As Introduced

136th General Assembly

Regular Session H. B. No. 446

2025-2026

To amend sections 1336.04, 1336.05, 1336.09, 1337.34, 1337.36, 1337.42, 1337.52, 2117.02, 5701.11, 5801.04, 5801.07, 5806.02, 5806.03, 5808.19, 5810.08, 5812.43, 5815.25, and 5816.11; to enact sections 5808.161, 5818.01, 5818.011, 5818.02, 5818.03, 5818.04, 5818.05, 5818.06, 5818.07, 5818.08, 5818.09, 5818.10, 5818.11, 5818.12, 5818.13, 5818.14, 5818.15, 5818.16, 5818.17, 5818.18, 5818.19, 5818.20, 5818.21, 5818.22, 5818.23, 5818.24, 5818.25, 5818.26, 5818.27, 5818.28, 5818.29, 5818.30, 5818.31, 5818.32, and 5818.33; and to repeal section 5808.08 of the Revised Code to modify trust and probate laws.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 1336.04, 1336.05, 1336.09, 1337.34, 1337.36, 1337.42, 1337.52, 2117.02, 5701.11, 5801.04, 5801.07, 5806.02, 5806.03, 5808.19, 5810.08, 5812.43, 5815.25, and 5816.11 be amended and sections 5808.161, 5818.01, 5818.011, 5818.02, 5818.03, 5818.04, 5818.05, 5818.06, 5818.07, 5818.08, 5818.09, 5818.10, 5818.11, 5818.12, 5818.13, 5818.14, 5818.15, 5818.16, 5818.17, 5818.18, 5818.19, 5818.20, 5818.21, 5818.22, 5818.23, 5818.24, 5818.25, 5818.26, 5818.27, 5818.28, 5818.29, 5818.30, 5818.31, 5818.32, and 5818.33 of the Revised Code be enacted to read as follows:

Sec. 1336.04. (A) A Subject to division (C) of this section, a transfer made or an obligation incurred by a debtor is fraudulent as to a creditor, whether the claim of the creditor arose before, or within a reasonable time not to exceed four years after, the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation in either of the following ways:

(1) With actual intent to hinder, delay, or defraud any creditor of the debtor;

(2) Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and if either of the following applies:

(a) The debtor was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction;

(b) The debtor intended to incur, or believed or reasonably should have believed that the debtor would incur, debts beyond the debtor's ability to pay as they became due.

(B) In determining actual intent under division (A)(1) of this section, consideration may be given to all relevant factors, including, but not limited to, the following:

(1) Whether the transfer or obligation was to an insider;

(2) Whether the debtor retained possession or control of the property transferred after the transfer;

(3) Whether the transfer or obligation was disclosed or concealed;

(4) Whether before the transfer was made or the obligation was incurred, the debtor had been sued or threatened with suit;

(5) Whether the transfer was of substantially all of the assets of the debtor;

(6) Whether the debtor absconded;

(7) Whether the debtor removed or concealed assets;

(8) Whether the value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred;

(9) Whether the debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred;

(10) Whether the transfer occurred shortly before or shortly after a substantial debt was incurred;

(11) Whether the debtor transferred the essential assets of the business to a lienholder who transferred the assets to an insider of the debtor.

(C) No transfer made or obligation incurred by a debtor due to or as a result of the debtor's death is actionable under division (A)(2) of this section.

Sec. 1336.05. (A) A Subject to division (C) of this section, a transfer made or an obligation incurred by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made or the obligation was incurred if the debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation and the debtor was insolvent at that time or the debtor became insolvent as a result of the transfer or obligation.

(B) A Subject to division (C) of this section, a transfer made or an obligation incurred by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made or the obligation was incurred if the transfer was made to or the obligation was incurred with respect to an insider for an antecedent debt, the debtor was insolvent at that time, and the insider had reasonable cause to believe that the debtor was insolvent.

(C) No transfer made or obligation incurred by a debtor due to or as a result of the debtor's death is actionable under this section.

Sec. 1336.09. A (A) Subject to division (B) of this section, a claim for relief with respect to a transfer or an obligation that is fraudulent under section 1336.04 or 1336.05 of the Revised Code is extinguished unless an action is brought in accordance with one of the following:

~~(A)~~(1) If the transfer or obligation is fraudulent under division (A)(1) of section 1336.04 of the Revised Code, within four years after the transfer was made or the obligation was incurred or, if later, within one year after the transfer or obligation was or reasonably could have been discovered by the claimant;

~~(B)~~(2) If the transfer or obligation is fraudulent under division (A)(2) of section 1336.04 or division (A) of section 1336.05 of the Revised Code, within four years after the transfer was made or the obligation was incurred;

~~(C)~~(3) If the transfer or obligation is fraudulent under division (B) of section 1336.05 of the Revised Code, within one year after the transfer was made or the obligation was incurred.

(B) Notwithstanding division (A) of this section, any claim for relief based on a transfer made or obligation incurred by a debtor due to or as a result of the debtor's death is extinguished unless an action is brought within six months after the debtor's death.

Sec. 1337.34. (A) Notwithstanding provisions in the power of attorney, an agent that has accepted appointment shall ~~do all of the following~~act in accordance with all of the following mandatory duties, none of which can be waived:

(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;

(2) Act in good faith;

(3) Act only within the scope of authority granted in the power of attorney;

(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 all of the following:

(a) The value and nature of the principal's property;

(b) The principal's foreseeable obligations and need for maintenance;

(d) Eligibility for a benefit, a program, or assistance under a statute or regulation.

(B) Except as otherwise provided in the power of attorney, an agent that has accepted appointment shall do all of the following:

(1) Act loyally for the principal's benefit;

(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;

(3) Act with the care, competence, and diligence ordinarily exercised by agents in similar circumstances;

(4) Keep a record of all receipts, disbursements, and transactions made on behalf of the principal;

(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.

(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.

(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.

(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.

(F) Absent a breach of duty to the principal, an agent is not liable if the value of the principal's property declines.

(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.

(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 thirty 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 thirty days.

Sec. 1337.36. (A) Any of 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;

(2) A guardian, conservator, or other fiduciary acting for the principal, including an executor or administrator of the estate of a deceased principal;

(3) A person authorized to make health-care decisions for the principal;

(4) The principal's spouse, parent, or descendant;

(5) An individual who would qualify as a presumptive heir of the principal;

(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;

(7) A governmental agency having regulatory authority to protect the welfare of the principal;

(8) The principal's caregiver or another person that demonstrates sufficient interest in the principal's welfare;

(9) A person asked to accept the power of attorney.

(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.

(C) In a judicial proceeding under this chapter involving the administration of a power of attorney, including actions under this section, the court, as justice may require, may award costs and expenses, including reasonable attorney's fees, to any party, to be paid by another party.

Sec. 1337.42. (A) An agent under a power of attorney may do any of 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 if 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, if the trust agreement also expressly authorizes the agent to exercise the principal's powers with respect to the revocation, amendment, or ~~distribution~~withdrawal of trust property, or the ability to direct the distribution of trust property:

(1) Create, amend, revoke, or terminate an inter vivos trust to the extent permitted by section 5801.05 of the Revised Code or any other provision of Title LVIII of the Revised Code;

(2) Make a gift;

(3) Create or change rights of survivorship;

(4) Create or change a beneficiary designation;

(5) Delegate authority granted under the power of attorney;

(6) Waive the principal's right to be a beneficiary of a joint and survivor annuity, including a survivor benefit under a retirement plan;

(7) Exercise fiduciary powers that the principal has authority to delegate.

