation, fines, penalties, or assessments with respect to a business, including attempts to
recover, in any manner permitted by law, money paid before or after the execution of the
power of attorney.
2725
2726
2727
2728
(G) Language in a power of attorney granting power with respect to proprietary interests
and materials transactions authorizes the attorney in fact in connection with or with
respect to any artistic, domestic, intellectual, literary, mechanical, scientific, or other
proprietary interest or material to do all of the following:
2729
2730
2731
2732
2733
(1) Abandon, apply for, extend, maintain, modify, receive, renew, secure, or terminate
any protection by copyright, patent, registration, or other mechanism for any
composition, design, device, discovery, formula, invention, mark, name, process,
program, recipe, service mark, trademark, trade name, or other protectable intangible or
tangible endeavor or work;
2734
2735
2736
2737
(2) Appeal from, compromise, conduct, defend, intervene in, participate in, prosecute,
settle, or terminate any proceeding before any administrative, judicial, or other agency,
board, body, commission, court, examiner, judge, magistrate, officer, or other official or
tribunal with jurisdiction of any proprietary interest or material;
2738
2739
2740
(3) Arrange or contract for payment or receipt of any charges, fees, royalties, or other
payments for assignment, license, sale, transfer, use, or other exploitation of any
proprietary interest or material;
2741
2742
2743
(4) Deal in and with any business data, business or trade secret, business method, client
or customer list, dealership, franchise, license, manufacturing process, or other
proprietary interest or material.
2744
2745
(H) Language in a power of attorney granting power with respect to insurance and
annuities authorizes the attorney in fact to do all of the following:
2746
2747
2748
2749
(1) Continue, pay the premium or assessment on, modify, rescind, release, or terminate a
contract procured by or for the principal that insures or provides an annuity to either the
principal or another person, whether or not the principal is a beneficiary under the
contract;
2750
2751
2752
(2) Procure new, different, or additional contracts of insurance or annuities for the
principal or the principal’s spouse, children, or other dependents and select the amount,
type of insurance or annuity, and mode of payment;
133
2753
2754
(3) Pay the premium or assessment on, modify, rescind, release, or terminate a contract of
insurance or annuity procured by the attorney in fact;
2755
(4) Apply for and receive a loan on the security of a contract of insurance or annuity;
2756
(5) Surrender and receive the cash surrender value;
2757
(6) Exercise an election that is not specifically prohibited;
2758
(7) Change the manner of paying premiums;
2759
2760
(8) Change or convert the type of insurance or annuity, with respect to which the
principal has or claims to have a power described in this section;
2761
2762
(9) If specifically authorized in the power of attorney, change the beneficiary of a
contract of insurance or annuity designated by the principal;
2763
2764
(10) Apply for and procure government aid to guarantee or pay premiums of a contract of
insurance on the life of the principal;
2765
2766
(11) Collect, sell, assign, hypothecate, borrow upon, or pledge the interest of the principal
in a contract of insurance or annuity;
2767
2768
2769
2770
(12) Pay from proceeds or otherwise, compromise or contest, and apply for refunds in
connection with, a tax or assessment levied by a taxing authority with respect to a
contract of insurance or annuity or its proceeds or liability accruing by reason of the tax
or assessment.
2771
2772
2773
(I)(1) Except for the restrictions set forth in division (I)(2) of this section, language in a
power of attorney granting power with respect to retirement plan transactions authorizes
the attorney in fact to do all of the following:
2774
2775
2776
2777
(a) Contribute to, withdraw from, and deposit funds in any type of retirement plan,
including, but not limited to, any tax qualified or nonqualified pension, profit sharing,
stock bonus, employee savings and other retirement plan, individual retirement account,
deferred compensation plan, or other type of employee benefit plan;
2778
(b) Select and change payment options for the principal under any retirement plan;
2779
2780
(c) Make rollover contributions from any retirement plan to other retirement plans or
individual retirement accounts;
2781
2782
(d) Exercise all investment powers available under any type of self-directed retirement
plan.
