Some people assume that his or her Last Will and Testament or Trust Agreement will determine who gets the assets upon his or her death.  However, there are other documents that can override the terms of a Last Will and Testament or Trust Agreement and pass outside of the probate estate or trust estate.

These documents include completed designation of beneficiary forms for assets such as retirement accounts, life insurance, bank accounts, brokerage accounts, and real estate.  We are seeing this as a growing issue, as many people have multiple accounts, with the majority of their net worth being held in retirement accounts.  When the accounts are established or updated, it is frequent to see beneficiaries being designated without any thought to the individual’s overall estate plan.  Therefore, it is imperative that the designation of beneficiary forms for these assets comply with current wishes, and are consistent with the terms of the Last Will and Testament or Trust Agreement if the same beneficiaries who receive assets by beneficiary designation are to receive the assets that are distributed pursuant to the terms of the Last Will and Testament or Trust Agreement.

Whether you’re filling out new paperwork, or moving an account from one institution to another, you will likely be asked to complete a new beneficiary designation form.

Failing to update beneficiary designation forms when life circumstances change is a common mistake.  Some changes in family relations that may require updating beneficiary designation forms are:

  1.        Dissolution of a marriage (divorce) or separation.
  2.         Death of a family member.
  3.        Marriage.
  4.        Changes regarding child, grandchild, or other beneficiary.

With a 401(k), a married spouse is essentially automatically entitled to the assets in the 401(k) unless the spouse formally waives receiving the assets by the execution of a formal waiver in the presence of a notary public.  If there is no beneficiary named and no surviving spouse, the employer’s plan documents determine who is next in line to receive the assets in the 401(k).

Under current Ohio law, payable upon death (“POD”) beneficiary designations can be made for bank accounts by completing the financial institution’s beneficiary documents.  By the same context, transfer on death (“TOD”) beneficiary designations can be made for brokerage accounts by completing the brokerage firm’s beneficiary documents.

For real estate, a TOD Designation Affidavit is effective upon death allowing the owner of the real estate to transfer the ownership of real estate upon the owner’s death to whomever the owner designates by name.  To be effective, this TOD Designation Affidavit must be recorded with the County Recorder where the real estate is located prior to the death of the owner.

Please contact Isaac Heintz (513.943.6654) of the Finney Law Firm for help with your estate planning and estate administration needs.




Although there is a lot of conversation and worry regarding the issue, estate and gift taxes do not affect most households.

In Ohio, there is currently no estate taxes for state taxation purposes.  The Ohio estate tax was repealed effective January 1, 2013.

There is a federal estate and gift tax that is 40% on assets subject to the tax; however, there is a large exemption that covers the average household.

The estate and gift tax exemption is the amount of money that can be transferred without having to pay estate taxes.  For 2023, the estate and gift tax exemption is $12.92 million individual, and $25.84 million for a married couple.  There will likely be a substantial reduction at the end of 2025. Unless new legislation is passed, the estate and gift tax exemption is scheduled to sunset back to the 2017 exemption amount (indexed to inflation), and will be approximately $7 million per individual, and $14 million for a married couple, depending on inflation over the next two years.

If your wealth exceeds your available estate and gift tax exemption, there is an opportunity to make gifts using the higher exemption amount prior to the sunset.  For individuals or couples close to the exemption amount after the sunset, it makes sense to explore options in order to try to avoid making the federal government a beneficiary of your estate.

If a married couple has significant wealth and is expecting to owe Federal estate taxes upon the death of the second spouse, current Internal Revenue Service Regulations allow a surviving spouse a period of five (5) years from the death of the first spouse, to elect portability.

Under current law, there is a $12,060,000 exemption from Federal estate taxes through the year 2025 (estimated to drop by approximately one-half in the year 2026), per person for estate taxes and gifts to children or other non-spouse beneficiaries during life or upon death.  Any amounts above the exemption could incur up to 40 percent in estate taxes.

Even though a surviving spouse may inherit all of the deceased spouse’s assets free of estate taxes, there may be estate taxes owed after the death of the surviving spouse.  Portability allows a surviving spouse the ability to transfer a deceased spouse’s unused exemption amount for estate and gift taxes to the surviving spouse.  This would allow the deceased spouse’s unused exemption to become available for the application to the surviving spouse’s subsequent transfers during life or upon death.

However, a surviving spouse may elect portability, allowing the spouse to have the deceased spouse’s unused exemption amount, as well as their own exemption amount, which would allow a $12,120,000 exemption from Federal estate taxes (under current law).

Portability can be elected by a surviving spouse within five (5) years from the date of death of the spouse by filing a Federal Estate Tax Return (Form 706) with the Internal Revenue Service.

