On June 14, 2016 Governor Kasich signed House Bill 229, which allows an Ohio family to establish its own trust company to serve as trustee for its family trusts.
Ohio now joins more than 15 states authorizing family trust companies (FTCs), which have become increasingly popular wealth planning tools.
Before passage of this Act, an Ohio family selecting a trustee had to use either a commercial trustee, or one or more individuals. This meant that an Ohio family that wanted to use an FTC was required to form and operate the FTC in another state.
Ohio’s legislation allows for unlicensed and licensed FTCs. An unlicensed FTC may provide services only to “family members”. A licensed FTC may provide services to “family members”, certain nonfamily members, and certain affiliated entities. Further, it must have a minimum capital balance of at least $200,000, satisfy other rules and restrictions, and is subject to supervision by Ohio’s Department of Financial Institutions and will be audited every 18 months.
This short summary is designed to provide a very broad overview, for a copy of the complete legislation, please click here.