134
2783
2784
2785
(2) Unless specifically authorized in a power of attorney, language in a power of attorney
granting power with respect to retirement plan transactions does not authorize the
attorney in fact to do any of the following:
2786
2787
2788
2789
2790
2791
2792
(a) Elect or change a retirement allowance plan of payment on the principal’s behalf
under Chapter 145., 742., 3305., 3307., 3309., or 5505. of the Revised Code, other than a
joint and survivor annuity leaving one-half to the spouse if the principal is married, a
single life annuity if the principal is single, or any plan that includes a partial lump sum
option; except that no express authority is necessary to elect a plan that meets the
minimum requirements of a court order to elect a plan that will pay a lifetime benefit to a
former spouse.
2793
2794
(b) If authorized under section 145.814 of the Revised Code, change an election made
under section 145.19 or 145.191 of the Revised Code;
2795
2796
2797
2798
(c) Terminate the principal’s membership in the public employees retirement system,
state teachers retirement system, school employees retirement system, Ohio police and
fire pension fund, or state highway patrol retirement system by withdrawing the
principal’s accumulated employee contributions.
2799
2800
(J) Language in a power of attorney granting power with respect to safe deposit
transactions authorizes the attorney in fact to do all of the following:
2801
(1) Open, continue, and have access to all safe deposit boxes;
2802
(2) Sign, renew, release, or terminate any safe deposit contract;
2803
(3) Drill or surrender any safe deposit box.
2804
2805
2806
2807
2808
2809
(K)(1) Language in a power of attorney granting power with respect to estates, trusts, and
other relationships in which the principal is a beneficiary authorizes the attorney in fact to
act for the principal in all matters that affect a trust, probate estate, guardianship,
conservatorship, escrow, custodianship, or other fund from which the principal is, may
become, or claims to be entitled as a beneficiary to a share or payment, including all of
the following:
2810
2811
(a) Accept, reject, disclaim, receive, receipt for, sell, assign, release, pledge, exchange, or
consent to a reduction in or modification of a share in or payment from the fund;
2812
2813
(b) Demand or obtain by litigation or otherwise money or any other thing of value to
which the principal is, may become, or claims to be entitled by reason of the fund;
2814
2815
2816
(c) Initiate, participate in, and oppose litigation to ascertain the meaning, validity, or
effect of a deed, will, declaration of trust, or other instrument or transaction affecting the
interest of the principal;
135
2817
2818
(d) Initiate, participate in, and oppose litigation to remove, substitute, or surcharge a
fiduciary;
2819
(e) Conserve, invest, disburse, and use anything received for an authorized purpose;
2820
2821
2822
(f) Transfer an interest of the principal in real property, stocks, bonds, accounts with
financial institutions, insurance, and other property to the trustee of a revocable trust
created by the principal as settlor;
2823
2824
(g) Transfer an interest of the principal in real property to any trustee or trustees of an
undisclosed trust for the benefit of the principal;
2825
2826
2827
(h) If specifically authorized in the power of attorney, designate or change the
designation of a beneficiary to receive any property, benefit, or contractual right on the
principal’s death.
2828
2829
2830
2831
2832
(2) Unless expressly authorized in the power of attorney, language granting power with
respect to estates, trusts, and other relationships in which the principal is a beneficiary
does not include authority to create, modify, or revoke a trust or authority to fund with
the principal’s property a trust not created by the principal or a person authorized to
create a trust for the principal.
2833
2834
(L) Language in a power of attorney granting power with respect to borrowing
transactions authorizes the attorney in fact to do all of the following:
2835
(1) Borrow money;
2836
2837
(2) Mortgage or pledge any real estate, tangible personal property, or intangible personal
property as security for any borrowing transactions;
2838
(3) Sign, renew, extend, pay, and satisfy any notes or other forms of obligations.
