reglab/statecodes huggingface dataset:
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 15 - FOREIGN TRUSTEES (§§ 53-12-320 — 53-12-323) › Section 53-12-320 - Nonresidents acting as trustees

(a)
Any nonresident who is eligible to serve as a trustee under Code Section
53-12-201
may act as a trustee in this state pursuant to the terms of this Code section.
(b)
Any nonresident trustee who acts as a trustee in this state shall be deemed to have consented to service upon the Secretary of State of any summons, notice, or process in connection with any action or proceeding in the courts of this state growing out of or based upon any act or failure to act on the part of the trustee unless the trustee shall designate as the agent for such service some person who may be found and served with notice, summons, or process in this state by a designation to be filed, from time to time, in the office of the Secretary of State, giving the name of the agent and the place in this state where the agent may be found and served.
(c)
If a nonresident trustee fails to designate a person who may be found and served with summons, notice, or process in this state, service of summons, notice, or process shall be made upon such trustee by serving a copy of the petition or other pleading, with process attached thereto, on the Secretary of State. The service shall be sufficient service upon such nonresident trustee, provided that notice of the service and a copy of the petition and process is forthwith sent by registered or certified mail or statutory overnight delivery by the plaintiff or the plaintiff's agent to such trustee, in the state where such trustee resides, and the return receipt is appended to the summons or other process and filed with the summons, petition, and other papers in the court where the action is pending. The Secretary of State shall charge and collect a fee as set out in Code Section
45-13-26
for service of process on him or her under this Code section.
Amended by 2011 Ga. Laws 245,§ 53, eff. 5/13/2011.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 15 - FOREIGN TRUSTEES (§§ 53-12-320 — 53-12-323) › Section 53-12-321 - Foreign entities acting as trustees

(a)
Any foreign entity may act in this state as trustee, executor, administrator, guardian, or any other like or similar fiduciary capacity, whether the appointment is by law, will, deed, inter vivos trust, security deed, mortgage, deed of trust, court order, or otherwise without the necessity of complying with any law of this state relating to the qualification of foreign entities to do business in this state or the licensing of foreign entities to do business in this state, except as provided in this article, and notwithstanding any prohibition, limitation, or restriction contained in any other law of this state, provided only that the foreign entity is authorized to act in the fiduciary capacity in the state in which it is chartered or licensed or, if the foreign entity is a national banking association, in the state in which it has its principal place of business.
(b)
Any foreign entity seeking to exercise fiduciary powers in this state, upon qualifying in this state to act in any of such fiduciary capacities, shall not be required by law to give bond, if bond is relieved by the instrument, law, or court order in which such entity has been designated to act in such fiduciary capacity.
(c)
Nothing in this article shall be construed to prohibit or make unlawful any activity in this state by a bank or other entity which is not incorporated or organized under the laws of this state or by a national bank which does not have its principal place of business in this state, which activity would be lawful in the absence of this article.
Amended by 2017 Ga. Laws 57,§ 29, eff. 6/1/2017.
Amended by 2011 Ga. Laws 181,§ 14, eff. 5/12/2011.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 15 - FOREIGN TRUSTEES (§§ 53-12-320 — 53-12-323) › Section 53-12-322 - Acting as fiduciary; establishment of place of business prohibited; certificate of authority required

A foreign entity, insofar as it acts in a fiduciary capacity in this state pursuant to this article, shall not establish or maintain in this state a place of business, branch office, or agency for the conduct in this state of business as a fiduciary unless it obtains a certificate of authority to transact business in this state as required by Article 15 of Chapter 2 of Title 14.
Amended by 2017 Ga. Laws 57,§ 30, eff. 6/1/2017.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 16 - TRUST INVESTMENTS (§§ 53-12-340 — 53-12-364) › Part 1 - GENERAL PROVISIONS (§§ 53-12-340 — 53-12-345) › Section 53-12-341 - Concentrated holdings and diversification

A trustee shall reasonably manage the risk of concentrated holdings of assets in a trust by diversifying or by using other appropriate mechanisms, except as otherwise provided in this Code section, as follows:
(1)
The duty imposed by this Code section shall not apply if the trustee reasonably determines that, because of special circumstances, the purposes of the trust are better served without complying with the duty;
(2)
The trustee shall not be liable for failing to comply with the duty imposed by this Code section to the extent that the terms of the trust instrument limit or waive the duty; and
(3)
Except as provided in this paragraph, the duty imposed by this Code section shall apply on or after January 1, 2011. With respect to any trust that is or becomes irrevocable before January 1, 2011, the duty imposed by this Code section shall not apply:
(A)
To the trust to the extent such trust instrument directs or permits the trustee to retain, invest, exchange, or reinvest assets without regard to any duty to diversify, without the need to diversify or create a diversity of investments, or without liability for either depreciation or failing to diversify, or contains other similar language expressing a settlor's intent to provide similar discretion to the trustee; or
(B)
Absent gross neglect, with respect to an asset that was transferred to the trustee of such trust by any settlor or gratuitous transferor.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 16 - TRUST INVESTMENTS (§§ 53-12-340 — 53-12-364) › Part 1 - GENERAL PROVISIONS (§§ 53-12-340 — 53-12-345) › Section 53-12-342 - Duties at inception of trusteeship

