(For Effective Date, See note.) Rules for Trusts; Consideration of Assets of an Inter Vivos Marital Trust Following Death

  1. Law
  2. Georgia Code
  3. Wills, Trusts, and Administration of Estates
  4. Trusts
  5. Spendthrift Provisions and Creditors' Rights and Claims
  6. (For Effective Date, See note.) Rules for Trusts; Consideration of Assets of an Inter Vivos Marital Trust Following Death

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    1. As used in this subsection, the term "creditor" means:
      1. With respect to subparagraphs (A) and (B) of paragraph (2) of this subsection, those creditors of a settlor whose claims against the property of the trust are governed by this article, including those creditors identified in subsection (d) of Code Section 53-12-80; and
      2. With respect to subparagraph (C) of paragraph (2) of this subsection, those claimants whose claims against the property of the settlor's estate are governed by Article 4 of Chapter 7 of this title, including those claimants identified in Code Section 53-7-40.
    2. Regardless of whether 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 instrument 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:
        1. 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 creditors of the settlor's estate to the extent the settlor's probate estate is inadequate; and
        2. Payments that would not be subject to the claims of the creditors of the settlor's estate 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.
    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; Ga. L. 2019, p. 1056, § 53/SB 52; Ga. L. 2020, p. 377, § 1-79/HB 865.)

Law reviews.

- For annual survey of law on wills, trusts, guardianships, and fiduciary administration, see 62 Mercer L. Rev. 365 (2010). For annual survey on wills, trusts, guardianships, and fiduciary administration, see 66 Mercer L. Rev. 231 (2014). For article on the 2018 amendment of this Code section, see 35 Ga. St. U. L. Rev. 219 (2018).


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