Marc L. Stolarsky Law LLC

Federal and Ohio Estate Taxes: Where they came from, where they are going and why

2010-01-18T09:44:00.000-08:00

Federal and Ohio Estate Taxes: Where they came from, where they are going and why by Marc Stolarsky, M.A., J.D.
Marc L. Stolarsky Law. LLC
Tel. No. 440-655-2343
Email: MARC@MLSLaw.Net
Web Site: www.MLSLaw.Net
January 19, 2010

Introduction
The estate tax has existed for thousands of years in ancient Egypt, but some still argue that it is unfair. Often the philosophical debate on estate taxes pits those who have the means to pay, but don't want to, against those who stand to benefit.
This article will examine the estate tax in the following order of subjects: (1) defining what is estate tax; (2) where it came from in world history; (3) it's origins and development in the United States; (4) the present and future condition of the U.S. federal estate tax; (5) the history of the Ohio estate tax; (6) the debate over the tax: for and against; (7) how democracy is being hurt by tremendous inequality of wealth; (8) how the estate tax can raise money, ameliorate unequal wealth and help the poor; (9) the argument against the Ohio estate tax; and (9) the future of the Ohio tax. It will conclude with my recommendation as to what should be done.
The advocates of the federal and state estate tax believe that democracy is strengthened when great wealth is redistributed to the poor while it funds important social programs and lowers the deficit. Opponents make these arguments: the estate tax is double taxation; that a capitalist economy should not be involved in redistributing wealth; it takes assets out of the economy and wastes it with dead end federal programs; it penalizes those who have had success and rewards those wh are lazy; it is an almost insignificant percentage of the taxes collected; it lowers the standard of living of the heirs of a decedent,; and the programs it funds create a dependent class.
Opponents of the Ohio estate tax repeat the same arguments as those against the federal tax and add these: that Ohio is losing residents to other states with lower estate taxes; that the loss of wealthy residents is lowering Ohio's productivity; that the lower population leads to less political clout in Congress and less dollars from federal programs.
The three questions I will analyze and answer in this paper are these: (1) Should government have a federal and an Ohio estate tax; (2) Should government redistribute personal assets of a decedent's estate to fund social programs; and (3) What should the estate tax be in the future.
I. Definition of the estate tax
Concise Encyclopedia defines estate tax this way:
[It is a l]evy on the value of property changing hands at the death of the owner, fixed mainly by reference to its total value. Estate tax is generally applied only to estates whose value exceeds a set amount, and it is applied at graduated rates.

Answers.com defines estate tax this way: "A tax imposed on the right to transfer property by inheritance and assessed on the net value of a decedent's estate before distribution to the heirs."
The amount of the estate tax to be paid is usually a percentage of the decedent's gross estate. However, it can also be the total assets of an estate at the time of death, which may be a different amount.
Estate tax is unique from all other taxes in the way it is assessed and how it is used. It is placed upon the estate of a deceased person as it passes to their heirs, beneficiaries, legatees, etc. It can be used to raise revenue and to redistribute wealth. It can potentially be leveled upon an estate by any branch of government, be it federal, state, or local. It is an excise tax as it is not a direct tax on property, but is levied on the transfer of the property at the time of death.
The term estate tax is sometimes used interchangeably with the terms inheritance tax and death tax among others. However, there is a distinction between them. While they all arise upon the death of an individual, an estate tax is against the personal representatives of the deceased, while an inheritance tax is against the beneficiaries of the estate. This distinction is not always understood and sometimes ignored which confuses the discussion.
The term "death tax" has been used since the 19th century and may refer to all taxes in the arena: estate, inheritance, succession, etc. It could also refer to something more specific like the term used in the Internal Revenue Code. More recently, the use of the term was popularized by Jack Faris of the National Federation of Independent Business when Newt Gingrich was Speaker of the House of Representatives. It is a neologism used by estate tax opponents as a propaganda tactic to argue for its repeal. It has extreme negative connotations that conger up thoughts of unfair taxation.
There are other taxes that are similar to estate taxes, but are slightly different in the way they are determined; who is responsible for paying; and when they are assessed. In an "inheritance tax" or "legacy tax", the tax is paid by the person receiving the asset and based on the amount that received. The "wealth tax" , sometimes used in interchangeably with the term "death tax" or "privilege tax", is a normative tax that may be set by a legislative body on what they consider to be extreme wealth. The term "death duty" may also be used interchangeably with the other terms.
Ohio estate tax is separate from federal estate tax, determined by adding up the entire gross estate, essentially everything of monetary value, to get a total amount. That includes real property, personal property or anything else of value. When it transfers to another person upon an Ohio resident's death or the death of a person who has an Ohio asset, it is taxed. States may have a "sponge tax" which allows states to collect the tax credit to the federal estate tax and it is discussed in more detail in section VII below.
II. Ancient history of estate tax
The estate tax and similar taxes have been used for thousands of years. It was first used in ancient Egypt in 700 B.C. to place a 10 percent tax any land transfers at the time of death. In Rome in the first century A.D., Augustus Caesar placed an inheritance tax on the person who was receiving the property if they were not a close relative. The Ancient Greeks also had a similar tax. In the Middle Ages the transfer tax was the cost assessed by the English King for permitting the estate of one of his deceased subjects to transfer the use of property (because the king owned all the land) to another subject. In the 19th century, European governments adopted several different types of estate taxes.
The modern estate tax was first instituted in Great Britain in 1889 as part of a broad death tax program. Most countries of the world followed suit and now have an estate tax payable at the time of the decedent's death.
III. History of the United States estate tax
Estate taxes and their like were first used in the United States as a temporary measure to defray the costs of going to war. In 1797, the United States Congress imposed a legacy tax to pay for the new navy President John Adams had petitioned for to prepare for war. This tax was on all “testamentary dispositions, descents and successions to the estates of intestates excepting those to parents, husbands, wives or lineal descendants” and included stamp duties. In 1802, it was repealed when the threats of war subsided.
In 1862, to raise money to pay for the Civil War , Congress passed an inheritance tax on personal property being transferred from the estate of the deceased to the new owner. It did not apply to any transfers of real property and person receiving the property was responsibility to pay the tax. In 1864, Congress renewed the tax, increased the amount to be taxed and added real estate to the list of items being levied. In 1870, they repealed this tax since the Civil War had ended five years earlier. While it did raise some revenue, the total amount “barely generated revenue for the federal government”.
In 1894, Congress passed an all-encompassing tax that included a tax on income, gifts and inheritances, but it was later struck down by the Supreme Court. In Pollock v. Farmers’ Loan & Trust Company, 157 U.S. 429 (1895) , the United States Supreme Court held the law as unconstitutional because it was in violation of the direct clause tax in Article I, Section 2 of the Constitution that stated, “representatives and direct taxes shall be apportioned among the several states” . It also violated Article I, in Section 9 that provides: “No capitation , or other direct, tax shall be laid, unless in proportion to the census or enumeration herein before directed to be taken.” This decision may have been more political then anything, the Court afraid to uphold the law in a time when the estate tax was being opposed.
In 1898, to pay for the Spanish-American War , Congress enacted the "The War Revenue Act of 1898" or "Modified Estate Tax , which was a death, inheritance and gift tax, but not specifically an estate tax. This was a tax on estates and inheritances to non-spouse beneficiaries that included a higher tax if the decedent's estate was of great value. Two years later it was challenged in Knowlton v. Moore, 178 U.S.41 (1900), as being a direct tax as prohibited by the U.S. Constitution. The U.S. Supreme Court affirmed Congress's right to create this tax, holding that it was not a direct tax because,
“. . . death is the generating source from which the particular taxing power takes its being and that it is the power to transmit, or the transmission from the dead to the living, on which such taxes are more immediately rested” and that it was in fact an excise tax and was constitutional as it was uniform. The Courts rationale to uphold the law was probably based on its desire to raise capital and present a united front in the war effort.
The law was also challenged for being a progressive tax that violated the Fourteenth Amendment's due process and equal protection clauses, an argument also rejected by the Court. It was repealed in 1902, after the war ended.
As a result of Pollock , the Sixteenth Amendment to the Constitution was enacted in 1913, giving Congress the authority to lay and collect taxes, including an estate tax. The Sixteenth Amendment states that: " The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration." In 1916, Congress passed "The Revenue Act of 1916" to pay for the First World War military mobilization. This law had aspects that were similar to modern laws, it was graduated and better administrated then ever before. It had an exemption of $50,000 with a graduated tax scale from one to 10 percent (for estates over $5,000,000). For the first time the estate tax was not repealed after the war ended.
In addition to the preparation for war, legislators also saw the need for the 1916 law for an additional reason: with the rapid industrialization from 1870 to 1916 suddenly there were extremes of wealth that could be redistributed. The Ways and Means Committee determined that this new tax would alleviate the burden from those who were struggling economically and take a portion of the assets of those with greater means to pay. They stated that the new estate tax would mean that " . . . a larger portion of our necessary revenues [would be]collected from the incomes and inheritances of those deriving the most benefit and protection from the Government”. From 1920 to 1940, the tax was used to redistribute wealth, at times taking up to 77 percent of the largest estates.
In New York Trust v. Eisner, 256 U.S. 345 (1921) , the U.S. Supreme Court upheld the federal estate tax rejecting the argument that the 1916 estate tax was an unconstitutional interference with state's rights to regulate descent and distribution. However, the tax had huge loopholes that enable decedent's estates to avoid the tax by giving life-time gifts to heirs and beneficiaries and passing the assets to grandchildren (also known as generation skipping).
In 1976, Congress passed the Tax Reform Act (P.L. 94-455), merging the estate tax with the gift tax and offering one graduated exemption for all taxable transfers made during a person's lifetime. They also enacted the generation skipping transfer tax to impose the tax on those passing assets to grandchildren. These measures effectively closed most of the loopholes that had been left open to avoid the tax. Before it's repeal in 2001, this tax could take as much as sixty percent of a decedent's gross estate.
In 1981, riding his conservative mandate President Ronald Reagan's pushed Congress to pass the Economic Recovery Tax Act of 1981 (P.L. 97-34). The most significant change was the unlimited marital deduction for estate and gift taxes. It also raised the gift tax exclusion to $10,000 and raised the wealth transfer exemption to $600,000. Before this change, the exemption had been at $60,000 in the 1976 Act. While this was a significant change, it came at a time when the economy was stronger making the need to raise revenues less necessary.
In 2001, the United States Congress passed the sweeping Economic Growth and Tax Relief Reconciliation Act (or EGTRRA) that changed the existing estate tax laws and is still in existence today (although that might change any day now if Congress's passes a bill to modify estate tax). Using a gradual nine-year plan, the law altered the rates of estate tax exclusions and gift tax exclusions (among other things). The table here below, shows how planners of the law gradually changes the yearly exemption and the percentage taxed:

YEAR TAXED EXEMPTION PERCENTAGE TAXED
2001 $675,000 55 Percent
2002 $1,000,000 50 Percent
2003 $1,000,000 49 Percent
2004 $1,500,000 48 Percent
2005 $1,500,000 47 Percent
2006 $2,000,000 46 Percent
2007 $2,000,000 45 Percent
2008 $2,000,000 45 Percent
2009 $3,500,000 45 Percent
2010 None None
2011 $1,000,000 45

One very significant provision of EGTRRA law is the "sunset provision" that was causes the law to automatically come to an end on January 1, 2011 This was to avoid the "Byrd Rule" that blocks any legislation that would unreasonably increase the federal deficit for more then ten years. However, if Congress failed to pass another bill before that time, the law would revert back to pre-EGTRRA laws.
IV. The present and future of the federal estate tax
President Barack Obama has been working with select Democratic congressional members to pass legislation to that would re-institute some estate tax for 2010 and thereafter. In May 2009, he had the U.S. Treasury Department publish a pamphlet called the “General Explanations of the Administration’s Fiscal Year 2010 Revenue Proposals” (or the “Green Book”). It proposed that for 2010 and after, estate taxes should be at the 2009-level, which means the exemption ceiling would be at $3.5 million and tax up to 45 percent of the gross estate. It is estimated that this would raise $3 billion for the federal government.
The House and Senate have introduced bills with mirroring the President's suggested guidelines. On November 22, 2009 Rep. Earl Pomeroy [D-ND] introduced H.R. 4154, the "Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009" into the House of Representatives. It was voted and passed on December 3, 2009.
On November 17, 2009, S.2784 was introduced by Senators Thomas R. Carper [D-DE] and George V. Voinovich [R-OH]. Because the Senate has been embroiled in the health care debate, this bill has not been voted on as yet.
In a December 2, 2009 Associated Press article, it speculated that these or a bill with similar guideline would pass making the exemption 3.5 billion and taxing at a rate of 45 percent. Married couples would have a total exemption of $7 million from the estate tax.
V. History of the Ohio Estate Tax
In 1893, the first Ohio inheritance tax was enacted during Governor McKinley's Administration , placing the burden to pay the tax on the person inheriting the asset. It wasn't until 1968, that Ohio replaced this with an estate tax and shifted the burden to the decedent's estate to pay the tax.
Effective on September 29, 2000, Ohio Revised Code Section 5731.02, "Rate of Tax - Credit" taxes on sliding scale the estates of every Ohio resident dying after July 1, 1968. This is the current law in Ohio. This table below shows the tax rates of the Ohio Estate tax without any of the tax credits:

Taxable Estate Bracket Tax Rate
Not over $40,000 2% of taxable estate
Over $40,000 but not over $100,000 $800 + 3% of excess over $40,000
Over $100,000 but not over $200,000 $2600 + 4% of excess over $100,000
Over $200,000 but not over $300,000 $6600 + 5% of excess over $200,000
Over $300,000 but not over $500,000 $11,600 + 6% of excess over $300,000
Over $500,000 $23,600 + 7% of excess over $500,000

Of all of the states, Ohio has the highest and most burdensome estate tax taxing the middle class rather then adopting the strategy of the other states that only to tax the wealthiest estates. Because of tax credits permitted for most estates, Ohio begins taxation at the amount of $338,333. The State also allows a marital deduction equal to the value of the asset passing to the surviving spouse.
The Ohio estate tax is a minor portion of in the total of all the taxes collected. In 2006, of the $27.1 billion dollars in taxes Ohio colleted, only about one percent was from the state estate taxes or $272 million. The total revenues for the general fund in Ohio was $20,248,225,935.00, but only $54,070,007.00 was from estate taxes, which works out to .2670% of total State revenue.
VI. State "Sponge Tax"
Before it was outlawed, Ohio, like many states that still collect estate taxes, exercised the "sponge tax" by taking a percentage of the federal estate tax already demanded. The decedent's estate could take a credit against the federal estate tax for estate taxes paid to the state. Pre-the passage of EGTRRA in 2001, 36 states had sponge taxes. However, EGTRRA phased out the right of the states to use the sponge after 2005. Ohio General Assembly officially repealed Ohio's sponge tax in 2005 when then Governor Bob Taft signed H.B. 66.
VII. The debate over estate taxes
The rich political history of the United States is replete with protest against what has been considered to be unfair taxation. The slogans against taxation are legendary: "No taxation without representation" ; "The power to tax is the power to destroy" ; and "Nothing is so sure as death and taxes" . One of the most significant events in this country's history was the Boston Tea Party which was a reaction of the Colonists to the unfairness of the stamp duty the tax by the British Empire in 1765. More recently we have witnessed the modern "tea parties" organized by people objecting to all taxes.
The discussion over what should be done about estate tax has been politicized, heated and sometimes illogical in many ways. Politicians have made political capital doing things like using terms like "death tax" to anger voters. Some have even stooped to having press conferences in funeral homes as a backdrop. Democrats and Republicans have used the same statistics to prove opposite points. One example is to site the amount the tax has collected to show its value or lack thereof. For several years legislators were able to tell the media that there would be no estate tax in 2010, knowing full well that they would probably pass a new estate tax bill for 2010.
There is no shortage of opponents to the estate tax and their arguments for its repeal. It is an unfair tax that infringes on the personal control of assets. The tax income, sales, etc. is an accepted evil, but a second tax added onto estates after death is unfair. The value of an estate is diminished thus lessening influence during life and after death. The taking assets from a decedent's estate lowers their heirs and beneficiaries standard of living. It is a way government bureaucrats use to punish someone who has worked hard and become wealthy. The estate tax is based in Marxist philosophy that is anathema to the capitalist ideal. The amount of tax that the federal estate tax subjects about one to two percent of Americans raising a tiny percentage of the total revenue. The estate tax as an unfair way to destroy private capital that in the end is going to hinder economic growth. . The estate tax hinders productivity when residents move to another state that has more favorable taxes. (See section X below.)
VIII. How unequal great wealth hurts democracy
Proponents of American capitalist ideal tout the concept that if government is free of burdensome regulations, everyone has ability to be rich and successful. President Ronald Reagan believed with hard work we all had the chance to be wealthy: "What I want to see above all is that this remains a country where someone can always get rich." Contrary to this, even with hard work it would take incredible luck and/or significant talent to rise above middle class standards. In fact, in the United States it is harder to move up then in most other capitalist countries.
In recent years a higher percentage of wealth has been accumulated by smaller percentage of people, leaving the majority of American's at the bottom disenfranchised. Because the top one percent in wealth controls about 40 percent , the wealthy have a disproportionately greater influence in our democracy. Wealthy individuals and businesses have tremendous influence because they have the means to hire lobbyists, purchase ads, and make huge contributions to campaigns.
In Aristotle's Politics , he says that for a democracy to be effective, there must be, (1) an avenue for all citizens to participate; and (2) they must take an active role in it. Aristotle believed that without relative social equality, including "moderate and sufficient property" for all citizens, democracy was impossible. If there were great extremes of rich and poor, the wealthy would amass tremendous power and influence and work toward their own self-interests.
Today the fabulously wealthy, by the shear weight of their tremendous assets, have power and influence that dwarf that of an average citizen. In his article entitled "Redistribute the Wealth? Yes, But Not What Obama Proposes", Paul Street sums it up this way:
[T]he privileged American Few aren’t content to own a disproportionate share of U.S. wealth. They and their imperial planners seek to control as much of the world’s treasure and resources (petroleum reserves in particular) as possible.

