Governor Kasich Signs House Bill 229 to Create Ohio Family Trust Company Act by Robert Galloway

Robert R. Galloway discusses in his article the Ohio House Bill 229 which was signed into law by Governor Kasich on June 14. The bill allows families in the state to establish their own trust company in order to serve as trustee for its family trusts. Galloway begins,

Family trust companies (FTCs) have seen increased use as a wealth succession planning tool in the past several years as more states have enacted FTC legislation. Currently, there are over 15 states with such legislation, the most recent being the state of Florida.

FTCs provide the benefit of a permanent trustee (in the form of a corporation or limited liability company) along with the ability of a family to substantially control its operations. Under current Ohio law, the trustee for a family trust was either (a) one or more individuals or (b) a commercial trustee. This meant that an Ohio family seeking to use an FTC was required to form and operate the FTC in another state. Such out-of-state operations resulted in increased operating costs, extra administrative effort and a loss of revenue from the state of Ohio.

Similar to laws in several other states, Ohio’s legislation allows for two types of FTCs: licensed and unlicensed. A licensed FTC is subject to the following requirements: (1) it must have a minimum capital balance of at least $200,000, and up to $500,000, at the discretion of Ohio’s superintendent of financial institutions; (2) it may provide services to “family members,” certain nonfamily members and certain affiliated entities; (3) it must maintain office space and at least one part-time employee in Ohio; (4) it must hold at least two governing board meetings per year in Ohio; (5) it must perform certain administrative activities in Ohio; and (6) it must maintain a fidelity bond and directors/officers insurance, each in the amount of $1 million. A licensed FTC is also subject to supervision by Ohio’s Department of Financial Institutions and will be audited every 18 months.

For the full story, click here: Governor Kasich Signs House Bill 229 to Create Ohio Family Trust Company Act

Posted by Allison Trupp, Associate Editor, Wealth Strategies Journal

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s