Provided the Form 706 is filed within the five (5) year period, it will not be necessary to request the Internal Revenue Service to issue a private letter ruling, as was required under previous Internal Revenue Service Regulations.

Pursuant to R.C. 5713.20(A), “[i]f the county auditor discovers that any building, structure, or tract of land or any lot or part of either, has been omitted from the list of real property, the auditor shall add it to the list[.]” This “omitted property” includes property that was incorrectly, though in earnest, subjected to an exemption. However, it does not stop there.

The auditor is also required to compute and assess the taxes for preceding years during which the property was incorrectly omitted or exempted, up to five years, unless the property was transferred in the meantime. For purposes of this provision, “in the meantime” means before the omitted tax is actually assessed. If the property was transferred, the assessment can only relate to the time period after the transfer – i.e., the new owner will not be responsible for omitted taxes that would have accrued prior to its ownership. This should encourage a new or prospective owner to evaluate whether and how the property is taxed, make sure any exemptions, indeed, apply or that such use will continue, and otherwise prepare themselves for the likelihood of an increased tax.

As for property taxes accrued prior to a transfer of ownership, these are typically prorated at the closing (as for arm’s length transactions for value). But what happens if there is no closing?

Consider the following scenario:

Father owns property that has, for years, been subject to a property tax exemption. Father is ill and wants to avoid probate upon his death, so he executes a Transfer on Death (“TOD”) Affidavit, which will allow the property to transfer to Daughter without the need to open an estate. Upon Father’s Death, the property transfers to Daughter. However, unbeknownst to Daughter (and, perhaps, even unbeknownst to Father), an “omitted tax” was assessed two weeks before Father’s death and, thus, prior to the point in time that the property actually transferred to her.

The omitted tax was assessed because the auditor found that the property was improperly exempted or the exemption no longer applied for tax years preceding Father’s death. Because the omitted tax was assessed prior to the actual transfer of the property (remember, it did not transfer until the time of Father’s death), the “unless in the meantime the property has changed ownership” exception to R.C. 5713.20 does not apply. However, property tax assessments “run with the property,” meaning that Daughter is now responsible for, essentially, paying back up to five years’ worth of tax savings that Father realized as the result of the improper exemption (through no fault of his own), even though Daughter had no vested interest in the property during the period for which the exemption was in effect. If Daughter does not pay the omitted tax, she risks tax liens and/or foreclosure of the property. These omitted taxes can pretty quickly add up to tens of thousands of dollars, even before non-payment penalties.

In the case of an omitted tax, timing is of the utmost importance – e.g., when the omitted tax was assessed relative to when the property changed ownership. This may seem like a one-off case or unlikely occurrence. However, TOD affidavits are becoming an increasingly popular method of avoiding probate and, often, the TOD beneficiaries take little interest in the property until such time as it is to transfer to them. The lesson: be vigilant. The county auditors’ websites publish information relating to tax assessments and payments. The knowledge of whether a property in which you may, at some future time, have an interest is literally a few mouse clicks away. And if you need help, we have attorneys who are familiar with these issues relative to each of the tax, real estate, and probate implications who can assist you.

Ohio law allows individuals to designate a Transfer-On-Death (“TOD”) beneficiary for real estate.  This is accomplished by filing a TOD Designation Affidavit with the applicable County Recorder.

To be effective, the Affidavit must comply with the requirements of Ohio Revised Code Section 2302.22 and be recorded prior to the death of the owner.  If the Affidavit is recorded after the owner’s death, it is not effective.

The interest of a deceased owner is transferred to the TOD beneficiaries who are identified in the TOD Designation Affidavit by name, and who survive the deceased owner.  The owner is also able to designate one or more persons as contingent TOD beneficiaries, who would take the same interest that would have passed to the TOD beneficiary had the TOD beneficiary survived the deceased owner.

If there is a designation of more than one TOD beneficiary, the beneficiaries take title to the interest in equal shares as tenants in common, unless the deceased owner has specifically designated other than equal shares or has designated that the beneficiaries take title with rights of survivorship.  If there are two or more TOD beneficiaries and the deceased owner has designated that title to the interest in the real property be taken by those beneficiaries with rights of survivorship, and one of the beneficiaries predeceases the owner, the surviving TOD beneficiary would take title to the deceased owner’s entire interest in the real estate.

The designation of multiple beneficiaries can present challenges.  One challenge is if there are multiple beneficiaries designated as tenants in common owners and a beneficiary predeceases the owner, the deceased beneficiary’s TOD interest in the real estate passes to the surviving TOD beneficiaries, and not to the deceased beneficiary’s lineal descendants.  Further, all of the tenants in common owners (and their spouses) would have to agree in connection with a mortgage or sale of the property.  To address these types of issues, the client may elect to create a trust, the Trustee of which would be designated as the TOD beneficiary.

