Ohio § 5815.22

§ 5815.22.

(A)(1) Except as provided in divisions (A)(2), (3), and (4) of this section, a spendthrift

provision in an instrument that creates an inter vivos or testamentary trust shall

not cause any forfeiture or postponement of any interest in property that satisfies

both of the following: (a) It is granted to a surviving spouse of the testator or other settlor. (b) It qualifies for the federal estate tax marital deduction allowed by Subtitle B,

Chapter 11, of the “Internal Revenue Code of 1986,” 26 U.S.C.A. 2056 , as amended, the estate tax marital deduction allowed by division (A) of section 5731.15 of the Revised Code , or the qualified terminable interest property deduction allowed by division (B) of section 5731.15 of the Revised Code . (2) Division (A)(1) of this section does not apply if an instrument that creates an inter

vivos or testamentary trust expressly states the intention of the testator or other

settlor that obtaining a marital deduction or a qualified terminable interest property

deduction as described in division (A)(1)(b) of this section is less important than

enforcing the forfeiture or postponement of the interest in property in accordance

with the spendthrift provision in the instrument. (3) Division (A)(1) of this section applies only to the forfeiture or postponement portions

of a spendthrift provision and does not apply to any portion of a spendthrift provision

that prohibits a beneficiary from assigning, alienating, or otherwise disposing of

any beneficial interest in a trust or prohibits a creditor of a beneficiary from attaching

or otherwise encumbering the trust estate. (4) Division (A)(1) of this section does not apply to any beneficiary of an inter vivos

or testamentary trust other than the surviving spouse of the testator or other settlor

or to any inter vivos or testamentary trust of which the surviving spouse of the testator

or other settlor is a beneficiary if an interest in property does not qualify for

a marital deduction or a qualified terminable interest property deduction as described

in division (A)(1)(b) of this section. (B)(1) Except as provided in divisions (B)(2) and (3) of this section, if an instrument

creating an inter vivos or testamentary trust includes a spendthrift provision and

the trust holds shares in an S corporation, the spendthrift provision shall not cause

any forfeiture or postponement of any beneficial interest, income, principal, or other

interest in the shares of the S corporation held by the trust.  For purposes of division (B)(1) of this section, “S corporation” has the same meaning

as in section 1361 of the “Internal Revenue Code of 1986,” 26 U.S.C. 1361 . (2) Division (B)(1) of this section does not apply if an instrument that creates an inter

vivos or testamentary trust expressly states the intention of the testator or other

settlor that maintenance of the corporation's status as an S corporation is less important

than enforcing the forfeiture or postponement of any beneficial interest, income,

principal, or other interest in the S corporation shares in accordance with the spendthrift

provision in the instrument. (3) Division (B)(1) of this section applies only to the forfeiture or postponement portions

of a spendthrift provision and does not apply to any portion of a spendthrift provision

that prohibits a beneficiary from assigning, alienating, or otherwise disposing of

any beneficial interest in a trust or prohibits a creditor of a beneficiary from attaching

or otherwise encumbering the trust estate. (C)(1) Except as provided in divisions (C)(2) and (3) of this section, a spendthrift provision

in an instrument that creates an inter vivos or testamentary trust shall not cause

any forfeiture or postponement of any interest in property that satisfies both of

the following: (a) It is granted to a person who is a skip person under the federal generation-skipping

transfer tax imposed by Subtitle B, Chapter 13, of the “Internal Revenue Code of 1986,” 26 U.S.C.A. 2601 - 2663 , as amended. (b) It qualifies as a nontaxable gift under section 2642(c) of the “Internal Revenue

Code of 1986,” 26 U.S.C.A. 2642(c) . (2) Division (C)(1) of this section does not apply if an instrument that creates an inter

vivos or testamentary trust expressly states the intention of the testator or other

settlor that qualifying as a nontaxable trust gift as described in division (C)(1)(b)

of this section is less important than enforcing the forfeiture or postponement of

the interest in property in accordance with the spendthrift provision in the instrument. (3) Division (C)(1) of this section applies only to the forfeiture or postponement portions

of a spendthrift provision and does not apply to any portion of a spendthrift provision

that prohibits a beneficiary from assigning, alienating, or otherwise disposing of

any beneficial interest in a trust or prohibits a creditor of a beneficiary from attaching

or otherwise encumbering the trust estate. (D) Divisions (A), (B), and (C) of this section are intended to codify certain fiduciary

and trust law principles relating to the interpretation of a testator's or other settlor's

intent with respect to the provisions of a trust.  Divisions (A), (B), and (C) of this section apply to trust instruments executed

prior to and existing on August 29, 2000, and to trust instruments executed on or

after August 29, 2000.