(Code 1981, §53-12-21, enacted by Ga. L. 2010, p. 579, § 1/SB 131.)
Law reviews.- For article, "The Rule Against Perpetuities as Applied to Georgia Wills and Trusts," see 16 Ga. L. Rev. 235 (1982).
JUDICIAL DECISIONS
Editor's notes.
- In light of the similarity of the statutory provisions, decisions under former Civil Code 1895, §§ 3148 and 3165, former Civil Code 1910, § 3783, former Code 1933, §§ 108-101 and 108-102, and former O.C.G.A. §§ 53-12-21 and53-12-24 are included in the annotations for this Code section.
No formal words are necessary to create a trust. Peavy v. Dure, 131 Ga. 104, 62 S.E. 47 (1908) (decided under former Civil Code 1895, §§ 3148 and 3150); Collins v. Collins, 157 Ga. 85, 121 S.E. 218 (1923);(decided under former Civil Code 1910, § 3783).
When a person has used language from which it can be gathered that the person intended to create a trust, such intention is not negatived by the surrounding circumstances, the settlor has done such things as are necessary in equity to bind oneself not to recede from that intention, the trust property is of such a nature as to be legally capable of being settled, the object of the trust is lawful, and the settlor had complied with the provisions of law as to evidence, a good and valid declaration of trust has (prima facie) been made. No technical terms or expressions need be used. It is sufficient if the language used shows that the settlor intended to create a trust, and clearly points out the property, beneficiary, and disposition to be made of the property. McCreary v. Gewinner, 103 Ga. 528, 29 S.E. 960 (1898) (decided under former Civil Code 1895, § 3148).
The following words create a trust and make the daughters trustees for their children, if any: "My said effects thus going into the hands of my said daughters [that is, at the death of the life-tenant], not to be subject to the control of any husband, but the same to belong to my said daughters and other children." Sumpter v. Carter, 115 Ga. 893, 42 S.E. 324, 60 L.R.A. 274 (1902) (decided under former law).
An agreement to hold the proceeds of land for another, or an agreement, upon consideration of the surrender of a title bond, to sell the land, and after deducting certain charges to deliver the residue of the proceeds over to a named person creates a valid express trust for such purpose. McCreary v. Gewinner, 103 Ga. 528, 29 S.E. 960 (1898) (decided under former Civil Code 1895, § 3148).
An undertaking on the part of a mortgagee, in consideration of the execution and delivery to the mortgagee by the mortgagor of a deed to the mortgaged property, to sell the property within a given time, and turn the proceeds, after making certain deductions, over to a named person, creates a valid express trust in favor of the latter. McCreary v. Gewinner, 103 Ga. 528, 29 S.E. 960 (1898) (decided under former Civil Code 1895, § 3148).
Deed which conveyed realty to guardian of minors created a trust estate in the property described. Wadley v. Oertel, 140 Ga. 326, 78 S.E. 912 (1913) (decided under former law); Trust Co. v. Wallace, 143 Ga. 214, 84 S.E. 538 (1915); Humphrey v. Johnson, 143 Ga. 703, 85 S.E. 830 (1915) (decided under former law); Fleck v. Ellis, 144 Ga. 732, 87 S.E. 1055 (1916);(decided under former law);(decided under former law).
When the intended husband contracts with L that his wife's property shall be free from all his marital rights, L was ipso facto made trustee of this settlement with the wife as the cestui que trust. Logan v. Goodall, 42 Ga. 95 (1871) (decided under former law).
When a father has property conveyed to himself to hold for his minor son and the father is not testamentary or statutory guardian, he is a trustee. McCrary v. Clements, 95 Ga. 778, 22 S.E. 675 (1895) (decided under former law).
Provisions in wills may be such that a trust is necessary in order to carry out and enforce them. In such a case an intention on the part of the testator to create the trust will generally be inferred and no formal words are necessary to create such an estate. Bell v. Watkins, 104 Ga. 345, 30 S.E. 756 (1898) (decided under former Civil Code 1895, § 3148).
Rule is applicable to express trusts. Hubbard v. Bibb Brokerage Co., 44 Ga. App. 1, 160 S.E. 639 (1931) (decided under former Civil Code 1910, § 3728).
Trust is an equitable obligation, either express or implied, resting upon a person by reason of a confidence reposed in the person, to apply or deal with property for the benefit of some other person, or for the benefit of that person and another or others, according to such confidence. Smith v. Francis, 221 Ga. 260, 144 S.E.2d 439 (1965) (decided under former Code 1933, §§ 108-101 and 108-102).
