Title 53

(a) A trustee shall not be personally liable on any warranty made in any conveyance unless the intention to create a personal liability is distinctly expressed. (b) Unless otherwise provided in the contract, a trustee shall not be personally liable on contracts properly entered i…

(a) Any nonresident who is eligible to serve as a trustee under Code Section 53-12-201 may act as a trustee in this state pursuant to the terms of this Code section. (b) Any nonresident trustee who acts as a trustee in this state shall be deemed to have consented to service upon …

(a) Any foreign entity may act in this state as trustee, executor, administrator, guardian, or any other like or similar fiduciary capacity, whether the appointment is by law, will, deed, inter vivos trust, security deed, mortgage, deed of trust, court order, or otherwise without …

A foreign entity, insofar as it acts in a fiduciary capacity in this state pursuant to this article, shall not establish or maintain in this state a place of business, branch office, or agency for the conduct in this state of business as a fiduciary unless it obtains a certificate o…

(a) Prior to the time when any foreign entity acts pursuant to the authority of this article in any fiduciary capacity in this state, the foreign entity shall file with the Secretary of State a verified statement which shall state: (1) The correct name of the foreign entity; (2) The…

(a) A trustee shall invest and manage trust assets as a prudent investor would by considering the purposes, provisions, distribution requirements, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution. (b…

A trustee shall reasonably manage the risk of concentrated holdings of assets in a trust by diversifying or by using other appropriate mechanisms, except as otherwise provided in this Code section, as follows: (1) The duty imposed by this Code section shall not apply if the trust…

Within a reasonable time after accepting a trusteeship or receiving trust assets, a trustee shall review the trust assets and make and implement decisions concerning the retention and disposition of assets in order to bring the trust portfolio into compliance with the purposes, p…

Compliance with the investment rules of this part shall be determined in light of the facts and circumstances existing at the time of a trustee’s decision or action and not by hindsight. History. — Code 1981, § 53-12-343, enacted by Ga. L. 2010, p. 579, § 1/SB 131.

The following terminology or comparable language in the provisions of a trust, unless otherwise limited or modified, shall authorize any investment or strategy permitted under this article and Article 17 of this chapter: ‘‘investments permissible by law for investment of trust fun…

(a) A trustee may delegate investment and management functions that a prudent trustee of comparable skills could properly delegate under the circumstances. The trustee shall exercise reasonable care, skill, and caution in: (1) Selecting an agent; (2) Establishing the scope and te…

In allocating receipts and disbursements to or between principal and income and with respect to any matter within the scope of Article 17 of this chapter: (1) A trustee shall administer a trust in accordance with the governing trust instrument, even if there is a different provis…

(a) Subject to subsections (c) and (f ) of this Code section, a trustee may adjust between principal and income by allocating an amount of income to principal or an amount of principal to income to the extent the trustee considers appropriate if: (1) The governing trust instrumen…

(a) Unless expressly prohibited by the trust instrument, a trustee may release the power to adjust under Code Section 53-12-361 and convert a trust into a unitrust as described in this Code section if: (1) The trustee determines that the conversion will enable such trustee to bet…

(a) A court shall not change a trustee’s decision to exercise or not to exercise a discretionary power conferred by Code Section 53-12-361 or 53-12-362 unless it determines that the decision was an abuse of the trustee’s discretion. (b) The decisions to which subsection (a) of th…

(a) The following provisions shall apply to a trust which by its governing trust instrument requires the distribution at least annually of a unitrust amount equal to a fixed percentage of not less than 3 percent nor more than 5 percent per year of the net fair market value of the …

This article shall be known and may be cited as the ‘‘Georgia Principal and Income Act.’’ History. — Code 1981, § 53-12-380, enacted by Ga. L. 2010, p. 579, § 1/SB 131.

As used in this article, the term: (1) ‘‘Accounting period’’ means a calendar year unless another 12 month period is selected by a fiduciary. Such term includes a portion of a calendar year or other 12 month period that begins when an income interest begins or ends when an income …

(a) If a beneficiary is to receive a pecuniary amount outright from a trust after an income interest ends, and no interest is provided for by the terms of the trust, the pecuniary amount usually bears interest at the legal rate after the expiration of 12 months from the date the i…

Expenses incurred in connection with the settlement of a decedent’s estate or the winding up of a terminating income interest, including interest and penalties concerning taxes, fees of attorneys and personal representatives and trustees, and court costs, may be charged against t…

(a) An income beneficiary shall be entitled to net income from the date on which the income interest begins. An income interest shall begin on the date specified in the terms of the trust or, if no date is specified, on the date an asset becomes subject to a trust or successive inco…

(a) A trustee shall allocate an income receipt or disbursement to principal if its due date occurs before a decedent dies in the case of an estate or before an income interest begins in the case of a trust or successive income interest. (b) A trustee shall allocate an income rece…

(a) As used in this Code section, the term ‘‘undistributed income’’ means net income received before the date on which an income interest ends. Such term shall not include an item of income or expense that is due or accrued or net income that has been added or is required to be a…

