TITLE 53 WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES

Section 12. (Revised Trust Code of 2010) Trusts, 53-12-1 through 53-12-506.

ARTICLE 5 SPENDTHRIFT PROVISIONS AND CREDITORS' RIGHTS AND CLAIMS

53-12-82. Rules for trusts; consideration of assets of an inter vivos marital trust following death.

1. Whether or not the trust instrument contains a spendthrift provision, the following rules shall apply:
   1. During the lifetime of the settlor, the property of a revocable trust shall be subject to claims of the settlor's creditors;
   2. With respect to an irrevocable trust:
      1. Creditors or assignees of the settlor may reach the maximum amount that can be distributed to or for the settlor's benefit during the settlor's life or that could have been distributed to or for the settlor's benefit immediately prior to the settlor's death, provided, that if a trust has more than one settlor, the amount the creditors or assignees of a particular settlor may reach shall not exceed the settlor's interest in the portion of the trust attributable to that settlor's contribution; and
      2. The portion of a trust that can be distributed to or for the settlor's benefit pursuant to the power of a trustee, whether arising under the trust agreement or any other law, to make a distribution to or for the benefit of a settlor for the purpose of reimbursing the settlor in an amount equal to any income taxes payable on any portion of the trust principal and income that is treated as the settlor's individual income under applicable law shall not be considered an amount that can be distributed to or for the settlor's benefit during the settlor's life or that could have been distributed to or for the settlor's benefit immediately prior to the settlor's death; and
   3. After the death of a settlor, and subject to the settlor's right to direct the source from which liabilities shall be paid, the property of a trust that was revocable at the settlor's death or had become irrevocable as a result of the settlor's incapacity shall be subject to claims of the settlor's creditors to the extent the probate estate is inadequate. Payments that would not be subject to the claims of the settlor's creditors if made by way of beneficiary designation to persons other than the settlor's estate shall not be made subject to such claims by virtue of this Code section unless otherwise provided in the trust instrument.
2. 1. As used in this subsection, the term:
      1. "Inter vivos marital trust" means:
         1. A trust described in Section 2523(e) of the Internal Revenue Code of 1986, as it existed on February 1, 2018;
         2. A trust for which the election described in Section 2523(f) of the Internal Revenue Code of 1986, as it existed on February 1, 2018, has been made; or
         3. Another trust to the extent such trust's assets are attributable to a trust described in division (i) or (ii) of this subparagraph.
      2. "Settlor's spouse" means the spouse of the settlor at the time of the creation of an inter vivos marital trust, regardless of whether such spouse is married to the settlor at the time of such spouse's death.
   2. Subject to Article 4 of Chapter 2 of Title 18, after the death of the settlor's spouse, the assets of an inter vivos marital trust shall be deemed to have been contributed by the settlor's spouse and not by the settlor.

(Code 1981, §53-12-82, enacted by Ga. L. 2010, p. 579, § 1/SB 131; Ga. L. 2018, p. 262, § 13/HB 121.)

The 2018 amendment, effective July 1, 2018, substituted the present provisions of this Code section for the former provisions, which read: "Whether or not the trust instrument contains a spendthrift provision, the following rules shall apply:

"(1) During the lifetime of the settlor, the property of a revocable trust shall be subject to claims of the settlor's creditors;

"(2) With respect to an irrevocable trust, creditors or assignees of the settlor may reach the maximum amount that can be distributed to or for the settlor's benefit during the settlor's life or that could have been distributed to or for the settlor's benefit immediately prior to the settlor's death. If a trust has more than one settlor, the amount the creditors or assignees of a particular settlor may reach shall not exceed the settlor's interest in the portion of the trust attributable to that settlor's contribution; and

"(3) After the death of a settlor, and subject to the settlor's right to direct the source from which liabilities shall be paid, the property of a trust that was revocable at the settlor's death or had become irrevocable as a result of the settlor's incapacity shall be subject to claims of the settlor's creditors to the extent the probate estate is inadequate. Payments that would not be subject to the claims of the settlor's creditors if made by way of beneficiary designation to persons other than the settlor's estate shall not be made subject to such claims by virtue of this Code section unless otherwise provided in the trust instrument."