Within a reasonable time after accepting a trusteeship or receiving trust assets, a trustee shall review the trust assets and make and implement decisions concerning the retention and disposition of assets in order to bring the trust portfolio into compliance with the purposes, provisions, distributions requirements, and other circumstances of the trust and with the requirements of this article.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 16 - TRUST INVESTMENTS (§§ 53-12-340 — 53-12-364) › Part 1 - GENERAL PROVISIONS (§§ 53-12-340 — 53-12-345) › Section 53-12-343 - Reviewing compliance

Compliance with the investment rules of this part shall be determined in light of the facts and circumstances existing at the time of a trustee's decision or action and not by hindsight.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 16 - TRUST INVESTMENTS (§§ 53-12-340 — 53-12-364) › Part 1 - GENERAL PROVISIONS (§§ 53-12-340 — 53-12-345) › Section 53-12-344 - Language invoking application of article

The following terminology or comparable language in the provisions of a trust, unless otherwise limited or modified, shall authorize any investment or strategy permitted under this article and Article 17 of this chapter: "investments permissible by law for investment of trust funds," "legal investments," "authorized investments," "using the judgment and care under the circumstances then prevailing that persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital," "prudent man rule," "prudent trustee rule," "prudent person rule," and "prudent investor rule."
Amended by 2011 Ga. Laws 245,§ 53, eff. 5/13/2011.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 16 - TRUST INVESTMENTS (§§ 53-12-340 — 53-12-364) › Part 1 - GENERAL PROVISIONS (§§ 53-12-340 — 53-12-345) › Section 53-12-345 - Delegation

(a)
A trustee may delegate investment and management functions that a prudent trustee of comparable skills could properly delegate under the circumstances. The trustee shall exercise reasonable care, skill, and caution in:
(1)
Selecting an agent;
(2)
Establishing the scope and terms of the delegation consistent with the purposes and provisions of the trust; and
(3)
Reviewing periodically the agent's actions in order to monitor the agent's performance and compliance with the terms of the delegation.
(b)
In performing a delegation function, an agent shall owe a duty to the trust to exercise reasonable care to comply with the terms of the delegation.
(c)
A trustee who complies with the requirements of subsection (a) of this Code section, and who takes reasonable steps to compel an agent to whom the function was delegated to redress a breach of duty to the trust, shall not be liable to the beneficiaries of the trust or to the trust for the decisions or actions of the agent to whom the function was delegated.
(d)
By accepting the delegation of a trust function from the trustee of a trust that is subject to the laws of this state, an agent shall waive the defense of lack of personal jurisdiction and shall submit to the jurisdiction of this state.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 16 - TRUST INVESTMENTS (§§ 53-12-340 — 53-12-364) › Part 2 - ALLOCATION OF PRINCIPAL AND INCOME (§§ 53-12-360 — 53-12-364) › Section 53-12-360 - Duty of trustee as to receipts and disbursements within scope of Article 17

In allocating receipts and disbursements to or between principal and income and with respect to any matter within the scope of Article 17 of this chapter:
(1)
A trustee shall administer a trust in accordance with the governing trust instrument, even if there is a different provision in Article 17 of this chapter;
(2)
A trustee may administer a trust by the exercise of a discretionary power of administration regarding a matter within the scope of Article 17 of this chapter given to the trustee by the governing trust instrument, even if the exercise of the power produces a result different from a result required or permitted by Article 17 of this chapter. No inference that the trustee has improperly exercised the discretionary power shall arise from the fact that the trustee has made an allocation contrary to a provision of Article 17 of this chapter;
(3)
A trustee shall administer a trust in accordance with Article 17 of this chapter if the governing trust instrument does not contain a different provision or does not give the trustee a discretionary power of administration regarding a matter within the scope of Article 17 of this chapter; and
(4)
A trustee shall add a receipt or charge a disbursement to principal to the extent that the governing trust instrument and Article 17 of this chapter do not provide a rule for allocating the receipt or disbursement to or between principal and income.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 16 - TRUST INVESTMENTS (§§ 53-12-340 — 53-12-364) › Part 2 - ALLOCATION OF PRINCIPAL AND INCOME (§§ 53-12-360 — 53-12-364) › Section 53-12-364 - Express total return unitrusts