2839
2840
(M)(1) Language in a power of attorney granting power with respect to fiduciary
transactions authorizes the attorney in fact to do all of the following:
2841
2842
(a) Represent and act for the principal in all ways and in all matters affecting any fund
with respect to which the principal is a fiduciary;
2843
2844
2845
2846
2847
(b) Initiate, participate in, and oppose any judicial or other proceeding for the removal,
substitution, or surcharge of a fiduciary, conserve, invest, or disburse anything received
for the purposes of the fund for which it is received, and reimburse the attorney in fact for
any expenditures properly made by the attorney in fact in the execution of the powers
conferred on the attorney in fact by the power of attorney;
2848
2849
(c) Agree and contract in any manner, with any person, and on any terms that the attorney
in fact selects for the accomplishment of the purposes set forth in division (M) of this
136
2850
2851
section and perform, rescind, reform, release, or modify the agreement or contract or any
other similar agreement or contract made by or for the principal;
2852
2853
2854
2855
2856
(d) Execute, acknowledge, verify, seal, file, and deliver any consent, designation,
pleading, notice, demand, election, conveyance, release, assignment, check, pledge,
waiver, admission of service, notice of appearance, or other instrument that the attorney
in fact determines is useful for the accomplishment of any of the purposes set forth in
division (M) of this section;
2857
2858
2859
2860
(e) Hire, discharge, and compensate any attorney, accountant, expert witness, or other
assistants when the attorney in fact determines that action to be desirable for the proper
execution by the attorney in fact of any of the powers described in division (M) of this
section and for the keeping of needed records;
2861
(f) Perform any other acts with respect to a fund of which the principal is a fiduciary.
2862
2863
2864
2865
(2) Division (M) of this section does not authorize a fiduciary to delegate any power of a
fiduciary unless the power is one the fiduciary is authorized to delegate under the terms
of the trust agreement or other instrument governing the exercise of the power or under
the law of the jurisdiction that governs that trust agreement or other instrument.
2866
2867
2868
(3) As used in division (M) of this section, “fund” means any trust, probate estate,
guardianship, conservatorship, escrow, custodianship, or other fund in which the
principal has, or claims to have, an interest as a fiduciary.
2869
2870
2871
2872
(4) All powers described in division (M) of this section may be exercised equally with
respect to any fund of which the principal is a fiduciary as of the date of the power of
attorney or becomes a fiduciary after that date, and regardless of whether the fund is
located in the state of Ohio or elsewhere.
2873
2874
(N) Language in a power of attorney granting power with respect to personal and family
maintenance authorizes the attorney in fact to do all of the following:
2875
2876
2877
2878
2879
(1) Do the acts necessary to maintain the customary standard of living of the principal,
the principal’s spouse, children, and other individuals customarily or legally entitled to be
supported by the principal, including providing living quarters by purchase, lease, or
other contract or paying the operating costs, including interest, amortization payments,
repairs, and taxes, on premises owned by the principal and occupied by those individuals;
2880
2881
2882
(2) For the individuals described in division (N)(1) of this section, provide normal
domestic help, usual vacations and travel expenses, and funds for shelter, clothing, food,
appropriate education, and other current living costs;
2883
2884
(3) For the individuals described in division (N)(1) of this section, pay expenses for
necessary medical, dental, and surgical care, hospitalization, and custodial care;
137
2885
2886
2887
(4) For the individuals described in division (N)(1) of this section, continue any provision
made by the principal for automobiles or other means of transportation, including
registering, licensing, insuring, and replacing them;
2888
2889
2890
(5) Maintain or open charge accounts for the convenience of the individuals described in
division (N)(1) of this section and open new accounts the attorney in fact considers
desirable to accomplish a lawful purpose;
2891
2892
2893
(6) Continue payments incidental to the membership or affiliation of the principal in a
church, club, society, order, or other organization or continue contributions to those
organizations.