(B) Notwithstanding a grant of authority to do an act described in division (A) of this section, 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.

(C) Subject to divisions (A), (B), (D), and (E) of this section, 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 1337.45 to 1337.57 of the Revised Code.

(D) Unless the power of attorney otherwise provides, a grant of authority to make a gift is subject to section 1337.58 of the Revised Code.

(E) Subject to divisions (A), (B), and (D) of this section, if the subjects over which authority is granted in a power of attorney are similar or overlap, the broadest authority controls.

(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.

(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.

(H) Notwithstanding a grant of authority to perform any of the acts enumerated in division (A) of this section, an agent is bound by the mandatory fiduciary duties set forth in division (A) of section 1337.34 of the Revised Code, including the duty to attempt to preserve the principal's estate plan, as well as the default duties set forth in division (B) of section 1337.34 of the Revised Code that the principal has not modified.

Sec. 1337.52. (A) As used in this section, "estate, trust, or other beneficial interest" means a trust, 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.

(B) ~~Unless~~ Subject to division (E) of section 5806.02 and division (A) of section 1337.42 of the Revised Code, 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 do all of the following:

(1) Accept, receive, receipt for, sell, assign, pledge, or exchange a share in or payment from an estate, trust, or other beneficial interest;

~~(2)~~(2)(a) 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;

(b) With respect to a revocable trust of which the principal is the settlor, an agent shall not exercise a right reserved by the principal to withdraw, or to direct the distribution of, trust property unless specifically permitted by the trust instrument.

(3) Exercise for the benefit of the principal a presently exercisable general power of appointment held by the principal;

(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;

(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;

(6) Conserve, invest, disburse, or use anything received for an authorized purpose;

(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;

(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.

Sec. 2117.02. An executor or administrator within three months after the date of appointment, and before the expiration of the period prescribed for the claim by section 2117.06 of the Revised Code, shall present any claim the executor or administrator has against the estate to the probate court for allowance. The claim shall not be paid unless allowed by the court. When an executor or administrator presents a claim amounting to five hundred dollars or more, the court shall fix a day not less than four nor more than six weeks from its presentation, when the testimony touching it shall be heard. The court shall issue an order directed to the executor or administrator requiring the executor or administrator to give notice in writing to all the heirs, legatees, or devisees of the decedent interested in the estate, and to the creditors named in the order. The notice shall contain a statement of the amount claimed, designate the time fixed for hearing the testimony, and be served upon the persons named in the order at least twenty days before the time for hearing. If any persons mentioned in the order are not residents of the county, service of notice may be made upon them by publication for three consecutive weeks in a newspaper published or circulating in the county, or as the court may direct. All persons named in the order shall be parties to the proceeding, and any other person having an interest in the estate may be made a party.

Sec. 5701.11. The effective date to which this section refers is the effective date of this section as amended by H.B. 14 of the 136th general assembly.

(A)(1) Except as provided under division (A)(2) or (B) of this section, any reference in Title LVII or section 149.311, 3123.90, 3770.07, 3770.071, 3770.072, 3770.073, 3772.37, or 3775.16, or 5812.43 of the Revised Code to the Internal Revenue Code, to the Internal Revenue Code "as amended," to other laws of the United States, or to other laws of the United States, "as amended," means the Internal Revenue Code or other laws of the United States as they exist on the effective date.

(2) This section does not apply to any reference in Title LVII of the Revised Code to the Internal Revenue Code as of a date certain specifying the day, month, and year, or to other laws of the United States as of a date certain specifying the day, month, and year.

(B)(1) For purposes of applying section 5733.04, 5745.01, or 5747.01 of the Revised Code to a taxpayer's taxable year ending after March 15, 2023, and before the effective date, a taxpayer may irrevocably elect to incorporate the provisions of the Internal Revenue Code or other laws of the United States that are in effect for federal income tax purposes for that taxable year if those provisions differ from the provisions that, under division (A) of this section, would otherwise apply. The filing by the taxpayer for that taxable year of a report or return that incorporates the provisions of the Internal Revenue Code or other laws of the United States applicable for federal income tax purposes for that taxable year, and that does not include any adjustments to reverse the effects of any differences between those provisions and the provisions that would otherwise apply, constitutes the making of an irrevocable election under this division for that taxable year.

(2) Elections under prior versions of division (B)(1) of this section remain in effect for the taxable years to which they apply.

Sec. 5801.04. (A) Except as otherwise provided in the terms of the trust, Chapters 5801. to 5811. of the Revised Code govern the duties and powers of a trustee, relations among trustees, and the rights and interests of a beneficiary.

(B) The terms of a trust prevail over any provision of Chapters 5801. to 5811. of the Revised Code except the following:

(1) The requirements for creating a trust;

(2) ~~The~~ Subject to Chapter 5818. of the Revised Code, the duty of a trustee to act in good faith and in accordance with the purposes of the trust;

(3) The requirement that the trust have a purpose that is lawful, not contrary to public policy, and possible to achieve;

(4) The power of the court to modify or terminate a trust under sections 5804.10 to 5804.16 of the Revised Code;

(5) The effect of a spendthrift provision and the rights of certain creditors and assignees to reach a trust as provided in Chapter 5805. of the Revised Code;

(6) The power of the court under section 5807.02 of the Revised Code to require, dispense with, or modify or terminate a bond;

(7) The power of the court under division (B) of section 5807.08 of the Revised Code to adjust a trustee's compensation specified in the terms of the trust which is unreasonably low or high;

(8) Subject to division (C) of this section, the duty under divisions (B)(2) and (3) of section 5808.13 of the Revised Code to notify current beneficiaries of an irrevocable trust who have attained twenty-five years of age of the existence of the trust, of the identity of the trustee, and of their right to request trustee's reports;

(9) Subject to division (C) of this section, the duty under division (A) of section 5808.13 of the Revised Code to respond to the request of a current beneficiary of an irrevocable trust for trustee's reports and other information reasonably related to the administration of a trust;

(10) The effect of an exculpatory term under section 5810.08 of the Revised Code;

(11) The rights under sections 5810.10 to 5810.13 of the Revised Code of a person other than a trustee or beneficiary;

(12) Periods of limitation for commencing a judicial proceeding;

(13) The power of the court to take any action and exercise any jurisdiction that may be necessary in the interests of justice;

(14) The subject-matter jurisdiction of the court for commencing a proceeding as provided in section 5802.03 of the Revised Code.

(C) With respect to one or more of the current beneficiaries, the settlor, in the trust instrument, may waive or modify the duties of the trustee described in divisions (B)(8) and (9) of this section. The waiver or modification may be made only by the settlor designating in the trust instrument one or more beneficiary surrogates to receive any notices, information, or reports otherwise required under those divisions to be provided to the current beneficiaries. If the settlor makes a waiver or modification pursuant to this division, the trustee shall provide the notices, information, and reports to the beneficiary surrogate or surrogates in lieu of providing them to the current beneficiaries. The beneficiary surrogate or surrogates shall act in good faith to protect the interests of the current beneficiaries for whom the notices, information, or reports are received. A waiver or modification made under this division shall be effective for so long as the beneficiary surrogate or surrogates, or their successor or successors designated in accordance with the terms of the trust instrument, act in that capacity.