(a)
The following provisions shall apply to a trust which by its governing trust instrument requires the distribution at least annually of a unitrust amount equal to a fixed percentage of not less than 3 percent nor more than 5 percent per year of the net fair market value of the trust's assets, valued at least annually, such trust to be referred to as an "express total return unitrust":
(1)
The unitrust amount may be determined by reference to the net fair market value of the trust's assets in one year or more than one year;
(2)
Distribution of such a fixed percentage unitrust amount shall be considered a distribution of all of the income of the total return unitrust and shall not be considered a fundamental departure from applicable state law, regardless of whether the total return unitrust is created and governed by Code Section
53-12-362
or by the provisions of the governing trust instrument;
(3)
Such a distribution of the fixed percentage of not less than 3 percent nor more than 5 percent shall be considered a reasonable apportionment of the total return of a total return unitrust;
(4)
The governing trust instrument may grant discretion to the trustee to adopt a consistent practice of treating capital gains as part of the unitrust distribution, to the extent that the unitrust distribution exceeds the net accounting income, or it may specify the ordering of such classes of income;
(5)
Unless the trust provisions specifically provide otherwise, or grant discretion to the trustee as set forth in paragraph (4) of this subsection, a distribution of the unitrust amount shall be considered to have been made from the following sources in order of priority:
(A)
From net accounting income determined as if the trust were not a unitrust;
(B)
From ordinary income not allocable to net accounting income;
(C)
From net realized short-term capital gains;
(D)
From net realized long-term capital gains; and
(E)
From the principal of the trust estate; and
(6)
The trust document may provide that assets used by the trust beneficiary, such as a residence property or tangible personal property, may be excluded from the net fair market value for computing the unitrust amount. Such use may be considered equivalent to the income or unitrust amount.
(b)
A trust which provides for a fixed percentage payout in excess of 5 percent per year shall be considered to have paid out all of the income of the total return unitrust and to have paid out principal of such trust to the extent that the fixed percentage payout exceeds 5 percent per year.
(c)
This Code section shall be effective for trusts established and wills executed on or after July 1, 2010.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 17 - GEORGIA PRINCIPAL AND INCOME ACT (§§ 53-12-380 — 53-12-455) › Part 1 - GENERAL PROVISIONS (§§ 53-12-380 — 53-12-381) › Section 53-12-380 - Short title

This article shall be known and may be cited as the "Georgia Principal and Income Act."
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 17 - GEORGIA PRINCIPAL AND INCOME ACT (§§ 53-12-380 — 53-12-455) › Part 1 - GENERAL PROVISIONS (§§ 53-12-380 — 53-12-381) › Section 53-12-381 - Definitions

As used in this article, the term:
(1)
"Accounting period" means a calendar year unless another 12 month period is selected by a fiduciary. Such term includes a portion of a calendar year or other 12 month period that begins when an income interest begins or ends when an income interest ends.
(2)
"Beneficiary" includes, in the case of a decedent's estate, an heir and devisee and, in the case of a trust, an income beneficiary and a remainder beneficiary.
(3)
"Fiduciary" means a personal representative or a trustee. Such term includes an executor, administrator, successor personal representative, special administrator, and a person performing substantially the same function.
(4)
"Income" means money or property that a fiduciary receives as current return from a principal asset. Such term includes a portion of receipts from a sale, exchange, or liquidation of a principal asset, to the extent provided in Part 4 of this article.
(5)
"Income beneficiary" means a person to whom net income of a trust is or may be payable.
(6)
"Income interest" means the right of an income beneficiary to receive all or part of net income, whether the trust provisions require it to be distributed or authorize it to be distributed in the trustee's discretion.
(7)
"Mandatory income interest" means the right of an income beneficiary to receive net income that the trust provisions require the fiduciary to distribute.
(8)
"Net income" means the total receipts allocated to income during an accounting period minus the disbursements made from income during the period, plus or minus transfers under this article to or from income during the period.
(9)
"Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, or government; a governmental subdivision, agency, or instrumentality; a public corporation; or any other legal or commercial entity.
(10)
"Principal" means property held in trust for distribution to a remainder beneficiary when the trust terminates.
(11)
"Terms of the trust" means the manifestation of the intent of a settlor or decedent with respect to the trust, expressed in a manner that admits of its proof in a judicial proceeding.
(12)
"Trustee" includes an original, additional, or successor trustee, whether or not appointed or confirmed by a court.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 17 - GEORGIA PRINCIPAL AND INCOME ACT (§§ 53-12-380 — 53-12-455) › Part 2 - EXPENSES (§§ 53-12-390 — 53-12-391) › Section 53-12-390 - Payment of interest on pecuniary amount

