Georgia has some excellent, pending trust law proposals on the table. The essence of these proposals is an expansion of flexibility for modifying and changing trust documents. Also included are new trust decanting provisions and an extension of the Georgia rule of perpetuities period to 360 years (currently 90 years).
Click here for a pdf copy of the proposals (dated December 13, 2016).
This blog post is not for the purpose of merely summarizing the proposals. Rather, below are a few of my initial observations (point Four is the take-away point):
One. I have for many years been a fan of designing as much flexibility within a trust document as possible, making sure the flexibility is consistent the client’s preferences.
Two. Flexibility can affect significantly the down-the-road tax savings options and asset protection features of the trust document.
Three. In the past, generally, the only way a client could obtain this flexibility was with inclusion of built-in, adaptive written provisions within the trust document, prior to most states changing their trust law to allow more flexibility.
Four. My key point is that clients must keep a very close eye on who — under these new Georgia proposals — ends up holding this flexibility and how does the flexibility positively or negatively affect the client’s wishes for the design and structure of the trust document (assuming these Georgia proposal are inacted).
In other words, clients (and their advisors) will need to think about whether they wish to limit or restrict any of these state-law provisions.
Overall, however, I believe these pending proposals are an improvement of the Georgia trust law and can be applauded.