If none of the designated TOD beneficiaries survive the deceased owner, and there are no contingent TOD beneficiaries designated, or who have predeceased the owner, the deceased owner’s interest in the real estate would be included in the deceased owner’s probate estate, and would be distributed pursuant to the decedent’s Last Will and Testament or the laws of intestacy.

For assistance with all of your estate planning and probate administration needs, contact Isaac T. Heintz (513.943.6654) or Tammy Wilson (513.943.6663). Read more about our Estate Planning practice here.


You may want to a use trusts for a multitude of reasons, including, but not limited to, avoiding probate, maintaining control of assets after death, and tax minimization. One of the more crucial reasons for you to use a trust is to allow for flexible property management.  The use of a trust to manage property is prudent when there are laws and regulations in place that limit the ownership, sale, and transfers of that property. This holds especially true when dealing with firearms. This post will discuss (a) some of the issues that the use of firearm trusts may address; (b) the relevant laws and regulations surrounding firearms; (c) what a firearm trust is; and (d) recommendations for planning for an estate that includes firearms.

What Issues Can Firearm Trusts Address?

Probate administration is an invasive process where the court makes much of your family’s private information public.  The types and values of the guns subject to probate administration are part of the public record.  Furthermore, if your firearms are part of the probate estate, then the parties receiving the firearms will be reflected in the public.  Often, this information is available online.  If you create a firearm trust, you can avoid the specifics of your firearm collection from becoming public knowledge and the recipients of the same.

Control of your firearms after death may be important considering the felonious implications of certain criminals and non-citizens possessing certain firearms. Those implications may make it difficult for you to legally transfer certain firearms to your heirs and beneficiaries, particularly when you do not know everything about their pasts. By creating a firearm trust, you can address that uncertainty.

In that same vein, under the current laws and regulations surrounding firearms, you may avoid certain regulatory requirements for the transfer of firearms at your death by putting your firearms into a firearm trust. For example, a transfer tax associated with the transfer of certain firearms may be avoided.

Generally, outright possession of a firearm limits possession to single individuals. However, if you create a firearm trust, one of the many results is flexibility of ownership. For example, if you name multiple co-trustees to the firearm trust, then those co-trustees may each enjoy the use of the firearms in the firearm trust. By knowing the laws and regulations, a competent estate planner should be able to take advantage of the many benefits provided by firearm trusts.

What Are the Laws and Regulations Surrounding Firearms?

There are many laws and regulations regarding firearms in the United States.  Generally, in accordance with the principles of federalism, states pass their own laws and regulations regarding firearms.  However, the federal government has its own firearm laws and regulations, including, but not limited to, the Gun Control Act of 1968 (the “GCA”); the National Firearms Action of 1934 (the “NFA”); and the various regulations implemented by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (the “ATF”).

Congress passed the GCA in response to the assassinations of John F. Kennedy and Dr. Martin Luther King Jr.  The GCA is composed of Title I and Title II.  Title I of the GCA addresses most firearms in the United States, including shotguns, rifles, and handguns.  Despite being under the GCA, Title I Firearms are not largely regulated by the federal government, unless those Title I Firearms enter interstate commerce.

The federal government’s abilities to regulate Title I Firearms in interstate commerce are addressed in Bezet v. United States, 714 F. App’x 336 (5th Cir. 2017). The Bezet Court found that the federal government may regulate, through the Commerce Clause, the importation of certain firearms and ammunition, and the use of certain imported parts in the assembling of firearms.  Furthermore, in Bezet, the GCA withstood intermediate scrutiny because Congress enacted the provision of issues with the important government objective of “buttress[ing] states’ individual efforts to curb crime and violence” through a “comprehensive national response.”  Using the same logic, the Bezet Court found that the federal government did not infringe on any Second Amendment rights because the law did not completely prevent consumers from obtaining firearms. The consumers merely had to overcome certain hurdles.  So, while the GCA may not impose many federal restrictions on firearms, it still has teeth.

Title II of the GCA “revises and incorporates provisions of the original NFA,” which Congress passed, under the Taxing Powers, in response to the organized criminal activity of the early twentieth century.  In its original form, the NFA governed the possession and sale of certain firearms and taxed the manufacturing and sale of said firearms.  The firearms regulated under the NFA were, and still are, accounted for under Title II of the GCA.  Consequently, the firearms that fall under Title II of the GCA (i.e., machine guns, short-barreled rifles, short-barreled shotguns, suppressors, and other destructive devices) have been deemed “Title II Firearms.”