(a)
If a beneficiary is to receive a pecuniary amount outright from a trust after an income interest ends, and no interest is provided for by the terms of the trust, the pecuniary amount usually bears interest at the legal rate after the expiration of 12 months from the date the income interest terminates.
(b)
The general rule in subsection (a) of this Code section shall be subservient to the equity and necessity of a particular case.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 17 - GEORGIA PRINCIPAL AND INCOME ACT (§§ 53-12-380 — 53-12-455) › Part 2 - EXPENSES (§§ 53-12-390 — 53-12-391) › Section 53-12-391 - Payment of expenses

Expenses incurred in connection with the settlement of a decedent's estate or the winding up of a terminating income interest, including interest and penalties concerning taxes, fees of attorneys and personal representatives and trustees, and court costs, may be charged against the principal or income in the discretion of the personal representative or trustee.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 17 - GEORGIA PRINCIPAL AND INCOME ACT (§§ 53-12-380 — 53-12-455) › Part 3 - INCOME (§§ 53-12-400 — 53-12-402) › Section 53-12-400 - When the right to income begins and ends

(a)
An income beneficiary shall be entitled to net income from the date on which the income interest begins. An income interest shall begin on the date specified in the terms of the trust or, if no date is specified, on the date an asset becomes subject to a trust or successive income interest.
(b)
An asset shall become subject to a trust:
(1)
On the date it is transferred to the trust in the case of an asset that is transferred to a trust during the transferor's life;
(2)
On the date of a testator's death in the case of an asset that becomes subject to a trust by reason of a will, even if there is an intervening period of administration of the testator's estate; or
(3)
On the date of an individual's death in the case of an asset that is transferred to a fiduciary by a third party because of such individual's death.
(c)
An asset shall become subject to a successive income interest on the day after the preceding income interest ends, as determined under subsection (d) of this Code section, even if there is an intervening period of administration to wind up the preceding income interest.
(d)
An income interest shall end on the day before an income beneficiary dies or another terminating event occurs, or on the last day of a period during which there is no beneficiary to whom a trustee may distribute income.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 17 - GEORGIA PRINCIPAL AND INCOME ACT (§§ 53-12-380 — 53-12-455) › Part 3 - INCOME (§§ 53-12-400 — 53-12-402) › Section 53-12-401 - Apportionment of receipts and disbursements when decedent dies or income interest begins

(a)
A trustee shall allocate an income receipt or disbursement to principal if its due date occurs before a decedent dies in the case of an estate or before an income interest begins in the case of a trust or successive income interest.
(b)
A trustee shall allocate an income receipt or disbursement to income if its due date occurs on or after the date on which a decedent dies or an income interest begins and it is a periodic due date. An income receipt or disbursement shall be treated as accruing from day to day if its due date is not periodic or it has no due date. The portion of the receipt or disbursement accruing before the date on which a decedent dies or an income interest begins shall be allocated to principal, and the balance shall be allocated to income.
(c)
An item of income or an obligation shall be due on the date the payor is required to make a payment. If a payment date is not stated, there shall be no due date for the purposes of this Code section. Distributions to shareholders or other owners from an entity to which Code Section
53-12-410
applies shall be deemed to be due on the date fixed by the entity for determining who is entitled to receive the distribution or, if no date is fixed, on the declaration date for the distribution. A due date shall be periodic for receipts or disbursements that have to be paid at regular intervals under a lease or an obligation to pay interest or if an entity customarily makes distributions at regular intervals.
Amended by 2011 Ga. Laws 245,§ 53, eff. 5/13/2011.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 17 - GEORGIA PRINCIPAL AND INCOME ACT (§§ 53-12-380 — 53-12-455) › Part 3 - INCOME (§§ 53-12-400 — 53-12-402) › Section 53-12-402 - Apportionment when income interest ends

