On March 27, 2013, a new Ohio law will become effective. This law will allow an individual to protect their assets to an extent that never previously existed in Ohio.
The new law is known as the Ohio Legacy Trust Act. Mr. Brian Layman and four of his colleagues were present during the signing; they crafted the bill for Ohio. The law was passed by the Ohio General Assembly and signed by Governor John Kasich on December 20, 2012.
Prior to this new law creditors could reach the assets of a trust to the same extent as the maker of the trust. In other words, if the maker of the trust is a beneficiary of the trust, the assets of the trust are available to the maker’s creditors.
Under the new Ohio Legacy Trust Act, this will no longer be the case. Assets that are placed in an Ohio Legacy Trust are protected from claims of creditors even if the maker of the trust is a beneficiary of that trust. Creditors cannot attach the assets as long as they remain in the trust and the trust is administered properly.
There are two major areas of exception contained in the new law.
- This law will not protect transfers made with the purpose of defrauding creditors.
- The law also permits a court to attach assets of the trust for the purpose of payment of child support, spousal support or division of marital assets in Domestic Relations Court.
This law will give those who have accumulated assets peace of mind to know that they can protect a nest egg for a rainy day. This is especially true in today’s litigious society. Professionals and business owners will find this protection especially useful in protecting their assets from claims arising out of the operation of their businesses.
Even those who do not seek the protection of the new law should benefit from it. Ohio is the only state in the Midwest that has an asset protection trust law. There are fourteen other states nationwide and some foreign countries that have this protection, but none of those are located within five hundred miles of Ohio. Ohio will benefit from Ohioans keeping their assets in Ohio and non-Ohioans bringing their trust business to this great state. In addition, this law should serve to promote business as individuals who use this law will feel a sense of security knowing that the assets they have are protected.
The Ohio Legacy Trust Act has been endorsed by the Ohio State Medical Association, the Ohio Chamber of Commerce and numerous other organizations and banks. The Legacy Trust is not for do-it-yourselfers – the law is complex and there are numerous traps for the unwary.
If you want to learn more about the Legacy Trust, please contact us today to schedule a consultation.
Brian Layman is a principal attorney with Layman, D’Atri and Associates, a law firm specializing in estate planning, trust and business law (firstname.lastname@example.org).