The original NFA regulations on the manufacturing and transferring of Title II Firearms included requirements like (a) filing an application with the ATF; (b) paying a $200 stamp tax; (c) providing fingerprints; (d) providing photographs; (e) undergoing background checks; and (f) seeking approval from a Chief Law Enforcement Officer (“CLEO”).  Some of these original regulations did not apply to trusts, so estate planners and their clients started using the “Firearm Trust Loophole” as means to circumvent some of the NFA’s regulations. For example, estate planners and their clients used firearm trusts to bypass the fingerprinting and CLEO approval requirements. In lieu of those regulatory requirements, the ATF tasked the federal government with the job of verifying and investigating applications. The abuse of the Firearm Trust Loophole came to a head in 2013 to 2014, where trustees and officers of other entities filed over 160,000 Title II Firearm applications, none of which were subject to the close scrutiny imposed on individuals by the ATF.  In response to this, The ATF closed the Firearm Trust Loophole by implementing Rule 41F, in 2016.

The ATF does many things regarding the federal regulation of firearms.  For example, the ATF provides guidance as to which types of firearms will fall under the NFA.  Likewise, the ATF helps to enforce various federal firearm regulations. However, one of the more critical roles of the ATF is to create federal firearm regulation through notice and comment rulemaking, as seen with Rule 41F.

The ATF’s reasoning for Rule 41F was “to ensure that the identification and background check requirements apply equally to individuals, trusts, and legal entities who apply to make or receive NFA firearms.”  In that spirit, Rule 41F changed the NFA in multiple ways.  Rule 41F added the term “Responsible Persons” to broadly encompass entities that were not covered under the original NFA. Responsible Persons specifically refers to partnerships, associations, companies, corporations, and trusts.  Furthermore, Rule 41F did away with the requirement that a CLEO had to sign off on the manufacture and acquisition of Title II Firearms.  However, Rule 41F did not entirely remove CLEOs from the picture, in that Responsible Persons, who are attempting to transfer Title II Firearms, must forward an application to a CLEO in the Responsible Persons’ domicile.  In addition to those changes, the ATF created Section 479.90a of Rule 41F to regulate the unplanned possession and distribution of Title II Firearms at the owner’s death.

What is a Firearm Trust?

A firearm trust is just what it sounds like, a trust used to legally transfer and possess firearms, and avoid regulatory requirements to that effect.  Firearm trusts can be used to ensure privacy, create situations where multiple beneficiaries may use the trust firearms, and ensure that firearms do not fall into the wrong hands.  Despite their continued utility, firearm trusts were once special compared to other trusts in that they were considered separate entities from the trustees and the beneficiaries. However, this became less true when the ATF passed Rule 41F.

Currently, trusts are bound by the regulatory requirements regarding the acquisition, ownership, and transfer of Title II Firearms. That being the case, it is important, now more than ever, for your estate planner to understand the relevant firearm laws and regulations that may surround your firearms, and how to draft an estate plan accordingly.

How Should Your Estate Planner Draft a Trust for Your Firearms?

Because of the laws and regulations surrounding firearms, there are certain things you should consider when creating a firearm trust, including, but not limited to, the type of trust, the language in the trust, the trustees and their powers, and the beneficiaries of the trust.

Regarding the type of trust used, you should consider creating a revocable inter vivos trust. Regarding the firearm trust language, your estate planner should use terms that reference the specific firearms you own and the applicable federal and state firearm laws and regulations. Likewise, the estate planner should use language that makes clear your intent to comply with said laws and regulations. To allow for the most utility, the language of the firearm trust should ensure that the firearm trust is a stand-alone trust, not one incorporated by another trust.

Regarding naming a trustee for the firearm trust, as with any other trust, there are factors to consider.  First, if dealing with a revocable inter vivos trust, you should consider naming yourself as a trustee, or co-trustee, which would allow you to benefit from the use of the trust firearms during your lifetime. Second, the trustee and the successors should be individuals who are legally capable of owning firearms (i.e., non-felons and citizens who have not renounced their citizenship).  Third, you and your estate planner should consider the possibility that a trustee, who is eligible at the time the estate planner drafts your firearm trust, may later become ineligible. To remedy that issue, your estate planner should draft a provision that outlines the appropriate course of action to deal with said situation.  Those provisions might take the form of treating an ineligible successor trustee as predeceasing a successor trustee, or a trust protector provision that allows an individual to elect eligible successor trustees.