(a)
As used in this Code section, the term "undistributed income" means net income received before the date on which an income interest ends. Such term shall not include an item of income or expense that is due or accrued or net income that has been added or is required to be added to principal under the terms of the trust.
(b)
When a mandatory income interest ends, the trustee shall pay to a mandatory income beneficiary who survives that date, or the estate of a deceased mandatory income beneficiary whose death causes the interest to end, the beneficiary's share of the undistributed income that is not disposed of under the terms of the trust unless the beneficiary has an unqualified power to revoke more than 5 percent of the trust immediately before the income interest ends. In the latter case, the undistributed income from the portion of the trust that may be revoked shall be added to principal.
(c)
When a trustee's obligation to pay a fixed annuity or a fixed fraction of the value of the trust's assets ends, the trustee shall prorate the final payment if and to the extent required by applicable law to accomplish a purpose of the trust or its settlor relating to income, gift, estate, or other tax requirements.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 17 - GEORGIA PRINCIPAL AND INCOME ACT (§§ 53-12-380 — 53-12-455) › Part 4 - ALLOCATION OF RECEIPTS DURING ADMINISTRATION OF TRUST (§§ 53-12-410 — 53-12-431) › Subpart 1 - RECEIPTS FROM ENTITIES (§§ 53-12-410 — 53-12-412) › Section 53-12-410 - Character of receipts

(a)
As used in this Code section, the term "entity" means a corporation, partnership, limited liability company, regulated investment company, real estate investment trust, common trust fund, or any other organization in which a trustee has an interest other than a trust or estate to which Code Section
53-12-411
applies, a business or activity to which Code Section
53-12-412
applies, or an asset-backed security to which Code Section
53-12-431
applies.
(b)
Except as otherwise provided in this Code section, a trustee shall allocate to income money received from an entity.
(c)
A trustee shall allocate the following receipts from an entity to principal:
(1)
Property other than money;
(2)
Money received in one distribution or a series of related distributions in exchange for part or all of a trust's interest in the entity;
(3)
Money received in total or partial liquidation of the entity; and
(4)
Money received from an entity that is a regulated investment company or a real estate investment trust if the money distributed is a capital gain dividend for federal income tax purposes.
(d)
Money shall be received in partial liquidation:
(1)
To the extent that the entity, at or near the time of a distribution, indicates that it is a distribution in partial liquidation; or
(2)
If the total amount of money and property received in a distribution or series of related distributions is greater than 20 percent of the entity's gross assets, as shown by the entity's year-end financial statements immediately preceding the initial receipt.
(e)
Money shall not be received in partial liquidation, nor shall it be taken into account under paragraph (2) of subsection (d) of this Code section, to the extent that it does not exceed the amount of income tax that a trustee or beneficiary must pay on taxable income of the entity that distributes the money.
(f)
A trustee may rely upon a statement made by an entity about the source or character of a distribution if the statement is made at or near the time of distribution by the entity's board of directors or other person or group of persons authorized to exercise powers to pay money or transfer property comparable to those of a corporation's board of directors.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 17 - GEORGIA PRINCIPAL AND INCOME ACT (§§ 53-12-380 — 53-12-455) › Part 4 - ALLOCATION OF RECEIPTS DURING ADMINISTRATION OF TRUST (§§ 53-12-410 — 53-12-431) › Subpart 1 - RECEIPTS FROM ENTITIES (§§ 53-12-410 — 53-12-412) › Section 53-12-411 - Distribution from trust or estate

A trustee shall allocate to income an amount received as a distribution of income from a trust or an estate in which the trust has an interest other than a purchased interest and shall allocate to principal an amount received as a distribution of principal from such trust or estate. If a trustee purchases an interest in a trust that is an investment entity, or a decedent or donor transfers an interest in such trust to a trustee, Code Section
53-12-410
or
53-12-431
shall apply to a receipt from the trust.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 17 - GEORGIA PRINCIPAL AND INCOME ACT (§§ 53-12-380 — 53-12-455) › Part 4 - ALLOCATION OF RECEIPTS DURING ADMINISTRATION OF TRUST (§§ 53-12-410 — 53-12-431) › Subpart 1 - RECEIPTS FROM ENTITIES (§§ 53-12-410 — 53-12-412) › Section 53-12-412 - Business and other activities conducted by trustee