(D) Except as provided under divisions (B) and (C) of this section, it is the policy of this state to give maximum effect to the principle of freedom of disposition and to the enforceability of governing instruments.

Sec. 5801.07. (A) Without precluding other means for establishing a sufficient connection with the designated jurisdiction, the terms of a trust designating the principal place of administration of the trust are valid and controlling if a trustee's principal place of business is located in or a trustee is a resident of the designated jurisdiction or if all or part of the administration occurs in the designated jurisdiction.

(B) A trustee is under a continuing duty to administer the trust at a place appropriate to its purposes, its administration, and the interests of the beneficiaries. If there is more than one place reasonably appropriate for administration of a trust, the trustee may administer the trust at any of those places. The original place of administration selected by the settlor remains an appropriate place of administration.

(C) Without precluding the right of the court to order, approve, or disapprove a transfer, the trustee, in furtherance of the duty prescribed by division (B) of this section, may transfer the trust's principal place of administration to another state or to a jurisdiction outside of the United States.

(D) The trustee shall notify the current beneficiaries of a proposed transfer of a trust's principal place of administration not less than sixty days before initiating the transfer. The notice of a proposed transfer shall include all of the following:

(1) The name of the jurisdiction to which the principal place of administration is to be transferred;

(2) The address and telephone number at the new location at which the trustee can be contacted;

(3) An explanation of the reasons for the proposed transfer;

(4) The date on which the trustee expects the proposed transfer to occur.

(E) In connection with a transfer of the trust's principal place of administration, the trustee may transfer some or all of the trust property to a successor trustee designated in the terms of the trust or appointed pursuant to section 5807.04 of the Revised Code.

Sec. 5806.02. (A) Unless the terms of a trust expressly provide that the trust is irrevocable, the settlor may revoke or amend the trust. This division does not apply to a trust created under an instrument executed before January 1, 2007.

(B) If a revocable trust is created or funded by more than one settlor, all of the following apply:

(1) To the extent the trust consists of community property, either spouse acting alone may revoke the trust, but the trust may be amended only by joint action of both spouses.

(2) To the extent the trust consists of property other than community property, each settlor may revoke or amend the trust with regard to the portion of the trust property attributable to that settlor's contribution.

(3) Upon the revocation or amendment of the trust by less than all of the settlors, the trustee shall promptly notify the other settlors of the revocation or amendment.

(C) The settlor may revoke or amend a revocable trust by substantial compliance with a method provided in the terms of the trust or, if the terms of the trust do not provide a method, by any method manifesting clear and convincing evidence of the settlor's intent, provided that a revocable trust may not be revoked or amended by a will or codicil, regardless of whether it refers to the trust or specifically devises property that would otherwise have passed according to the terms of the trust unless the terms of the trust expressly allow it to be revoked or amended by a will or codicil.

(D) Upon revocation of a revocable trust, the trustee shall deliver the trust property as the settlor directs.

(E) An agent under a power of attorney may exercise a settlor's powers with respect to revocation, amendment, withdrawal of trust property, or the ability to direct the distribution of trust property only to the extent expressly authorized by both the terms of the trust and the power.

(F) A guardian of the estate of the settlor or, if no guardian of the estate has been appointed, a guardian of the person of the settlor may exercise a settlor's powers with respect to revocation, amendment, or distribution of trust property only with the approval of the court supervising the guardianship.

(G) A trustee who does not know that a trust has been revoked or amended is not liable to the settlor or settlor's successors in interest for distributions made and other actions taken on the assumption that the trust had not been amended or revoked.

Sec. 5806.03. (A) During the lifetime of the settlor of a revocable trust, whether or not the settlor has capacity to revoke the trust, the rights of the beneficiaries are subject to the control of the settlor, and the duties of the trustee, including the duties to inform and report under section 5808.13 of the Revised Code, are owed exclusively to the settlor. If the trustee breaches its duty during the lifetime of the settlor, any recovery obtained from the trustee after the settlor becomes incapacitated or dies shall be apportioned by the court. If the settlor is living when the recovery is obtained, the court shall apportion the recovery between the settlor and the trust, or allocate the entire recovery to the settlor or the trust, as it determines to be equitable under the circumstances. If the settlor is not living when the recovery is obtained, the court shall apportion the recovery between the settlor's estate and the trust, or allocate the entire recovery to the settlor's estate or the trust, as it determines to be equitable under the circumstances.

(B) During the period the power may be exercised, the holder of a power of withdrawal has the rights of a settlor of a revocable trust under this section to the extent of the property subject to the power.

(C) While a trust is revocable, the trustee may follow a direction of the settlor that is contrary to the terms of the trust.

Sec. 5808.161. (A) As used in this section:

(1) "Protector" has the same meaning as in section 5818.01 of the Revised Code.

(2) "Internal Revenue Code" has the same meaning as in section 5747.01 of the Revised Code.

(B) With respect to any trust, or portion thereof, that is treated as being owned by a person under sections 671 to 679 of the Internal Revenue Code or any similar federal, state, or other tax law, the trustee, in the trustee's sole discretion, may pay to the appropriate taxing authority or may reimburse the person being treated as the owner any amount of the person's income tax liability attributable to the inclusion of the trust's income, capital gains, deductions, or credits in the calculation of the person's taxable income. In the trustee's sole discretion, the trustee may pay such tax reimbursement amount to the person directly or to the appropriate taxing authority.

(C) This section applies to all trusts, whether created on, before, or after the effective date of this section, unless any of the following apply:

(1) Applying this section would reduce or prevent a contribution to the trust from qualifying for a federal tax benefit, including a federal tax exclusion or deduction, which was originally claimed or could have been claimed for the contribution;

(2) The trust is a grantor retained annuity trust or grantor retained unitrust during a term interest under paragraph (c)(3) of section 2702 of the Internal Revenue Code;

(3) Applying this section would be the only trigger that would result in any trust, or portion thereof, as treated as being owned by a person under sections 671 to 679 of the Internal Revenue Code or any similar federal, state, or other tax law. This division does not prohibit reimbursement in a subsequent year provided that the reimbursement relates to a year in which the person was treated as an owner under sections 671 to 679 of the Internal Revenue Code.

(D) A trustee who acts in good faith in exercising or not exercising the power granted by this section is rebuttably presumed to have acted in accordance with the terms and purposes of the trust and the interests of the beneficiaries, and no inference of impropriety shall arise as a result of a trustee exercising or not exercising the power.

(E)(1) If the terms of a trust require the trustee to act at the direction or with the consent of a protector or that the decisions governed by this section be made directly by a protector, the powers granted by this section to the trustee shall instead or also be granted, pursuant to the terms of the trust, to the protector.

(2) If a protector is granted powers under division (E)(1) of this section, that person is subject to the limitations described in this section, which shall be applied as if the protector were a trustee.

(F) A person shall not be considered a beneficiary of a trust solely by reason of the application of this section or the application of a similar provision in the trust instrument.