Regarding the trustee’s powers, you and your estate planner should grant the trustee broad powers.  The broad powers should ensure that the trustee can fill out the requisite transfer forms, be reimbursed for costs that the trustee incurs while owning and transferring firearms, and have discretion regarding if, and when, the trustee must transfer firearms to beneficiaries.

Regarding naming beneficiaries, you should name eligible beneficiaries. Likewise, you and your estate planner should come up with an alternate plan of disposition to address situations where a beneficiary might later become ineligible to legally own certain firearms.  That may be done by providing a charitable remainder to certain entities that can possess and dispose of the firearms correctly.  Alternatively, you could decide to leave the firearms in further trust for other beneficiaries or dissolve the trust and distribute the firearms outright.



The creation of a firearm trust is a responsible thing for you to do. However, if you do not plan for the disposition of your firearms, the executor of your estate is not going to be entirely without direction. The ATF created Section 479.90a of Rule 41F to guide executors of estates through the disposition of Title II firearms in unplanned estates.

Section 479.90a provides that an executor of an estate may possess a decedent’s registered firearms but must apply to transfer the firearms to the decedent’s heirs before the close of probate.  In said application, the executor must, among other things, name the estate as the transferor and sign on behalf of the decedent. To avoid having to deal with uncertainty and regulatory red tape associated with unplanned estates and Section 479.90a, please feel free to contact the Finney Law Firm.

Please contact Isaac Heintz (513.943.6654) or Jennings Kleeman (513.797.2858) to discuss your estate planning needs.



Attorney Isaac T. Heintz

Interest in estate planning grows

The COVID-19 crisis is prompting an increasing number of people to take care of their estate plan, including reviewing and updating their existing estate plan to comply with their current wishes.  We are seeing an increased number of people thinking about having an estate plan in place in the event something should happen to them.

What does a basic estate plan include?

Estate planning can be simple or can be complex, especially during a fast moving and potentially deadly pandemic.  At a minimum, it is recommended that each individual should have:

  • A basic Last Will and Testament,
  • A general durable Power of Attorney, and
  • Health care directives (i.e., Health Care Power of Attorney and Living Will).

By having these minimal estate planning tools in place, the Last Will and Testament will direct the individual’s wishes for the disposition of his or her assets in the event of death.  The general durable Power of Attorney allows a chosen individual to make financial decisions.  The health care directives provide the individual’s wishes for medical treatment, and designate certain chosen people to make health care decisions on their behalf, and receive health care information from their physicians.

The additional option of a trust

If an individual is looking to avoid probate of assets upon his or her death, the establishment of a Trust is a beneficial tool for this purpose. Not only does a Trust instrument allow for the disposition of assets upon the death of an individual, it avoids the necessity for probate, and is effective in reducing probate administration expenses, such as attorney’s fees, fiduciary fees, and court costs.

Social distancing and safe execution of documents 

Finney Law Firm, LLC is practicing a safe signing environment at both of our offices, and is working with estate planning clients to arrange for signing of estate planning documents at the client’s residence upon request.


The experienced estate planning team at Finney Law Firm, LLC is available to assist with implementing an estate plan, and reviewing and/or amending an existing estate plan.

Our goal is to continue to fulfill the estate planning needs of our clients during this crisis.

Contact Tammy Wilson (513.943.6663) or Isaac T. Heintz (513.943.6654) for your estate planning needs.

With the advent of the COVID-19 Crisis, Finney Law Firm and Ivy Pointe Title have quickly stepped to the plate, with technology that allows for the practice of law with appropriate social distancing, with attorneys who focus on practice areas to help their clients, and with cutting edge information on emerging programs to help businesses and individuals in need.

Technology allowing for electronic interaction

Finney Law Firm and Ivy Pointe Title  have carefully developed the tools to be prepared for a day such as this:

  • DocuSign allows for execution of documents from your computer.  By federal and state law, e-signed documents are fully enforceable as with “inked” documents. Our team is licensed and trained in DocuSign technology for all documents in which clients will allow an electronic signature.
  • Electronic notary.  Finney Law Firm and Ivy Pointe Title contracted with one of only a handful of licensed e-notaries in Ohio for exclusive provision of e-notary services. Using the platform DocVerify, we have the strongest technology to allow real estate closings and other transactions to proceed.  By Ohio law, it is permissible to have documents signed and acknowledged (notarized) without person-to-person interaction via electronic signature and electronic notary.
  • Electronic payments. We use e-billing and credit card payments (and wire transfers and EFTs) for clients who prefer this method of billing and payment.
  • Electronic discovery and electronic depositions. Your litigation does not need to stop because of the COVID-19 crisis. Most of the work pre-trial can still move forward using e-mail, Zoom.US or Microsoft Teams for depositions, and motion work that can be electronically filed with almost all Courts.
  • Work-from-Home. If you do need to visit our offices, you will find that most of our professionals are not at their desks. Rather, they are safely (for you and them) working from home with the latest technology including Microsoft Surface laptops, Microsoft Teams Video Conferencing, Microsoft Office 365 data in the cloud, so we can access your data from anywhere in the planet, but with tremendous Microsoft security technology and backups.