(a)
If a trustee who conducts a business or other activity determines that it is in the best interest of all the beneficiaries to account separately for the business or activity instead of accounting for it as part of the trust's general accounting records, the trustee may maintain separate accounting records for its transactions, whether or not its assets are segregated from other trust assets.
(b)
A trustee who accounts separately for a business or other activity may determine the extent to which its net cash receipts shall be retained for working capital, the acquisition or replacement of fixed assets, and other reasonably foreseeable needs of the business or activity, and the extent to which the remaining net cash receipts are accounted for as principal or income in the trust's general accounting records. If a trustee sells assets of the business or other activity, other than in the ordinary course of the business or activity, the trustee shall account for the net amount received as principal in the trust's general accounting records to the extent the trustee determines that the amount received is no longer required in the conduct of the business.
(c)
Activities for which a trustee may maintain separate accounting records shall include:
(1)
Retail, manufacturing, service, and other traditional business activities;
(2)
Farming;
(3)
Raising and selling livestock and other animals;
(4)
Management of rental properties;
(5)
Extraction of minerals and other natural resources;
(6)
Timber operations; and
(7)
Activities to which Code Section
53-12-430
applies.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 17 - GEORGIA PRINCIPAL AND INCOME ACT (§§ 53-12-380 — 53-12-455) › Part 4 - ALLOCATION OF RECEIPTS DURING ADMINISTRATION OF TRUST (§§ 53-12-410 — 53-12-431) › Subpart 2 - RECEIPTS (§§ 53-12-420 — 53-12-431) › Section 53-12-420 - Principal receipts

A trustee shall allocate to principal:
(1)
To the extent not allocated to income under this article, assets received from a transferor during the transferor's lifetime, a decedent's estate, a trust with a terminating income interest, or a payor under a contract naming the trust or its trustee as beneficiary;
(2)
Money or other property received from the sale, exchange, liquidation, or change in form of a principal asset, including realized profit, subject to the provisions of this article;
(3)
Amounts recovered from third parties to reimburse the trust because of disbursements described in paragraph (7) of subsection (a) of Code Section
53-12-451
or for other reasons to the extent not based on the loss of income;
(4)
Proceeds of property taken by eminent domain, but a separate award made for the loss of income with respect to an accounting period during which a current income beneficiary had a mandatory income interest shall be income;
(5)
Net income received in an accounting period during which there is no beneficiary to whom a trustee may or must distribute income; and
(6)
Other receipts as provided in this article.
Amended by 2011 Ga. Laws 245,§ 53, eff. 5/13/2011.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 17 - GEORGIA PRINCIPAL AND INCOME ACT (§§ 53-12-380 — 53-12-455) › Part 4 - ALLOCATION OF RECEIPTS DURING ADMINISTRATION OF TRUST (§§ 53-12-410 — 53-12-431) › Subpart 2 - RECEIPTS (§§ 53-12-420 — 53-12-431) › Section 53-12-421 - Rental property

To the extent that a trustee accounts for receipts from rental property pursuant to this Code section, the trustee shall allocate to income an amount received as rent of real or personal property, including an amount received for cancellation or renewal of a lease. An amount received as a refundable deposit, including a security deposit or a deposit that is to be applied as rent for future periods, shall be added to principal and held subject to the terms of the lease and shall not be available for distribution to a beneficiary until the trustee's contractual obligations have been satisfied with respect to such amount.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 17 - GEORGIA PRINCIPAL AND INCOME ACT (§§ 53-12-380 — 53-12-455) › Part 4 - ALLOCATION OF RECEIPTS DURING ADMINISTRATION OF TRUST (§§ 53-12-410 — 53-12-431) › Subpart 2 - RECEIPTS (§§ 53-12-420 — 53-12-431) › Section 53-12-422 - Obligation to pay money

(a)
An amount received as interest, whether determined at a fixed, variable, or floating rate, on an obligation to pay money to the trustee, including an amount received as consideration for prepaying principal, shall be allocated to income without any provision for amortization of premium.
(b)
A trustee shall allocate to principal an amount received from the sale, redemption, or other disposition of an obligation to pay money to the trustee more than one year after it is purchased or acquired by the trustee, including an obligation whose purchase price or value when it is acquired is less than its value at maturity. If the obligation matures within one year after it is purchased or acquired by the trustee, an amount received in excess of its purchase price or its value when acquired by the trust shall be allocated to income.
(c)
This Code section shall not apply to an obligation to which Code Section
53-12-425
through
53-12-428
,
53-12-430
, or
53-12-431
applies.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 17 - GEORGIA PRINCIPAL AND INCOME ACT (§§ 53-12-380 — 53-12-455) › Part 4 - ALLOCATION OF RECEIPTS DURING ADMINISTRATION OF TRUST (§§ 53-12-410 — 53-12-431) › Subpart 2 - RECEIPTS (§§ 53-12-420 — 53-12-431) › Section 53-12-423 - Insurance policies and similar contracts