One example of how unequal wealth leads to unequal power, is how some financial institutions contributed big dollars to political campaigns and were rewarded. The Emergency Economic Stabilization Act of 2008 , also known as the Troubled Asset Relief Program (or TARP) passed at the urging of then-President George W. Bush, is a 2008 program of the United States government to purchase assets and equity from financial institutions to strengthen its financial sector. Most of the $700 billion in assets were to address the subprime mortgage crises.
President Obama asked the Congress for even more funds to bail out the financial industry. Of the fifteen top contributor's to President Obama's 2008 campaign, six of them (one is now gone) are financial firms:
Ranking on List Name of Institution Amount Contributed
- No. 2 Goldman Sachs $743,000
- No. 4 Citigroup $500,000
- No. 6 JP Morgan Chase $478,000
- No. 9 UBSAG $419,000
- N0 10 Lehman Brothers 392,000
(filed for bankruptcy protection

- No. 15 Morgan Stanley $344,000

Another way that the wealthy industrialists use their resources is to persuade legislators to wage wars for their own profits. In a war, the government can funnel money to the wealthy that are in control of this country's natural resources, factories, transportation, etc. In 1936, in a book by Daniel Guérin, entitled Fascism and Big Business , he first outlined, “an informal and changing coalition of groups with vested psychological, moral, and material interests in the continuous development and maintenance of high levels of weaponry, in preservation of colonial markets and in military-strategic conceptions of internal affairs.” .
In his "Farewell Address" President Eisenhower called this Guérin concept the "military-industrial complex". In a parting speech as he prepared to leave the White House warned against this possibility:
In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. [Emphasis added]

When before the First World War this country maintained a small peacetime military, now this country maintains a massive force that accounts for 47 percent of the world's total arms expenditures. Many of this countries state and local governments are dependant on military dollars. For instance, a Washington State economist in 2002 estimated that in Western Washington the military was responsible for 166,000 jobs or 15 percent of the workforce being employed, an amount of $7.06 billion. These numbers are not unusual and are consistent in other areas as well.
Says Paul Street about this:

[W]ar, militarism, arms sales, and conquest are lucrative investments in and of themselves. The Pentagon budget is a giant public subsidy — a powerful mechanism of regular public wealth transfer to the high-tech corporate sector.

Unfortunately, the mutation of democracy that Aristotle warned us about where the wealthy have disproportionate influence has come to fruition.
IX. Redistributing the wealth to retain a healthy democracy
The philosophy of Social Darwinism , has been used by the wealthy and powerful to justify their disproportionate accumulation of tremendous wealth while ignoring the poor, hungry, elderly, sick and needy. Sometimes known as "natural selection" or "survival of the fittest" , this is the theory that government should stay out of the socioeconomic arena, and allow every person to fend for themselves, sinking or swimming alone.
Similar to this, is the theory of "lezze-faire" economics espoused by political economics philosophers to claim that there should be a free flow business unencumbered by government interference. They believe that there is an "invisible hand" that will adjust to all economic issues and eventually business will prosper more efficiently without government interference, thus benefiting everyone.
Followers of these theories believe that any assistance given to the individual make them week and dependent on welfare.
Since the collapse of the economy led to the Great Depression of 1929, the country has adopted many of the principles of the welfare state and become more responsive to each citizen's individual needs. While there are still disagreements as to how much government should do, it has developed and funded myriad social programs effectively ended the cycle of poverty for some.
An estate tax can be used to redistribute the large pool of individual wealth to the people sitting at the lower part of the socioeconomic chart. Says Susan K. Hill, author of Leaping Before We Look?: Repeal of the Estate Tax Credit and the Consequences for States, Americans, and the Federal Government, estate tax is one way, " ... to reduce the wealth being amassed by powerful families, thereby avoiding the creation of a hereditary aristocracy in this country. . ."
The redistribution of wealth is not a new concept and has been supported throughout history by many Americans an non-Americans alike including but not limited to Adam Smith , Alexis de Tocqueville , Thomas Jefferson , Wilhelm von Humboldt , John Stuart Mill , , and John Dewey. (There is also a contingent of thinkers that opposes the redistribution of wealth i.e. Alexander Hamilton, George W. Bush, George H.W. Bush, Ronald Reagan, William McKinley, etc.)
One proponent of wealth redistribution was Thomas Jefferson , who said,
"I am conscious that an equal division of property is impracticable. But the consequences of this enormous inequality producing so much misery to the bulk of mankind, legislators cannot invent too many devices for subdividing property, only taking care to let their subdivisions go hand in hand with the natural affections of the human mind. Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise. Whenever there is in any country, uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right. The earth is given as a common stock for man to labor and live on."

James Madison, who had originally wanted government to “protect the minority of the opulent against the majority,” came to the realization that this country could be threatened by too much wealth and power if it was amassed by a few. In the1790's, he denounced the “daring depravity of the times [as] the rising class of business people become ‘the tools and tyrants’ of government, overwhelming it with their force and benefiting from its gifts”. Madison three ways to have a healthy democracy:
(1) By establishing a political equality among all;
(2) By withholding unnecessary opportunities from a few, to increase the inequality of property, by an immoderate, and especially an unmerited, accumulation of riches; and
(3) By the silent operation of laws, which, without violating the rights of property, reduce extreme wealth towards a state of mediocrity, and raise extreme indigence towards a state of comfort.

It was Franklin Roosevelt who as President from 1933 to 1945, who's New Deal pushed Congress to pass an avalanche of legislation authorizing the spending federal funds to end the Depression and establish the modern welfare state . It is ironic that Franklin D. Roosevelt , who's family had amassed tremendous wealth , was in favor of such a distribution. However, although Roosevelt was wealthy, was willing to share his own wealth to help the needy. He said, "The transmission from generation to generation of vast fortunes by will, inheritance, or gift is not consistent with the ideals of the American people."
Most recently, in his campaign for President last year, then Senator Barack Obama told “Joe the Plumber” the following about redistributing assets:
It’s not that I want to punish your success. I just want to make sure that everybody who is behind you, that they’ve got a chance for success too. My attitude is that if the economy’s good for folks from the bottom up, it’s gonna be good for everybody … I think when you spread the wealth around, it’s good for everybody. [Emphasis added]

Although he did make this liberal statement, as President, Obama has distanced himself a bit from this statement because of political necessity to move toward the center.
X. The argument against the Ohio estate tax
The Ohio estate taxes against the upper and middle estates has injured the State by losing: (1) residents to other states with lower estate taxes (2) residents it loses their productivity; (3) population which determines representation in the House of Representatives ; and (4) federal funding. .
One example of how it is being hurt by the migration out of Ohio can be seen the story of legendary late-U.S. Senator Howard Metzenbaum (a legendary political liberal who served Ohio in the Senate in 1974 by appointment and then 1976 - 1995). In 2002, he changed his domicile to Florida to avoid the steep Ohio estate tax. Metzenbaum, who had made millions owning parking facilities, wanted to pass along all of his fortune to his heirs. By becoming a Florida resident just before his death, Metzenbaum avoided the high Ohio taxes and Ohio lost revenue and a productive, important resident. This is not an unusual occurrence.
The Estate Planning, Trust, and Probate Law (“EPTPL”) Section of the Ohio State Bar Association, has recommended for several years that the State of Ohio lower the state's estate tax. Ohio needs to reassess its estate tax and determine if it wants to continue taxing the middle class at such a high rate and tax the large estates at the risk of losing residents and their resources.
XI. The future of Ohio estate tax
Many states are phasing out the estate tax. Of the 51 jurisdictions of the United States (including the District of Columbia), about half states, have estate taxes ( or 25 to be exact). Six of these will end their estate tax in the next few years. Should Ohio be one of these that are ending the estate tax?
In 2001, some Ohio legislators tried to end the estate tax, but were defeated due to a huge lobbying effort of municipalities. In 2006, the EPTPL recommend to the General Assembly H.B. 589, which if it had passed, would have increased the state tax exemption to be equal to the federal levels. That bill was reintroduced in 2007, but it again filed to be enacted after Governor Strickland announced he was prepared to veto any such measure.
In the Spring of 2009, H.B. 61 was introduced by sponsors Jay Hottinger and Cheryl Grossman in the Ohio General Assembly. This bill was designed,
"To reduce the estate tax by increasing the credit amount, to authorize townships and municipal corporations, or electors thereof by initiative, to exempt from the estate tax any estate property located in the township or municipal corporation, and to distribute all estate tax revenue originating in a township or municipal corporation that does not exempt property from the tax to the township or municipal corporation."

This bill would permit the local municipalities to assess estate tax that is now the right of the state government. It is likely that it would be organized much like the RITA tax, but a central body to benefit each town, city and village. It is currently in the House Ways and Means Committee and its possibility of passage it unclear.
In September 2009, the Ohio chapter of the Americans for Prosperity filed petition with 1,000 signatures asking that there be an initiative on the Ohio Ballot in November 2010 to repeal the estate tax. If this petition is approved the group will be required to collect 120,683 valid signatures to be certified by the Ohio Attorney General. The group has until the first Monday in January 2010 to turn in these signatures.
Thus far it is unclear what will happen in Ohio and if it will retain the estate tax as is, change it, or extinguish it altogether.
Conclusion
Both Federal and Ohio estate tax exemption should be set at $3.5 million at the rate of 45 percent to redistribute the wealth of those that have accumulated tremendous assets, fund social programs that help those in need, and give certainty to those trying to draft their estate plans.
First, the estate tax is an excellent way to keep wealth and power from being amassed in the hands of a small percentage of individuals. Without this distribution of wealth, it becomes more and more difficult for the poor and middle class to move up on the socioeconomic ladder as they have fewer avenues politically and in the businesses world. A redistribution of the huge amounts of wealth will give everyone more access to government and more of a chance to "make it" economically.
Second, while estate tax raises a small percentage or revenues, it can be significant in these difficult times. Natural and made-made disasters have caused the budgets to be strained and maximizing revenue imperative: the Bush II tax cuts , the recession of the U.S. economy , natural calamities like hurricane Katrina , the wars in Iraq and Afghanistan , the automakers collapse , Wall Street debacle , collapsing banks , and subprime mortgage crisis . At this time the deficit is at astounding amount of $12,090,547,788,483.00 , and likely to go higher so additional revenues are always a good thing.
Finally, the federal and state legislators should institutionalize the law to eliminate uncertainty about the future. Because no one knows for sure what the estate tax law will be, they cannot plan what to do with their estate assets once they die. Every time the estate tax laws change, estate planners will have to write a new estate plan making predictability impossible. At the moment however, estate planners are at the mercy of legislators that may have other motives dictating what they do with the laws.

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A Federal or state tax imposed on the manufacture and distribution of certain non-essential consumer goods. http://www.investorwords.com/1813/excise_tax.html.

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Id.

Id.

Id.

http://en.wikipedia.org/wiki/Estate_tax_in_the_United_States#cite_note-Blog_De_Novo-29.

Politicizing the Internal Revenue Code, De Novo, May 6, 2007.

Capitol Hill Memo; In 2 Parties' War of Words, Shibboleths Emerge as Clear Winner, New York Times, April 27, 2001.

Newton Leroy "Newt" Gingrich (born Newton Leroy McPhersn; June 17, 1943) is an American politician who served as the Speaker of the United States House of Representatives from 1995 to 1999. http://en.wikipedia.org/wiki/Newt_Gingrich.

Homer Gets a Tax Cut: Inequality and Public Policy in the American Mind.

Federal Estate and Gift Taxation, John K. McNulty, 5th Ed, West Publishing Co., St. Paul, Minnesota, p.1. (1994).

A wealth tax is generally conceived of as a levy based on the aggregate value of all household holdings actually accumulated as purchasing power stock (rather than flow), including owner-occupied housing; cash, bank deposits, money funds, and savings in insurance and pension plans; investment in real estate and unincorporated businesses; and corporate stock, financial securities, and personal trusts. Edward N. Wolff, "Time for a Wealth Tax?", Boston Review, Feb-Mar 1996. http://en.wikipedia.org/wiki/Wealth_tax.

"The term 'excise tax' and 'privilege tax' are synonymous. The two are often used interchangeably." American Airways v. Wallace, 57 F.2d 877, 880; Jurisdictions may have an estate tax that functions similarly to the that in the U.S., but just use a different term: the term inheritance tax is used in the Untied Kingdom, Ireland, and U.S. states Iowa, Indiana, Kentucky, Maryland, Nebraska, New Jersey, Oklahoma, Pennsylvania and Tennessee; some jurisdictions use the term "death duty" like Hong Kong, Bermuda and Canada; some jurisdictions have a gift tax arising at the transfer or property at death like Austria; other terms "rights of succession" in Belgium, "taxes on beneficiaries" in the Czech Republic, "rights of succession" in France. http://en.wikipedia.org/wiki/Estate_tax_in_the_United_States.

Death duty is tax on inherited property. http://www.thefreedictionary.com/death+duty;
In some jurisdictions the term used is death duty, and for historical reasons that term is used colloquially - although it is no longer correct legally - in the United Kingdom and some Commonwealth nations. http://en.wikipedia.org/wiki/Inheritance_tax.

Ohio Revised Code Section 5731.01(A). 19 Ohio Prob. L.J. 26 Probate Law Journal, September/October 2008, Nuggets and Nuances: Ohio Estate Tax Issues, Audits, Tax Apportionment and a Plea for Reform, William J. McGraw, III, Esq., Dungan & LeFevre Co., L.P.A., PLJO Editorial Advisory Board.

Id.

http://en.wikipedia.org/wiki/Sponge_tax.

http://en.wikipedia.org/wiki/Sponge_tax.

The Rise and Decline of the Estate Tax, 11 Tax L. Rev. 223 (1946). Mary R. Wampler, Repealing The Federal Estate Tax: Death to the Death Tax, Or Will Reform Save The Day?, 25 Seton Hall Legis. J., 525, 527 (2001).

John R. Luckey, "A History of Federal Estate, Gift and Generation-skipping Taxes," Congressional Research Service, March 16, 1995, and Martha Britton Eller, "Federal Taxation of Wealth Transfers, 1992-1995," SOI Bulletin, Winter 1996-97; Barbara A. Hauser, Death Duties and Immortality: Why Civilization Needs Inheritances, 34 Real Prop. Prob. & TR. J. 363, 380 (Summer 1999).

Gaius Julius Caesar Augustus (September 23, 63 BC – August 19, AD 14) was the first emperor of the Roman Empire, which he ruled alone from 31 BC until his death in AD 14.

Barbara A. Hauser, Death Duties and Immortality: Why Civilization Needs Inheritances, 34 Real Prop. Prob. & TR. J. 363, 367 (Summer 1999).

Anton-Herman Chroust, Estate Planning in Hellenic Antiquity: Aristotle’s Last Will and Testament, 45 Notre Dame Lawyer 629 (1969).

The Middle Ages of European history is a period of international history covering roughly a millennium in the 5th century through 16th centuries. http://en.wikipedia.org/wiki/Middle_Ages.

http://www.heritage.org/Research/Taxes/bg1719.cfm#pgfId-1098851.

Barbara A. Hauser, Death Duties and Immortality: Why Civilization Needs Inheritances, 34 Real Prop. Prob. & TR. J. 363, 372-76 (Summer 1999).

http://www.britannica.com/EBchecked/topic/193317/estate-tax

See footnote ii above; http://www.britannica.com/EBchecked/topic/193317/estate-tax.

