Editor’s note: This op-ed is sponsored by Andrew A. Popp, Esq. of Weisenburger Law Offices in Ravenna.
Sponsored by state Reps. Brian Stewart and Diane Grendell, House Bill 7 passed both the House and the Senate and is set to become law as of Aug. 17, 2021. The purpose of this bill was to revise numerous issues regarding Ohio probate, guardianship and trusts. What is changing, and what do you need to do about it?
While a consultation with a licensed professional is necessary to give formal legal advice, this article is going to break down some of the main changes to the law and discuss some of the options available to you.
Probate and organ donation
Probate is the court supervised process whereby assets that are owned by a deceased person are managed, debts settled and an inheritance is eventually distributed to the heirs named in a will, or if there is no will, to those who would inherit according to Ohio’s Rule of Descent and Distribution (O.R.C. 2105.06). In addition to tangible assets, the law currently permits a person to make an anatomical gift of his or her bodily remains after passing (organ donation) in a Last Will and Testament, or Living Will. As of Aug. 17, 2021, those types of gifts will no longer be honored as they exist in either of those documents. Similarly, a revocation of an anatomical gift in a Last Will or Living Will is going to be disregarded.
What should you do? If you wish to be an organ donor when you pass, or previously wished to be a donor and have changed your mind, do not rely on a provision in your Last Will or Living Will to state your wishes. For those wishing to be an organ donor or gift their bodily remains to an organization such as a medical school you will need to sign up through the Ohio Donor Registry and/or with the Ohio Bureau of Motor Vehicles to complete the proper paperwork.
Support for surviving spouse and automobiles
Some of the most common assets that pass through probate are motor vehicles. While there are simple ways to avoid this, such as joint ownership with rights of survivorship or naming a transfer on death (TOD) beneficiary, most people are unaware, or simply do not complete the necessary documents.
When one spouse passes away, the law gives the surviving spouse and any minor children the right to receive up to $40,000 for support. If the surviving spouse chooses to keep an automobile that is not set to pass via joint ownership or a TOD designation, that $40,000 is reduced by the value of that vehicle. If selecting more than one vehicle, the old law would reduce the support allowance by the value of the cheapest vehicle. This led to confusion as a plain reading of the law indicated that it applied to the cheapest vehicles owned by the deceased, not the cheapest vehicle the surviving spouse selected. The change to the law corrects this.
What should you do? Unless you are in this situation, probably nothing. This amendment clarifies what seems to have been the intent of the legislature from the beginning. Moreover, it only applies to vehicles that would pass through probate. My suggestion is to ensure that none of your motor vehicles will be subject to probate in the first place.
Procedure for name change
House Bill 7 contains substantial changes to the law regarding obtaining a name change. The purpose behind these amendments was to make the process faster, more efficient and at a lower cost to applicants. As discussed in more detail below, the change effects the hearing and publication notice requirements and gives the county probate court more discretion in determining the best way to handle each case.
When seeking a name change, the probate court may hold a hearing on the application. Notice must be given to the proper parties at least 30 days in advance and specify the probate court where the application was filed, the case number, and the hearing date and time. Currently, the probate court may grant an exception to the notice requirement if the applicant submits satisfactory proof that the publication of notice would jeopardize personal safety. The bill expands this, and notice may not be required under the new law if the applicant submits satisfactory proof that open records of the name change or conformity, or publication of the hearing notice would jeopardize the applicant’s personal safety.
Court authority and procedural changes
The changes to the law additionally grant the probate court more discretion in determining what documents are necessary in evaluating an application for a name change. Under the new law, the probate court can require an applicant to submit to a criminal background check. Previously, an applicant only needed to state in the application if he or she had been convicted of, pleaded guilty to, or had been adjudicated a delinquent child for identity fraud or has a duty to register as a sex offender because he or she was convicted of, pleaded guilty to, or was adjudicated a delinquent child for having committed a sexually oriented offense or a child-victim oriented offense. The new law now requires a sworn affidavit to that effect. This impacts the penalties involved for incorrect or falsified statements.
These are only a couple of the numerous changes that House Bill 7 is making to the existing law regarding name changes. Prior to any legal action, a detailed review of the current law should be done.
A guardian is a person appointed by the probate court to manage the affairs of another person, known as the ward. The appointed person can be given authority over finances, medical or personal decisions depending on the circumstances the ward finds him or herself in. Strict limits are in place spelling out permitted and prohibited actions a guardian can take, as well as preliminary requirements. The new bill expands and clarifies some of these powers as discussed below.
Authority of guardian
In establishing a guardianship, the probate court confers upon the guardian powers to manage the affairs of the ward. These are generally the same powers as the ward would have if he or she was competent, with some exceptions. Under House Bill 7, the guardian has additional exercisable powers, subject to approval by the probate court. Once the changes go into effect a guardian will now be able to modify beneficiary designations, exercise spousal survivorship rights, create, amend, or revoke revocable trusts of property of the ward’s estate that may extend beyond the ward’s minority, disability or life, and to disclaim property. For reference, disclaiming property is used where the ward is the named beneficiary in a will, trust, beneficiary designation or similar arrangement, and the ward does not want the asset(s) that he or she would receive.
All of these powers must not impair the financial ability of the ward’s estate to provide for foreseeable maintenance needs, and if applicable, the probate court must consider the disposition of property in the ward’s will, or if none, his or her prospective heirs. This has also been expanded so that the probate court must additionally consider the disposition of the ward’s property by the ward’s revocable trust, if any. House Bill 7 also modifies hearing and notice requirements for the new authorities a guardian can exercise.
Who can be guardian
As discussed above, a guardianship can be established over the finances (Guardian of the Estate), or personal and medical decisions (Guardian of the Person). One of the difficulties with any guardianship is finding a person to serve who is competent, diligent and otherwise available to act as needed. A solution to this issue is to have a non-profit corporation serve as guardian of a ward. Under current law, a non-profit corporation can only serve as guardian over the finances of a ward (Guardian of the Estate). House Bill 7 changes this and a non-profit corporation will be permitted to be the guardian of the person as well as the estate. This may help to simplify matters for wards that do not have friends or family who are willing and eligible to serve as guardians for them.
Modification of a non-charitable irrevocable trust
Non-charitable irrevocable trusts have been utilized more frequently in recent years to accomplish various goals. These types of trusts can ensure that you can leave an inheritance to your friends and family despite personal impediments you may run into in the future. One of the concerns over these types of trusts is that modification is difficult, if not outright prohibited. House Bill 7 modifies and clarifies the procedures for removal or replacement of a trustee for such trusts.
Currently, the law permits a non-charitable irrevocable trust to be amended upon agreement by all the beneficiaries. The new law adds a restriction whereby the amendment cannot remove or replace the currently serving trustee. This can help ensure that the intent of the trust creator is preserved, and the beneficiaries cannot simply appoint a new person who may be more lenient or favorable with discretionary distributions.
The changes to the law discussed here are only some of the modifications that will be imposed when House Bill 7 becomes effective in August 2021. If you have concerns about any of the changes discussed above, you are encouraged to contact an attorney to determine any appropriate actions.
Andrew Popp is an attorney licensed in Florida and Ohio. He focuses his legal practice on probate, estate planning, guardianship and related areas of the law. Andrew provides legal services to families throughout northeast Ohio.