(a)
Except as otherwise provided in subsection (b) of this Code section, a trustee shall allocate to principal the proceeds of a life insurance policy or other contract in which the trust or its trustee is named as beneficiary, including a contract that insures the trust or its trustee against loss for damage to, destruction of, or loss of title to a trust asset. The trustee shall allocate dividends on an insurance policy to income if the premiums on the policy are paid from income and to principal if the premiums are paid from principal.
(b)
A trustee shall allocate to income proceeds of a contract that insures the trustee against loss of occupancy or other use by an income beneficiary, loss of income, or, subject to Code Section
53-12-412
, loss of profits from a business.
(c)
This Code section shall not apply to a contract to which Code Section
53-12-425
applies.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 17 - GEORGIA PRINCIPAL AND INCOME ACT (§§ 53-12-380 — 53-12-455) › Part 4 - ALLOCATION OF RECEIPTS DURING ADMINISTRATION OF TRUST (§§ 53-12-410 — 53-12-431) › Subpart 2 - RECEIPTS (§§ 53-12-420 — 53-12-431) › Section 53-12-424 - Insubstantial allocations not required

If a trustee determines that an allocation between principal and income required by Code Sections
53-12-425
through
53-12-428
or Code Section
53-12-431
is insubstantial, the trustee may allocate the entire amount to principal unless one of the circumstances described in Code Section
53-12-361
applies to the allocation. Such power may be exercised by a cotrustee in the circumstances described in Code Section
53-12-361
and may be released for the reasons and in the manner described in such Code section. An allocation shall be presumed to be insubstantial if:
(1)
The amount of the allocation would increase or decrease net income in an accounting period, as determined before the allocation, by less than 10 percent; or
(2)
The value of the asset producing the receipt for which the allocation would be made is less than 10 percent of the total value of the trust's assets at the beginning of the accounting period.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 17 - GEORGIA PRINCIPAL AND INCOME ACT (§§ 53-12-380 — 53-12-455) › Part 4 - ALLOCATION OF RECEIPTS DURING ADMINISTRATION OF TRUST (§§ 53-12-410 — 53-12-431) › Subpart 2 - RECEIPTS (§§ 53-12-420 — 53-12-431) › Section 53-12-426 - Liquidating asset

(a)
As used in this Code section, the term "liquidating asset" means an asset whose value will diminish or terminate because such asset is expected to produce receipts for a period of limited duration. Such term includes a leasehold, patent, copyright, royalty right, and right to receive payments during a period of more than one year under an arrangement that does not provide for the payment of interest on the unpaid balance. Such term shall not include a payment subject to Code Section
53-12-425
, resources subject to Code Section
53-12-427
, timber subject to Code Section
53-12-428
, an activity subject to Code Section
53-12-430
, an asset subject to Code Section
53-12-431
, or any asset for which the trustee establishes a reserve for depreciation under Code Section
53-12-452
.
(b)
A trustee shall allocate to income 10 percent of the receipts from a liquidating asset and the balance to principal.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 17 - GEORGIA PRINCIPAL AND INCOME ACT (§§ 53-12-380 — 53-12-455) › Part 4 - ALLOCATION OF RECEIPTS DURING ADMINISTRATION OF TRUST (§§ 53-12-410 — 53-12-431) › Subpart 2 - RECEIPTS (§§ 53-12-420 — 53-12-431) › Section 53-12-427 - Minerals, water, and other natural resources

(a)
To the extent that a trustee accounts for receipts from an interest in minerals or other natural resources pursuant to this Code section, the trustee shall allocate them as follows:
(1)
If received as nominal delay rental or nominal annual rent on a lease, a receipt shall be allocated to income;
(2)
If received from a production payment, a receipt shall be allocated to income if and to the extent that the agreement creating the production payment provides a factor for interest or its equivalent. The balance shall be allocated to principal;
(3)
If an amount received as a royalty, shut-in-well payment, take-or-pay payment, bonus, or delay rental is more than nominal, 90 percent shall be allocated to principal and the balance to income; and
(4)
If an amount is received from a working interest or any other interest not provided for in paragraph (1), (2), or (3) of this subsection, 90 percent of the net amount received shall be allocated to principal and the balance to income.
(b)
An amount received on account of an interest in water that is renewable shall be allocated to income. If the water is not renewable, 90 percent of the amount shall be allocated to principal and the balance to income.
(c)
This Code section shall apply whether or not a decedent or donor was extracting minerals, water, or other natural resources before the interest became subject to the trust.
(d)
If a trust owns an interest in minerals, water, or other natural resources on July 1, 2010, the trustee may allocate receipts from the interest as provided in this Code section or in the manner used by the trustee before July 1, 2010. If the trust acquires an interest in minerals, water, or other natural resources after July 1, 2010, the trustee shall allocate receipts from the interest as provided in this Code section.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 17 - GEORGIA PRINCIPAL AND INCOME ACT (§§ 53-12-380 — 53-12-455) › Part 4 - ALLOCATION OF RECEIPTS DURING ADMINISTRATION OF TRUST (§§ 53-12-410 — 53-12-431) › Subpart 2 - RECEIPTS (§§ 53-12-420 — 53-12-431) › Section 53-12-428 - Timber