Practice areas to help your business

Our business lawyers are up to date and prepared to help you through the thicket of issues that arise or are heightened with the COVID-19 crisis:

Attorney Isaac T. Heintz is proficient in contract interpretation, including how to enforce or avoid obligations under a lease or other agreement. He has already written purchase agreements with COVID-19 contingencies to extend due diligence periods to the declared end of the crisis. As you might expect, Isaac has also had many clients initiate their estate planning, or finish long-delayed estate planning work.

Attorney Stephen E. Imm heads our employment law group, and is advising clients on a myriad of new COVID-19 legislation and addressing employment law claims under previously existing law and the new enactments.

Attorney Bradley M.  Gibson heads our litigation group which is dealing with a multitude of business-to-business disputes, including those arising because of the COVID-19 crisis.

Attorney Richard P. Turner runs Ivy Pointe Title and in that capacity has been using every tool at our disposal to continue to close your transactions “accurately and on time, every time.”  These include closings respecting social distancing, and we stand prepared to be one of the first agencies in Ohio to implement fully electronic closings.  We also can do drive-by closings where you come to our office and sign documents from your car, or we come to you and you can sign them on our car hood.

Attorney Christopher P. Finney heads our public interest practice, and the host of issues addressing government-to-business and government-to-individual interaction arising from the COVID-19 crisis.

CARES Act assistance for your small business

Congress just passed the CoronaVirus Aid, Relief and Economic Security Act, which includes the Paycheck Protection Program that will provide what essentially are grants to businesses with fewer than 500 employees and enhanced Economic Injury Disaster Loans (EIDL).

Attorney Rebecca L. Simpson has been counseling clients through this program, and on Thursday night she joins other presenters on a panel addressing “CARES Act, Including Paycheck Protection and Funds for Businesses.”


We are working furiously to meet the needs of our clients in this fast-emerging crisis. Let us know how we can help you or your small business navigate these turbulent waters to come to the other side safely and profitably.

And our hope is that each of you remain healthy throughout this pandemic.



An inter vivos trust is a trust created during a person’s lifetime that becomes effective while that person (“Grantor”) is living.  As an inter vivos trust operates during the lifetime of the Grantor, it is commonly referred to as a “living trust.”

The Grantor may want to create a living trust, but may also desire to retain an interest in the trust property and control over its management, such as serving as Trustee, receiving all of the income, retaining the power to revoke or amend the trust, and keeping the right to change the beneficiaries.

Living trusts are not for everyone. Anyone considering a living trust should consult with an estate planning attorney to discuss the potential benefits and disadvantages for such person’s individual situation.

The following is a summary of some advantages of living trusts:

Provide For and Protect Beneficiaries.  The Grantor’s desire to provide for and protect someone is probably the most common reason for creating an inter vivos trust.

Minor Children.  Minor children lack the legal capacity to manage property.  A trust permits the Grantor to make a gift for the benefit of a minor without giving the minor control over the property or triggering the necessity for the minor to have a court-appointed guardian to manage that property. A trust is also more flexible and allows a Grantor to have greater control over how the property is used when contrasted with other methods, such as a transfer to a guardian of the minor’s estate or to a custodian under the Uniform Transfers to Minors Act.

Individuals Lacking Management Skills.  An individual beneficiary may lack the skills necessary to properly manage the trust property. This could be the result of a mental or physical disability, or a lack of experience in making prudent investment decisions.  By putting the money under the control of the trustee with investment experience, the Grantor increases the likelihood that the beneficiary’s interests are served for a longer period of time.

Spendthrifts. Some individuals may be competent to manage property, but are likely to use it in an excessive or frivolous manner.  By using a carefully drafted trust, a Grantor can protect the trust property from the beneficiary’s own excesses, as well as the beneficiary’s creditors.

Under the laws of the State of Ohio, the Grantor may protect trust assets by including a spendthrift provision. A spendthrift clause does two things: (1) it prohibits the beneficiary from selling, disposing of, or otherwise transferring the beneficiary’s interest, and (2) it prevents the beneficiary’s creditors from reaching the beneficiary’s interest in the trust. The spendthrift provision permits the Grantor to carry out the Grantor’s intent of benefitting the designated beneficiary, but not the beneficiary’s assignees or creditors. Grantors typically include spendthrift restrictions in a trust because they protect beneficiaries from their own lack of management of the trust property, or from disposing or selling of trust property, and also protects assets from the beneficiary’s personal creditors.