2894
2895
2896
(O) Language in a power of attorney granting power with respect to benefits from social
security, medicare, medicaid, other governmental programs, or civil or military service
authorizes the attorney in fact to do all of the following:
2897
2898
2899
2900
2901
(1) Execute vouchers in the name of the principal for allowances and reimbursements
payable by the United States or a foreign government or by a state or political subdivision
of a state to the principal, including allowances and reimbursements for transportation of
the principal’s spouse, children, and other individuals customarily or legally entitled to be
supported by the principal, and for shipment of their household effects;
2902
2903
2904
2905
(2) Take possession and order the removal and shipment of property of the principal from
a governmental or private post, warehouse, depot, dock, or other place of storage or
safekeeping and execute and deliver a release, voucher, receipt, bill of lading, shipping
ticket, certificate, or other instrument for that purpose;
2906
2907
2908
(3) Prepare, file, and prosecute a claim of the principal to a benefit or assistance, financial
or otherwise, to which the principal claims to be entitled under a statute or governmental
regulation;
2909
2910
(4) Prosecute, defend, submit to arbitration, settle, and propose or accept a compromise
with respect to any benefits the principal may be entitled to receive;
2911
2912
(5) Receive the financial proceeds of a claim of the type described in division (O) of this
section and conserve, invest, disburse, or use anything so received for a lawful purpose.
2913
2914
(P)(1) Language in a power of attorney granting power with respect to records, reports,
and statements authorizes the attorney in fact to do all of the following:
2915
2916
2917
(a) Keep records of all cash received and disbursed for or on account of the principal, of
all credits and debits to the account of the principal, and of all transactions affecting in
any way the assets and liabilities of the principal;
2918
2919
(b) Prepare, execute, and file all tax, social security, unemployment insurance, and
information returns required by the laws of the United States, of any state or political
138
2920
2921
2922
2923
subdivision of any state, or of any foreign government and to prepare, execute, and file
all other papers and instruments that the attorney in fact determines is desirable or
necessary for the safeguarding of the principal against excess or illegal taxation or against
penalties imposed for a claimed violation of any law or other governmental regulation;
2924
2925
2926
2927
(c) Prepare, execute, and file any record, report, or statement with respect to price, rent,
wage, or rationing control or other governmental activity that the attorney in fact
determines is desirable or necessary for the safeguarding or maintenance of the
principal’s interest;
2928
2929
2930
(d) Hire, discharge, and compensate any attorney, accountant, or other assistant when the
attorney in fact determines that action to be desirable for the proper execution by the
attorney in fact of any of the powers described in this section;
2931
2932
2933
(e) Do any other act, in connection with the preparation, execution, filing, storage, or
other utilization of any records, reports, or statements of or concerning the principal’s
affairs that the principal can do through an attorney in fact.
2934
2935
2936
2937
(2) An attorney in fact may exercise all powers described in division (P)(1) of this section
equally with respect to any records, reports, or statements of or concerning the affairs of
the principal as they exist at the time the principal gives the power of attorney or after the
principal gives the power of attorney, in the state of Ohio or elsewhere.
2938
2939
(Q) Language in a power of attorney granting power with respect to tax matters
authorizes the attorney in fact to do all of the following:
2940
2941
2942
2943
2944
2945
2946
2947
(1) Prepare, sign, and file federal, state, local, and foreign income, gift, payroll, and other
tax returns, claims for refunds, requests for extensions of time, petitions regarding tax
matters, and any other tax-related documents, including receipts, offers, waivers,
consents (including consents and agreements under section 2032A of the “Internal
Revenue Code of 1986,” Pub. L. No. 94-455, 26 U.S.C. 2032A, as amended), closing
agreements, and any power of attorney required by any tax collection or enforcement
agency with respect to a tax year upon which the statute of limitations has not run and the
following twenty-five tax years;
2948
2949
(2) Pay taxes due, collect refunds, post bonds, receive confidential information, and
contest deficiencies determined by any tax collection or enforcement agency;
2950
2951
(3) Exercise any election available to the principal under federal, state, local, or foreign
tax law;
2952
2953
(4) Act for the principal in all tax matters for all periods before any tax collection or
enforcement agency.