(a)
To the extent that a trustee accounts for receipts from the sale of timber and related products pursuant to this Code section, the trustee shall allocate the net receipts:
(1)
To income to the extent that the amount of timber removed from the land does not exceed the rate of growth of the timber during the accounting periods in which a beneficiary has a mandatory income interest;
(2)
To principal to the extent that the amount of timber removed from the land exceeds the rate of growth of the timber or the net receipts are from the sale of standing timber;
(3)
To or between income and principal if the net receipts are from the lease of timberland or from a contract to cut timber from land owned by a trust by determining the amount of timber removed from the land under the lease or contract and applying the rules in paragraphs (1) and (2) of this subsection; or
(4)
To principal to the extent that advance payments, bonuses, and other payments are not allocated pursuant to paragraph (1), (2), or (3) of this subsection.
(b)
In determining net receipts to be allocated pursuant to subsection (a) of this Code section, a trustee shall deduct and transfer to principal a reasonable amount for depletion.
(c)
This Code section shall apply whether or not a decedent or transferor was harvesting timber from the property before it became subject to the trust.
(d)
If a trust owns an interest in timberland on July 1, 2010, the trustee may allocate net receipts from the sale of timber and related products as provided in this Code section or in the manner used by the trustee before July 1, 2010. If the trust acquires an interest in timberland after July 1, 2010, the trustee shall allocate net receipts from the sale of timber and related products as provided in this Code section.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 17 - GEORGIA PRINCIPAL AND INCOME ACT (§§ 53-12-380 — 53-12-455) › Part 4 - ALLOCATION OF RECEIPTS DURING ADMINISTRATION OF TRUST (§§ 53-12-410 — 53-12-431) › Subpart 2 - RECEIPTS (§§ 53-12-420 — 53-12-431) › Section 53-12-429 - Property not productive of income

(a)
If a marital deduction is allowed for all or part of a trust whose assets consist substantially of property that does not provide the spouse with sufficient income from or use of the trust assets, and if the amounts that the trustee transfers from principal to income under Code Section
53-12-361
and distributes to the spouse from principal pursuant to the terms of the trust are insufficient to provide the spouse with the beneficial enjoyment required to obtain the marital deduction, the spouse may require the trustee to make property productive of income, convert property within a reasonable time, or exercise the power conferred by Code Section
53-12-361
. The trustee may decide which action or combination of actions to take.
(b)
In cases not governed by subsection (a) of this Code section, proceeds from the sale or other disposition of an asset shall be principal without regard to the amount of income the asset produces during any accounting period.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.
2023 CODE OF GEORGIA › Title 53 - WILLS, TRUSTS, AND ADMINISTRATION OF ESTATES (§§ 53-1-1 — 53-17-12) › Chapter 12 - REVISED GEORGIA TRUST CODE OF 2010 (§§ 53-12-1 — 53-12-506) › Article 17 - GEORGIA PRINCIPAL AND INCOME ACT (§§ 53-12-380 — 53-12-455) › Part 4 - ALLOCATION OF RECEIPTS DURING ADMINISTRATION OF TRUST (§§ 53-12-410 — 53-12-431) › Subpart 2 - RECEIPTS (§§ 53-12-420 — 53-12-431) › Section 53-12-430 - Derivatives and options

(a)
As used in this Code section, the term "derivative" means a contract or financial instrument or a combination of contracts and financial instruments which gives a trust the right or obligation to participate in some or all changes in the price of a tangible or intangible asset or group of assets, or changes in a rate, an index of prices or rates, or other market indicator for an asset or a group of assets.
(b)
To the extent that a trustee does not account under Code Section
53-12-412
for transactions in derivatives, the trustee shall allocate to principal receipts from and disbursements made in connection with those transactions.
(c)
If a trustee grants an option to buy property from the trust, whether or not the trust owns the property when the option is granted, grants an option that permits another person to sell property to the trust, or acquires an option to buy property for the trust or an option to sell an asset owned by the trust, and the trustee or other owner of the asset is required to deliver the asset if the option is exercised, an amount received for granting the option shall be allocated to principal. An amount paid to acquire the option shall be paid from principal. A gain or loss realized upon the exercise of an option, including an option granted to a settlor of the trust for services rendered, shall be allocated to principal.
Added by 2010 Ga. Laws 506,§ 1, eff. 7/1/2010.