John Adams (October 30, 1735 – July 4, 1826) was an American politician and the second President of the United States (1797–1801), after being the first Vice President (1789–1797) for two terms. http://en.wikipedia.org/wiki/John_Adams.

The Quasi-War was an undeclared war fought almost entirely at sea between the United States and France from 1798 to 1800. In the United States, the conflict was sometimes also referred to as the Franco-American War, the Undeclared War with France, the Undeclared Naval War, the Pirate Wars, or the Half-War.; http://en.wikipedia.org/wiki/Quasi-War; John Adams, David McCullough, Simon & Schuster , New York , New York , (2001).

Knowlton v. Moore, 178 U.S. 41 (1900).

Barbara A. Hauser, Death Duties and Immortality: Why Civilization Needs Inheritances, 34 Real Prop. Prob. & TR. J. 363, 375 (Summer 1999).

The American Civil War (1861–1865), also known as the War Between the States and several other names, was a civil war in the United States of America. Eleven Southern slave states declared their secession from the United States and formed the Confederate States of America (the Confederacy). http://en.wikipedia.org/wiki/American_Civil_War.

Id.

Id.

Id.

See footnote xlii above.

Federal Estate and Gift Taxation, John K. McNulty, 5TH Ed., West Publishing Co., St. Paul, Minnesota, p.3, (1994) .

www.tax.org/Museum/1866-1900.htm.

Id.

U.S. Constitution, Article I, Section 2, Clause 3.

A capitation tax is an assessment levied by the government upon a person at a fixed rate regardless of income or worth. Since it is a tax upon the individual, and not upon merchandise, a capitation tax is frequently labeled a head tax. A poll tax is a capitation tax. http://legal-dictionary.thefreedictionary.com/Capitation+Tax.

Article I, Section 9; Pollock v. Farmers’ Loan & Trust Company, 157 U.S. 429 (1895).

The Spanish–American War was a military conflict between Spain and the United States that took place between April and August 1898, over the issues of the liberation of Cuba. http://en.wikipedia.org/wiki/Spanish%E2%80%93American_War.

The War Revenue Act of 1898 imposed another death tax in order to raise revenues to finance the Spanish-American War. The 1898 death tax was a form of estate tax, levied upon the value of all personal property included in a decedent's gross estate. Property passing to a surviving spouse was excluded from the tax, and a $10,000 specific exemption excluded small estates. The tax rates were graduated from 0.74 percent to 15 percent, taking into consideration both the size of the estate and the degree of kinship of the decedent and the beneficiaries. http://wikileaks.org/leak/crs/95-444.txt.

Id.

Federal Estate and Gift Taxation, John K. McNulty, 5TH Ed., West Publishing Co., St. Paul, Minnesota, p.2, (1994).

The Constitution requires in Article I, Section 8 that “the duties, imposts, and excises shall be uniform throughout the United States ” and that direct taxes must be apportioned. Knowlton v. Moore, 178 U.S. 41, (1900).

The Fourteenth Amendment (Amendment XIV) to the United States Constitution, along with the Thirteenth and Fifteenth Amendments, was adopted after the Civil War as one of the Reconstruction Amendments on July 9, 1868. http://en.wikipedia.org/wiki/Fourteenth_Amendment_to_the_United_States_Constitutio.

Due process alternatively due process of law or the process that is due, is the principle
that the government must respect all of the legal rights that are owed to a person according to the law. Due process holds the government subservient to the law of the land, protecting individual persons from the state. http://en.wikipedia.org/wiki/Due_process.

The Equal Protection Clause, part of the Fourteenth Amendment to the United States Constitution, provides that "no state shall ... deny to any person within its jurisdiction the equal protection of the laws". U.S. Constitution, Amendment 14; http://en.wikipedia.org/wiki/Equal_Protection_Clause#cite_note-0.

The Court relied on holdings in prior cases that the right to take property by devise or descent is a creature of law, thus conditions on it may be imposed. This tax was upheld in Knowlton v. Moore, 178 U.S.41 (1900).

Pollock v. Farmers’ Loan & Trust Company, 157 U.S. 429 (1895).

The Sixteenth Amendment states: " The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."

United States Constitution, Sixteenth Amendment.

The 2 percent bracket had previously applied to income below $20,000. That amount was lowered to $2,000. The top bracket (on income above $2 million) was raised from 15 percent to 67 percent. The act was applicable to incomes for 1917; http://en.wikipedia.org/wiki/War_Revenue_Act_of_1917.

Federal Taxation of Income, Estates and Gifts, Boris I. Bittker, Lawrence Lokken, 2nd Ed., Warren, Gorham & Lamont, Boston, Massachusetts, (1993); www.ustreas.gov/opc/opc0038.html.

http://www.heritage.org/Research/Taxes/bg1719.cfm#pgfId-1098851.

Id.

The business boom opened up many opportunities for financial gain. The economic activity it generated enabled many people to establish successful businesses, expand existing ones, and profit from investments. Some business leaders and investors were able to amass huge fortunes. The number of millionaires in the United States grew from perhaps about 20 in 1850 to more than 3,000 in 1900. http://www.theusaonline.com/history/industrilazation.htm.

Federal Taxation of Income, Estates and Gifts, Boris I. Bittker, Lawrence Lokken, 2nd Ed., Warren, Gorham & Lamont, Boston, Massachusetts, (1993).

The Committee of Ways and Means is the chief tax-writing committee of the United States House of Representatives and has jurisdiction over all taxation, tariffs and other revenue-raising measures, as well as a number of other programs. http://en.wikipedia.org/wiki/United_States_House_Committee_on_Ways_and_Means.

The Committee on Ways and Means of the U.S. House of Representatives explained that “a new type of tax was needed, because the consumption taxes in effect at that time bore most heavily upon those least able to pay them”. The Rise and Decline of the Estate Tax, Louis Eisenstein, 11 Tax Law Rev. 230-231 (1956).

Id.

http://www.treasury.gov/education/fact-sheets/taxes/ustax.shtml.

New York Trust v. Eisner, 256 U.S. 345 (1921)

Id.

The U.S. Generation-skipping transfer tax imposes a tax on both outright gifts and transfers in trust to or for the benefit of unrelated humans more than 37 and a half years younger than the donor or to related persons more than one generation younger than the donor, such as grandchildren; See IRS Form 709 Instructions; Federal Taxation of Income, Estates and Gifts, Boris I. Bittker, Lawrence Lokken, 2nd Ed., Vol. 5 Warren, Gorham & Lamont, Boston, Massachusetts, p. 120-2, (1993).

Id.

1976, Congress passed the Tax Reform Act (P.L. 94-455).

Id.; Internal Revenue Code Section 2601 (1990). Gift tax rates effectively began at 37 percent on cumulative taxable.

The limitation on the marital deduction was increased to the greater of $250,000 or one-half (1/2) of the decedent’s gross estate. The Act also increased the $60,000 estate tax exemption to $175,000.

Charles P. Rettig, Recent Legislation Aims to Replace the Estate Tax with a Modified Carryover-Basis Tax Regime, 24 L.A. Law. 32, 33-34 (Nov. 2001).

Ronald Wilson Reagan (February 6, 1911– June 5, 2004) was the 40th President of the United States (1981–1989) and the 33rd Governor of California (1967–1975). http://en.wikipedia.org/wiki/Ronald_Reagan.

The Economic Recovery Tax Act of 1981 (also known as ERTA or the Kemp-Roth Tax Cut) was "A bill to amend the Internal Revenue Code of 1954 to encourage economic growth through reductions in individual income tax rates, the expensing of depreciable property, incentives for small businesses, and incentives for savings, and for other purpose." Pub.L. 97-34, 95 Stat. 172, enacted August 13, 1981). http://en.wikipedia.org/wiki/Economic_Recovery_Tax_Act_of_1981.

Federal Estate and Gift Taxation, John K. McNulty, 5th Ed., West Publishing Co., St. Paul, Minnesota, p.10, (1994).

Economic Recovery Tax Act of 1981 (P.L. 97-34).

To Praise the Estate Tax, Not to Bury It, Michael Graetz, 93 Yale L.J. 259, p. 3 (1983).

Pub.L. 107-16, 115 Stat. 38, June 7, 2001.

The Act would also repeal the generation-skipping tax in 2010 as well.

By including this sunset provision, the law avoided the Byrd Rule that would give Senators the right to block any legislation that would unreasonably increase the federal deficit for more then a ten year period of time.

The Byrd rule originated on October 24, 1985, as an amendment offered by Senator Robert C. Byrd to the Consolidated Omnibus Budget Reconciliation Act of 1985. The temporary rule was extended and modified over time and made permanent in 1990 as Section 313 of the Congressional Budget Act of 1974 (2 U.S.C. 644); Under the Byrd rule, the Senate is prohibited from considering extraneous matter as part of a reconciliation bill or resolution or conference report thereon. The definition of what constitutes "extraneous matter" is set forth in the Budget Act;
http://www.rules.house.gov/Archives/byrd_rule.htm.

Id.

Id.

Id.

Barack Hussein Obama II; born August 4, 1961) is the 44th and current President of the United States. http://en.wikipedia.org/wiki/Barack_Obama,

www.uslaw.com/law_blogs/?item=471685.

Id.

http://www.examiner.com/x-10908-Estate-Planning-Examiner~y2009m6d1-Obama-administrations-proposed-2010-estate-tax-change.

Id.

H.R. 4154.

The tally of the voting was 225 yeas (all Democrats) and 200 nays (of which all 174 Republicans voted no with 26 Democrats). Nine votes were no (six Democrats and three Republicans). http://mhs.typepad.com/threepointfive-45/federal-estate-tax-bills-in-front-of-congress.html.

http://mhs.typepad.com/threepointfive-45/federal-estate-tax-bills-in-front-of-congress.html.

When on December 8, 2009, this writer inquired of Drey Samuelson, Senator Tim Johnson's [D-SD] Chief of Staff what Congress is likely to do about estate taxes, the response was: "... this is currently before Congress, but god knows how it will end up—it’s very uncertain." [Emphasis added]
E-mail from Dreyfus Samuelson, Chief of Staff for Sen. Tim Johnson [D-SD], December 8, 2009.

http://www2.ljworld.com/news/2009/dec/02/congress-scrambles-extend-estate-tax

Id.

William McKinley Jr. (January 29, 1843 – September 14, 1901) was the 25th President of the United States. Before that however, he was Governor of Ohio from 1891 to 1896.; http://www2.ljworld.com/news/2009/dec/02/congress-scrambles-extend-estate-tax

www.tax.ohio.gov/divisions/communications/.../estate_tax_07.pdf; 19 Ohio Prob. L.J. 26 Probate Law Journal, September/October 2008, Nuggets and Nuances: Ohio Estate Tax Issues, Audits, Tax Apportionment and a Plea for Reform, William J. McGraw, III, Esq., Dungan & LeFevre Co., L.P.A., PLJO Editorial Advisory Board.

The new law passed on July 1, 1968, was modeled after the federal law that required the estate to pay the estate tax. Id.; III; http://daytonos.com/?p=867.

http://codes.ohio.gov/orc/5731.02.

http://en.wikipedia.org/wiki/Ohio_estate_tax.

17 Ohio Prob. L.J. 125.

tax.ohio.gov/faqs/Estate/estate.stm.

Id.

This is from an Ohio Department of Transportation report in 2006. 19 Ohio Prob. L.J. 26 Probate Law Journal, September/October 2008, Nuggets and Nuances: Ohio Estate Tax Issues, Audits, Tax Apportionment and a Plea for Reform, William J. McGraw, III, Esq., Dungan & LeFevre Co., L.P.A., PLJO Editorial Advisory Board.

The general fund in a government account is the total amount after including all assets and liabilities that are not assigned to other purposes. http://www.answers.com/topic/general-fund

See footnote cxvi.

17 Ohio Prob. L.J. 161, Ohio Probate Law Journal, May/June 2007, Reforming the Ohio Estate Tax, Robert M. Brucken, Esq.

For example, if a decedent's estate was valued at $2,000,000 in 2001 the estate tax would have been $675,000. If the state had no estate tax then the state estate tax would be zero, but the sponge tax would be $99,600 which would go to the state making the amount that goes to the federal government $460,000 totaling $560,250.

See footnote cxix.

Id.

Id.

"No taxation without representation" began as a slogan in the period 1763–1776 that summarized a primary grievance of the British colonists in the Thirteen Colonies. http://en.wikipedia.org/wiki/No_taxation_without_representation.

This principle was recognized by Chief Justice Marshall in the case of Providence Bank v. Billings 4 Pet. (29 US) 514 (1830), argued 11 Feb. 1830, decided 22 Mar. 1830 by vote of 7 to 0; Marshall for the Court in which he held that in the absence of express stipulation or reasonable implication to the contrary in its charter, the bank was subject to the taxing power of the State, notwithstanding that http://quotationsbook.com/quote/38275/.

http://books.google.com/books?id=rBItAAAAYAAJ&pg=PA332&lpg=PA332&dq=%22Nothing+is+so+sure+as+death+and+taxes%22&source=bl&ots=ImpTRhq7oT&sig=_3qv_kZIi3bablh3tK9PSvQaMl8&hl=en&ei=PdIhS4XEBce1lAejx6SBCg&sa=X&oi=book_result&ct=result&resnum=1&ved=0CAgQ6AEwAA#v=onepage&q=%22Nothing%20is%20so%20sure%20as%20death%20and%20taxes%22&f=false.

The Boston Tea Party was a direct action by colonists in Boston, a town in the British colony of Massachusetts, against the British government. On December 16, 1773, after officials in Boston refused to return three shiploads of taxed tea to Britain, a group of colonists boarded the ships and destroyed the tea by throwing it into Boston Harbor. The incident remains an iconic event of American history, and reference is often made to it in other political protests.. http://en.wikipedia.org/wiki/Boston_Tea_Party.

A stamp duty was for the administrative costs of probating an estate and was carried out by putting a stamp on the probate documents when the property was transferred to the new party. It was not based on a percentage of the estate or the asset, but rather a pre-set cost.

The Stamp Act of 1765 (short title Duties in American Colonies Act 1765; 5 George III, c. 12) was a tax imposed by the British Parliament on the colonies of British America. The act required that many printed materials in the colonies carry a tax stamp. Morgan and Morgan pg. 96-97; http://en.wikipedia.org/wiki/Stamp_Act_1765#cite_note-0.

The tea parties of 2009 were a result of the Obama Administration's initiatives to spend more money to help the economy, do in debt and raise taxes.

33 Ohio N.U. L. Rev. 61, Ohio Northern University Law Review, 2007, Tax Articles, Let's Protect Our Economy and Democracy From Paris Hilton: the Case For Keeping the Estate Tax.

The Rise and Decline of the Estate Tax, 11 Tax L. Rev. 223 (1946).

See footnote cxxx.

thecaucus.blogs.nytimes.com/.../democrats-turn-on-the-heat-in-republican-districts/.

Michale J. Graetz & Ian Shapiro, Death By a Thousand Cuts: The Fight Over Taxing Inherited Wealth 206 (Princeton University Press 2005); http://www.examiner.com/x-10908-Estate-Planning-Examiner~y2009m6d1-Obama-administrations-proposed-2010-estate-tax-change.

hubpages.com/.../The-Pros-and-Cons-of-the-Bush-Tax-Cuts--Do-they-really-favor-the-wealthy-or-is-that-a-myth--What-will-help-the.

http://www.thefreelibrary.com/Income+tax+issues+for+estates-a068952713.

www.jstor.org/stable/1336533.

www.scselfservice.org/.../FrequentlyAskedQuestions2.htm.

See Michale J. Graetz & Ian Shapiro, Death By a Thousand Cuts: The Fight Over Taxing Inherited Wealth 206 (Princeton University Press 2005).

www.ultimatemetal.com/.../499847-capitalism-vs-communism-5.html.

Id. Death By a Thousand Cuts: The Fight Over Taxing Inherited Wealth 206 (Princeton University Press 2005); 36 Wkly. Comp. Pres. Doc., at 1986 (Aug. 31, 2000); In 2000, President Bill Clinton vetoed a bill that would have repealed the estate tax, stating that such a law would only benefit about 2 percent of the taxpayers and more then half the benefits of the repeal would go to one-tenth percent of the families. ;As we will see later, the fact that this small number of taxpayers will ever be subject to the estate tax has been used by both proponents and opponents of repeal. See 36 Wkly. Comp. Pres. Doc., at 1986 (Aug. 31, 2000). According to President Clinton, the estate tax should be kept because it fell on a small segment of the population. Proponents of estate tax repeal took the opposite view and argued that it should be eliminated because the amount of taxes raised was too low.

www.house.gov/jec/fiscal/tx-grwth/estattax/estattax.htm.

www.demos.org/inequality/quotes.cfm.

http://dissidentvoice.org/2008/10/redistribute-the-wealth-yes-but-not-what-obama-proposes/#footnote_6_4318

Id.

www.fordfound.org/newsroom/speeches/112.

