Ohio offers anyone planning an estate access to a financial tool called an Ohio Legacy Trust. These trusts, also called domestic asset protection trusts, allow benefactors to set aside funds in a special account that is inaccessible to creditors. This protects the contents of the trust from creditors regardless of how much the creditors are owed.
An Ohio Legacy Trust is a good tool for setting aside money for the future. The creator of the trust is allowed to designate beneficiaries who are able to withdraw funds or assets from the trust. Typically, beneficiaries tend to include the benefactor, children, grandchildren, a charity or friends. Although an OLT cannot replace a will or power of attorney, it is a powerful tool that can be used in conjunction with other estate planning devices to safeguard the integrity of a person's estate and help distribute assets in the future.
Many types of assets can be placed into an OLT. Personal property, profits from stock dividends, real estate titles and investment accounts can all be secured from the reach of creditors in an OLT. Distribution of the funds or assets in an OLT is managed by an independent trustee who is allowed to refuse distribution to any creditors. However, all of the beneficiaries of the OLT are allowed to apply for their share of the distribution by submitting a request in writing to the designated trustee.
An OLT can be created by a business, an individual or a corporation. Regardless of who forms the OLT, it is safe from creditors as long as it is properly formed. In order for trusts to be effective, they must be created properly. An attorney may be able to help a client design and form a trust to suit the client's needs.
Source: Ohio State Bar Association, "Ohio Legacy Trusts Protect Assets", December 14, 2014