Because a good deal of Ohio probate law depends on federal estate tax language, the Ohio State Bar Association (OSBA) is drafting amendments to the Ohio Revised Code that would aid interpretation of trusts and wills of Ohio residents who die while the federal estate tax is repealed.
"Our proposal would give attorneys three tools for clients who die without amending their documents," says Bill McGraw, partner with Dungan & LeFevre in Troy and chair of OSBA's Estate Planning, Trust and Probate Section. "It has a rule of construction to interpret the trust or will to say that the documents will be interpreted according to the estate tax formulas and terms that were in effect on December 31, 2009."
Alternatively, the OSBA proposal would allow all parties to enter into a private settlement agreement. "If they don't all agree, our proposal expands the existing authority of the court to include the power to modify a trust to specifically address estate tax language," McGraw says.
Once approved by OSBA's Board of Governors, the proposal will go to the Ohio General Assembly. "If lawmakers pass it and it's signed by the governor, it's effective immediately and retroactive to January 1, 2010," McGraw says. "It also would apply to any period of time when the federal estate tax is not in effect."
The proposed amendments won't impact Ohio's estate tax of up to 7 percent on inherited assets at more than $338,000, which remains in effect.