Another estimate is that the top one percent of the population controls the same amount of wealth as the bottom 90 percent. www.vaildaily.com/article/20091018/EDITS/910179989/1021/rss -.

http://dissidentvoice.org/2008/10/redistribute-the-wealth-yes-but-not-what-obama-proposes/#footnote_6_4318

Id.

Aristotle, Politics; classics.mit.edu/Aristotle/politics.html.

Id.

Secretary of the Treasury under Presidents attacked the estate tax for just such a reason. http://dissidentvoice.org/2008/10/redistribute-the-wealth-yes-but-not-what-obama-proposes/

http://dissidentvoice.org/2008/10/redistribute-the-wealth-yes-but-not-what-obama-proposes/. It would have been hard for there to be democracy in Aristotle's world as the government sanctioned slavery and the disenfranchisement of women.

Id.

Paul Street (born 23 May 1958) is an American journalist, author, historian, and political commentator. He has a doctorate in U.S. History from Binghamton University.
Street served as both the Director of Research and Vice President for Research and Planning at the Chicago Urban League from 2000 to 2005. He is the author of four books: "Racial Oppression in the Global Metropolis: A Living Black Chicago History" (New York: Rowman & Littlefield 2007); "Segregated Schools: Educational Apartheid in the Post–Civil Rights Era" (New York: Routledge 2005); "Empire and Inequality: America and the World since 9/11" (Boulder: Paradigm 2004).
His latest book is "Barack Obama and the Future of American Politics" (Boulder: Paradigm Oct. 2008). http://en.wikipedia.org/wiki/Paul_Street.

Id.

Public Law 110-343.

Id.

The Obama administration planned to extend the life of the $700 billion financial bailout fund until next October. One unnamed Administration official said it was expected to pledge to use no more than $560 billion from the fund. http://news.yahoo.com/s/nm/20091209/bs_nm/us_financial_bailout

http://www.opensecrets.org/

Public Papers of the Presidents, Dwight D. Eisenhower, 1960, p. 1035- 1040.

Daniel Guérin, in his 1936 book, about the fascist government support to heavy industry. It can be defined as, “an informal and changing coalition of groups with vested psychological, moral, and material interests in the continuous development and maintenance of high levels of weaponry, in preservation of colonial markets and in military-strategic conceptions of internal affairs” Fascism and Big Business, Daniel Guérin,1936.

Fascism and Big Business, Daniel Guérin,1936.

"Farewell Address." In The Annals of America. Vol. 18. 1961-1968: The Burdens of World Power, 1-5. Chicago: Encyclopaedia Britannica, 1968..

Public Papers of the Presidents, Dwight D. Eisenhower, 1960, p. 1035- 1040.

Id.

http://en.wikipedia.org/wiki/Military-industrial_complex.

"Redistribute the Wealth? Yes, But Not What Obama Proposes", Paul Street

Social Darwinism refers to various ideologies based on a concept of competition among all individuals, groups, nations, or ideas drives social evolution in human societies. Johnson, D. Paul (2008). "The Historical Background of Social Darwinism". Contemporary Sociological Theory. Berlin: Springer. pp. 492. ISBN 0387765212. "In the social realm the competitive struggle may be among individuals or among different groups within society, different societies, or different racial or ethnic populations." http://en.wikipedia.org/wiki/Social_Darwinism#cite_note-0

Natural selection is the process by which heritable traits that make it more likely for an organism to survive and successfully reproduce become more common in a population over successive generations. It is a key mechanism of evolution. http://en.wikipedia.org/wiki/Natural_selection.

http://en.wikipedia.org/wiki/Natural_selection.

"Survival of the fittest", a term coined by anthropologist Herbert Spencer, or "The Gospel of Wealth" theory written by Andrew Carnegie. http://en.wikipedia.org/wiki/Social_Darwinism.

An Inquiry into the Nature and Causes of the Wealth of Nations (generally referred to by the short title The Wealth of Nations) is the magnum opus written by Scottish economist and moral philosopher Adam Smith and was first published in 1776. It is an account of economics at the dawn of the Industrial Revolution, as well as a rhetorical piece written for the generally educated individual of the 18th century - advocating a free market economy as more productive and more beneficial to society.

In The Wealth of Nations, Smith writes, "By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention."

The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s. Great Depression, Encyclopedia Britannica.

The "welfare state" is a model in which the state assumes primary responsibility for the welfare of its citizens. http://en.wikipedia.org/wiki/Welfare_state.

Id.

Id.

Susan K. Hill, Leaping Before We Look?: Repeal of the Estate Tax Credit and the Consequences for States, Americans, and the Federal Government, 32 Pepp. L. Rev. 151, 157-58 (2004).

Adam Smith (June 16, 1723 – 17 July 1790) was a Scottish moral philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Wealth of Nations, is considered his magnum opus and the first modern work of economics. Adam Smith is widely cited as the father of modern economics. Hoaas, David J.; Madigan, Lauren J. (1999). "A citation analysis of economists in principles of economics textbooks". The Social Science Journal 36 (3): 525–532.

Alexis-Charles-Henri Clérel de Tocqueville (29 July 1805, Paris – 16 April 1859, Cannes) was a French political thinker and historian best known for his Democracy in America (appearing in two volumes: 1835 and 1840) and The Old Regime and the Revolution (1856). http://en.wikipedia.org/wiki/Alexis_de_Tocqueville.

Thomas Jefferson (April 13, 1743 – July 4, 1826) was the third President of the United States (1801–1809), the principal author of the Declaration of Independence (1776), and one of the most influential Founding Fathers for his promotion of the ideals of republicanism in the United States. http://en.wikipedia.org/wiki/Thomas_Jefferson.

Friedrich Wilhelm Christian Karl Ferdinand Freiherr von Humboldt (June 22, 1767– April 8, 1835), government functionary, diplomat, philosopher, founder of Humboldt University in Berlin. http://en.wikipedia.org/wiki/Wilhelm_von_Humboldt.

John Stuart Mill (May 20, 1806 – May 6, 1873), English philosopher, political theorist, political economist, civil servant and Member of Parliament, was an influential Classical liberal thinker of the 19th century whose works on liberty justified freedom of the individual in opposition to unlimited state control. http://en.wikipedia.org/wiki/John_Stuart_Mill#cite_note-1

John Dewey (October 20, 1859 – June 1, 1952) was an American philosopher, psychologist, and educational reformer whose ideas have been very influential to education and social reform. Noam Chomsky, The Common Good, pp. 5-10; http://en.wikipedia.org/wiki/John_Dewey#cite_note-0.

Thomas Jefferson (April 13, 1743 – July 4, 1826) was the third President of the United States (1801–1809), the principal author of the Declaration of Independence (1776), and one of the most influential Founding Fathers for his promotion of the ideals of republicanism in the United States. http://en.wikipedia.org/wiki/Thomas_Jefferson.

Thomas Jefferson to James Madison, 1785. ME 19:18, Papers 8:682.

http://www.cooperativeindividualism.org/chomsky_commongood.html.

dissidentvoice.org/.../redistribute-the-wealth-yes-but-not-what-obama-proposes/.

Papers 14:197--98. See footnote cixxxvi.

Franklin Delano Roosevelt (January 30, 1882 – April 12, 1945), the 32nd President of the United States, was a central figure in world events during the mid-20th century, leading the United States during a time of worldwide economic crisis and world war. http://en.wikipedia.org/wiki/Franklin_D._Roosevelt.

New Deal legislation created new government agencies, such as the Works Progress Administration, the National Recovery Administration, the Social Security Act, etc. http://en.wikipedia.org/wiki/Franklin_D._Roosevelt.

The welfare state involves a direct transfer of funds from the public sector to welfare recipients, but indirectly, the private sector is often contributing those funds via redistributionist taxation; Encyclopedia of Political Economy. Ed. Phillip Anthony O'Hara. Routledge, 1999. p. 1245.

See footnote cixxxvi

One of the wealthiest and oldest families in New York State, the Roosevelts distinguished themselves in areas other than politics.. http://en.wikipedia.org/wiki/Franklin_D._Roosevelt.

http://www.issuewonk.com/reading.asp?ID=67&type=54&keyword=.

Samuel Joseph Wurzelbacher (born December 3, 1973), is more commonly known as "Joe the Plumber" was given that name during the 2008 U.S. presidential election after he was videotaped questioning then-Democratic candidate Barack Obama about his small business tax policy during a campaign stop in Ohio. Troy, Tom (2008-12-20). The Blade (Toledo, Ohio: Block Communications).

Redistribute the Wealth? Yes, But Not What Obama Proposes, by Paul Street / October 29th, 2008, http://dissidentvoice.org/2008/10/redistribute-the-wealth-yes-but-not-what-obama-proposes/.

Those things that include income taxes, sales taxes, licensefees, and support of local churches and charities.

It is expected that the Ohio population loss will mean we will lose another seat in the U.S. House of Representatives.

Much of the federal funds given to states and municipalities are based on the population of an area as well as the number of Representatives that are seated in the Congress.

Howard Morton Metzenbaum (born June 4, 1917 – died March 12, 2008), served in the United States Senate in 1974 and then from 1976 to 1995. He was a Democrat and considered to be one of the leaders of the liberal contingent known as "Senator No" for his ability to block conservative oriented legislation. http://bioguide.congress.gov/scripts/biodisplay.pl?index=m000678

Id.

19 Ohio Prob. L.J. 26 Probate Law Journal, September/October 2008, Nuggets and Nuances: Ohio Estate Tax Issues, Audits, Tax Apportionment and a Plea for Reform, William J. McGraw, III, Esq., Dungan & LeFevre Co., L.P.A., PLJO Editorial Advisory Board.

http://blog.kasichforohio.com/?tag=estate-tax.

17 Ohio Prob. L.J. 125.

See footnote cci.

Id.

See Brucken at footnote cxix.

Id.

Id.; The Columbus Dispatch, "Estate tax under fire," September 9, 2009.

http://www.legislature.state.oh.us/bills.cfm?ID=128_HB_61.

State Representative Jay Hottinger is now in his second term in the Ohio House of Representatives. He represents the 71st House District, which encompasses portions of Licking County. http://www.house.state.oh.us/index.php?option=com_displaymembers&task=detail&district=71

State Representative Cheryl Grossman is currently serving her first term in the Ohio House of Representatives. She represents the 23rd House District, which includes Grove City, Hilliard, parts of Dublin, and other western portions of Franklin County. http://www.house.state.oh.us/index.php?option=com_displaymembers&task=detail&district=23.

http://www.progressivestates.org/content/304/062606-reforming-failed-tax-subsidies

http://www.legislature.state.oh.us/bills.cfm?ID=128_HB_61; http://www.progressivestates.org/content/304/062606-reforming-failed-tax-subsidies

http://lsc.state.oh.us/coderev/hou128.nsf/House+Bill+Number/0061?OpenDocument

There self-appointed mission is the following: " Americans for Prosperity (AFP) and Americans for Prosperity Foundation (AFP Foundation) are committed to educating citizens about economic policy and mobilizing those citizens as advocates in the public policy process. AFP is an organization of grassroots leaders who engage citizens in the name of limited government and free markets on the local, state and federal levels. The grassroots members of AFP advocate for public policies that champion the principles of entrepreneurship and fiscal and regulatory restraint."http://www.americansforprosperity.org/national-site

The Columbus Dispatch, "Estate tax under fire," September 9, 2009.

Id.

http://ballotpedia.org/wiki/index.php/Ohio_Estate_Tax_Repeal_Initiative_%282010%29.

Ironically it was President Franklin D. Roosevelt who wanted to redistribute the wealth, even though he came from a family that ad accumulated great wealth, Isaac Shapiro, New IRS Data Indicate Rising Income Inequality, CBPP Says, 2005 TNT 200-18 (Oct. 18, 2005); see also Edward N. Wolff, Top Heavy: A Study of the Increasing Inequality of Wealth in America 1-2 (The Twentieth Century Fund Press 1995).

During George W. Bush's first term (2001-2004), he sought and obtained Congressional approval for tax cuts: the Economic Growth and Tax Relief Reconciliation Act of 2001, the Job Creation and Worker Assistance Act of 2002 and the Jobs and Growth Tax Relief Reconciliation Act of 2003. These acts decreased all tax rates, reduced the capital gains tax, increased the child tax credit and eliminated the so-called "marriage penalty", and are set to expire in 2011. The U.S. national debt grew significantly from 2001 to 2008, both in dollars terms and relative to the size of the economy (GDP), due to a combination of tax cuts and wars in both Afghanistan and Iraq. Budgeted spending under President Bush averaged 19.9% of GDP, similar to his predecessor President Bill Clinton, although tax receipts were lower at 17.9% versus 19.1%. FY 2009 Budget; CBO Historical Data. Ruth Carlitz & Richard Kogan, CBO Data Show Tax Cuts Have Played Much Larger Role Than Domestic Spending Increases in Fueling the Deficit (Jan. 31, 2005), http://www.cbpp.org/1-25-05bud.pdf; See also Edmund L. Andrews, Deficit Study Disputes Role of Economy, N.Y. Times, Mar. 16, 2004, at A18.

The Global Financial Crisis has been called by leading economists the worst financial crisis since the one related to the Great Depression of the 1930s. Reuters. Retrieved 2009-9-30, from Business Wire News. See Raymond J. Keating, Tax Cut Permanency: The Death Tax, Small Business & Entrepreneurship Council (Apr. 7, 2005), http://www.sbecouncil.org/content/display.cfm?ID=89.

Hurricane Katrina of the 2005 Atlantic hurricane season was the costliest hurricane, as well as one of the five deadliest, in the history of the United States. Janega, James (August 28, 2009). "Katrina victims rebuilding lives". Chicago Tribune. http://www.chicagotribune.com/news/local/chi-katrina-chicago_janegaaug28,0,6677067.story.

The Iraq War, also known as the Occupation of Iraq, The Second Gulf War or Operation Iraqi Freedom, is an ongoing military campaign which began on March 20, 2003, with the invasion of Iraq by a multinational force led by troops from the United States and the United Kingdom.

The War in Afghanistan is an ongoing armed conflict which began on October 7, 2001, as the US military's Operation Enduring Freedom that was launched, along with the British military, in response to the September 11 attacks.

The automotive industry crisis of 2008–2009 was a part of a global financial downturn. The automotive industry was weakened by a substantial increase in the prices of automotive fuels linked to the 2003-2008 energy crisis which discouraged purchases of sport utility vehicles (SUVs) and pickup trucks which have low fuel economy. The popularity and relatively high profit margins of these vehicles had encouraged the American "Big Three" automakers, General Motors, Ford, and Chrysler to make them their primary focus.

Doyle McManus (2008-09-24). "Americans reluctant to fund bailout, poll finds Americans reluctant to fund bailout, poll finds". Americans reluctant to fund bailout, poll finds.

Three important catalysts of the subprime crisis were the influx of moneys from the private sector, the banks entering into the mortgage bond market and the predatory lending practices of mortgage brokers, specifically the adjustable rate mortgage, 2-28 loan ; "Senator Dodd: Create, Sustain, Preserve, and Protect the American Dream of Home Ownership". DODD. 2007-02-07. http://dodd.senate.gov/?q=node/3731. Retrieved 2009-02-18. ; Bernanke-Four Questions-April 2009.

The subprime mortgage financial crisis is an ongoing real estate crisis and financial crisis triggered by a dramatic rise in mortgage delinquencies and foreclosures in the United States, with major adverse consequences for banks and financial markets around the globe. Bernanke-Four Questions-April 2009.
As of December 2009, the federal deficit is $12,090,547,788,483.00. The estimated population of the United States is 307,432,371 so each citizen's share of this debt is $39,327.50. The National Debt has continued to increase an average of
$3.84 billion per day since September 28, 2007. http://www.brillig.com/debt_clock/.

How To Improve the Image of Attorneys and Serve Clients More Effectively

2009-09-30T11:44:00.000-07:00

How To Improve the Image of Attorneys and Serve Clients More Effectively

Harry S. Truman once said “Always do right; you’ll gratify some and astonish the rest.” That should be every attorneys motto when dealing with their clients.

The image of the attorney has deteriorated to the crises stage. The law schools, bar associations and Ohio Supreme Court should address this issue, since it has resulted in people seeking non-lawyers for their legal problems.

All too often people who have legal issues are afraid to talk to a lawyer. They may have had a bad experience themselves or heard a horror story about someone they know.

