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O.C.G.A. § 7-1-242 — Restriction on corporate fiduciaries | Georgia Code
O.C.G.A. § 7-1-242 (2018) Copy Cite Official Site Syfertize CourtListener Scholar Amendments

TITLE 7 BANKING AND FINANCE

Section 1. Financial Institutions, 7-1-1 through 7-1-1021.

ARTICLE 2 BANKS AND TRUST COMPANIES

7-1-242. Restriction on corporate fiduciaries.

  1. No corporation, partnership, or other entity may lawfully act as a fiduciary in this state except:
    1. A financial institution authorized to act in such capacity pursuant to the provisions of Georgia law;
    2. A trust company;
    3. A national bank or a state bank lawfully doing a banking business in this state and authorized to act as a fiduciary under the laws of the United States or another state;
    4. A savings bank or savings and loan association lawfully doing a banking business in this state and authorized to act as a fiduciary under the laws of the United States or another state;
    5. Attorneys at law licensed to practice in this state, whether organized as a professional corporation or otherwise;
    6. An investment adviser registered pursuant to the provisions of 15 U.S.C. Section 80b-3 or Chapter 5 of Title 10, provided that this exception shall not authorize an investment adviser to act in any fiduciary capacity subject to the provisions of Title 53, relating to wills, trusts, and the administration of estates, or Title 29, relating to guardianships and conservatorships;
    7. A securities broker or dealer registered pursuant to the provisions of 15 U.S.C. Section 78o or Chapter 5 of Title 10 acting in such fiduciary capacity incidental to and as a consequence of its broker or dealer activities; or
    8. A nonprofit corporation.
  2. Acting as a fiduciary for purposes of this Code section includes but is not limited to:
    1. Accepting or executing trusts or otherwise acting as a trustee;
    2. Administering real or tangible personal property located in Georgia or elsewhere. For the purposes of this paragraph, "administer" means to possess, purchase, sell, lease, insure, safekeep, manage, or otherwise oversee; and
    3. Acting pursuant to a court order as personal representative, executor, or administrator of the estate of a deceased person or as guardian or conservator for a minor or incapacitated person.
  3. Nothing in this chapter shall be construed to repeal or to change Article 15 of Chapter 12 of Title 53 or any other statutes or rules of law on such subject.

(Code 1933, § 109-302.1, enacted by Ga. L. 1973, p. 525, § 1; Code 1933, § 41A-1103, enacted by Ga. L. 1974, p. 705, § 1; Ga. L. 1980, p. 972, §§ 5, 6; Ga. L. 1981, p. 1366, § 4; Ga. L. 1990, p. 301, § 2; Ga. L. 1991, p. 810, § 2; Ga. L. 1998, p. 795, § 13; Ga. L. 2004, p. 631, § 7; Ga. L. 2008, p. 381, § 3/SB 358; Ga. L. 2010, p. 579, § 2/SB 131.)

Cross references.

- Substitution of parties to contracts generally, § 13-4-20.

Impossibility as excuse for nonperformance, § 13-4-21.

JUDICIAL DECISIONS

Legislative intent.

- It was not the intent of the General Assembly in enacting former Code 1933, § 41A-1103 (see now O.C.G.A. § 7-1-242) to repeal former Code 1933, § 22-5503 (see now O.C.G.A. § 14-5-42). McGonagle v. Duncan, 244 Ga. 308, 260 S.E.2d 44 (1979).

OPINIONS OF THE ATTORNEY GENERAL

Applicability to facilities conducting only trust business.

- Branch banking and bank holding company restrictions apply to bank facilities conducting only trust business. 1980 Op. Att'y Gen. No. 80-156.

State-chartered credit unions not custodians of retirement funds.

- State-chartered credit unions may not act as a custodian or trustee for retirement funds under the Employee Retirement Income Security Act of 1974. 1975 Op. Att'y Gen. No. 75-56.

Applicability to investment advisors.

- Term "fiduciary" as used in O.C.G.A. § 7-1-242 includes the specific persons or entities identified in O.C.G.A. § 7-1-4(20) as well as other persons or entities who take possession of or title to assets of others or exercise control over such assets for the purpose of managing those assets. This definition of fiduciary and the restrictions of O.C.G.A. § 7-1-242 would also apply to corporate investment advisers who, in addition to offering advice for sale, also take custody of or exercise control over the customers' assets for the purpose of administering those assets, but this opinion does not address the issue of whether the restrictions of O.C.G.A. § 7-1-242 apply to a securities dealer who, incidental to the trading of securities, may hold uninvested client funds and securities subject to customer instruction and directives. 1989 Op. Att'y Gen. 89-25.

RESEARCH REFERENCES

Am. Jur. 2d.

- 10 Am. Jur. 2d, Banks and Financial Institutions, §§ 19, 23.

C.J.S.

- 9 C.J.S., Banks and Banking, §§ 223, 224.

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This Georgia Code resource is curated by an Orange Park personal injury and workers' comp lawyer, a personal injury and workers' compensation attorney admitted in Georgia (State Bar of Georgia No. 881027, since 2006) and Florida. For legal consultation, call 904-383-7448.