Sec. 5808.19. (A) As used in this section, unless otherwise provided in any other provision in this section:

~~(1)~~(1)(a) "Beneficiary" ~~means~~ includes the beneficiary of a primary gift, the beneficiary of a future interest, and ~~includes~~ a class member if the future interest is in the form of a class gift.

(b) Except as otherwise provided in this division, the amendment to division (A)(1)(a) of this section in this act shall be given retroactive effect to the fullest extent permitted under Ohio Constitution, Article II, Section 28. The amendment shall not be given retroactive effect in those instances where doing so would invalidate or supersede any instrument that conveys real property or any interest in the real property, recorded in the office of the county recorder in which that real property is situated.

(2) "Class member" means 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.

(3) "Descendant of a grandparent of the transferor" means an individual who would qualify as a descendant of a grandparent of the transferor under the rules of construction that would apply to a class gift under the transferor's will to the descendants of the transferor's grandparent.

(4) "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 may occur at a time during the course of a day.

(5) "Future interest" means an alternative future interest or a future interest in the form of a class gift.

(6) "Future interest under the terms of a trust" means a future interest that was created by a transfer creating a trust or a transfer to an existing trust, or by an exercise of a power of appointment to an existing trust, that directs the continuance of an existing trust, designates a beneficiary of an existing trust, or creates a trust.

(7) "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 division (A) of section 2105.06 of the Revised Code if the beneficiary had died intestate and unmarried on the distribution date.

(8) "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.

(9) "Stepchild" means a child of the surviving, deceased, or former spouse of the transferor and not of the transferor.

(10) "Transferor" means any of the following:

(a) 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;

(b) The testator, if the future interest was devised by will;

(B)(1)(a) As used in "surviving descendants" in divisions (B)(2)(b)(i) and (ii) of this section, "descendants" means the descendants of a deceased beneficiary or class member who would take under a class gift created in the trust.

(b) As used in divisions (B)(2)(b)(i) and (ii) of this section, "surviving beneficiaries" or "surviving descendants" means beneficiaries or descendants, whichever is applicable, who survive the distribution date by at least one hundred twenty hours.

(2) Unless a contrary intent appears in the instrument creating a future interest under the terms of a trust, each of the following applies:

(a) 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.

(b) 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 is a grandparent of the transferor, a descendant of a grandparent of the transferor, or a stepchild of the transferor, either of the following applies:

(i) 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. The surviving descendants 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.

(ii) 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 that includes more than one generation, a substitute gift is created in the surviving descendants of the deceased beneficiary or beneficiaries. 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 purposes of division (B)(2)(b)(ii) of this section, "deceased beneficiary" means a class member who failed to survive the distribution date by at least one hundred twenty hours and left one or more surviving descendants.

(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 an intent to negate the application of division (B)(2)(b) of this section.

(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 "for my spouse for life, then to my children who survive my spouse" or "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 an intent to negate the application of division (B)(2)(b) of this section. Words of survivorship under division (C)(2) of this section 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 as condition-precedent, condition-subsequent, or in any other form.

(3) A residuary clause in a will is not a sufficient indication of an intent that is 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 that is 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.

(D) If, after the application of divisions (B) and (C) of this section there is no surviving taker of the property, and a contrary intent does not appear in the instrument creating the future interest, the property passes in the following order:

(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.

(2) If no taker is produced under 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 division (D)(2) of this section, the residuary clause is treated as creating a future interest under the terms of a trust.

(3) If no taker is produced under divisions (D)(1) and (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 division (D)(3) of this section, the residuary clause in the transferor's revocable trust instrument is treated as creating a future interest under the terms of a trust.

(4) If no taker is produced under divisions (D)(1), (2), and (3) of this section, the property passes to those persons who would succeed to the transferor's intestate estate and in the shares as provided in the intestate succession law of the transferor's domicile if the transferor died on the distribution date. Notwithstanding division (A)(10) of this section, for purposes of division (D)(4) of this section, if the future interest was created by the exercise of a power of appointment, "transferor" means the donor if the power is a nongeneral power, or the donee if the power is a general power.

(E) This section applies to all trusts that become irrevocable on or after March 22, 2012. This section does not apply to any trust that was irrevocable before March 22, 2012, even if property was added to the trust on or after March 22, 2012.

Sec. 5810.08. A (A) As used in this section, "trust directive" has the same meaning as in section 5818.01 of the Revised Code.

(B) Except as provided in division (C) of this section, a term of a trust relieving a trustee of liability for breach of trust is unenforceable to the extent that it either of the following apply:

(1) The term relieves the trustee of liability for breach of trust committed in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries or ;

(2) The term was inserted as the result of an abuse by the trustee of a fiduciary or confidential relationship to with the settlor.

(C) A trustee may be relieved from liability for implementing or complying with a trust directive to the extent that the relief meets any of the following criteria:

(1) The relief is permitted or allowed by Chapter 5818. of the Revised Code.

(2) The relief is authorized by any term of a trust that is permitted or allowed by Chapter 5818. of the Revised Code.

(3) The relief is otherwise allowed by the Ohio Trust Code.

Sec. 5812.43. (A) A trustee shall make all of the following disbursements from principal:

(1) The remaining one-half of the disbursements described in divisions (A) and (B) of section 5812.42 of the Revised Code;

(2) All of the trustee's compensation calculated on principal as a fee for acceptance, distribution, or termination, and disbursements made to prepare property for sale;

(3) Payments on the principal of a trust debt;

(4) Expenses of a proceeding that concerns primarily principal, including a proceeding to construe the trust or to protect the trust or its property;

(5) Premiums paid on a policy of insurance not described in division (D) of section 5812.42 of the Revised Code of which the trust is the owner and beneficiary;

(6) Estate, inheritance, and other transfer taxes, including penalties, apportioned to the trust;

(7) Disbursements related to environmental matters, including reclamation, assessing environmental conditions, remedying and removing environmental contamination, monitoring remedial activities and the release of substances, preventing future releases of substances, collecting amounts from persons liable or potentially liable for the costs of those activities, penalties imposed under environmental laws or regulations and other payments made to comply with those laws or regulations, statutory or common law claims by third parties, and defending claims based on environmental matters;

(8) Disbursements related to payments to a taxing authority or reimbursement to a person being treated as the owner under sections 671 to 679 of the Internal Revenue Code, as defined in section 5747.01 of the Revised Code, or any similar federal, state, or other tax law, for any amount of the person's income tax liability attributable to the inclusion of the trust's income, capital gains, deductions, or credits in the calculation of the person's taxable income.

(B) If a principal asset is encumbered with an obligation that requires income from that asset to be paid directly to the creditor, the trustee shall transfer from principal to income an amount equal to the income paid to the creditor in reduction of the principal balance of the obligation.

Sec. 5815.25. (A) As used in this section, "fiduciary" means a trustee under any testamentary, inter vivos, or other trust, an executor or administrator, or any other person who is acting in a fiduciary capacity for any person, trust, or estate.