Some of those in need of legal assistance are desperately afraid of dealing with an attorney, who they don’t trust or who they are afraid will overcharge them. The result is they may purchase fill-in-the-blank forms from office supply stores, try to do complicated matters themselves or risk breaking the law to get legal work done by a non-attorney who claims to know what they are doing. The result is a mess that may cost them tremendous money and/or hardship.

There are simple rules that all attorneys should follow to rebuild the fractured image of the legal profession.

Attorneys need to be more sensitive to the client’s needs. The average person that is in need of an attorney is at a vulnerable time, often confused and anxious. Allow them some leeway to express themselves and understand their pain.

Attorneys should treat their clients with respect and treasure their trust. It is a tremendous duty to assist someone and that has to be done with great care.

Attorneys should be committed to the principle that their client always comes first and the attorney works for them. It is a great honor to be retained as a legal counsel and it should be every attorneys goal to do the work quickly, accurately and without problems.

Attorneys should do a better job of communicating with their clients by keeping them updated with their case, returning telephone calls promptly, and sending them updates on relevant changes in the laws.

Using legalese might confuse someone, so it is better to use simple language. That doesn't mean talking down to your client, but making sure what you are saying. If your client doesn’t understand what you have told them, you have failed in communication which could lead to more problems, not the least of which if their anger toward you.

Attorney should treat their clients with respect and not speak to them condescendingly. Because it can be stressful and expensive, the client may not be 100 percent happy with their legal experience, but they should feel that thier attorney gave them excellent representation and worth what they paid. They should have all of their questions answered before the legal relationship ends.

If all attorneys could follow these simple guidelines the image of the attorney would improve greatly.

Marc L. Stolarsky, Esq.
Attorney
Cleveland, Ohio

Grandparent's Rights Podcast

2009-07-10T08:23:00.000-07:00

If you missed me on WAKR this morning answering questions about grandparents rights, here is the podcast --

http://rayhorner.net/category/podcasts/

Let me know what you think.

Cleveland Magazine January 2009 Most Interesting People Article web link

2009-07-08T08:31:00.000-07:00

Here is the web link to the article in Cleveland Magazine, January 2009, Most Interesting People:

http://www.clevelandmagazine.com/ME2/dirmod.asp?sid=E73ABD6180B44874871A91F6BA5C249C&nm=Arts+%26+Entertainment&type=Publishing&mod=Publications%3A%3AArticle&mid=1578600D80804596A222593669321019&tier=4&id=B46AF34977A74ECE8D77AAC9ECF5339C

House Bill 175: Humane Agents

2009-06-09T07:47:00.000-07:00

Ohio Animal Law Legislative Update

In an effort to keep you apprised of legislation on animal issues in Ohio, I am sending you this email.

House Bill 175: Humane Agents introduced by Rep. Gerberry is to require a person to file proof of successful completion of training with the county recorder prior to being appointed as a humane society agent and to require the revocation of an appointment under certain circumstances.

The web link is -- http://www.legislature.state.oh.us/bills.cfm?ID=128_HB_1754

Please let me know if you have any questions.

Marc

The van Bakeren Foundation

2009-04-27T07:13:00.000-07:00

Here is a web link to The van Bakeren Foundation, a non-profit group to create a sustainable, low-cost, equitable health care system to benefit people animals and the environment as they relate to veterinary medicine.

www.vanBakerenFoundation.org

Here is an update on what I am doing --

2009-04-21T21:29:00.000-07:00

Things are busy as usual for me. Here is an update on what is going on --

- I will be speaking on estate planning for non traditional couples at 9:15 a.m. on Sunday, April 26, at the West Shore Church, 20100 Hilliard Road in Westlake.

- I will be speaking on pet trusts at 1:00 p.m., April 30, at Legacy Place, 992 Vail Drive, in Twinsburg, Ohio.

- I will be on 1590 AM, WAKR, Akron radio, from 8:20 a.m. on May 1, May 15, June 12 and June 19 on the "Ask the Attorney" segment.

- Here is the web link to the article I wrote on digital assets that appeared in this weeks Cleveland Jewish News in their estate planning edition -- http://www.clevelandjewishnews.com/articles/2009/04/17/news/business/doc49e7403682b3f870226903.txt

- I'll be on American Idol next week (just kidding).

JUSTICES TO REVIEW WHETHER VIDEOS OF ANIMAL CRUELTY PROTECTED SPEECH

2009-04-21T21:28:00.000-07:00

I though you might find this story important. It is not legislation, but it is about animal welfare --

JUSTICES TO REVIEW WHETHER VIDEOS OF ANIMAL CRUELTY PROTECTED SPEECH

The New York Times reports that the U.S. Supreme Court agreed yesterday to review the appeal of Robert Stevens, a Virginia man challenging his conviction for selling dog-fighting videos on First Amendment grounds. Stevens was sentenced to 37 months in prison under a 1999 federal law that criminalizes the creation or sale of depictions of cruelty to animals; although all 50 states ban animal cruelty itself, only the federal law targets depictions of it. Stevens’ lawyers argued that “there is no claim that the defendant was himself involved in acts of animal cruelty or was even present at their commission,” and that many of the acts in the videos were lawful in the jurisdictions where they were documented. In an amici brief urging the Court to take up the case, animal protection group the Humane Society argued that “gruesome depictions of animal mutilation” as targeted by the federal law should join the limited categories of speech that are beyond the protections of the First Amendment, such as obscenity, child pornography, and fighting words. Last summer the 3rd Circuit Court of Appeals overturned Stevens’ conviction, holding that animals aren’t affected by videos showing cruelty in the same way that minors suffer continuing harm by having images of child pornography in the marketplace.
For full story, see: http://www.nytimes.com/2009/04/21/us/21scotus.html?_r=1&ref=us
Fox News: http://www.foxnews.com/story/0,2933,517156,00.html
Columbus Dispatch: http://www.dispatchpolitics.com/live/content/national_world/stories/2009/04/21/copy/scotus_animals_ap_0421.ART_ART_04-21-09_A5_BDDKAAE.html?adsec=politics&sid=101
Washington Times: http://washingtontimes.com/news/2009/apr/21/animal-cruelty-case-advances/

Web Link to the Cleveland Jewish News Article on Digital Assets

2009-04-19T20:33:00.001-07:00

Here is the web link to the Cleveland Jewish News Article --

http://www.clevelandjewishnews.com/articles/2009/04/17/news/business/doc49e7403682b3f870226903.txt

Ohio Animal Law Legislative Update For 2009 -- HB 79 Vicious Dogs" Bill

2009-04-15T20:58:00.000-07:00

HB 79, "Vicious Dogs", recently introduced by Rep. Sears, "To remove pit bulls from the definition of 'vicious dogs' in state law". I have pasted it below and here is the web link --

http://www.legislature.state.oh.us/bills.cfm?ID=128_HB_79

As Introduced

128th General Assembly
Regular Session
2009-2010

H. B. No. 79

Representative Sears

Cosponsors: Representatives Skindell, Stebelton, Wachtmann

A BILL

To amend section 955.11 of the Revised Code to remove pit bulls from the definition of "vicious dog" in state law.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That section 955.11 of the Revised Code be amended to read as follows:

Sec. 955.11. (A) As used in this section:

(1)(a) "Dangerous dog" means a dog that, without provocation, and subject to division (A)(1)(b) of this section, has chased or approached in either a menacing fashion or an apparent attitude of attack, or has attempted to bite or otherwise endanger any person, while that dog is off the premises of its owner, keeper, or harborer and not under the reasonable control of its owner, keeper, harborer, or some other responsible person, or not physically restrained or confined in a locked pen which that has a top, locked fenced yard, or other locked enclosure which that has a top.

(b) "Dangerous dog" does not include a police dog that has chased or approached in either a menacing fashion or an apparent attitude of attack, or has attempted to bite or otherwise endanger any person while the police dog is being used to assist one or more law enforcement officers in the performance of their official duties.

(2) "Menacing fashion" means that a dog would cause any person being chased or approached to reasonably believe that the dog will cause physical injury to that person.

(3) "Police dog" means a dog that has been trained, and may be used, to assist one or more law enforcement officers in the performance of their official duties.

(4)(a) "Vicious dog" means a dog that, without provocation and subject to division (A)(4)(b) of this section, meets any either of the following:

(i) Has killed or caused serious injury to any person;

(ii) Has caused injury, other than killing or serious injury, to any person, or has killed another dog.

(iii) Belongs to a breed that is commonly known as a pit bull dog. The ownership, keeping, or harboring of such a breed of dog shall be prima-facie evidence of the ownership, keeping, or harboring of a vicious dog.

(b) "Vicious dog" does not include either of the following:

(i) A police dog that has killed or caused serious injury to any person or that has caused injury, other than killing or serious injury, to any person while the police dog is being used to assist one or more law enforcement officers in the performance of their official duties;

(ii) A dog that has killed or caused serious injury to any person while a person was committing or attempting to commit a trespass or other criminal offense on the property of the owner, keeper, or harborer of the dog.

(5) "Without provocation" means that a dog was not teased, tormented, or abused by a person, or that the dog was not coming to the aid or the defense of a person who was not engaged in illegal or criminal activity and who was not using the dog as a means of carrying out such activity.

(B) Upon the transfer of ownership of any dog, the seller of the dog shall give the buyer a transfer of ownership certificate that shall be signed by the seller. The certificate shall contain the registration number of the dog, the name of the seller, and a brief description of the dog. Blank forms of the certificate may be obtained from the county auditor. A transfer of ownership shall be recorded by the auditor upon presentation of a transfer of ownership certificate that is signed by the former owner of a dog and that is accompanied by a fee of twenty-five cents.

(C) Prior to the transfer of ownership or possession of any dog, upon the buyer's or other transferee's request, the seller or other transferor of the dog shall give to the person a written notice relative to the behavior and propensities of the dog.

(D) Within ten days after the transfer of ownership or possession of any dog, if the seller or other transferor of the dog has knowledge that the dog is a dangerous or vicious dog, he the seller or other transferor shall give to the buyer or other transferee, the board of health for the district in which the buyer or other transferee resides, and the dog warden of the county in which the buyer or other transferee resides, a completed copy of a written form on which the seller shall furnish the following information:

(1) The name and address of the buyer or other transferee of the dog;

(2) The age, sex, color, breed, and current registration number of the dog.

In addition, the seller shall answer the following questions, which shall be specifically stated on the form as follows:

"Has the dog ever chased or attempted to attack or bite a person? If yes, describe the incident(s) in which the behavior occurred."

"Has the dog ever bitten a person? If yes, describe the incident(s) in which the behavior occurred."

"Has the dog ever seriously injured or killed a person? If yes, describe the incident(s) in which the behavior occurred."

The dog warden of the county in which the seller resides shall furnish the form to the seller at no cost.

(E) No seller or other transferor of a dog shall fail to comply with the applicable requirements of divisions (B) to (D) of this section.

Section 2. That existing section 955.11 of the Revised Code is hereby repealed.

Passing Digital Assets in You Trust or Will

2009-02-24T11:13:00.000-08:00

Passing Digital Assets Upon Your Death by Marc Stolarsky, Esq.
Q.: What are "digital asset"?
A.: These are intangible informational assets such as online bank accounts, stock holdings that exist entirely in digital media or the rights to an exclusively online business. There has been tremendous growth of these things and some have a very high monetary value. Also included are financial records, web sites, blogs, MySpace, Linkedin and Facebook accounts, address books, client lists, calendars, letters, diaries, other personal and business information, etc.

Q: Can these assets be passed to heirs in a will or trust?
A: Because the type and location of these assets change very quickly trying to list them in a will or a trust can be difficult: names and passwords change, new spin off businesses are created, e-stocks are created, purchased and sold, and email accounts are created and developed. Doing a new will or codicil every time you make a change might mean doing a new one document every few weeks which becomes confusing to the persons trying to figure out what the assets are and where they are located.

Q: How can I assure my digital assets are passed to the right person(s)?
A: The laws today are not clear as to how to pass digital assets because they have not kept pace with technological development. However, here are some good suggestions that may help limit confusion:
- Keep a master list on paper (not on the computer) of all online dealings including urls, user names and passwords with domain names, where they are registered, and when they need to be renewed to keep the businesses name and internet location.
- Make sure to keep it updated on a regular basis every time a change is made or simply check it once a month to see if it is current.
- Keep the information in a safe, secure place where you would keep your important business papers such as a fireproof safe or clearly labeled binder.
- Tell your attorney, executor, trustee and other people who are important to your estate plan where it is located in case they need to use it. Instruct them when it is permissible for them to use it and when it can be seen by others such as your heirs, such as if you should become incapacitated or incompetent or upon your death.

Q: What else can I do to make sure my wishes are carried out?
A: If you should have a serious illness or pass away, you should instruct a trusted person as to what to do with your digital assets, such as instructions for what to do with your online business transactions. Although these instructions may not be legally binding after your death, they will most likely be followed by a trusted person. You may request that these assets be destroyed, such as erased off a computer hard disk. However, keep in mind that there may be back-ups of that data that need to be destroyed also and that simply erasing something on a hard disk may just allow space for a new document.

Q: What types of things have become digital?
A: In today's technological age we may soon have electronic wills and trusts for testators to pass all their assets and express their wishes. At the moment you cannot write an electronic will, but states like Nevada are considering it and Ohio may not be that far off some day.
We already have automatic check transfers, paperless college courses with electronic tests, and electronic signatures. Many courts are going to paperless pleadings to save on the use of trees. In some cases real property transaction can take place with "eClosing" which permits the buyer to sign an electronic pad just once, the signature being affixed to each place automatically.

Q: Why aren't we using digital to keep all records today?
A: Although technology has advanced, we are still using antiquated methods to assure there no disputes. In the past it was thought that documents like a will must be written out on paper so that it could be validated, to prove that it actually existed, that it was signed and it was the testator's intent. This was especially important with wills because if there was a dispute the paper document could be examined carefully for authentication.

Ohio December 2008 Animal Legislative Update

2009-02-23T10:12:00.000-08:00

December 2008 Animal Law Legislative Update
from Marc L. Stolarsky Law, LLC

Here are two bills recently introduced in the Ohio General Assembly in December 2008 --

SB 381, "Animal Feeding Operations" was introduced by Senator Stivers to require additional information to be considered when determining the impact on local infrastructure of a major concentrated animal feeding facility; to require an applicant for a permit to operate such a facility to complete all infrastructure improvements prior to applying for that permit; and to revise other requirements governing applications for permits to install and permits to operate.
Here is the web link to the bill: http://www.legislature.state.oh.us/bills.cfm?ID=127_SB_381

SB 383, "Animal Feeding Operations" was introduced by Senator Mumper to revise the Concentrated Animal Feeding Facilities Law.
Here is the web link to the bill: http://www.legislature.state.oh.us/bills.cfm?ID=127_SB_383

Ohio Pet Trust Available on My Web Site

2009-02-23T10:10:00.000-08:00

Check out my web site at www.MLSLaw.Net to purchase an Ohio pet trust. I will receive it personally and you can call to ask me questions.

