Types of Trusts

Revocable Guardianship Trust
Under its broad authority as the Superior Guardian of every guardianship and ward subject to its jurisdiction, the Probate Court may create (as grantor) a revocable trust for its ward; one which terminates when the need for the guardianship ends. This usually occurs under one of 3 circumstances:

• The guardianship was based upon the ward's minority and he has now attained the age of majority (18 years)
• The guardianship was based upon the ward's disability and the disability has ended
• The ward's death

Under this same authority, the Probate Court may also authorize that gifts of the ward's assets be made in trust for others.

Special Needs Trust
A special needs trust is another species of trust which the Probate Court may create under its broad authority as Superior Guardian. Such trusts are usually created when the ward (whether a minor or incompetent adult) has funds, income or a stream of future income (annuity payments) and a legally recognized mental or physical disability which would entitle the ward to participate in qualifying government funded programs, or to receive disability income from a government agency. The ward's funds, or income might disqualify him or her from participation in or the receipt of such assistance. However, the Probate Court may decide to create a special needs trust for the ward so that the ward is still eligible to participate in the governmental assistance programs.

In such instances, the ward's funds or income may continue to be used for his or her benefit, but only as a supplement to governmentally funded assistance; to provide a means of supplying the ward with goods, services or other beneficial needs which the governmental agency does not provide. Upon the death of the ward or the termination of the guardianship, the government has a right to recover the sums it advanced for the ward's benefit during the guardianship, subject to the approval of the Probate Court. Any funds or assets which remain in the guardianship, after satisfaction of the governmental claims, may either be released to the former ward or, in the event of the ward's death, such assets would pass to his or her estate for its administration.

Great care must be exercised in the creation and administration of such a trust. Compliance with the many federal and state laws regulating such trust may require the skill and expertise of legal and other professionals.

Wrongful Death Trust
Ohio law provides that the next of kin of a decedent may sue for the decedent's wrongful death, when appropriate. While such suits may only be instituted by the fiduciary appointed by the Probate Court, the underlying claim is for the benefit of the next of kin, not the estate.

Note: The estate may also have a separate survival action it may institute on its own behalf [such a survival action may or may not be related to the decedent's death].

Wrongful death suits are not litigated in the Probate Court. However, any settlement or judgment reached under such lawsuits must be reported to the Probate Court which appointed the fiduciary or representative of the decedent's estate. The Probate Court must approve of such settlements and, among other matters, determine how the money from the settlement or judgment should be dispensed.

Whenever one or more of the beneficiaries of a wrongful death claim is a minor (under the age of 18), the Probate Court may decide to create a wrongful death trust for the minor(s). Such trusts then regulate how the money apportioned for the benefit of each minor shall be held, invested and/or expended for the minor's benefit until the trust terminates. Such trusts may remain in existence until each minor-beneficiary reaches 25 years of age, unless sooner terminated by the Probate Court.

Testamentary Trust
A testamentary trust is a trust created within a decedent's last will and testament. By its terms, it leaves certain (or all) of the decedent's property in the control of one or more persons, as trustee(s), for the benefit of one or more others - the trust beneficiaries. The language of the testamentary trust usually includes a statement of its purpose, the identity of the beneficiary(s), a description of the property of the trust and the duties and powers of the trustee(s).

A testamentary trust may be created for the benefit of individual persons, charitable purposes or both.

Such trusts are administered through the Probate Court until all provisions of the trust have been fully effectuated. While a testamentary trust for the benefit of individual persons may be made to end at some future point, a charitable trust may, depending upon the value of the assets which comprise the charitable portion of the trust, go on in perpetuity.

A testamentary trust may, by its provisions, limit probate administration by including language that the property subject to such a trust shall pour over to an living or inter vivos trust separately created by the decedent prior to his or her death.