2954
2955
(R) Language in a power of attorney granting power with respect to licenses authorizes
the attorney in fact to obtain, renew, or transfer all of the following:
139
2956
(1) Automobile, truck, boat, and other vehicle licenses;
2957
(2) Business licenses of any type.
2958
2959
(S) Language in a power of attorney granting power with respect to access to documents
authorizes the attorney in fact to do all of the following:
2960
2961
2962
2963
2964
2965
(1) Have access to and possession of the principal’s will, trusts, instruments, deeds, life
insurance policies, contracts, employee benefit records, and other documents, including,
but not limited to, documents protected under the “Financial Services Modernization Act
of 1999,” Pub. L. No. 106-102, 15 U.S.C. 6801, as amended, and the “Health Insurance
Portability and Accountability Act of 1996,” Pub. L. No. 104-191, 42 U.S.C. 300gg, as
amended;
2966
(2) Have access to mail and redirect mail.
2967
2968
(T) Language in a power of attorney granting power with respect to employment of
agents authorizes the attorney in fact to do all of the following:
2969
2970
2971
(1) Employ attorneys, accountants, investment advisors, expert witnesses, realtors, or
other professionals when the attorney in fact believes the employment of the professional
to be desirable;
2972
(2) Pay any agents reasonable compensation.
2973
2974
2975
(U) Language in a power of attorney with respect to delegation authorizes the attorney in
fact to delegate any or all of the powers granted by the principal to any person or persons
whom the attorney in fact selects.
2976
2977
(V) Language in a power of attorney granting power with respect to claims and litigation
authorizes the attorney in fact to do all of the following:
2978
2979
2980
2981
2982
(1) Assert and prosecute before a court or administrative agency a claim, claim for relief,
cause of action, counterclaim, offset, or defense against an individual, organization, or
government, including an action to recover property or any other thing of value, to
recover damages sustained by the principal, to eliminate or modify tax liability, or to seek
an injunction, specific performance, or other relief;
2983
2984
(2) Bring an action to determine adverse claims, intervene in litigation, and act as amicus
curiae;
2985
2986
2987
(3) In connection with litigation, procure an attachment, garnishment, libel, order of
arrest, or other preliminary, provisional, or intermediate relief and use any available
procedure to effect or satisfy a judgment, order, or decree;
140
2988
2989
2990
(4) In connection with litigation, perform any lawful act, including acceptance of tender,
offer of judgment, admission of facts, submission of a controversy on an agreed
statement of facts, consent to examination before trial, and bind the principal in litigation;
2991
2992
(5) Submit to arbitration, settle, and propose or accept a compromise with respect to a
claim or litigation;
2993
2994
2995
2996
2997
2998
2999
3000
(6) Waive the issuance and service of process upon the principal, accept service of
process, appear for the principal, designate persons upon whom process directed to the
principal may be served, execute and file or deliver stipulations on the principal’s behalf,
verify pleadings, seek appellate review, procure and give surety and indemnity bonds,
contract and pay for the preparation and printing of records and briefs, and receive and
execute and file or deliver a consent, waiver, release, confession of judgment, satisfaction
of judgment, notice, agreement, or other instrument in connection with the prosecution,
settlement, or defense of a claim or litigation;
3001
3002
3003
3004
(7) Act for the principal with respect to a voluntary or involuntary bankruptcy or
insolvency proceeding concerning the principal or another person, a reorganization
proceeding, or a receivership or application for the appointment of a receiver or trustee
that affects an interest of the principal in property or any other thing of value;
3005
3006
3007
(8) Pay a judgment against the principal or a settlement made in connection with
litigation and receive and conserve money or any other thing of value paid in settlement
of or as proceeds of a claim or litigation.
