NORTH CANTON, Ohio - A new asset-governing law has the potential to make a huge economic impact in Ohio and the ripple effect is starting in Stark County. Premier Bank & Trust, a four-branch community bank headquartered in North Canton, employs one of the estate-planning experts who drafted the new law.
Premier Bank VP and Senior Trust Officer, Dan Griffith, an estate planning attorney, says the Ohio Asset Management and Modernization Act (OAMMA) allows individuals to put a portion of their assets into a protected account managed by a third-party trustee. The protected account, called a Domestic Asset Protection Trust (DAPT), is a multi-generational legacy trust that allows one generation to preserve business or personal assets for future generations.
Because the trustee maintains custody of the assets, this trust offers clients a safe way to legally protect their nest egg from creditor attack. Account holders can request monetary distributions from the trust and have the freedom to decide how to allocate stocks. Trustees may also grant access to tangible assets such as a vacation home. Regardless of asset type, everything earns protection from creditors (with the exception of child support and, in some cases, spousal support). The incentives from these trust accounts add up for the state of Ohio, too.
Prior to the new legislation, these kinds of funds would have been shipped off to out-of-state locations with stronger protections places like Delaware, South Dakota or the Cayman Islands. While costly, dangerous and often viewed as unethical in the court of public opinion, many were willing to take the risk for the perceived financial advantages.
Griffith recently opened Premier's second DAPT since the law went into effect in late March. With just these two trusts, Premier is helping to keep several millions of dollars-plus fees and taxes that go along with them-in the state of Ohio. ?
"In both DAPTs we've been involved with, we're bringing money into Ohio that was previously taxed by entities outside the state," said Griffith. "Now it's in our jurisdiction, under our taxes and will help create Ohio jobs."
How Ohio Wins
After 10 years with similar asset legislation in effect, Delaware credits more than 1.5 percent of the state's economy to DAPTs alone. In New Hampshire, new trusts helped create an estimated 3,000 to 4,000 jobs. Experts say Ohio has an even bigger potential for success.
"We can already see the trickle-down effect with growth of trust officers, legal and administrative jobs," says Griffith.
Another potential sign of improvement comes from Chief Executive Magazine's list of "Best & Worst States for Business." In 2012 Ohio ranked 35. This year the state jumped up 13 spots to rank 22.
Griffith hopes this means more businesses consider Ohio when deciding where to build new offices or manufacturing plants; when before, they'd ignore Ohio altogether because the laws were not in their favor. The state lost opportunity for jobs, revenue and other taxes, etc., but now it has a strong chance to "sit at the table" for those opportunities.
While the new law certainly helps the State become more business friendly, Griffith's efforts now focus on teaching individuals like medical professionals, business owners and others who are subject to liability about what they can gain from a DAPT.
"The biggest benefit of opening a DAPT extends beyond protection over your nest egg?it's about keeping the assets local and having some control over stock decisions and distributions," says Griffith. The expert trust officer explains how your choice of trustee can bring extra benefits, too.
Why Choose Premier as your Trustee?
Any bank with a trust department can serve as trustee; however, Premier Bank offers several advantages.
1. Knowledge and Expertise. A Premier Bank trust officer and estate-planning attorney helped write the law, so we understand the logistics behind it. That knowledge ensures all trust documentation is prepared correctly.
2. Flexibility. Our trust department is flexible because we accept a variety of assets (small business interests, vacation homes, promissory notes, etc.) based on individual needs and interests. Big banks tend to focus strictly on traditional stocks and bonds instead of what's most important to each client.
3. Innovation. We've been on the front lines to see the changes as they happen and administer new trusts from the beginning. This makes our approach more innovative than other trustees.