Majority rule appears to be that funds paid by a mortgagor to an escrow account to be used by the mortgagee to meet tax and insurance obligations upon the property as those obligations accrue do not constitute trust properties such as would render the mortgagee accountable to the mortgagor for any earnings or profits from the funds. Knight v. First Fed. Sav. & Loan Ass'n, 151 Ga. App. 447, 260 S.E.2d 511 (1979) (decided under former law).
Manifest intention necessary to create trust.
- While educational purposes are proper matters of charity, and while no formal words are necessary to create a trust estate, there must be a manifest intention to do so. Moore v. Wells, 212 Ga. 446, 93 S.E.2d 731 (1956) (decided under former Code 1933, § 108-102).
Estates may be created not for the benefit of the grantee but for the use of some other person; they are termed trust estates; no formal words are necessary to create such an estate and whenever a manifest intention is exhibited that another person shall have the benefit of the property the grantee shall be declared a trustee. Finch v. Miller, 178 Ga. 37, 172 S.E. 25 (1933) (decided under former Civil Code 1910, § 3728).
When a person makes a deposit in a savings bank in the person's own name as trustee for another person, retains the bank book, gives notice to the beneficiary, makes withdrawals from the deposits in the account, and dies leaving the account unexplained, the beneficiary is entitled to the balance remaining at the death of the depositor, unless evidence is produced that overcomes the legal presumption in favor of the trust, by showing that the depositor never intended to create a trust, or has revoked the trust. Wilder v. Howard, 188 Ga. 426, 4 S.E.2d 199 (1939) (decided under former law).
Parties in an action to establish a trust are entitled to introduce, and the jury is entitled to consider, as tending to prove the intention of the parties, evidence relating to the nature and circumstances of the transactions and the conduct and declarations of the parties. Epps v. Wood, 243 Ga. 835, 257 S.E.2d 259 (1979) (decided under former Code 1933, § 108-101 et seq.)
Duty to find and effectuate settlor's intention.
- In construing trust instrument, it is duty of court to find intention of settlor and to effectuate that intention insofar as the language used and the rules of law will permit. Thomas v. Trust Co. Bank, 247 Ga. 693, 279 S.E.2d 440 (1981) (decided under former law).
Every kind of valuable property, both real and personal, that can be assigned at law may be subject matter of trust. Carmichael Tile Co. v. Yaarab Temple Bldg. Co., 182 Ga. 348, 185 S.E. 504 (1936) (decided under former Code 1933, §§ 108-101 and 108-102).
Trust fund may exist notwithstanding that beneficiaries may not be in existence at time of fund's creation or be specifically named. Carmichael Tile Co. v. Yaarab Temple Bldg. Co., 182 Ga. 348, 185 S.E. 504 (1936) (decided under former Code 1933, §§ 108-101 and 108-102).
It is essential to creation of express trust that object of bounty of grantor is defined by deed, and that the person or class of persons who shall be the beneficial owners of the property are marked out. Heyward v. Hatfield, 182 Ga. 373, 185 S.E. 519 (1936) (decided under former law).
Adoption laws determine class of beneficiaries of testamentary trust.
- In order to effectuate the testator's intent, the adoption laws in effect at the date of the testator's death will determine the class of beneficiaries entitled to take under a testamentary trust in the absence of an express contrary intent; similarly, in order to determine the intention of a settlor as to who is to be included in a class of beneficiaries under an inter vivos trust, the law in effect at the time the trust was executed must be examined. Thomas v. Trust Co. Bank, 247 Ga. 693, 279 S.E.2d 440 (1981) (decided under former law).
Precatory words.
- Words "I further will that my granddaughter to receive a support" are not precatory or recommendatory. Bell v. Watkins, 104 Ga. 345, 30 S.E. 756 (1898) (decided under former Code 1895, § 3148).
Testator devised his property as follows: I will to my wife, R, for her to give to our children as they arrive of age as she may be able, keeping a memorandum so as each child shall be equal. It was held, that "the words 'for her to give,'" etc., in the will, construed in connection with the rest of the item, are not such precatory or recommendatory words as will create a trust. It is left discretionary with her to give off to the children as she is able, and it is not declared what she shall give off, whether the entire share of each child or only a part. Had the intention been apparent that the wife should hold or use the property for the benefit of the children during minority, a trust would have been created, although the words were not mandatory in form. Glore v. Scroggins, 124 Ga. 922, 53 S.E. 690 (1906).
Words, "I give, to my beloved wife, my wagons, buggy, and also my household and kitchen furniture, all without limitation or reserve, for her to do as she thinks best for herself and all of my lawful heirs," are not sufficient precatory words to create a trust because the wife was first given without reserve or limitation. If the following words created such a trust, it could not be without limitation. Wood v. Owen, 133 Ga. 751, 66 S.E. 951 (1910) (decided under former Code 1895, § 3162).