Marc

Podcast about Ohio pet trusts -- WAKR Radio Appearance

2009-02-23T10:06:00.000-08:00

Here is a podcast from www.AkronNewsNow.com. It is my appearance on WAKR 1590 AM Akron, Ohio radio with Ray Horner. We we discussing Ohio pet trusts.

http://media.akronnewsnow.com/assets/2008/9/26/STOLARSKY1.MP3

National Chart: Pet and Animal Trust in the United States

2009-02-03T14:54:00.000-08:00

State Statute Effective Based on
Wisconsin Wis. Stat Section 701.11 1969 None
Montana Mont. Code Ann. Sec. 72-2-1017 1993, Amend 1995 UPC 2-907
Arizona Ariz. Rev. Stat Section 14-2907 January 1, 1995 UPC 2-907
Colorado Colo. Rev. State Section 15-11-901 July 1, 1995 UPC 2-907
North Car N.C. Gen. State Section 36A-147 Oct 1, 1995 - Jan 1, 2006 UPC 2-907
New York N.Y. Est. Powers & Trust Law Section 7-8.1 1996 None
Alaska Alaska Stat. Section 13.12.907 1996 UPC 2-907
(Honorary trusts not enforceable for pet trusts)
Utah Utah Code Ann. Section 75-2-1001 July 1, 1998, Amend. 2003 UPC 2-907
Iowa Iowa Code Ann. Section 633A.2105 July1, 2000 None
Michigan Mich. Comp. Laws. Ann. Section 700.2722 April 1, 2000 UPC 2-907
Washington Wash. Rev. Code Sections 11.118.005 - .110 2001 None
Oregon Or. Rev. Stat. Section 128.308 2001 - Dec. 31, 2005 UPC 2-907
New Jersey N.J. State. Ann. Section 3B:11-38 July 10, 2001 None
Nevada Nevada State. Section 163.0075 October 1, 2001 None
Florida Fla. State. Ann Sec.737.116 Apr. 23, 2002 - Jn. 30, 2007 UPC 2-907
Kansas Kan. State. Ann. Section 58a-408 January 1, 2003 UTC 408
Wyoming Wyo. Stat. Ann. Section 4-10-409 July 1, 2003 UTC 408
New Mexico NM. Stat. Ann. Section 46A-4-408 July 1, 2003 UTC 408
Missouri Mo. Ann. Stat. Section 456.4-408 2004 UTC 408
Dist. of Col. D.C. Code Ann. Section 19-1304.08 March 10, 2004 UTC 408
Tennessee Tenn. Code Ann. Section 35-15-408 July 1, 2004 UTC 408
New Hamp. N.H. Rev. Stat. Ann. Sec. 564-B:4-408 October 1, 2004 UTC 408
Nebraska Neb. Rev. Stat. Sec. 30-3834 January 1, 2005 UTC 408
Illinois Ill. Comp. Stat. 76 ILCS 5/15.2 January 1, 2005 UPC 2-907
Hawaii Hawaii Stat. Sec. 560:7-501 June 24, 2005 UPC 2-907
Indiana Indiana Cod Sec. 30-4-2-18 July 1, 2005 None
Idaho Idaho Code Section 15-7-601 July 1, 2005 None
Maine Me. Rev. Stat. tit. 18-B, 408 July 1, 2005 UTC 408
RI R.I. Statutes Section 4-23-1 July 19, 2005 None
Arkansas Arkansas Code Sec. 28-73-408 September 1, 2005 UTC 408
* North Car N.C. Gen. Stat. Section 36C-4-408 January 1, 2006 UPC 2-907
* Oregon Or. Rev. Stat. Ann. Section 130.185 January 1, 2006 UTC 408
South Car. S.C. Code Section 67-7-408 January 1, 2006 UTC 408
Texas Tex. Prop. Code Section 112.037 January 1, 2006 None
S. Dakota S.D. Cod. Laws 55-1-21 - 55-1-22 February 22, 2006 UPC 2-907
Virginia Virginia Code Sec. 55-544.08 July 1, 2006 UTC 408
Penn Uniform Trust Act Sec. 7738 November 4, 2006 UTC 408
Ohio ORC Section 5804.08 January 1, 2007 UTC 408
Alabama Ala. Code Section 19-3B-408 January 1, 2007 UTC 408
* Florida Fla. State. Ann Sec. 736.0408 July 1, 2007 UTC 408
N. Dakota N.D. Cent. Code Sec. 59-12-08 August 1, 2007 UTC 408
Delaware Title 12, Sec. 12 Sec. 3555 August 1, 2008 None
California Cal. Prob. Code. Sec. 15212 January 1, 2009 None

* State with existing law passed new law

Courtesy of by Marc L. Stolarsky Law LLC

An Overview of Animal and Pet Trust in the United States

2009-02-02T16:08:00.000-08:00

by Marc L. Stolarsky, Esq.

Introduction
As of this writing there are 40 of the United States that have passed laws permitting animal or pet trusts. Of these state laws, ten are based on some form of the Uniform Probate Code Section 2-907, eighteen are based on the Uniform Trust Code Section 408, and twelve borrow from both, but are not specifically based on either. In this article, I will review the relevant statues in the UPC and the UTC as well as the other states with pet trusts laws.
Uniform Probate Code Section 2-907
Prior to 1990, the Common Law took the position that animal trusts were invalid because a beneficiary could not be identified in definite and certain terms. The courts had held that a beneficiary must be a human being, an institution, or the like and not an animal. This is because a human beneficiary was necessary to hold the power to enforce the trust.
The issues of creating animal trusts were addressed in 1990, when the National Conference of Commissioners on Uniform State Laws (NCCUSL) met who then drafted the UPC and included the proposed animal trust code Section 2-907. This Section allowed the establishment of a valid and enforceable trust for "the care of a designated domestic or pet animal." The provision established a "presumption against a disposition . . . [for a pet's care] being merely precatory or honorary" and instead treated these trusts separately from other trusts established for lawful non-charitable purposes. The grantor's intent could be determined by the use of extrinsic evidence. To encourage individuals to serve as trustees of such trusts, the UPC Section reduced the administrative burdens placed on the management of animal trusts. Under Section 2-907, a court was authorized to appoint a trustee and were given the power to make other determinations necessary to carry out the testator's intent. An individual designated by the trust or appointed by the court could enforce the terms of the trust. The inclusion of language allowing for an "enforcer" of a trust negated the need for a guardian ad litem to protect the interests of the animal beneficiaries of an enforceable animal trust. If no more purpose exists the trust terminated when no living animal was covered by the trust. There was specific language authorizing the court to "reduce the amount of property transferred, if it determines that that amount substantially exceeds the amount required for the intended use." (Emphasis added) If there is a reduction in the property transferred, the property would pass as if it was unexpended trust property as directed in the trust, under a residuary clause in the testator's will, or to the heirs of the transferor.
Uniform Trust Code Section 408
In 2000, ten years after the first UPC pet trust statute was written, another group of trust scholars drafted the Uniform Trust Code that included an animal trust provision, Sections 408. The UTC Section 408 is much shorter then the UPC statute, and consists of three sections. Section 408(a) states that a trust may be created for the care of a living animal alive during the lifetime of the settlor and that the trust terminates when the animal(s) die.
Section 408(b) states that the trust may be enforced by a person appointed by the trust or a person appointed by the court and that any person with an interest in the welfare of the animal may request that the court to enforce the trust or appoint someone to enforce the trust or remove a person appointed. Also, while the animal will ordinarily be alive on the date the trust is created, an animal may be added as a beneficiary after that date as long as the addition is made prior to the settlor’s death. Animals in gestation, but not yet born at the time of the trust’s creation may also be covered by its terms. A trust authorized by this section may be created to benefit one designated animal or several designated animals. The person appointed by the court to enforce the trust should also be a person who has exhibited an interest in the animal’s welfare.
Section 408(c) states that an animal trust may not have an excessive amount of assets in it and the court may invade the trust if it deems it is excessive. However, it does not define what is excessive.
Comparing and Contrasting the UPC Section 2-907 and UTC Section 408
The UPC Section 2-907 and UTC Section 408 have both similarities and differences. Both codes declare that an animal trust is now enforceable by providing that either the trust creator or court may appoint a person to enforce the trust. Both the UPC and UTC also provide that the trust may last for the life of the animal, and that the court may order the diversion of funds if the trust property substantially exceeds the amount needed for the intended use.
However, the UPC and UTC differ in other areas. The UPC applies to "domestic or pet animals," which are subjective terms raising possible questions of interpretation. The UTC allows for the creation of a trust for any animal and the UTC provides that a trust for animals is to be treated like any other trust with respect to such issues as trustee reporting, which in this case would be to the trust enforcer.
Because the UTC dispenses with many of the formalities with respect to all trustees, the key difference between the UPC and UTC animal trust provisions in a state that has otherwise enacted the UTC is that the UPC does away with trustee reporting and the vital obligation to keep trust funds separate from other funds: "Except as ordered by the court or required by the trust instrument, no filing, report, registration, periodic accounting, separate maintenance of funds, appointment, or fee is required by reason of the fiduciary relationship of the trustee." However, remember that under the UTC, trusts for humans, animals, and charities are subject to the same rules of interpretation.
The UTC provides a better method for establishing a animal trust then the UPC for several reasons. First, the UTC overrides the rule of perpetuities by matching the allowable period of the trust to the length of the lifespan of the designated animal or animals. While the UPC also sets the duration of an animal trust to the measuring life of the designated animal, the UPC only provides for a single animal, while the UTC permits multiple animals to be covered by the trust. The UTC requires a trust to terminate only at the death of the last covered animal.
Second, the UTC provides greater enforceability to animal trusts than does the UPC which provides greater assurance for the pet owner. The provisions permit any person, not one specifically designated in the trust instrument as permitted by the UPC, to petition a court to evaluate whether or not the trust beneficiary or trustee is acting in accordance with the trust document. In addition, under the UTC, the trust beneficiary, who is the animal's caretaker, has rights of a qualified beneficiary, so that the trustee is held accountable for actions in administering a trust. In contrast, the UPC provides that a trustee has no filing, reporting, or other fiduciary responsibilities designed to hold a trustee accountable, unless specifically provided in the trust instrument.
Specific State Pet and Animal Statutes
States have been slow to adopt pet and animal trust statues although the laws they did pass have been similar to the UPC and UTC examples. From 1993 to 2002, nine states passed pet trusts laws based on the UPC 2-907, specifically Montana , Arizona , Colorado , North Carolina , Alaska , Utah , Michigan , Oregon and Florida . During the same time of 1993 to 2002, five states passed pet trust laws that were not based on any suggested code, specifically New York , Iowa , Washington State , New Jersey and Nevada .
Although UTC 408 was offered to the states in 2000, it was not until 2003 that any state enacted it. From 2003 to 2007, eighteen states based laws based on UTC Section 408, specifically Kansas , Wyoming , New Mexico , Missouri , District of Columbia , Tennessee , New Hampshire , Nebraska , Maine , Arkansas , South Carolina , Oregon , Virginia , Pennsylvania , Ohio , Alabama , Florida and North Dakota . After 2003, only four states passed pet trust laws modeled after the UPC 2-907, being Illinois , Hawaii , North Carolina and South Dakota .
From 2003 to 2007, only four states passed pet trust laws that are not based on either the UPC or UTC statute: specifically Indiana , Idaho , Rhode Island and Texas . Of all these statute, the most progressive and far-reaching has been the California law recently enacted on January 1, 2009. It includes animal organizations as interested parties of a pet trust and permits the following: (1) the trust may be enforced by the trustee, anyone appointed by the court or any person interested in the welfare of the animal or " . . . any nonprofit charitable organization that has as its principal activity the care of animals may petition the court regarding the trust . . . " (Emphasis added) and (2) "[a]ny beneficiary, any person designated by the trust instrument or the court to enforce the trust, or any nonprofit charitable corporation that has as its principal activity the care of animals may, upon reasonable request, inspect the animal, the premises where the animal is maintained, or the books and records of the trust." Time will tell if the California law becomes too difficult to legislate and if the courts there are bombarded with litigation or if it helps to administer the ultimate intent of the settlor.
Conclusion
While pet and animal trusts have been utilized by only a small percentage of the populace, they are important in assuring a valued companions are not left homeless or euthanized when their owners are gone. The future will most likely bring changes on the law that are lacking in many ways such as defining what animals may be covered, what are excessive amounts in the trust, who is an interested party and what happens to the offspring of the animals covered in the trust.

ENDNOTES

Marc L. Stolarsky is an attorney practicing Estate Planning probate and domestic relations in the northeast Ohio area.
Wisconsin law has an honorary trust law that allows pet trust, but they are not enforceable; Wis.Stat. Section 701.11.
William J. Bowe & Douglas H. Parker, Page on the Law of Wills Section 40.19 (1982).
Id.
The original UPC was drafted in 1969 as a joint project between NCCUSL and the Real Property, Probate and Trust Law Section of the American Bar Association. It has been revised several times, most recently in 2006.
Unif. Probate Code s 2-907(b) (amended 1993).
Gerry W. Beyer, "Pet Animals: What Happens When Their Humans Die?", 40 Santa Clara L. Rev. 617, 663-64 (2000).
Unif. Probate Code s 2-907(b).
Gerry W. Beyer, supra.
Unif. Probate Code s 2-907(c)(7).
Unif. Probate Code Section 2-907(c)(4).
In re Fouts, 677 N.Y.S.2d 699 (N.Y. Sup. Ct. 1998).
Unif. Probate Code s 2-907(b).
Unif. Probate Code Section 2-907(c)(6).
Id.; see also Section 2-907(c)(2).
UTC Section 408(a).
UTC Section 408(b).
UTC Section 408(b).
UTC Section 408(b).
UTC Section 408(b).
UTC Section 408(b).
UTC Section 408(c).
Unif. Probate Code s 2-907(b)(9); UTC Section 408(b).
Unif. Probate Code s 2-907(b)(2) and (b)(9); UTC Section 408(a) and (c).
Unif. Probate Code s 2-907(b).
UTC Section 408(a).
UPC Section 2-907(c)(5).
UTC Section 408(a).
UTC Section 408(a).
UTC Section 408(a).
Susan Albert, "Pet Trusts: The Uniform Trust Code Gives Enforceability a New Bite", New Hampshire Bar Journal, Winter 2006, found online at http://www.nhbar.org/publications/display-journal-issue.asp? id=314.
Uniform Trust Code s110(c) (2000).
Unif. Probate Code s 2-907(b)(6).
Mont. Code Ann. Sec. 72-2-1017.
Ariz. Rev. Stat. Section 14-2907.
Colo. Rev. State Section 15-11-901.
N.C. Gen. State Section 36A-147 was law from October 1, 1995 to Jan 1, 2006 and on January 1, 2006 enacted N.C. Gen. Stat. Section 36C-4-408, both based on UPC Section 2-907.
Alaska Stat. Section 13.12.907.
Utah Code Ann. Section 75-2-1001.
Mich. Comp. Laws. Ann. Section 700.2722.
Or. Rev. Stat. Section 128.308 was law 2001 to Dec. 31, 2005 based on the UPC 2-907; Or. Rev. Stat. Ann. Section 130.185 was enacted January 1, 2006 was based on UTC Section 408.
Fla. State. Ann Sec.737.116 was law Apr. 23, 2002 to June 30, 2007 based on UPC 2-907; Fla. State. Ann Sec. 736.0408 was enacted July 1, 2007 based on UTC Section 408.
N.Y. Est. Powers & Trust Law Section 7-8.1.
Iowa Code Ann. Section 633A.2105.
Wash. Rev. Code Sections 11.118.005 through .110.
N.J. State. Ann. Section 3B:11-38.
Nevada State. Section 163.0075.
Kan. State. Ann. Section 58a-408.
Wyo. Stat. Ann. Section 4-10-409.
NM. Stat. Ann. Section 46A-4-408.
Mo. Ann. Stat. Section 456.4-408.
D.C. Code Ann. Section 19-1304.08.
Tenn. Code Ann. Section 35-15-408.
N.H. Rev. Stat. Ann. Sec. 564-B:4-408.
Neb. Rev. Stat. Sec. 30-3834.
Me. Rev. Stat. tit. 18-B, 408.
Arkansas Code Sec. 28-73-408.
S.C. Code Section 67-7-408.
Or. Rev. Stat. Section 128.308 was effective 2001 - Dec. 31, 2005 based on UPC 2-907; Or. Rev. Stat. Ann. Section 130.185 effective January 1, 2006 is based on UTC Section 408.
Virginia Code Sec. 55-544.08.
Uniform Trust Act Sec. 7738.
ORC Section 5804.08.
Ala. Code Section 19-3B-408.
Fla. State. Ann Sec.737.116 was effective Apr. 23, 2002 - June 30, 2007 and based on UPC 2-907; Fla. State. Ann Sec. 736.0408 effective July 1, 2007 was based on UTC Section 408.
N.D. Cent. Code Sec. 59-12-08.
Ill. Comp. Stat. 76 ILCS 5/15.2.
Hawaii Stat. Sec. 560:7-501.
N.C. Gen. State Section 36A-147 was effective October 1, 1995 - Jan 1, 2006 and based on UPC 2-907; N.C. Gen. Stat. Section 36C-4-408 enacted on January 1, 2006 was based on UPC 2-907.
S.D. Cod. Laws 55-1-21 - 55-1-22.
Indiana Cod Sec. 30-4-2-18.
Idaho Code Section 15-7-601.
R.I. Statutes Section 4-23-1.
Tex. Prop. Code Section 112.037.
Cal. Prob. Code Section 15212(c).
Cal. Prob. Code Section 15212(f).

Cocoa mulch can hurt or kill your pet!

2009-02-02T16:06:00.000-08:00

Over the weekend the doting owner of two young lab mixes purchased Cocoa Mulch from Target to use in their garden. They loved the way it smelled and it was advertised to keep cats away from their garden. Their dog Calypso decided that the mulch smelled good enough to eat and dev oured a large helping. She vomited a few times which was typical when she eats something new but wasn't acting lethargic in any way.

The next day, Mom woke up and took Calypso out for her morning walk. Half way through the walk, she had a seizure and died instantly.

Although the mulch had NO warnings printed on the label, upon further investigation on the company's website, this product is HIGHLY toxic to dogs and cats. Cocoa Mulch is manufactured by Hershey's, and they claim that 'It is true that studies have shown that 50% of the dogs that eat Cocoa Mulch can suffer physical harm to a variety of degrees (depending on each individual dog). However, 98% of all dogs won't eat it.'

