Ohio Asset Protection: Loopholes and Limitations
The Ohio Legacy Trust Act goes into effect on March 27, 2013 (the “Act”). The act purports to be a domestic asset protection trust solution. The reality is that Ohio is merely the latest state to enact law that protects assets from creditors “sometimes.”
Attorneys Howard Rosen and Patricia Donlevy-Rosen, both recognized authorities on asset protection planning, analyze the limitations of Ohio’s asset protection law in their most recent article titled Ohio Legacy trusts: A New “Protective” Trust Law?
The article is published through the Donlevy-Rosen & Rosen, P.A.’s periodical newsletter, The Asset Protection News™, and can be viewed on their website at Ohio Legacy Trusts: A New “Protective” Trust Law.
The article does outline some positive provisions of the Act. For example, the Act provides for statutory protection for planning professionals by prohibiting lawsuits (relating to the transfer of property to a legacy trust) filed against a trustee, advisor, or person involved in the establishment of a legacy trust.
The Act also includes a flight provision which provides for the trustee’s automatic removal in the event the Ohio trustee is involved in any legal action where the out declines to apply to Act. Properly structured, this could give way to an automatic succession to an offshore trustee. Rosen and Donlevy-Rosen point out that this flight provision only provides for the relocation of the trustee and not the trust assets. Practically, say Rosen Donlevy-Rosen, the trust assets could remain subject to the legal action.
“The protective efficacy of the Act”, says Rosen, “will ultimately depend upon a US court upholding the planning in the settlor’s favor, and the inapplicability of the full faith and credit clause of the US Constitution.”
For more of the attorneys’ analysis of the Ohio Legacy Trust Act, read their complete article at Ohio Legacy Trusts: A New “Protective” Trust Law.
Full text of the act here: Ohio Legacy Trust Act.
Learn More About Asset Protection in Ohio U.S.
Consumers and practitioners seeking a way to effectively protect assets from potential creditors should contact the law firm of Donlevy-Rosen Rosen, P.A. at 800-417-7134