Effect of precatory words generally.
- General rule is that the courts will not by construction reduce an estate once devised absolutely in fee by limitations contained in subsequent parts of the will unless the intention to do so is unmistakably manifest. Russell v. Marshall, 221 Ga. 601, 146 S.E.2d 296 (1965) (decided under former Code 1933, § 108-103).
Provisions in the will requiring the testator's wife to make an inventory, to sell at public or private sale, make a final return and instructing the ordinary (now probate judge) to discharge the executor do no more than protect creditors and follow the law applicable to executors, and in nowise diminish the fee simple estate therein devised. Russell v. Marshall, 221 Ga. 601, 146 S.E.2d 296 (1965) (decided under former Code 1933, § 108-103).
Testator's expressions of confidence in his wife and in her preserving the property and taking care of their children, neither expressly nor by implication limited or qualified her estate thus devised; therefore, the estate was in fee simple. Russell v. Marshall, 221 Ga. 601, 146 S.E.2d 296 (1965) (decided under former Code 1933, § 108-103).
Cited in Hibble v. Mutual Oil Co., 175 Ga. 381, 165 S.E. 219 (1932); Refinance Corp. v. Wilson, 183 Ga. 336, 188 S.E. 707 (1936); Harvey v. Greenfield, 186 Ga. 192, 197 S.E. 276 (1938); Wilson v. Fulton Nat'l Bank, 188 Ga. 691, 4 S.E.2d 660 (1939); Sanders v. First Nat'l Bank, 189 Ga. 450, 6 S.E.2d 294 (1939); Hall v. Hall, 203 Ga. 656, 47 S.E.2d 806 (1948); Budreau v. Mingledorff, 207 Ga. 538, 63 S.E.2d 326 (1951); Joseph v. Citizens & S. Nat'l Bank, 210 Ga. 111, 78 S.E.2d 193 (1953); United States Epperson Underwriting Co. v. Jessup, 22 F.R.D. 336 (M.D. Ga. 1958); Wright v. Piedmont Eng'r & Constr. Corp., 106 Ga. App. 401, 126 S.E.2d 865 (1962); Riser v. Trust Co., 231 Ga. 155, 200 S.E.2d 756 (1973); Epps v. Wood, 243 Ga. 835, 257 S.E.2d 259 (1979); Raines v. Duskin, 247 Ga. 512, 277 S.E.2d 26 (1981); Odum v. Henry, 254 Ga. 739, 334 S.E.2d 304 (1985); Wasson v. Waid, 188 Ga. App. 177, 372 S.E.2d 508 (1988).
RESEARCH REFERENCES
Am. Jur. 2d.
- 76 Am. Jur. 2d, Trusts, §§ 66, 135.
C.J.S.- 90 C.J.S., Trusts, § 25.
ALR.
- Grantee's oral promise to grantor as giving rise to trust, 35 A.L.R. 280; 45 A.L.R. 851; 80 A.L.R. 195; 129 A.L.R. 689; 159 A.L.R. 997.
May unconsummated intention to make a gift of personal property be made effective as a voluntary trust, 96 A.L.R. 383; 123 A.L.R. 1335.
Precatory trusts, 107 A.L.R. 896.
Effect of deed in which the word "trustee" follows the name of grantee, but does not set out terms of trust or name the beneficiary, 137 A.L.R. 460.
Devise or legacy upon promise of devisee or legatee that another shall benefit as creating trust, 155 A.L.R. 106.
Gift or trust by deposit in bank in another's name or in depositor's own name in trust for another, as affected by lack of knowledge on part of such other person, 157 A.L.R. 925; 168 A.L.R. 1324.
Creation of voluntary trust in bank deposit maintained in ordinary individual form, 168 A.L.R. 1273.
Term "proceeds" in will or other trust instrument as indicating intention as to whether assets are to constitute principal or income, 1 A.L.R.2d 194.
Wills: effect of gift to be disposed of "as already agreed" upon or the like, 85 A.L.R.3d 1181.
Unemployment compensation: trucker as employee or independent contractor, 2 A.L.R.4th 1219.
Trusts: merger of legal and equitable estates where sole trustees are sole beneficiaries, 7 A.L.R.4th 621.
Adopted child as within class named in deed or inter vivos trust instrument, 37 A.L.R.5th 237.
Determination of employer-employee relationship for social security contribution and unemployment tax purposes under sec. 3121(d)(2) of Federal Insurance Contributions Act (26 USCS sec. 3121(d)(2)), sec. 3306(i) of Federal Unemployment Tax Act (26 USCS sec. 3306(i)), and implementing regulations, 37 A.L.R. Fed 95.