3008
141
3009
EXHIBIT F
3010
§ 5810.14 Transferring Personal Property to the Trustee of a Trust
3011
3012
3013
3014
(A) Personal property may be transferred to a trustee as authorized by section 5804.01of
the Revised Code by executing the necessary written instrument identifying the personal
property transferred and identifying the trustee by name, followed by the designation
trustee.
3015
3016
3017
3018
3019
3020
3021
3022
(B) The future transfer of personal property to a trustee as a designated beneficiary
(including but not limited to a transfer on death designation or payable on death
designation), participation in a joint ownership arrangement or any other contractual
transfer arrangement, made by executing the necessary written instrument identifying the
trustee by name, followed by the designation trustee shall be deemed to be a transfer of
the personal property to the trustee serving at the time of the future transfer. A
certification of trust (under section 5810.13 of the Revised Code) may establish the
identity of the trustee and any succession of trustees.
3023
3024
3025
3026
3027
3028
(C) A written instrument transferring personal property to a trust or a written instrument
providing for the future transfer of personal property to a trust, by identifying the trust
without identifying the trustee, shall be deemed to be a transfer of the personal property
to the trustee serving at the time of transfer. A certification of trust (under section
5810.13 of the Revised Code) may establish the identity of the trustee and any succession
of trustees.
3029
3030
3031
(D) An instrument of transfer under this section may but is not required to contain
additional identifying information including the trust name, the name of the settler, the
date of trust creation and the date of applicable trust amendments.
3032
3033
(E) Nothing in this section is intended to affect the operation of section 5301.03 of the
Revised Code.
3034
3035
3036
(F) Nothing in this section is intended to affect or be in conflict with Revised Code
Section 5301.071 (E) “Validity of instruments” which addresses transfers of real property
to or from trusts and trustees.
3037
(G) This section is declarative of existing law.
3038
§ 5301.071 Validity of instruments.
3039
3040
3041
3042
No instrument conveying real estate, or any interest therein, and of record in the
office of the county recorder of the county within this state in which such real estate is
situated shall be deemed defective nor shall the validity of such conveyance be affected
because:
3043
3044
3045
(A)
The dower interest of the spouse of any grantor was not specifically
released but such spouse executed said instrument in the manner provided in Section
5301.01 of the Revised Code.
142
3046
3047
(B)
The officer taking the acknowledgement of such instrument having an
official seal did not affix such seal to the certificate of acknowledgement.
3048
3049
(C)
The certificate of acknowledgement is not on the same sheet of paper as
the instrument.
3050
3051
3052
(D)
The executor, administrator, guardian, assignee, or trustee making such
instrument signed or acknowledged the same individually instead of in his representative
or official capacity.
3053
3054
3055
3056
3057
3058
3059
3060
3061
3062
3063
3064
3065
3066
3067
(E)
The grantor or grantee of the instrument is a trust rather than the trustee or
trustees of the trust, provided that the trust named as grantor or grantee has been duly
created under the laws of the state of its existence at the time of the conveyance and a
memorandum of trust complying with Section 5301.255 of the Revised Code and
containing a description of the real property conveyed by such instrument is recorded in
the office of the county recorder in which the instrument of conveyance is recorded.
Upon compliance with the preceding sentence, a conveyance to a trust shall be deemed to
be a conveyance to the trustee or trustees of the trust in furtherance of the manifest
intention of the parties. This subsection (E) shall be given retroactive effect to the fullest
extent permitted under Article II, Section 28, of the Ohio Constitution; provided,
however, that this subsection (E) shall not be given retroactive or curative effect if to do
so would invalidate or supersede any instrument conveying real estate, or any interest
therein, recorded in the office of the county recorder in which such real estate is situated
prior to the date of recording of a curative memorandum of trust or the effective date of
this statute, whichever event occurs last.
