Testimony of Ellen K. Meehan on HB 432 Given

Testimony of Ellen K. Meehan on HB 432 given

Tuesday, February 23rd before the House Judiciary Committee

Chairman Butler and Members of the House Judiciary Committee:

I am Ellen K. Meehan, attorney with Squire Patton Boggs in Cleveland. I appear for the Ohio State Bar Association in support of HB 432. I am the author of three amendments in HB 432 with respect to the Ohio Transfers to Minor Act and I also address the provisions of HB 432 clarifying the Ohio survivorship rules, the circumstances under which a guardian may be allowed to sell real estate, and the deposit of Wills with the Probate Court. I am a member of the Ohio State Bar Association’s Estate Planning, Trust and Probate Law Section and am currently a member of its Council.

Amendments to RC § 2105.02, .14, and .31 - .40, HB 432, Line 290

Uniform Simultaneous Death Act

Ohio’s version of the Uniform Simultaneous Death Act (“USDA”) was enacted in Ohio in 2002. Generally, the USDA requires that a person cannot receive property from a decedent unless that person survives the decedent by 120 hours. The proposed amendments to the USDA will clarify that the USDA specifically applies to property inherited through intestacy; will clarify that the USDA will apply to posthumously-born children; and will clarify the meaning of certain provisions that have been a source of controversy among estate planning members of the Bar.

Amendment to RC § 2107.07 & .10 HB 432, Line 605

Deposit of Wills

Ohio law currently provides for the deposit of Wills by the testator in the office of the judge of the probate court in the county in which the testator lives. Amendments to § 2107.07 and .10 will allow a deposit of the Will to be made either before or after a testator’s death and will provide that the deposited Will shall not be a public record until the time that an application is filed to probate the Will. If no application for probating the Will is made, the Will will remain sealed and its contents never revealed. The Amendments also change the existing law of how forfeiture for withholding a Will applies.

Amendment to RC § 2127.012, HB 432, Line 826

Sale of Land by Guardian

Ohio law now provides that a guardian’s only option for selling real estate owned by the ward is to implement a land sale proceeding under RC § 2127.10. Such proceedings can be time-consuming, complicated, and expensive. New § 2127.012 will provide for a simplified method of obtaining authority to sell real estate owned by the ward, similar to the proceeding that administrators of a decedent’s estate may utilize. Under the proposed new law, guardians of an estate may sell the real estate if (1) the ward’s spouse and next of kin, all of whom must be adults, consent to the sale and such consents are filed with the probate court; (2) the sale price is equal to at least 80% of the appraised value of the property; and (3) the guardian must provide a bond or additional bond in an amount that the court considers sufficient. The proposed new section will make it simpler for guardians to sell a ward’s real estate, will put safeguards into place, and will conserve the ward’s assets by making the process simpler and less expensive than a land sale proceeding.

Amendments to RC § 5801.01-.10, HB 432, Line 1387

Ohio Transfers to Minors Act

Current Ohio law provides that assets held in custodianship form must be distributed outright to the minor when the minor attains age 21. The proposed amendments would allow for delayed distribution beyond the age of 21 of custodial property transferred under a Will, Trust, or exercise of a testamentary power of appointment if the governing document provides that the custodianship is to continue until a specified age, not later than the date the minor attains age 25. If the custodial property is transferred by inter vivos gift, delayed distribution until age 25 is permissible but the donee has an automatic right of withdrawal for a period of 60 days after the donee attains age 21, which right may be negated in the instrument of transfer. The proposal also clarifies who has the right to name a successor custodian if one is not already named and the named custodian dies or can no longer serve. Finally, the creation of a custodianship that is not authorized by a Will, Trust, or other governing instrument is allowed if certain conditions are met and court approval is necessary where the value of the custodial property exceeds $10,000. The Ohio guardianship statute allows a guardianship to be terminated if the entire assets of the ward do not exceed $25,000. It is proposed that the threshold requirement for court approval of the creation of a custodianship under the Ohio Transfers to Minors Act be increased from $10,000 to $25,000, to coordinate with the guardianship statute.

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