(a) As used in this Code section, the term ‘‘entity’’ means a corporation, partnership, limited liability company, regulated investment company, real estate investment trust, common trust fund, or any other organization in which a trustee has an interest other than a trust or est…

A trustee shall allocate to income an amount received as a distribution of income from a trust or an estate in which the trust has an interest other than a purchased interest and shall allocate to principal an amount received as a distribution of principal from such trust or esta…

(a) If a trustee who conducts a business or other activity determines that it is in the best interest of all the beneficiaries to account separately for the business or activity instead of accounting for it as part of the trust’s general accounting records, the trustee may maintai…

A trustee shall allocate to principal: (1) To the extent not allocated to income under this article, assets received from a transferor during the transferor’s lifetime, a decedent’s estate, a trust with a terminating income interest, or a payor under a contract naming the trust o…

To the extent that a trustee accounts for receipts from rental property pursuant to this Code section, the trustee shall allocate to income an amount received as rent of real or personal property, including an amount received for cancellation or renewal of a lease. An amount rece…

(a) An amount received as interest, whether determined at a fixed, variable, or floating rate, on an obligation to pay money to the trustee, including an amount received as consideration for prepaying principal, shall be allocated to income without any provision for amortization of…

(a) Except as otherwise provided in subsection (b) of this Code section, a trustee shall allocate to principal the proceeds of a life insurance policy or other contract in which the trust or its trustee is named as beneficiary, including a contract that insures the trust or its tr…

If a trustee determines that an allocation between principal and income required by Code Sections 53-12-425 through 53-12-428 or Code Section 53-12-431 is insubstantial, the trustee may allocate the entire amount to principal unless one of the circumstances described in Code Sect…

(a) As used in this Code section, the term: (1) ‘‘Payment’’ means a payment that a trustee may receive over a fixed number of years or during the life of one or more individuals because of services rendered or property transferred to the payor in exchange for future payments. Such…

(a) As used in this Code section, the term ‘‘liquidating asset’’ means an asset whose value will diminish or terminate because such asset is expected to produce receipts for a period of limited duration. Such term includes a leasehold, patent, copyright, royalty right, and right …

(a) To the extent that a trustee accounts for receipts from an interest in minerals or other natural resources pursuant to this Code section, the trustee shall allocate them as follows: (1) If received as nominal delay rental or nominal annual rent on a lease, a receipt shall be …

(a) To the extent that a trustee accounts for receipts from the sale of timber and related products pursuant to this Code section, the trustee shall allocate the net receipts: (1) To income to the extent that the amount of timber removed from the land does not exceed the rate of …

(a) If a marital deduction is allowed for all or part of a trust whose assets consist substantially of property that does not provide the spouse with sufficient income from or use of the trust assets, and if the amounts that the trustee transfers from principal to income under Co…

(a) As used in this Code section, the term ‘‘derivative’’ means a contract or financial instrument or a combination of contracts and financial instruments which gives a trust the right or obligation to participate in some or all changes in the price of a tangible or intangible asse…

(a) As used in this Code section, the term ‘‘asset-backed security’’ means an asset whose value is based upon the right it gives the owner to receive distributions from the proceeds of financial assets that provide collateral for the security. Such term includes an asset that give…

(a) A trustee shall make the following disbursements from income: (1) One-half of the regular compensation of the trustee and of any person providing investment advisory or custodial services to the trustee; (2) One-half of all court costs, attorney’s fees, and other fees and exp…

(a) A trustee shall make the following disbursements from principal: (1) The remaining one-half of the disbursements described in paragraphs (1) and (2) of subsection (a) of Code Section 53-12-450; (2) All of the trustee’s compensation calculated on principal as a fee for accepta…

(a) As used in this Code section, the term ‘‘depreciation’’ means a reduction in value due to wear, tear, decay, corrosion, or gradual obsolescence of a fixed asset having a useful life of more than one year. (b) A trustee may transfer to principal a reasonable amount of the net c…

Wherever a charge that is properly allocable to income has been made or is expected to be made from principal because of the unusually large nature of the charge or otherwise, the trustee may transfer an appropriate amount from income to principal in one or more accounting period…

(a) A tax required to be paid by a trustee based on receipts allocated to income shall be paid from income. (b) A tax required to be paid by a trustee based on receipts allocated to principal shall be paid from principal, even if the tax is called an income tax by the taxing auth…

(a) A fiduciary may make adjustments between principal and income to offset the shifting of economic interests or tax benefits between income beneficiaries and remainder beneficiaries which arise from: (1) Elections and decisions, other than those described in subsection (b) of this …

As used in this article, the term: (1) ‘‘Directed trustee’’ means a trustee that is subject to a trust director’s power of direction. (2) ‘‘Power of appointment’’ means a power that enables a person, acting in a nonfiduciary capacity, to: (A) Designate a recipient of either an own…

(a) This article shall apply when the trust instrument evidences the settlor’s intent to provide for the office and function of a trust director, regardless of the terms used to describe such office and functions. (b) This article shall not apply to: (1) A power of appointment; (…