3068
Rationale for Proposal:
3069
3070
3071
Currently, many Ohio citizens utilize revocable and irrevocable trust agreements as part
of the estate planning process. Attorneys and others recommend that persons who create
such trusts should do some or all of the following:
3072
3073
1.
Re-register personal property from individual names into the names of the
trustees of trusts;
3074
3075
2.
Create new deeds wherein the Grantees would be the trustees of one or
more trusts; and
3076
3077
3078
3.
Create beneficiary designations for insurance proceeds, retirement plan
proceeds and payable on death (“POD and TOD”) arrangements naming a
trust as a beneficiary.
3079
3080
3081
3082
3083
There is currently no statutory guidance regarding the proper way to register an
asset into the name of the trustees of a trust or to designate a trust as beneficiary. By way
of example, some practitioners have prepared deeds transferring real estate from an
individual to the “Tom Smith Trust” and not to: “Tom Smith, Trustee of the Tom Smith
Trust”. Pursuant to Ohio common law, any transfer to a “trust” and not to the “trustee of
143
3084
3085
3086
3087
3088
the trust” is void. Many recorded deeds transferring real estate to a “trust” and not to a
“trustee” are currently void and substantial cost may be required to correct these deeds.
Further, there is no statutory guidance regarding the re-registration of accounts at
financial institutions, brokerage firms or other “custodians” from an individual’s name to
the trustee of that individual’s trust.
3089
3090
3091
3092
3093
3094
3095
3096
3097
3098
3099
3100
3101
3102
3103
3104
3105
3106
3107
In order to provide clarity regarding the naming of trustees and/or trusts as current
registered owners or future owners of personal property, the Estate Planning, Trust and
Probate Law Council is proposing new Revised Code Section 5810.14 which will then
provide a safe harbor for practitioners and the citizens of Ohio to use when implementing
their estate plans by funding their trusts. New Section 5810.14 incorporates the use of
the Certification of Trust currently provided by Revised Code Section 5810.13 to cure
any confusion which may exist as the result of registering intangible personal property
(stock certificates, brokerage accounts, CDs, accounts at financial institutions, etc.) into
the name of the “trust” instead of the “trustees” of the trust. The language of the
proposed statute also clarifies the manner in which the identity of the “currently-serving”
trustee of a trust referenced in a beneficiary designation or other similar instrument is
proven by utilizing a Certification of Trust already included in the “Ohio Trust Code” at
Revised Code Section 5810.13. Frequently, the person or entity serving as trustee at the
time such a beneficiary designation is created will be different than when the payment is
made upon the death of the insured, contributor to an IRA, participant in a profit-sharing
plan, etc. Prospectively, new Section 5810.14 will provide guidance to financial
institutions, attorneys, financial planners and Ohio citizens by providing a statutorily
suggested method of registration of assets into “trust” form and efficiently identifying the
proper “then-serving trustee”.
3108
3109
3110
3111
3112
3113
3114
3115
3116
3117
3118
New Revised Code Section 5301.071(E) incorporates the use of a Memorandum
of Trust (currently sanctioned by Ohio Law) to allow deeds which would otherwise be
void (pursuant to the common law) to become cured and valid upon filing of such a
Memorandum with the County Recorder’s Office where the previously “void” deed was
recorded. As a result, an efficient and relatively low-cost procedure which is not
currently statutorily recognized will be provided to Ohio citizens and their advisors to
replace the inefficient and relatively expensive procedure involving costly title searches,
re-opening of estates of grantors who have died and similar expensive processes. In
addition, the provisions of new Revised Code Section 5301.071(E) also provide a
statutorily sanctioned procedure for preparing deeds wherein the intended grantee is
meant to be a “trustee”.
3119
3120
3121
If the proposed legislation is approved and enacted, the process of estate planning and the
funding of trusts for Ohio citizens will be made more efficient, more uniform and less
costly.
144