On June 14, 2016, Governor Kasich signed House Bill 229 allowing families to establish a family trust company to serve as trustee of family trusts. The Ohio Family Trust Company Act (O.R.C. Chapter 1112) makes Ohio part of a select group of approximately 16 states with these forward-thinking statutes. Most notably, South Dakota, Nevada and Wyoming were pioneers in offering families this statutory option, while Missouri, like Ohio, added statutes which became effective in 2016.
The Ohio Family Trust Company Act became effective on September 15, 2016. The Act authorizes both licensed (regulated by the Ohio Division of Commerce’s Department of Financial Institutions) and unlicensed Family (Private) Trust Companies. A key requirement of an Ohio Family Trust Company is that the clients served are limited to “family members.” Family members include spouses, spousal equivalents, adopted children, stepchildren and foster children. It also includes family charities, family estates, trusts set up for family members, key employees and entities owned and operated by family members.
What is a Private Family Trust Company (“PFTC”)?
A PFTC is:
When considering trustee options, typically, naming a traditional (bank) corporate trustee or individual(s) are considered. Below is an outline of some of the characteristics of each of these options as well as for a PFTC:
Traditional Corporate Trustee
Turnover of Personnel
Sensitive & knowledgeable about the family
Flexible/Subjective – saying “no” can be difficult
Individual Fiduciary Liability
Impact of Family Dynamics
Private Family Trust Company
Governed by Family Members
Permanent Trustee Solution
Institutionalize the personal, business, & investment matters for a family
Flexibility in Managing Concentrated Positions
Consistent Trust Administration/Compliance
Family Engagement Opportunity
Start the conversation with CLS Consulting, LLC on how an Ohio Family Trust Company can provide a succession solution for your family!« Back to Blog