Snowbirds May Spend More Time in Ohio
The legislature has passed a bill that changes the amount of time an individual may remain in Ohio during a calendar year without creating a presumption that they are residents for income tax purposes. Prior to the passage of this law, an individual had to stay out of Ohio for eight months in order to qualify for the safe-harbor allowing them to avoid Ohio income tax on certain types of income. That period has been reduced to six months for 2007 and beyond.
Ohio Has A New Trust Code
On January 1, 2007, Title 58 of the Ohio Revised Code became effective adopting Ohio’s version of the Uniform Trust Code. It will apply to all trusts whether created before or after January 1 of this year.
If you created a revocable trust prior to the date of enactment, you may want to modify it to waive certain of these requirements that will be imposed after your death in order to preserve your privacy, delay the dissemination of certain trust information to beneficiaries until they reach age 25 and simplify the trustee’s duties. If you are serving as trustee of any trust, you should be aware of the new reporting requirements for trustees. Trustees are required to provide reports and notices to certain beneficiaries.
The Ohio Trust Code also includes procedures for resolving certain issues in connection with irrevocable trusts by the agreement of the parties without a judicial proceeding. This new procedure, called a “Private Settlement Agreement,” is permissible for certain matters concerning trust construction, administration, distribution and investment. They may be used to modify an irrevocable trust instrument where the modification is not inconsistent with a dominant purpose of the trust. This new tool may save both time and expense for clients in certain circumstances. It also may accomplish changes in irrevocable trusts that were not previously possible.
Gifts From IRAs to Charity Under the Pension Protection Act of 2006
The Pension Protection Act of 2006 contains a provision that allows individuals to make gifts from their IRAs to charity and exclude the amount from their gross income. This opportunity is available only through the end of 2007. To qualify:
• You must be age 70 ½ or older;
• The gift must be made directly from your IRA to a
qualified charity*;
• The gift may not exceed $100,000 for the year.
* Gifts to donor advised funds, supporting organizations and charitable remainder trusts do not qualify.
If you have philanthropic objectives and you do not need the additional income from a required distribution from your IRA, check with your tax advisor to see if you may benefit from this opportunity.