Persons Susceptible to Influence.  When a person suddenly acquires a significant amount of property, that person may be under pressure from family, friends, or other individuals or organizations who wish to share in the windfall.  An inter vivos trust can make it virtually impossible for the beneficiary to transfer trust property to other people or organizations.

Retain Flexibility.  The Grantor may restrict the beneficiary’s control over the property in any manner the Grantor desires, as long as the restrictions are not illegal or in violation of public policy.  This flexibility allows the Grantor to determine how the trustee distributes trust benefits, such as by spreading the benefits over time, giving the trustee discretion to select who receives distributions and in what amounts and frequencies, requiring the beneficiary to meet certain criteria to receive or continue receiving benefits, or limiting the purposes for which trust assets may be used, such as health care or education.

Revocation and/or Amendment.  The Grantor may amend, or even revoke, a revocable inter vivos trust during the Grantor’s lifetime.

Trustee.  The Trustee is responsible for handling the assets held in the trust, including distributing the assets according to the terms of the trust document.  Thus, the Grantor has the flexibility of designating the individual or corporate trust department of the Grantor’s choosing to serve in the role as Trustee.

Avoid Probate.  Property in an inter vivos trust or received by the trust as beneficiary upon the death of the Grantor is not part of the Grantor’s probate estate. The property remaining in the trust when the Grantor dies and all property received by the trust, is administered and distributed according to the terms of the trust; it does not pass under the Grantor’s Last Will and Testament nor by intestate succession.

Reduction in Administration Expenses.  Some expenses incurred in the administration of a probate estate include attorney’s fees, fiduciary fees, appraisal fees, and court costs. The use of an inter vivos trust may be effective to reduce these expenses because less (if any) of the decedent’s property would pass through the decedent’s probate estate.

Increased Privacy.   All probate estate proceedings are public record, and can be viewed by anyone.  Documents filed in an administration of a probate estate include, but are not limited to, the inventory of all of the decedent’s probate assets, with the date of death value of each.  Further, the names of the beneficiaries of a probate estate, as well as the assets distributed to the beneficiaries, are also public record.  By the use of an inter vivos trust, the Grantor can keep private the extent of the Grantor’s assets and their disposition.

Avoidance of Ancillary Administration for Real Property Located Outside the State of Ohio.   If a decedent owned out-of-state real property, the decedent’s Last Will and Testament is probated in the county of the decedent’s residence, with some type of ancillary administration being necessary in the state or county in which the out-of-state real property is located. This ancillary administration can be expensive, inconvenient and time-consuming, and can be avoided if the property passes by way of an inter vivos trust.


Finney Law Firm prevails in “Mansion House case” through Ohio Supreme Court

Attorney Casey A. Taylor

Recently, our firm had a probate decision make its way all the way up to the Ohio Supreme Court as part of joint effort by Attorneys Isaac T. Heintz of our transactional team and Casey A. Taylor of our litigation team.

While the precise legal issues in that case were somewhat idiosyncratic (and certainly underutilized), the underlying situation in that case was not all that unique. That is, our firm has been approached on more than one occasion by an individual whose spouse has passed away and, to their surprise (or perhaps not), had disinherited them before their passing.

Many times, the surviving spouses are left believing they have no recourse and will be left with pennies on the dollar relative to the decedent’s estate. However, that is not always the case.

A Surviving Spouse’s Right to Purchase Assets from Decedent’s Estate

Under Ohio law, a surviving spouse has the right to purchase certain assets from an estate at the appraised value, including “the mansion house.” See R.C. 2106.16 (providing the right to purchase “the mansion house, including the decedent’s title in the parcel of land on which the mansion house is situated and lots or farm land adjacent to the mansion house and used in conjunction with it as the home of the decedent” at its appraised value, provided that it is not specifically devised/bequeathed to someone else).

The “mansion house” is often not an actual mansion, as the name would suggest but, generally speaking, can be thought of as the decedent’s primary residence. See id. (“. . . as the home of the decedent.”) (emphasis added). Additionally, if there is a farm associated with the mansion house, which is used in connection with the home (and not a commercial farming operation), the farm should also be subject to the surviving spouse’s right to purchase.

The statute, however, is not limited to the “mansion house” but also may apply to household goods and other personal property under certain circumstances. Although it is typically not the focal point of a surviving spouse’s rights, R.C. 2106.16 can provide an opportunity for a surviving spouse to promote a more expeditious resolution of an estate and, if the facts and circumstances are right, benefit monetarily.