This Snopes site gives the following information: http://www.snopes.com/critters/crusader/cocoamulch.asp

Cocoa Mulch, which is sold by Home Depot, Foreman's Garden Supply and other Garden supply stores, contains a lethal
ingredient called 'Theobromine'. It is lethal to dogs and cats. It smells like chocolate and it really attracts dogs. They will ingest this stuff and die. Several deaths already occurred in the last 2-3 weeks. Just a word of caution, check what you are using in your gardens and be aware of what your gardeners are using in your gardens.

Theobromine is in all chocolate, especially dark or baker's chocolate which is toxic to dogs. Cocoa bean shells contain potentially toxic quantities of theobromine, a xanthine compound similar in effects to caffeine and theophylline. A dog that ingested a lethal quantity of garden mulch made from cacao beanshells developed severe convulsions and died 17 hours later. Analysis of the stomach contents and the ingested cacao bean shells revealed the presence of lethal amounts of theobromine.

PLEASE GIVE THIS THE WIDEST DISTRIBUTION!!!

Pet Trusts in Ohio

2009-01-19T13:09:00.000-08:00

Ohio Animal Trusts
by Marc L. Stolarsky, M.A., J.D.

1. The Role of Animals Have Evolved
Americans keep a huge number of pets; more than 68 million dogs and 73 million cats, plus horses, birds and a variety of reptiles, rodents, fish and other mammals. With the increase in numbers, the traditional uses of animals as only a source of food and mere tools to use to increase productivity have evolved over time. The increase of animals as companions has been significant.
Not only are pets friends, they may also help in so many other ways, as well as having tremendous therapeutic effects when they bond emotionally. Pet owners' satisfaction with their pets derives from a human-animal bond, beneficial to both owner and pet in many ways. It extends beyond just companionship, and becomes a symbiotic relationship that enhances quality of life. These benefits can be emotional, psychological, physical, and spiritual.

2. Animals As Property and Not Beneficiaries
Unfortunately in the past, the intent of well meaning animal owners, who in post-mortem gifted some or all of their assets to their pets, have been foiled by the courts that determined no enforceable Trust could be created for the benefit of a specific animal.
People who left money to their pets were considered to be of unsound mind for just that reason and their testamentary document voided. News stories of some famous personality leaving large sums of money to their pets have been reported as oddities and something people chuckle over as being ridiculous. Such stories like that of Leona Helmsley leaving twelve million dollars to her Maltese Trouble is considered to be a per se' sign of a mental disorder.
At common law in the United States, a person could not create an effective trust for an animal because it required a clearly identifiable beneficiary. An identifiable beneficiary was necessary because there had to be someone who would enforce the trust, i.e. someone to bring a suit in court if the trustee was using assets for a purpose outside those outlined in the trust. Animals were and largely are still considered to be property in this country, with few legal rights to assert.

3. Honorary Trusts
Before animal trusts could be created, many states permitted what were called "honorary trusts". In establishing an honorary trust a testator could leave assets to a person or institution for the benefit of an animal. It was termed honorary because the trustee did not have any legal obligation to use the assets for the animal and could use the assets for any purpose they chose, even their own selfish enjoyment.
Recognition of honorary trusts occurred in Great Britain in the 19th Century when court issued their opinion in In re Dean, 41 Ch. D. 552 (1889). Here the decedent had established a testamentary trust for the care of his horses and dogs, ordering the trustee to pay a fixed amount each year for the animals' lifetimes, but for no longer than fifty years. The court held that since the gift was for the benefit of specific animals rather than for animals in general, it failed to constitute a valid charitable gift. Nonetheless, the court upheld the gift as an honorary trust, rejecting the contention that the trust was invalid because it lacked a human beneficiary who could enforce its provisions, and ultimately determined that the gift was not "obnoxious to the law."
In the United States, the Restatement of the Law of Trusts first mentioned honorary trusts in 1935, when it stated that there could be trusts for a "specific" non-charitable purpose". In Section 124 of the Restatement, it stated that if property is transferred for a specific non-charitable purpose a trust was not created, but it did give the individual it was transferred to the power to apply the assets to the outlying purpose.
In a 1950 Ohio case, George P. Searight passed away, leaving $1,000 for the benefit of his dog Trixie, but stipulated his friend Florance Hand would be paid 75 cents a day for the animal's care until she passed away. The Court held that when a trust is created to benefit an animal, but no human beneficiary is capable of enforcing the trust, an honorary trust is created.
In 1957, in the Second Restatement of Trusts, the new Section 124 was almost identical to the first Restatement Section 124, but added to it by acknowledging that an honorary trust could be created with gifts for the benefit of animals. Included in the comments was a fact pattern dealing specifically with how an animal honorary trust could be created. The Second Restatement Section 124 was the impetus for States to adopt honorary trust legislation.
In 2003, Section 47 of the Third Restatement was very much like the first two versions of Section 124 preceding it. Section 47 contained a similar fact pattern like the Second Restatement describing how an animal honorary trust works.
In another important Ohio case in 2004, in Beverly Walkecker, et al. v. Erie County Humane Society , the decedent Ruth Ann Lovett died on December 24, 1996. She had already signed a Will bequeathing $325,000 in assets to the Erie County Humane Society with the stipulation that they take care of her Siamese cat Sinbad for as long as it lived. Ten weeks after her death the Humane Society euthanized the cat, without even attempting to find it a home. The Ohio Supreme Court determined that an honorary trust was created and that it would terminate when the purpose of the trust ended. Here in Walkecker, the Court was again showing that individuals had the right to create an honorary trust, but not an animal trust.
Honorary trusts have a major flaw: because animals were considered to be property under the law, the assets have to pass to a person for the animal's benefit. The person who then receives the assets are on their honor to use the assets for the intended purpose, but have no legal obligation to do so. If they take the assets for their own use and enjoyment, the courts have no power intervene.
In addition, there may be income tax problems with honorary trusts that could have been avoided using other means.
Whatever the result, drafting an honorary trust that had such a tenuous existence was a bad idea. If a trust failed for any of the above or other reasons, the courts were petitioned to determine if the assets contained within it reverted back to the estate and therefore to the heirs of the deceased. Also, if a trust was poorly written and left some doubt as to what its purpose was, a court could determine that it is not an honorary trust and void the entire document.

4. Uniform Probate Code and Uniform Trust Code
Looking back into the history of animal trust legislation, both the Uniform Probate Code and the Uniform Trust Code dominate the landscape. Drafted by a large pool of trust legal scholars chosen from all over the United States, these are comprehensive updates of state trust codes that attempt to close the gaps in our laws.
The Common Law prior to 1990 took the position that animal trusts were invalid because for one, a beneficiary could not be identified in definite and certain terms. The courts held that a beneficiary must be a human being, an institution, or the like and not an animal. This is because a human beneficiary was necessary to hold the power to enforce the trust. Under the law, an animal was not capable of forcing the trustee to administer the trust and provide distributions in accordance with the settlor's directions.
The issues of creating animal trusts were addressed in 1990, when the National Conference of Commissioners on Uniform State Laws (NCCUSL) revised the UPC and included the proposed animal trust code Section 2-907. This was presented as an "optional" section labeled as such because the idea of recognizing enforceable animal trusts was apparently viewed as too radical for states considering adopting the UPC. This Section allowed the establishment of a valid and enforceable trust for "the care of a designated domestic or pet animal." The provision established a "presumption against a disposition . . . [for a pet's care] being merely precatory or honorary" and instead treated these trusts separately from other trusts established for lawful non-charitable purposes. The grantor's intent could be determined by the use of extrinsic evidence. To encourage individuals to serve as trustees of such trusts, the UPC Section reduced the administrative burdens placed on the management of animal trusts. Under Section 2-907, a court was authorized to appoint a trustee and were given the power to make other determinations necessary to carry out the testator's intent. An individual designated by the trust or appointed by the court could enforce the terms of the trust. The inclusion of language allowing for an "enforcer" of a trust negated the need for a guardian ad litem to protect the interests of the animal beneficiaries of an enforceable animal trust. If no more purpose exists, "the trust terminates when no living animal is covered by the trust." There is specific language authorizing the court to "reduce the amount of property transferred, if it determines that that amount substantially exceeds the amount required for the intended use." If there is a reduction in the property transferred, the property would pass as if it was unexpended trust property as directed in the trust, under a residuary clause in the testator's will, or to the heirs of the transferor.
In 2000, ten years after the first UPC was written, another group of trust scholars drafted the Uniform Trust Code that included an animal trust provision, Sections 408 and 409. The UPC Section 2-907 and UTC Section 408 and 409, have both similarities and differences. Both codes declare that an animal trust is now enforceable by providing that either the trust creator or court may appoint a person to enforce the trust. Both the UPC and UTC also provide that the trust may last for the life of the animal, and that the court may order the diversion of funds if the trust property substantially exceeds the amount needed for the intended use.
However, the UPC and UTC differ in other areas. The UPC applies to "domestic or pet animals," which are subjective terms raising possible questions of interpretation. The UTC allows for the creation of a trust for any animal and the UTC provides that a trust for animals is to be treated like any other trust with respect to such issues as trustee reporting, which in this case would be to the trust enforcer.
Because the UTC dispenses with many of the formalities with respect to all trustees, the key difference between the UPC and UTC animal trust provisions in a state that has otherwise enacted the UTC is that the UPC does away with trustee reporting and the vital obligation to keep trust funds separate from other funds: "Except as ordered by the court or required by the trust instrument, no filing, report, registration, periodic accounting, separate maintenance of funds, appointment, or fee is required by reason of the fiduciary relationship of the trustee." However, remember that under the UTC, trusts for humans, animals, and charities are subject to the same rules of interpretation.
The UTC provides a better method for establishing a animal trust then the UPC for several reasons. First, the UTC overrides the rule of perpetuities by matching the allowable period of the trust to the length of the lifespan of the designated animal or animals. While the UPC also sets the duration of an animal trust to the measuring life of the designated animal, the UPC only provides for a single animal, while the UTC permits multiple animals to be covered by the trust. The UTC requires a trust to terminate only at the death of the last covered animal.
Second, the UTC provides greater enforceability to animal trusts than does the UPC, providing greater assurance for the pet owner. The provisions permit any person, not one specifically designated in the trust instrument as permitted by the UPC, to petition a court to evaluate whether or not the trust beneficiary or trustee is acting in accordance with the trust document. In addition, under the UTC, the trust beneficiary, who is the animal's caretaker, has rights of a qualified beneficiary, so that the trustee is held accountable for actions in administering a trust. In contrast, the UPC provides that a trustee has no filing, reporting, or other fiduciary responsibilities designed to hold a trustee accountable, unless specifically provided in the trust instrument.
In the last fifteen years, there are 41 States in this country that have laws permitting animal trust. Specifically they are Alabama, Alaska, Arizona, Arkansas, California, Colorado, District of Columbia, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Michigan, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, Wyoming. Of the states that now have animal trust statutes, nine are based on the 2-907 of the Uniform Probate Code, eighteen are based on the Section 408 of the Uniform Trust Code and eleven are not based on either, but have borrowed generously from both codes.
Of these States, sixteen of them permit trusts for the care of a designated domestic or pet animal and the animal's offspring. These are Alaska, Arizona, California, Colorado, Hawaii, Illinois, Michigan, Missouri, Montana, New Mexico, New York, North Carolina, South Dakota, Tennessee, Utah and Wisconsin. This is significant so that the offspring of these animals will not have to be euthanized or go homeless.

5. Ohio Revised Code Section 5804.08
Based on UTC Section 408, the Ohio Revised Code Section 5804.08, "Trust for Care of Animal", was passed by the General Assembly in 2006 and enacted in 2007 as part of the modified Unified Trust Code introduced by Rep. Wagoner as S.B. 416. The Ohio law as it reads today states the following:
Sec. 5804.08 Trust for Care of Animals
(A) A trust may be created to provide for the care of an animal alive during the settlor's lifetime. The trust terminates upon the death of the animal or, if the trust was created to provide for the care of more than one animal alive during the settlor's lifetime, upon the death of the last surviving animal.
(B) A person appointed in the terms of a trust or, if no person is so appointed, a person appointed by the court may enforce a trust authorized by this section. A person having an interest in the welfare of an animal that is provided for care by a trust authorized by this section may request the court to appoint a person to enforce the trust or to remove a person appointed.
(C) The property of a trust authorized by this section may be applied only to its intended use, except to the extent the court determines that the value of the trust property exceeds the amount required for the intended use. Except as otherwise provided in the terms of the trust, property not required for the intended use may be distributed to the settlor if then living or to the settlor's successors in trust.

Pursuant to O.R.C. Section 5804.08(A), a trust may be inter vivos (created during the life of the pet owner) or testamentary (created at time of death), such as by the Last Will and Testament of the pet owner. The life of the trust will be only as long as the animal or animals live that it is created to benefit. Therefore, in Ohio the trust will not continue to support the offspring of that animals.
In O.R.C. Section 5804.08(B), a person may be appointed as trustee of the animal trust. If no one is appointed, the court has authority to appoint a trustee to serve in that capacity. The court can be petitioned by a person with an interest in the animal including the caregiver of the animal to have a Trustee appointed or have them removed. This concept has its roots in the "Uniform Guardianship and Protective Proceedings Act", which originated the concept of permitting a person with a demonstrated interest in the animal's welfare to petition the court. It's main purpose was to allows a person interested in the welfare of a ward or protected person to file petitions on behalf of the ward or protected person and now that includes those with interests in animals.
In O.R.C. Section 5804.08(C), the property placed in the trust may only be used for the stated purpose of the trust. However, if the property placed in the trust is excessive, the court has authority to distribute the property to the creator of the trust, or to the heirs of the creator of the trust. The court would most likely look at the needs of the animal and the intent of the trust creator and determine the amount of property is necessary for the animal.
While O.R.C. Section 5804.08 is a breakthrough, there are potential problems that should be addressed. The statute should state that the animal trusts are "valid and enforceable." That way the statute would distinguish itself from honorary trust statutes that are not really valid trusts because they are not enforceable in court. It would also imply that animal trusts are no different than express trusts and are subject to the same fiduciary requirements.
The Ohio law should also include a provision, similar to the Washington animal trust statute , which allows for identification of the animals to be covered by the trust. The Washington statute states that the animals "may be individually identified, or may be identified in such other manner that they can be readily identified." The inclusion of such language would help prevent a potential challenge to the trust on the grounds that the "beneficiaries" are not named or described by breed or type. Thus, if a trust document states that "property is to be used for the care of my 'pets' or my 'dogs' " an heir might argue that the trust is too vague or that the beneficiaries are not ascertainable. Including the above language would limit the effectiveness of such an argument by giving the court some flexibility in determining the animals to be covered, and would compensate for vague or incomplete drafting.
The statute should also include language allowing for liberal construction of planning documents and should allow extrinsic evidence to help discern the pet owner's intent. The UPC Section 2-907 includes such language , and attempts to bring any possible animal trust document under its provisions.
The statute's duration should not be limited and should provide that it continue for the offspring of those animals that exist when the trust is created. That way these animals will be assured proper care so long as the trust assets are exist.
Although the general policy of preventing waste justifies the court authority to disallow excessive animal trust funding, in many instances the costs outweigh the benefits. Allowing courts to reduce the amount of trust property not only guarantees a challenge by the pet owner's heirs, but also guarantees a reduction of trust property if a particular judge is not fond of the idea of animal trusts. This is a handy weapon which all challengers may rely on and gives judges who frown on the notion of trusts for animals a sound legal reason for attacking such trusts.
The statute should provide, much like UPC section 2-907, an incentive for a trustee to serve by reducing the amount of administrative duties and requirements. As suggested earlier, including such a provision may be construed as hampering the legitimacy of animal trusts by giving them a status different from that of express trusts. However, this potential disadvantage is far outweighed by this huge advantage: the reduced likelihood that a named trustee will attempt to avoid the responsibility of enforcing the terms of the trust. Thus, a provision limiting the trustee's duties will further the goal of carrying out the intent of the pet owner. An effective animal trust depends on a trustee who carries out the terms, and it makes sense to give him an incentive to accept the job.
The statute should employ language similar to that of UPC section 2-907(b)(6), which states that "except as ordered by the court or required by the trust instrument, no filing, report, registration, periodic accounting, separate maintenance of funds, appointment, or fee is required by reason of the existence of the fiduciary relationship of the trustee."
These are some suggestions and are certainly not all issues that need to be addressed by drafters of legislation. However, if they use these suggestions it would assist those creating animal trust to effectuate their intent.

