Ohio Legacy Trust

Does an Ohio Domestic Asset Protection Trust Fit Into My Estate Planning?

Ohio Domestic Asset Protection Trusts can shield your assets from creditors, but only if your trust is drafted, implemented, and funded within a properly structured estate plan. An experienced estate planning attorney is a must when implementing this type of sophisticated trust to ensure that it functions appropriately within your overall estate plan.

The Ohio Asset Management Modernization Act (“AMMA”) was enacted into law and became effective in early 2013. Specifically, the AMMA enacted Ohio Revised Code §5816.01, et seq., also known as the “Ohio Legacy Trust Act”, which creates a unique opportunity for individuals to shelter assets from most creditors. Simply stated, the new law allows for the creation of an irrevocable trust that, if funded properly, can act as a barrier to future liabilities. A client’s financial resources or the liability risks inherent in certain professions (or some investment activities) may make it prudent to consider an Ohio Legacy Trust as another aspect of your estate planning. The Ohio Domestic Asset Protection Trust is a “self-settled spendthrift, irrevocable trust” that is effective against the settlor’s creditors, as well as creditors of other beneficiaries of the settlor.

For many years, Ohio (and many other states) law prevented individuals from using self-settled irrevocable trusts to shield their assets from their creditors. As discussed above, the Ohio Legacy Trust Act now authorizes this action for the first time in Ohio. Further, while some other states have asset protection laws, the AMMA stands alone as the most comprehensive statutory framework in the asset protection area making Ohio a top jurisdiction for individuals to engage in this type of estate planning.

The Ohio Legacy Trust may have applications in all types of planning, including, but not limited to:

  • Asset protection planning
  • Divorce planning
  • Prenuptial planning
  • Bankruptcy planning
  • Estate planning
  • Business planning
  • Gift (and gift tax) planning
  • Income tax planning

Simply put, the AMMA has given individuals a powerful tool to achieve asset protection objections in a broad array of circumstances.

Given the broad application of the Ohio Legacy Trust, it could be used to help just about anyone. However, asset protection trusts are usually recommended for individuals in higher risk occupations and professions. Some possible candidates for an Ohio Legacy Trust include individuals who may be: (i) receiving substantial inheritances, gifts, or other “sudden wealth monies”; (ii) in professions that are exposed to greater liability risks, such as: physicians, lawyers, accountants, farmers, architects, business owners, financial planners, rental real estate owners, real estate developers, investment advisors, and consultants; and (iii) wanting to provide greater protections and estate planning options for certain “nest-egg” assets accumulated over time.

The cost of creating an Ohio Legacy Trust will vary greatly from individual to individual, since no two cases are the same. The implementation costs will thus be influenced by a number of factors, including: ease/difficulty in obtaining information to perform the solvency analysis; unique provisions/needs for the trust and qualified affidavit; and the types of assets used to fund the trust.

If you are interested in an Ohio Legacy Trust, please contact our Dublin, Ohio estate planning attorneys. We will be glad to set up a meeting with you to discuss your planning objectives and assist in determining if an Ohio Legacy Trust would work for you. We will also be able to give you an idea of the cost and benefits of an Ohio Legacy Trust as it applies to your unique circumstances.

Arenstein & Andersen Co., LPA provides comprehensive estate planning and probate services. Some of our legal services relating to estate planning and probate include: preparing revocable trusts, wills, powers of attorney, healthcare powers of attorney, and living wills; assisting with advanced wealth transfer strategies, including the preparation of irrevocable trusts, such as domestic asset protection trusts, charitable remainder trusts, charitable lead trusts, and life insurance trusts, along with other wealth transfer tools such as family limited partnerships; counseling clients on probate avoidance techniques to streamline and reduce the costs associated with estate administration; assisting business owners with succession and wealth transfer planning; planning for children or other loved ones with special needs to include the use of wholly discretionary trusts, supplemental services trusts, and special needs trusts to protect the beneficiary’s eligibility for public assistance benefits; advising clients on Medicaid planning and other elder care issues ; representing Executors, Administrators, and Trustees with the administration of estates and trusts, including assistance with tax planning and the preparation of Federal estate tax returns, and Federal and Ohio fiduciary income tax returns; and assisting with applications for, and the administration of, guardianships for both minors and incompetents.