As a threshold issue, R.C. 2106.16 only applies to assets that are, “not specifically devised or bequeathed.”  A specific devise or bequeath occurs when a Will specifically references a designated asset transferring to a particular party (e.g., I give to John Doe the real estate located on 123 General Street, Anytown, Ohio).

A residual devise/bequest, by contrast, almost never qualifies as a specific devise/bequest (e.g., I give to John Doe the rest, residue and remainder of my estate).  As long as the asset in question is not subject to a specific bequest, R.C. 2106.16 may be an option as to the asset in question.

R.C. 2106.16 – the “Mansion House Statute” – Applied in Real Life

Not only can the exercise of this right allow the surviving spouse to purchase and, at his or her election, remain in the home that served as the decedent’s residence (and, perhaps, as the surviving spouse’s residence too, though this is not required – keep reading. . . ), but it can also serve to maximize an otherwise disinherited spouse’s share under the decedent’s estate. For instance (and especially where the mansion house appraises for less than the surviving spouse believes it is worth), a practical, yet largely overlooked strategy available to surviving spouses is to purchase the mansion house (or another undervalued asset contemplated under the statute) and immediately sell it to a third-party purchaser for a higher price. R.C. 2106.16 imposes no requirement that the surviving spouse maintain ownership of the mansion house/asset for any set period of time.

Thus, if the subsequent sale generates excess proceeds, those proceeds would belong to the spouse. In this scenario, even a disinherited surviving spouse who would otherwise take very little under the decedent’s estate may be able to pocket a significant amount by capitalizing on the difference between the appraised value and market value/purchase price of a sale to a subsequent buyer, consistent with his or her rights under R.C. 2106.16.

Further, there may be instances where the purchase of one or more assets by the surviving spouse (or the threat of him/her purchasing) could help facilitate a resolution or settlement of the decedent’s estate. For example, if the asset is desired by the executory/adverse party, he or she may seek a prompt resolution if that asset is in jeopardy, or the surviving spouse could otherwise use his or her right to purchase as a bargaining chip of sorts.

These are just a couple of ways that R.C. 2106.16 could be used to the benefit of a surviving spouse in an otherwise less-than-ideal situation in a practical sense. This is an area where our firm excels – we have a well-rounded team, with experience in diverse areas of the law and real estate, who come together to develop innovative solutions for our clients.

Our Case

In our “Mansion House” case, our client was a surviving spouse asserting her right to purchase the home and farm owned by her husband, which served as his primary residence. The executor of the decedent’s estate challenged our client’s right to purchase the home/farm, arguing primarily that she (the surviving spouse) did not live at the home/farm full time at the time of her husband’s (the decedent) death. In essence, the executor wished to impose a residency requirement on the surviving spouse where the statute only contemplates the residency of the decedent. Though more secondary arguments, the executor also asserted that:

  • the property was somehow specifically devised by virtue of the residuary clause in the decedent’s will and, thus, excluded from the purview of R.C. 2106.16 (conveniently, the executor was the beneficiary of the residual and desired the home/farm), and that
  • if the decedent’s home was the “mansion house,” and if our client had a right to purchase it, that right did not extend to the farmlands adjacent to the home because they were a separate parcel.

The trial court rejected all three of the executor’s arguments and found for our client (i.e., that the home/farm at issue was a “mansion house” under that statute and that our client was entitled to purchase it at its appraised value). Specifically, the trial court found that the plain language of the statute does not impose a residency requirement on the surviving spouse – the “mansion house” is the home of the decedent.

Additionally, the residuary clause contained no specific devise of the property at issue. And lastly, the statute (R.C. 2106.16) explicitly contemplates “lots or farm land adjacent to the mansion house” and used in conjunction therewith. On appeal by the executor, the Twelfth District Court of Appeals unanimously upheld the finding in our client’s favor. You can read the full appellate decision HERE (link to 12th Dist. Decision).

In a final effort to thwart our client’s purchase of the property, the executor sought discretionary review from the Ohio Supreme Court, arguing that the question was a great issue of public importance. The High Court, however, declined to exercise its jurisdiction to hear the case, leaving the lower court decisions for our client undisturbed.


This was a very favorable outcome for our client and our firm, and we take pride in our ability to deliver creative solutions to our clients’ unique, and often difficult, legal questions. If you would like to speak someone regarding estate planning or any other legal questions you may have, please don’t hesitate to reach out to us.  You may reach Isaac Heintz at 513.943.6654 and Casey Taylor at 513.943.5673.