(B) If an instrument or other applicable written agreement describes, appoints, or directs a fiduciary to handle only the administrative duties and responsibilities of a trust, that administrative fiduciary shall not have any duties, responsibilities, or liabilities to the trust beneficiaries or to other persons interested in a trust except for those administrative duties and responsibilities specifically described in the instrument or written agreement. The administrative duties and responsibilities of a trust under this division may include any of the following:

(1) Opening and maintaining bank, brokerage, financial, or other custodial accounts to receive trust income or contributions and from which trust expenditures, bills, and distributions may be disbursed;

(2) Maintaining and handling trust records, reports, correspondence, or communications;

(3) Maintaining an office for trust business;

(4) Filing any trust tax returns;

(5) Employing agents in connection with the fiduciary's administrative duties;

(6) Taking custody of or storing trust property;

(7) Any other similar administrative duties for the trust.

(C) If an instrument under which a fiduciary acts reserves to the grantor, or vests in an advisory or investment committee or in one or more other persons, including one or more fiduciaries, to the exclusion of the fiduciary or of one or more of several fiduciaries, any power, including, but not limited to, the authority to direct the acquisition, disposition, or retention of any investment or the power to authorize any act that an excluded fiduciary may propose, any excluded fiduciary is not liable, either individually or as a fiduciary, for either of the following:

~~(1) Any loss that results from compliance with an authorized direction of the grantor, committee, person, or persons;~~

(2) Any loss that results from a failure to take any action proposed by an excluded fiduciary that requires a prior authorization of the grantor, committee, person, or persons if that excluded fiduciary timely sought but failed to obtain that authorization.

~~(D)~~ Any administrative fiduciary as described in division (B) of this section ~~or any excluded fiduciary as described in division (C) of this section~~ is relieved from any obligation to perform investment reviews and make recommendations with respect to any investments to the extent the ~~grantor~~settlor, an advisory or investment committee, or one or more other persons have authority to direct the acquisition, disposition, or retention of any investment.

~~(E)~~(D) This section does not apply to the extent that the instrument under which an administrative fiduciary as described in division (B) of this section ~~or an excluded fiduciary as described in division (C) of this section~~ contains provisions that are inconsistent with this section.

Sec. 5816.11. (A) Any person may serve as an advisor of a legacy trust, except ~~that a~~ as follows:

(1) A transferor may act as an advisor only in connection with investment decisions.

(2) No person shall concurrently serve as a trustee and advisor of a legacy trust.

(B) If a person concurrently serves or purports to concurrently serve as trustee and advisor of a legacy trust in violation of division (A)(2) of this section, then the effects, consequences, and time period of that concurrent service are subject to section 5818.06 of the Revised Code.

(C) An advisor shall be considered a fiduciary unless the terms of a legacy trust instrument expressly provide otherwise.

Sec. 5818.01. As used in this chapter:

(A)(1) "Breach of trust" means a breach of a fiduciary duty imposed on a protector by this chapter, any other applicable laws of this state, or the terms of a trust.

(2) "Breach of trust" includes only acts or omissions undertaken by a protector while acting in a fiduciary capacity, and does not include any act or omission undertaken by a protector in a nonfiduciary capacity.

(3) "Breach of trust" does not encompass or include any act or omission of a protector if the act or omission is allowed by either of the following:

(a) The terms of a trust, except where those terms are expressly prohibited by this chapter or other applicable laws of this state;

(b) This chapter, except if the trust expressly prohibits the act or omission.

(B) "Directed trust" means a trust that includes terms granting a power of direction to a protector.

(D) "Ohio legacy trust act" means Chapter 5816. of the Revised Code.

(E) "Person" has the same meaning as in section 5801.01 of the Revised Code.

(F) "Power of direction" means a power vested in a protector by the terms of a trust that allows a protector to do any of the following:

(1) Issue binding trust directives to another trust officeholder, including trust directives that direct, order, mandate, require, veto, bar, prohibit, or prevent any actual or proposed decisions or actions by a trust officeholder regarding the trust or trust estate, including decisions or actions regarding trust investments, trust administration, or distributions to or for trust beneficiaries;

(2) Remove another trust officeholder from a trust office, or appoint another person to a trust office;

(3) Modify or amend the trust instrument, including amendments that do any of the following:

(a) Achieve favorable tax treatment;

(b) Respond to or take advantage of any changes in any federal, state, local, or other tax laws that affect or might affect a trust, the trust settlor, any of the trust beneficiaries, or the administration of the trust;

(4) Increase or decrease the interests of any beneficiaries to the trust;

(5) Modify the terms of any power of appointment granted by the trust, provided that, except to the extent the terms of a trust expressly allow otherwise, such a modification shall not allow appointments to any person or class of persons who are not beneficiaries of the trust;

(6) Terminate a trust;

(7) Change the situs or the governing law of a trust;

(8) Make binding interpretations of the terms of a trust;

(9) Require a trustee to consult with the protector regarding specified matters;

(10) Add or remove persons as beneficiaries of a trust;

(11) Add or remove powers and discretion granted under the terms of a trust;

(12) Otherwise direct the administration of a trust or the conduct of a trust officeholder.

(G) "Protector" means a trust officeholder, other than a trustee, that holds a power of direction pursuant to the terms of a trust, regardless of whether the terms of a trust refer to the person holding a power of direction as a "protector," "adviser," "director," or some other name or title.

(H) "Settlor," "state," "terms of a trust," "trustee," and "trust instrument" have the same meanings as in section 5801.01 of the Revised Code.

(I) "Trust directive" means a verbal, written, or other directive, order, or instruction issued by a protector to another trust officeholder whereby the protector, as part of the protector's exercise or nonexercise of a power of direction, requires the trust officeholder to implement, comply with, or otherwise act in a manner consistent with the directive, order, or instruction.

(J)(1) "Trust office" means any office, position, or role created by the terms of a trust whereby the person holding or occupying such office is wholly or partially responsible for either of the following:

(a) The management, administration, or supervision of the trust or the trust estate;

(b) The investment of trust property.

(2) Without limiting the generality of division (J)(1) of this section, "trust office" includes the offices of trustee, protector, advisor, and investment advisor.

(3) "Trust office" does not include the position or role of settlor or beneficiary.

(4) "Trust office" does not include the position or role of beneficiary surrogate, as defined in section 5801.01 of the Revised Code, unless the trust instrument expressly provides otherwise.

(K) "Trust officeholder" means any person who holds a trust office.

(L) "Willful misconduct" means intentional wrongdoing. "Willful misconduct" does not include negligence, gross negligence, or recklessness.

(M) "Wrongdoing" means malicious conduct or conduct designed to defraud or seek an unconscionable advantage.

Sec. 5818.011. This chapter may be cited as the Ohio trust protector and directed trust act.

Sec. 5818.02. (A) This chapter governs the rights, powers, discretion, duties, and liabilities of a protector in connection with the protector's exercise or nonexercise of a power of direction. Where permitted by this chapter, the terms of a trust prevail over this chapter and may modify, supplement, limit, eliminate, waive, or restrict the application of this chapter.

(B)(1) Except as otherwise provided by the terms of a trust or section 5518.03 of the Revised Code, and to the maximum extent allowed by the Ohio Constitution and the United States Constitution, this chapter applies to any trust, whenever created, that is wholly or partially administered in this state or that is wholly or partially governed by the laws of this state.

(2) The terms of a trust may provide that the laws of this state wholly or partially govern some of the rights, powers, discretion, duties, or liabilities of a protector while the laws of one or more jurisdictions other than this state govern all other rights, powers, discretion, duties, or liabilities of a protector.

