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Building a Better Mouse Trap Pre-nuptual Planning with an Ohio Legacy Trust

A quiet resolution in Ohio trust law took place on March 27, 2013, with the passage of the Ohio Asset Management Modernization Act of 2012 (AMMA). With virtually no media attention, AMMA delivered a domestic asset protection trust in Ohio, known as the Ohio Legacy Trust.

Unfortunately, in the United States today, fifty percent of first marriages end in divorce. An astounding sixty-seven percent of second marriages end in divorce and seventy-four percent of third marriages end in divorce.

It is anticipated that the Ohio Legacy Trust will become a popular and effective pre-nuptual planning tool for individuals contemplating marriage.

A recent article in an online newsletter for trust services highlighted nationally respected finance and legal experts providing their dissertation on the benefits of an asset protection trust in the widely publicized divorce case of Tiger Woods.

How would an Ohio Legacy Trust have saved Tiger Woods a record seven hundred and fifty million dollar divorce settlement? Now in Ohio, the answer is straight forward.

Hypothetically, had Tiger Woods created an Ohio Legacy Trust (you do not need to be an Ohio resident to create this trust) and funded it with the approximate one billion dollars of his net worth, the trust assets would have been protected from a property settlement in a subsequent divorce action. A few important caveats: The trust should have been funded eighteen months prior to the divorce action, or more conservatively, funded eighteen months prior to the marriage. Also, funding the trust should not render the creator of the trust insolvent or be an attempt to defraud creditors.

Mr. Woods could be a mandatory income beneficiary of the Ohio Legacy Trust and receive principal distributions for his health, education, maintenance and support at the discretion of the trustee, which must be an Ohio resident or financial institution subject to Ohio banking regulations. His Ohio attorney would also have had his signed and notarized “Notice of Personal Property Transfer” recorded with the county recorders office to put future potential creditors (in this example, his future wife) on notice that a good portion of his tangible personal property ( yachts and golf clubs, conceivably) and intangible personal property (millions in bank deposits, brokerage accounts and ownership in his LLC’s, conceivably) was transferred into his Ohio Legacy Trust. Finally, Tiger Woods would have executed a “Qualified Affidavit” attesting to the fact that the transfer of wealth into his Ohio Legacy Trust was not intended to defraud creditors and would not render him insolvent.

An Ohio Legacy Trust is not just for the mega wealthy Tiger Woods of the world, or for high net worth earners. Instead, it is for anyone who wishes to protect or preserve his or her wealth from future creditors. Ohio has now become the leading jurisdiction in the country for asset protection trusts. Should you wish to explore the advantages and benefits of an Ohio Legacy Trust, our estate planning attorneys stand ready to be of service to you.

Stark & Knoll Co., L.P.A. 3475 Ridgewood Road Akron, Ohio 44333-3163
Phone: 330-376-3300 Fax: 330-376-6237

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