On January 1, 2007, the Ohio Trust Code (OTC) went into effect.  The new law imposes duties on trustees of irrevocable trusts, even trusts that existed before 1/1/07.

• Trustees must send an annual report of trust assets, liabilities and trustee compensation to current beneficiaries (and to other beneficiaries who request it).  Trustees also must keep current beneficiaries “reasonably informed about the administration of the trust and of the material facts necessary for them to protect their interests.”
• A trustee’s failure to meet a notice requirement is a breach of trust.  Remedies can include removing the trustee, denying trustee compensation, and awarding damages.
• If you have a revocable trust, you should consider revising it if you do not want these requirements to apply to your trustees.  Some requirements can be waived.
• Clients who do not want beneficiaries to receive reports can name a surrogate to receive reports instead.  The surrogate might be a family member who understands the client’s intentions and the needs of the beneficiary.  This can be helpful where beneficiaries, for example, have substance abuse issues.

To discuss the effect of this new law on your role as a trustee or on your estate plan, contact your estate planner or any member of the Taft Estate Planning Group at 513-381-2838.