Sec. 5818.03. Any person who is, within the meaning of the Ohio legacy trust act, an "advisor" is considered a protector in connection with the legacy trust for the purposes of this chapter. This chapter applies to any legacy trust that provides for, permits, allows, or includes such an advisor, except that the Ohio legacy trust act governs and controls in the event of any conflict between the Ohio legacy trust act and this chapter.

Sec. 5818.04. A protector is a fiduciary unless the terms of a trust expressly provide otherwise.

Sec. 5818.05. (A) Except as otherwise provided by this section, any person who is not at the time in question a trustee of a trust may serve as a protector of that trust. No person shall concurrently serve as trustee and protector of the same trust.

(B) The terms of a trust may further restrict or limit the eligibility of a person to serve as a protector of the trust.

(C) If a trust instrument creates more than one trust, a person may serve as protector of any such trust for which the person is not concurrently serving as trustee.

(D) The terms of a trust may provide that any rights, powers, or authority granted to a protector may vest in and be exercised by a trustee during any time the protector's office is vacant or upon the occurrence of a stated contingency, but the trustee shall be treated as holding and exercising those vested rights, powers, and authorities in the trustee's capacity as a trustee and fiduciary.

(E) A person that is a transferor to a legacy trust, within the meaning of the Ohio legacy trust act, may serve as an advisor to that legacy trust only to the extent authorized by division (A) of section 5816.11 of the Revised Code.

Sec. 5818.06. If a person attempts or purports to concurrently serve as a trustee and protector of the same trust, both of the following apply:

(A) The person shall be treated as having acted as a trustee rather than as a protector during the time of the attempted or purported concurrent service.

(B)(1) The terms of a trust may provide rules and procedures that permit a subsequent protector to wholly or partially ratify, assume, affirm, reject, invalidate, or disavow any trust directives issued by the person during the time of the person's attempted or purported concurrent service as trustee and protector.

(2) Except to the extent otherwise provided by or decided pursuant to the terms of a trust, a subsequent protector is presumed to have ratified and affirmed all trust directives issued by the person during the person's time of attempted or purported concurrent service.

(3) Any actions taken or treated as having been taken by the person in the capacity of trustee during the person's time of attempted or purported concurrent service shall be treated as valid and effective to the same extent, and in the same fashion, that the trustee actions would be if the office of protector was vacant during the time of concurrent service.

Sec. 5818.07. Subject to section 5818.13 of the Revised Code, the rights, powers, discretion, duties, and liabilities of a protector may be varied, allocated, and limited among one or more protectors as follows:

(A) The terms of a trust may do either or both of the following:

(1) Provide that a protector is a fiduciary in connection with some matters and not a fiduciary in connection with other matters;

(2) Impose different duties and liabilities on a protector regarding different matters.

(B) If a trust has more than one protector, the terms of the trust may do either or both of the following:

(1) Allocate different rights, powers, duties, discretion, and authority to different protectors;

(2) Provide different standards of liability for different protectors.

(C) Protectors with jointly held powers shall act by a majority decision, except to the extent the terms of a trust provide otherwise.

Sec. 5818.08. Except to the extent otherwise provided by the terms of a trust, a protector may take additional, supplemental, or ancillary steps that the protector reasonably deems to be necessary or appropriate to exercise or refrain from exercising a power of direction.

Sec. 5818.09. Subject to sections 5818.10, 5818.11, 5818.12, and 5818.13 of the Revised Code, all of the following apply to the scope of a protector's discretion:

(A) If a protector is acting in a fiduciary capacity, then the protector may exercise any power of direction to the same extent as, and subject to the same fiduciary obligations and limitations applicable to, a trustee of the trust if the trustee is authorized to exercise the same power.

(B) If a protector is not acting in a fiduciary capacity, then, except as otherwise provided by the terms of the trust, the protector may exercise any protector's power in the protector's sole and absolute discretion.

(C) Nothing in this section limits or impairs any power or discretion that a person serving as protector might hold in such person's capacity as a settlor or beneficiary.

Sec. 5818.10. Except to the extent that the terms of a trust expressly provide otherwise, a person serving as protector shall not exercise a protector's power of direction to require or compel a distribution to or for the benefit of such person.

Sec. 5818.11. Notwithstanding the terms of a trust, a protector shall not use a power of direction to do either of the following:

(A) Require another person to release a trust officeholder from liability for the willful misconduct of that trust officeholder;

(B) Alter the terms of a trust in ways that exculpate a trust officeholder from liability for the willful misconduct of that trust officeholder.

Sec. 5818.12. (A)(1) If a protector holds a power of direction in a fiduciary capacity, then the protector may be found liable for breach of trust due to the protector's exercise or nonexercise of that power of direction whenever the protector has committed such a breach.

(2) If a protector is found liable for breach of trust, then the protector's liability shall be the same that would attach under the following circumstances:

(a) To a sole trustee holding the same power in a fiduciary capacity, if the protector is the only protector holding that power;

(b) To a co-trustee holding the same power in a fiduciary capacity with another co-trustee, if the protector holds that power with one or more other protectors.

(3) Nothing in division (A) of this section precludes a protector from being found liable for wrongful acts or omissions other than, or in addition to, breach of trust.

(B)(1) If a protector holds a power of direction in a nonfiduciary capacity, then the protector is not liable for breach of trust or other breach of fiduciary duty due to a protector's exercise or nonexercise of that power of direction.

(2) Nothing in division (B) of this section precludes a protector from being found liable for wrongful acts or omissions other than breach of trust or breach of fiduciary duty.

(C) If a protector is licensed, certified, or otherwise authorized by law to provide health care in the ordinary course of the protector's business or practice of a profession, then, to the extent the protector acts in the capacity of a health care provider, the protector has no duty or liability under this chapter.

(D) The terms of a trust may impose duties or liabilities on a protector in addition to the duties and liabilities imposed by this chapter.

Sec. 5818.13. (A) Whenever a protector is not acting as a fiduciary, the terms of a trust may vary, limit, restrict, or eliminate the duties or liability of a protector, except that the terms of a trust shall not do either of the following:

(1) Eliminate a protector's liability for acts or omissions that constitute willful misconduct by the protector;

(2) Preclude a court of competent jurisdiction from removing a protector on account of the protector's willful misconduct.

(B) Whenever a protector is acting as a fiduciary, a term of a trust relieving the protector of liability for breach of trust is unenforceable if either of the following apply:

(1) The term relieves the protector of liability for a breach of trust committed in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries;

(2) The term is added to the trust as the result of an abuse by the protector of a fiduciary or confidential relationship with the settlor.

(C) Notwithstanding any other provision of this chapter, a protector is always liable for any act or omission that constitutes willful misconduct by the protector.

(D) In the event of any conflict between this section and any other provision of this chapter, this section governs and controls.

Sec. 5818.14. (A) In any action against a protector, the protector may assert any defense available at law or equity, including any defense available under this chapter or under the terms of a trust.

(B) If a protector is a fiduciary, then, in connection with any claim for breach of trust asserted against that protector, the protector may also assert any defense that would be available to a trustee in that position and under similar circumstances regarding an action for breach of trust against the trustee.