6. Tax Issues With Animal Trusts
While this work will not present a complete review of all tax issues facing drafters of animal trusts, it is important to at least touch on some of the more relevant tax issues for animal trust. Keep in mind this writer is not and has no desire to be a CPA.
For the calculation of federal estate taxes, any amount passing to an animal trust by reason of the settlor's death will generally be included by the Internal Revenue Service in the gross taxable estate. Under Revenue Ruling 78-105 , the IRS has ruled that no portion of the amount passing to a valid trust for the lifetime benefit of a pet qualifies for the charitable estate tax deduction, even if the remainder beneficiary is a qualifying charity. Trust creators, however, depending on how much a tax burden will result, should consider how the estate taxes attributable to such a trust will be paid. The proceeds from life insurance is an excellent way to pay estate taxes.
Regarding taxation of the income of trust assets, Revenue Ruling 76-486 , provides that if a trust for the benefit of an animal is valid under state law, then the trust itself will be subject to income taxation.
Who is responsible for paying trust income taxes? An animal is not a beneficiary recognized by the IRS and, therefore, cannot be taxed. A caretaker of the animal could not be charged with the tax liability of trust income because the caretaker serves only as an agent of the animal and does not consume the distributions for his or her own benefit (similar to a court appointed guardian of a minor or incapacitated person). The Trustee must pay the taxes of the Trust, since by law he is the owner of the Trust assets and that is his duty. He has a right of reimbursement for the Trust funds he holds. Under some circumstances he may be personally liable for the tax, for example, if he makes other payments and does not retain enough to cover them.
In general, a trust is taxed on the income it accumulates. Trust beneficiaries are taxed on their distributions. The trust itself benefits when distributions are made because income distributions decrease the trust's tax liability. Another benefit of distributions is that the beneficiaries are taxed at a lower rate than are trusts, thus making the assets worth more in the hands of the beneficiary than in the hands of the trust.
If anyone appointed by the trust, such as a trustee or caretaker, receives some stipend or salary, the trust can deduct that amount. If the that person is considered the beneficiary, then under IRC's 661, the trust is entitled to deduct the amount of "distributable net income" paid out to them.
If a trust official is receiving some compensation for services, they in turn are required to recognize this amount on his or her tax return.

7. Trusts vs. Wills For Animal Welfare
A Trust is superior to a Will when passing assets for the benefit of an animal for several reasons. For one thing, a trust can be more specific as to how the assets are distributed, when, to whom and how. A trust can designate a trustee who becomes responsible for carrying out the explicit tenants of the trust. In addition, it can name a pet manager to find a good home for the animal; a caretaker who walks, feeds, cleans and cares for the animal; a veterinarian who is familiar with the pets history; and can require it be feed a certain food, exercised in any manner or way, given acres of space to run or sleep on a bed silk sheets.
A Will is much more rigid then a trust, bequeathing assets to person or institution, and requesting that the use assets for the benefit of an animal. In addition, a Will must go through probate, increasing costs, becoming public record and increasing the time that the testator's wishes are in limbo.

Conclusion
O.R.C. Section 5804.08 has created an easy and affordable way for animal owners who are diligent and dutiful to provide for their animal companions once they are no longer able. It can take effect when the owner becomes ill or when they pass away, but can always detail every single item of their handling. While there are flaws in the Ohio law, a trust can be written to assure that an animal companion is taken care of so that it can lead a happy and healthy life before and after its master is gone.

ENDNOTES

ENDNOTES

Marc L. Stolarsky is an attorney practicing Estate Planning in the northeast Ohio area. He earned his Master of Arts From Bowling Green State Unverstity and his Juris Doctor from Cleveland-Marshall College of Law.

J. Animal L. & Ethics 21, Journal of Animal Law & Ethics, May, 2007, 21 Mediating Animal Law Matters, Journal of Animal Law and Ethics; Kathy Hessler.

Pets are an important part of the lives of many individuals. A recent study found that 73 percent of dog owners and 65 percent of cat owners consider their companion animals to be akin to a child or other close family member, and many treat their pets as a member of their immediate family. American Pet Products Manufacturers, 2001-02 APPMA National Pet Owners Survey (2002) (reporting data from 2000).

A survey by the American Pet Products Manufacturers Association found that 84% of pet owners said pets make their family and home life physically and emotionally healthier. See "Pets Bring Out the Best in Humans" (April 26, 2006), found online at http://www.themonroetimes.com/f0424aug.htm.

77 Pa. B.A. Q. 107, Pennsylvania Bar Association Quarterly, July, 2006, "What the General Practitioner Needs to Know about Pennsylvania Animal Law, Personal and Estate Planning For Pennsylvanians Owning Pets", Neil E. Hendershot, Dauphin County.

See Gerry W. Beyer, "Pet Animals: What Happens when their Humans Die?", 40 Santa Clara L. Rev. 617 (2000).

Betty White was reported have a will that leaves five million dollars to her pets. "Betty White Leaves $5M to Her Pets," San Antonio Star, Nov. 4, 1990, at 25.

"Estate planning: Not just for Leona's dog, Linda Lombard; Associated Press, Ohio Lucky dog!", Cincinnati Post, by Linda Lombard, September 22, 2007.

Kristina A. Hancock, Chair of the animal law committee of the ABA's Tort Trial & Insurance Practice Section.

In re Dean, 41 Ch. D. 552 (1889).

Id. at 623.

Id.

The Restatement of Trusts Section 124 states: "Where the owner of property transfers it upon an intended trust for a specific non-charitable purpose and there is no definite or definitely ascertainable beneficiary designated, no trust is created; but the transferee has power to apply the property to the designated purpose, unless he is authorized by the terms of the intended trust so to apply the property beyond the period of the rule against perpetuities, or the purpose is capricious."; Note: In Ohio as in many other States, the rule against perpetuities is not an issue with animal trusts. In Ohio O.R.C. Section 2131.08(B) and (C) save the trust if the animal dies within the 21 year period. O.R.C. Section 2131.09(B) abolished the RAP when the trust instrument so provides. Also, the new O.R.C. Section 5804.09 supplies its own rule on duration.

Id.

In re Searight's Estate v. Miller (1950) 87 Ohio App. 417.

Id.

Restatement (Second) of Trusts Section 124; In part the example states: A bequeaths his dog, Fido, to B together with the sum of $1000 "in trust" to use the money for the support of the dog for twenty years. B cannot be compelled to use the money for supporting the dog, but he has power to use the money for this purpose and incurs no liability by doing so. If B refuses or neglects to support the dog, he holds the money upon a resulting trust for A's estate." Id.

Missouri, Mo. Rev. Stat. Section 456.050; California, Cal. Prob. Code Section 15212; Tennessee, Tenn. Code Ann. Section 35-50-118 (2002); and Wisconsin Wis. Stat. Ann. Section 701.11 (West 2002)

Restatement (Third) of Trusts Section 47.

Beverly Walkecker, et al. v. Erie County Humane Society (April 12, 2004) 810 N.E.2d 968, No. 2004-0607, Court of Appeals Case No. E-03-022, Trial Court Case No. 97-1-019.

See Rev. Rul. 76-486, 1976-2 C.B. 192.

For further discussion of these concepts, see In re Searight's Estate, 95 N.E.2d 779 (Ohio App. 1950); According to Section 124 of Restatement 2d, Trusts, where property is transferred in trust for a noncharitable purpose and there is no definite or definitely ascertainable beneficiary designated (as for the care of animals), then no trust is created. However, the transferee has the power, if exercised, to use the property for the designated purpose. The "trust" is subject to the rule against perpetuities. It may not be held for a purpose extending beyond the lives in being plus twenty-one years.

Jennifer R. Taylor, "A "Pet" Project for State Legislatures: The Movement Toward Enforceable Pet Trusts in the Twenty-First Century", 13 Quinnipac Prob. L.J. 419, 420 (1999).

William J. Bowe & Douglas H. Parker, Page on the Law of Wills Section 40.19 (1982).

Id.

The 1990 version of the UPC section 2-907 states:
(a) Honorary Trusts. A trust for a noncharitable corporation or unincorporated society or for a lawful noncharitable purpose may be performed by the trustee for [21] years but no longer, whether or not there is a beneficiary who can seek the trust's enforcement or termination and whether or not the terms of the trust contemplate a longer duration.
(b) Trust for Pets. Subject to this subsection, a trust for the care of a designated domestic or pet animal and the animal's offspring is valid.
Except as expressly provided otherwise in the trust instrument:
(1) No portion of the principal or income may be converted to the use of the trustee or to any use other than for the benefit of a covered animal.
(2) The trust terminates at the earlier of 21 years after the trust was created or when no living animal is covered by the trust.
(3) Upon termination, the trustee shall transfer the unexpended trust property in the following order:
(i) as directed in the trust instrument;
(ii) if the trust was created in a nonresiduary clause in the transferor's will or in a codicil to the transferor's will, under the residuary
clause in the transferor's will; and
(iii) if no taker is produced by the application of subparagraph (i)or (ii), to the transferor's heirs under Section 2-711.
(4) For the purposes of Section 2-707, the residuary clause is treated as creating a future interest under the terms of a trust.
(5) The intended use of the principal or income can be enforced by an individual designated for that purpose in the trust instrument or, if none, by an individual appointed by a court upon application to it by an individual.
(6) Except as ordered by the court or required by the trust instrument, no filing, report, registration, periodic accounting, separate maintenance of funds,
appointment, or fee is required by reason of the existence of the fiduciary relationship of the trustee.
(7) A governing instrument must be liberally construed to bring the transfer within this section, to presume against the merely precatory or honorary nature of the disposition, and to carry out the general intent of the transferor. Extrinsic evidence is admissible in determining the transferor's intent.
(8) A court may reduce the amount of the property transferred, if it determines that that amount substantially exceeds the amount required for the intended use. The amount of the reduction, if any, passes as unexpended trust
property under subsection (b)(3).
(9) If no trustee is designated or no designated trustee is willing or able to serve, a court shall name a trustee. A court may order the transfer of the property to another trustee, if required to assure that the intended use is carried out and if no successor trustee is designated in the trust instrument or if no designated successor trustee agrees to serve or is able to serve. A court may also make such other orders and determinations as shall be advisable to carry out the intent of the transferor and the purpose of this section.

Unif. Probate Code s 2-907(b) (amended 1993).

Gerry W. Beyer, "Pet Animals: What Happens When Their Humans Die?", 40 Santa Clara L. Rev. 617, 663-64 (2000).

Unif. Probate Code s 2-907(b).

Gerry W. Beyer, supra.

Unif. Probate Code s 2-907(c)(7).

Unif. Probate Code Section 2-907(c)(4).

In re Fouts, 677 N.Y.S.2d 699 (N.Y. Sup. Ct. 1998).

Unif. Probate Code s 2-907(b).

Unif. Probate Code Section 2-907(c)(6).

Id.; see also Section 2-907(c)(2).

UTC Section 408 states the following:
(a) Creation and termination. A trust may be created to provide for the care of an animal alive during the settlor's lifetime. The trust terminates upon the death of the animal or, if the trust was created to provide for the care of more than one animal alive during the settlor's lifetime, upon the death of the last surviving animal.
(b) Enforcement.--A trust authorized by this section may be enforced by a person appointed in the trust instrument or, if no person is so appointed, by a person appointed by the court. A person having an interest in the welfare of the animal may request the court to appoint a person to enforce the trust or to remove a person appointed.
(c) Limitation.--Property of a trust authorized by this section may be applied only to its intended use, except to the extent the court determines that the value of the trust property exceeds the amount required for the intended use. Except as otherwise provided in the trust instrument, property not required for the intended use must be distributed to the settlor, if then living, otherwise to the settlor's successors in interest.

Also, UTC Section 409, "Noncharitable Trusts", states the following:
(1) A trust may be created for a noncharitable purpose without a definite or definitely ascertainable beneficiary or for a noncharitable but otherwise valid purpose to be selected by the trustee. The trust may not be enforced for more than 21 years.
(2) A trust authorized by this section may be enforced by a person appointed in the terms of the trust or, if no person is so appointed, by a person appointed by the court.
(3) Property of a trust authorized by this section may be applied only to its intended use, except to the extent the court determines that the value of the trust property exceeds the amount required for the intended use. Except as otherwise provided in the terms of the trust, property not required for the intended use must be distributed to the settlor, if then living, otherwise to the settlor’s successors in interest.

UPC Section 2-907(c)(5).

Susan Albert, "Pet Trusts: The Uniform Trust Code Gives Enforceability a New Bite", New Hampshire Bar Journal, Winter 2006, found online at http://www.nhbar.org/publications/display-journal-issue.asp? id=314.

Uniform Trust Code s110(c) (2000).

Alabama, Ala. Code § 19-3B-408; Alaska, Alaska Stat. § 13.12.907; Arizona, Ariz. Rev. Stat. § 14-2907 (2002); Arkansas, Arkansas Code § 78-73-408; California, Cal. Prob. Code § 15212; Colorado, Colo. Rev. Stat. § 15-11-901; District of Columbia; Florida, Fla. Stat. Ann. § 737.116; Hawaii, Hawaii Stat. § 560:7-501; Idaho, Idaho Code § 15-7-601; Illinois, Ill. Comp. Stat. 760 ILCS 5/15.2; Indiana, Indiana Code § 30-4-2-18; Iowa, Iowa Code Ann. § 633A.2105; Kansas, Kan. Stat. Ann. § 58a-408; Maine, Me. Rev. Stat. Ann. tit. 18-B, 408; Michigan, Mich. Comp. Laws Ann. § 700.2722; Missouri, Mo. Ann. Stat. § 456.4-408; Montana, Mont. Code Ann. § 72-2-1017; Nebraska, Neb. Rev. Stat. § 30-3834; Nevada, Nevada Stat. § 163.0075; New Hampshire, N.H. Rev. Stat. Ann. § 564-B:4-408; New Jersey, N.J. Stat. Ann. § 3B:11-38; New Mexico, N.M. Stat. Ann. § 46A-4-408; New York, N.Y. Est. Powers & Trusts Law § 7-8.1; North Carolina, N.C. Gen. Stat. § 36A-147; North Dakota, N.D. Cent. Code § 59-12-08; Ohio, ORC § 5804.08 Trust for care of animal; Oregon, Or. Rev. Stat. § 128.308; Pennsylvania, § 7738. Trust for care of animal - UTC 408; Rhode Island, R.I. Statutes § 4-23-1; South Carolina, S.C. Code § 67-7-408; South Dakota, S.D. Codified Laws §§ 55-1-21 & 55-1-22; Tennessee, Tenn. Code Ann. § 35-15-408; Texas, Tex. Prop. Code § 112.037; Utah, Utah Code Ann. § 75-2-1001; Virginia, Virginia Code § 55-544.08; Washington, Wash. Rev. Code §§ 11.118.005 -.110; Wisconsin, Wis. Stat. § 701.11; Wyoming, Wyo. Stat. Ann. § 4-10-409. This list is as of February 12, 2008, pursuant to www.professorbeyer.com/Articles/Animal_Statutes.htm .

8 Alaska Stat. Section 13.12.907 (Michie 1998); Ariz. Rev. Stat. Ann. Section 14-2907 (West 1995); Cal. Prob. Code Section 15212 (West Supp. 2000); Colo. Rev. Stat. Ann. Section 15-11-901 (West 1999); Mich. Comp. Laws Ann. Section 700.2722 (West Supp. 1999); Mont. Code Ann. Section 72-2-1017 (1999); Mo. Ann. Stat. Section 456.055 (West 1992); N.M. Stat. Ann. Section 45-2-907 (Michie Supp. 1995); N.Y. Est. Powers & Trusts Section 7-6.1 (McKinney Supp. 1999); N.C. Gen. Stat. Section 36A-147 (1995); Tenn. Code Ann. Section 35-50-118 (1996); Utah Code Ann. Section 75-2-1001 (Supp. 1999); Wis. Stat. Ann. Section 701.11(1) (West Supp. 1999).

O.R.C. Section 5804.08.

Uniform Probate Code Sections 5-210(b), 5-414(a).

Wash. Rev. Code Section 11.118.020 (2002).

Id.

Unif. Prob. Code. Section 2-907(b) (1990) (amended 1993).

Unif. Prob. Code Section 2-907(b)(6) (1990) (amended 1993).

IRS Circular 230 Disclosure: To ensure compliance with the requirements imposed by IRS Circular 230, we inform you that any tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding tax-related penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any tax-related matter(s) addressed herein.
Rev. Rul. 78-105

Rev. Rul. 78-105, 1978-1 C.B. 295.

1976-2 CB 192.

Pet Trusts in Ohio

2009-01-19T13:01:00.000-08:00

I am an attorney practicing law in Ohio in the following areas --

- Pet/Animal Trusts
- Estate Planning
- Probate
- Domestic Relations

Please contact me for more information at MARC@MLSLaw.Net or check out my web site at www.MLSLaw.Net.

Have a great day!