O.C.G.A.
Code text and O.C.G.A. statutory annotations on this page reflect the 2019 Official Code of Georgia Annotated (Public.Resource.Org Release 73, 2019-08-21; public domain per Georgia v. Public.Resource.Org, 2020). The Syfert case-law annotations in Notes of Decisions, below, are current.
(a) A trust may be created for any lawful purpose.
(b) A condition in terrorem shall be void unless there is a direction in the trust instrument as to the disposition of the property if the condition in terrorem is violated, in which event the direction in the trust instrument shall be carried out, except as otherwise provided in subsection (c) of this Code section. (c) A condition in terrorem shall not be enforceable against an individual for: (1) Bringing an action for interpretation or enforcement of a trust instrument; (2) Bringing an action for an accounting, for removal, or for other relief against a trustee; or (3) Entering into a settlement agreement.
History
Code 1981, § 53-12-22, enacted by Ga. L. 2010, p. 579, § 1/SB 131; Ga. L. 2020, p. 377, § 1-74/HB 865. The 2020 amendment, effective Janu-
ary 1, 2021, inserted ‘‘, except as otherwise provided in subsection (c) of this Code section’’ in subsection (b); and added subsection (c).
Annotations
JUDICIAL DECISIONS Clause valid. - In terrorem clause in the subject trust contained an alternative disposition in the event the clause was triggered and, thus, it passed the test in O.C.G.A. § 53-12-22(b). Duncan v. Rawls, 345 Ga. App. 345, 812 S.E.2d 647 (2018), cert. denied, No. S18C1055, 2018 Ga. LEXIS 713 (Ga. 2018). No good faith/probable cause exception. - Trial court correctly concluded that no good faith/probable cause exception existed in O.C.G.A. § 53-12-22. Duncan v. Rawls, 345 Ga. App. 345, 812 S.E.2d 647 (2018), cert. denied, No. S18C1055, 2018 Ga. LEXIS 713 (Ga. 2018). Challenges to will and trust barred beneficiary’s recovery of trust distribution. - Decedent’s niece could not recover the $25,000 provided for the niece in
a decedent’s revocable trust because the niece had violated the trust’s in terrorem clause by filing legal challenges to the validity of the decedent’s will and obtaining a temporary restraining order against the trustee, preventing the trustee from distributing trust assets. Howell v. Bates, 350 Ga. App. 708, 830 S.E.2d 250 (2019). Benefits forfeited. - Sibling forfeited any benefits under a parent’s trust by violating the trust’s in terrorem clause, and the superior court erred in not only awarding a constructive trust based on any benefits the brother would have received under the trust, but also in permitting the claim of undue influence to proceed to the jury. Giller v. Slosberg, No. A21A0001, 2021 Ga. App. LEXIS 204 (Apr. 27, 2021).
Notes of Decisions
Jenifer Duncan v. Olga Rawls, 812 S.E.2d 647 (Ga. Ct. App. 2018).
· cites it 60× “The appellants first argue that Georgia should recognize a probable cause exception to enforcement of in terrorem provisions, and that by holding otherwise, the lower court misinterpreted OCGA § 53-12-22 (b). The appellants further argue that they should be able to bring their…”
Slosberg v. Giller, 876 S.E.2d 228 (Ga. 2022).
· cites it 62× “In so doing, the Court of Appeals repeated Duncan’s conclusions that in terrorem clauses “‘are allowed under Georgia law with only one codified limitation, that being [OCGA § 53-12-22 (b)]’”; that there is no statutory good-faith or probable-cause exception to the enforcement of…”
Howell v. Bates as Tr. of Anne S. Florance Revocable Trust, 830 S.E.2d 250 (Ga. Ct. App. 2019).
· cites it 8× “]" *715 (a) Although Howell does not specifically challenge the validity of the "no contest" clause in the Trust, we hold that it is valid and enforceable, because it provides that, if any person violates the clause, his or her distribution becomes part of the residue *256 of…”
Est. of Spruill v. Comm'r, 88 T.C. 1197 (Tax Ct. 1987).
“Express trusts are those trusts created and manifested by agreement of the parties. Implied trusts are those trusts which are inferred by law from the nature of the transaction or the conduct of the parties.”
Callaway v. Willard, 739 S.E.2d 533 (Ga. Ct. App. 2013).
· cites it 2× “First, the beneficiary must “seek or file” an action that challenges either: (i) “the management decisions made or proposed by [the] trustee during the administration of thfe] Trust”; (ii) “the management of the Trust Estate”; or (iii) “the final distribution of the Trust Estate.”
Fowler v. Montgomery, 326 S.E.2d 765 (Ga. 1985).
· cites it 4× “OCGA § 53-12-22. Appellee sought to establish an agreement between appellant and their mother, and thus an express trust, by parol.”
Hayes v. Clark, 530 S.E.2d 38 (Ga. Ct. App. 2000).
· cites it 2× “5 See OCGA § 53-12-22. 6 65 Ga. App. 576 ( 16 SE2d 120 ) (1941).”
944, Inc. v. Georgia State Bank, 403 S.E.2d 466 (Ga. Ct. App. 1991).
· cites it 2× “the benefit of all inferences and reasonable doubts, the signature card shows that 944, Inc. had an interest in the checking account sufficient to support the theory of at least the existence of an implied trust involving the bank and 944, Inc.”
Georgia Farm Bureau Mut. Ins. v. Smith, 346 S.E.2d 848 (Ga. Ct. App. 1986).
· cites it 2× “” OCGA § 53-12-22. “A trust is implied: (1) Whenever the legal title is in one person but the beneficial interest, either from the payment of the purchase money or from other circumstances, is either wholly or partially in another .”
Jennifer Duncan v. Olga Rawls (Ga. Ct. App. 2021).
· cites it 6× “Respondents appealed, and this Court affirmed the trial court’s ruling as to the general validity of the August 2013 trust’s in-terrorem provision under former OCGA § 53-12-22 (b), which simply provided: “A condition in terrorem shall be void unless there is a direction in the…”
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