(C) A protector who undertakes acts or omissions in a nonfiduciary capacity is not liable for breach of trust based on such acts or omissions.

Sec. 5818.15. (A)(1) Upon receipt of a trust directive, a trust officeholder shall take reasonable steps to implement or comply with the trust directive.

(2) A trust officeholder has no duty to implement or comply with a trust directive until the trust directive is actually received by the trust officeholder.

(B) Except to the extent that a trust officeholder's conduct constitutes willful misconduct, all of the following apply:

(1) A trust officeholder may presume that a trust directive is valid and appropriate.

(2) A trust officeholder may rely upon information provided by a protector in connection with a trust directive.

(3) A trust officeholder may ask a protector to clarify a trust directive.

(4) A trust officeholder may require a protector to place a verbal trust directive in writing before the trust officeholder implements or complies with the trust directive.

(5) A trust officeholder has no liability to any person for implementing or complying with a trust directive.

(C) A trust officeholder shall not do any of the following to the extent that such acts would constitute willful misconduct by the trust officeholder:

(1) Presume that a trust directive is valid or appropriate;

(2) Implement or comply with a trust directive;

(3) Rely upon information provided by a protector in connection with a trust directive.

(D) Any person who claims that a trust officeholder engaged in willful misconduct when implementing or complying with a trust directive bears the burden of proving that misconduct.

(E) The terms of a trust may impose duties or liabilities on a trust officeholder in addition to the duties and liabilities imposed by divisions (A) to (D) of this section.

(F) Notwithstanding any contrary provision of this chapter, a trust officeholder that has actually received a trust directive is always liable for any act or omission undertaken by the trust officeholder in connection with such trust directive that constitutes willful misconduct by the trust officeholder.

(G) In the event of any conflict between this section and any other provision of this chapter, this section governs and controls.

Sec. 5818.16. A trust officeholder may petition a court of competent jurisdiction for instructions regarding the trust officeholder's duties under section 5818.15 of the Revised Code.

The right conferred by this section is in addition to the trust officeholder's rights under section 5818.15 of the Revised Code to seek clarification of a trust directive from a protector and require a trust directive to be in writing, and the trust officeholder's right under section 5818.23 of the Revised Code to ask a person to clarify the capacity in which that person is acting.

A trust officeholder may exercise the rights granted by sections 5818.15 and 5818.23 of the Revised Code in addition to or instead of petitioning for judicial instructions under this section.

Sec. 5818.17. The following rules of construction apply in connection with all protectors, directed trusts, and trust directives:

(A) Courts shall give effect to this state's policy of maximizing a settlor's freedom of disposition as set forth in division (D) of section 5801.04 of the Revised Code.

(B) Courts shall liberally interpret, construe, and apply this chapter in ways and means that do all of the following:

(1)(a) Recognize and allow directed trusts;

(b) Uphold the rights, powers, discretion, and authority of a protector;

(2) Without limiting the generality of the foregoing, the term "power of direction" shall be liberally and broadly interpreted, construed, and applied.

(C) The rule of the common law that statutes in derogation of common law are to be strictly construed does not apply to this chapter.

Sec. 5818.18. Except as otherwise provided by section 5818.19 of the Revised Code or the terms of a trust, protectors and trustees have all of the following limited duties:

(A)(1) A trustee shall provide information to a protector to the extent that the information is reasonably related to the powers and duties of the protector.

(2) A protector shall provide information to a trustee to the extent the information is reasonably related to the powers or duties of the trustee.

(B)(1) Subject to division (B)(2) of this section, a protector, referred to in division (B) of this section as a "first protector," shall provide information to another protector, referred to in division (B) of this section as an "other protector," to the extent the information is reasonably related to the powers or duties of the other protector.

(2) Subject to division (B)(3) of this section, the first protector need not provide the other protector with information related to either of the following:

(a) Any power to direct that may be exercised by the other protector without the consent or approval of the first protector;

(b) Any duty that the first protector does not share with the other protector.

(3) Division (B)(2) of this section does not apply if the first protector's failure to provide the information to the other protector would constitute willful misconduct by the first protector.

Sec. 5818.19. Except as otherwise provided by the terms of a trust:

(A) A trustee does not have a duty to do any of the following:

(1) Monitor or supervise a protector;

(2) Inform a protector of the trustee's communications with beneficiaries regarding a protector's performance in or suitability for trust office;

(3) Inform a protector of matters that were communicated in confidence to the trustee by a beneficiary, or that the trustee reasonably believes were communicated in confidence to the trustee by a beneficiary;

(4) Inform or give advice to a settlor, beneficiary, trustee, or protector regarding any instance in which the trustee might have acted differently than a protector.

(B) A protector, referred to in this division as a "first protector," does not have a duty to do any of the following:

(1) Monitor a trustee or another protector;

(2) Inform a trustee of the first protector's communications with beneficiaries regarding a trustee's performance in or suitability for trust office;

(3) Inform another protector of the first protector's communications with beneficiaries regarding the other protector's performance in or suitability for trust office;

(4) Inform a trustee or another protector of matters that were communicated in confidence to the first protector, or that the first protector reasonably believes were communicated in confidence to the first protector, by a beneficiary;

(5) Inform or give advice to a settlor, beneficiary, trustee, or another protector regarding any instance in which the first protector might have acted differently than a trustee or another protector.

(C)(1) Subject to division (C)(2) of this section, no act, omission, or course of conduct undertaken by a trustee or protector impairs, limits, restricts, or waives divisions (A) and (B) of this section.

(2) A trustee may wholly or partially assume any duty referred to or described in division (A) of this section, and a protector may wholly or partially assume any duty referred to or described in division (B) of this section, by means of an express, written, and signed agreement to wholly or partially assume that duty.

Sec. 5818.20. (A) A protector, referred to in this division as a "first protector," that acts in reliance on information provided by a trustee or another protector is not liable for any damage or loss directly or indirectly caused by such reliance, except to the extent that the reliance constitutes willful misconduct by the first protector.

(B) A trustee that acts in reliance on information provided by a protector is not liable for any damage or loss directly or indirectly caused by such reliance, except to the extent to that the reliance constitutes willful misconduct by the trustee.

(C) The terms of a trust may expressly impose on trustees and protectors duties and liabilities greater than those imposed by divisions (A) and (B) of this section.

Sec. 5818.21. This chapter does not apply to any exercise or nonexercise of a power or authority by either of the following:

(A) A settlor, if the power or authority is conferred on or retained by the settlor, in the capacity of a settlor, pursuant to the terms of a trust;

(B) A beneficiary, if the power or authority is conferred on the beneficiary, in the capacity of a beneficiary, pursuant to the terms of a trust.

Sec. 5818.22. (A) A court shall consider both of the following factors in determining whether a person is acting in that person's capacity as a settlor, beneficiary, or protector:

(1) The terms of a trust;

(2) Any documents or communications regarding the person's exercise or nonexercise of a power or authority.

(B) A court shall presume that the capacity asserted or identified by the person in a document is correctly asserted or identified when all of the following conditions are met:

(1) The person executes the document.

(2) The document specifies the capacity in which a person acts.

(3) The terms of a trust grant the person the capacity specified in the document.

