Governor Deal Recently signed into law a change to Georgia’s Trust Code which is expected to keep more trust business in the state. Georgia House Bill 121 strikes a middle ground between the most restrictive and most liberal terms by lengthening the lifespan of a trust from 90-360 years, which is expected to keep Georgia settlors from establishing trusts in more liberal states.
What you should know
Georgia’s new Rule Against Perpetuities, which took effect July 1, 2018, is similar to its neighbors Florida & Tennessee, and longer than Alabama, South Carolina or North Carolina. Establishing a trust for such a long-term could create problems for descendants if unforeseen circumstances prevented the trust from fulfilling its purpose. However, Georgia legislators have added protections for descendants by adding provisions to allow beneficiaries to amend non-charitable irrevocable trust under certain circumstances.
House Bill 121 provides several options for modification. First, if the settlor is still alive and has the consent of all the beneficiaries, the court may modify or terminate the trust even if the modification does not agree with the original intent of the trust. After the settlor’s death, the court may modify the trust if all the beneficiaries consent and the modification is in line with the purpose of the trust or the court may terminate the trust if its continuation would not fulfill its original purpose.
The court may also modify the trust, the administrative provisions of the trust or appoint an additional trustee if unforeseen circumstances prompt modification to further the purposes of the trust or to achieve the settlors tax objectives. Further, the court may order the division of a single trust into two or more trusts or the consolidation of two or more trusts into a single trust if the division or consolidation would be helpful to the administration of such trust or trusts.
Finally, the court may terminate a trust and order distribution of the trust property if the costs of administration would substantially impair the purposes of the trust, the purpose of the trust has been fulfilled or become illegal or impossible to fulfill or continuance of the trust would not accomplish the purposes of the trust.