(C) If a person's capacity as settlor, beneficiary, or protector is unclear after applying the factors provided in divisions (A) and (B) of this section, then a court may consider any other facts or circumstances that may be relevant to determining the capacity in which the person is acting.

Sec. 5818.23. In addition to any other rights conferred upon a trust officeholder by this chapter or by the terms of a trust, a trust officeholder may ask a person that issues a communication or instruction to clarify whether that communication or instruction was issued in that person's capacity as a settlor, beneficiary, or trust officeholder. If a person purports to issue a communication or instruction in that person's capacity as a trust officeholder, then any other trust officeholder receiving the communication or instruction may ask the issuer to specify the official capacity in which the issuer is acting.

Sec. 5818.24. To the maximum extent allowed by the Ohio Constitution and the United States Constitution, the courts of this state have personal jurisdiction over a person who accepts an appointment to serve as a protector of a trust subject to this chapter.

Sec. 5818.25. (A) No beneficiary shall commence a proceeding against a protector for breach of trust, based on acts or omissions undertaken by the protector in a fiduciary capacity, more than two years after the date that a beneficiary, a representative of a beneficiary, or a beneficiary surrogate is sent a report or accounting that adequately discloses the existence of a potential claim for breach of trust and informs the beneficiary, representative, or surrogate of the time allowed for commencing a proceeding against the protector.

(B) If a claim is brought against a protector regarding acts or omissions undertaken by the protector in a nonfiduciary capacity, or for causes of action other than breach of trust, then the action must be commenced within the same limitation period that would otherwise apply to that claim.

Sec. 5818.26. Nothing in this chapter requires a trust to have a protector, and the terms of a trust may omit any requirement for or reference to a protector.

Sec. 5818.27. (A) The terms of a trust may set forth reasonable procedures for the issuance or delivery of a trust directive, or any other document related to or arising out of any of the following:

(1) The implementation of a trust directive;

(2) A protector's exercise or nonexercise of the protector's rights, powers, authority, or discretion;

(3) Any other matter related to or arising out of such protector's duties, liabilities, or service as protector.

(B) The terms of a trust concerning the issuance or delivery of any item described in division (A) of this section are presumed to be both reasonable and the exclusive means for such issuance or delivery. The presumptions set forth in this division may be rebutted only by clear and convincing evidence. Nothing in this division shall be construed to impair, limit, or restrict a trust officeholder's rights to do any of the following:

(1) Seek clarification of a trust directive from a protector or request that the protector put the trust directive in writing pursuant to section 5818.15 of the Revised Code;

(2) Seek judicial instructions pursuant to section 5818.16 of the Revised Code;

(3) Ask a person to clarify the capacity in which such person is acting pursuant to section 5818.23 of the Revised Code.

(C) If the terms of a trust do not set forth reasonable procedures for the issuance or delivery of any item described in division (A) of this section, or if the terms of a trust provide that those reasonable procedures are nonexhaustive, then any such item may be issued or delivered by any method that is consistent with section 5801.08 of the Revised Code.

Sec. 5818.28. (A) A person designated as a protector of a trust may accept such designation by complying with a method of acceptance provided in the terms of the trust, exercising powers or performing duties of the protector, or otherwise indicating acceptance of the office and responsibilities of the protector.

(B) A person designated as a protector who has not yet accepted may reject the designation. A designated protector who does not accept within a reasonable time after knowing of the designation is deemed to have rejected the designation.

Sec. 5818.29. All of the following apply to a trust except to the extent that the terms of the trust provide otherwise:

(A) A protector shall give bond to secure performance of the protector's duties only if the court finds that a bond is needed to protect the interests of the beneficiaries or is required by the terms of the trust and the court has not dispensed with the requirement.

(B) The court may specify the amount of a bond, its liabilities, and whether sureties are necessary. The court may modify or terminate a bond at any time.

(C) A regulated financial-service institution or licensed trust company qualified to do trust business in this state need not give bond.

Sec. 5818.30. Except as otherwise provided under the terms of the trust, a vacancy in a protector position occurs under any of the following circumstances:

(A) A person designated as a protector rejects the designation.

(B) A person designated as a protector cannot be identified or does not exist.

(D) A protector is disqualified or removed.

(E) A protector dies.

(F) A guardian of the estate or person is appointed for an individual serving as a protector.

Sec. 5818.31. (A) Except as otherwise provided under the terms of the trust, a protector may resign upon at least thirty days' notice to any person who is a qualified beneficiary as defined by section 5801.01 of the Revised Code, the settlor, if living, and all trustees, or with the approval of the court.

(B) In approving a resignation of a protector, the court may issue orders and impose conditions reasonably necessary for the protection of the trust property.

(C) Any liability of a resigning protector or of any sureties on the protector's bond for acts or omissions of the protector is not discharged or affected by the protector's resignation.

Sec. 5818.32. Subject to the terms of a trust instrument, all of the following apply:

(A) The settlor, a trustee, or a beneficiary may request the court to remove a protector, or the court may remove a protector on its own initiative.

(B) The court may remove a protector for any of the following reasons:

(1) The protector has committed a serious breach of trust, but only if the protector is a fiduciary.

(2) Lack of cooperation among protectors substantially impairs the administration of the trust.

(3) Because of unfitness, willful misconduct, or unwillingness to serve as protector, the court determines that removal of the protector best serves the interests of the beneficiaries.

(4) If the protector is a fiduciary, because of persistent failure of the protector to discharge the duties imposed on the protector by the trust instrument, the court determines that removal of the protector best serves the interests of the beneficiaries.

(C) Pending a final decision on a request to remove a protector, or in lieu of or in addition to removing a protector, the court may do any of the following, as necessary to protect the trust property or the interests of the beneficiaries:

(1) Compel the protector to perform the protector's duties;

(2) Enjoin the protector from engaging in acts of willful misconduct;

(3) If the protector is a fiduciary, enjoin the protector from committing a breach of trust;

(4) If the protector is serving in a nonfiduciary capacity, compel the protector to redress an act of willful misconduct by paying money, restoring property, or other means;

(5) If the protector is a fiduciary, compel the protector to redress a breach of trust by paying money, restoring property, or other means;

(6) Order a protector to account;

(7) Appoint a special fiduciary to take possession of any trust property held by the protector;

(8) Suspend the protector;

(9) Reduce or deny compensation to the protector;

(10) Void an act of the protector, impose a lien or a constructive trust on any trust property held by the protector, or trace trust property wrongfully disposed of by the protector and recover the property or its proceeds;

(11) Order any other appropriate relief.

Sec. 5818.33. (A) If the terms of a trust do not specify the protector's compensation, a protector is entitled to compensation that is reasonable under the circumstances.

(B) If the terms of a trust specify the protector's compensation, the protector is entitled to be compensated as specified, but the court may allow more or less compensation if the duties of the protector are substantially different from those contemplated when the trust was created or the compensation specified by the terms of the trust would be unreasonably low or high.

Section 2. That existing sections 1336.04, 1336.05, 1336.09, 1337.34, 1337.36, 1337.42, 1337.52, 2117.02, 5701.11, 5801.04, 5801.07, 5806.02, 5806.03, 5808.19, 5810.08, 5812.43, 5815.25, and 5816.11 of the Revised Code are hereby repealed.

Section 3. That section 5808.08 of the Revised Code is hereby repealed.