Georgia Trust Lawyer Notes

After many years of providing legal counsel and advice to wronged beneficiaries of trusts, I have found it important to provide insight into common situations that result in beneficiaries having legal claims.

First, the trustee of the trust is the person holding legal title to the property in the trust, and the creator of the trust has imposed equitable duties on the trustee to hold, manage and distribute trust property for the benefit of another person, i.e. the trust beneficiary.  The trustee has a fiduciary^[1] duty to exercise the utmost in good faith, honesty and loyalty in performing their duties.  However, often the trusted relative or friend acting as the trustee puts his or her interests before the interest of the beneficiaries and either self-deals or simply takes property from the trust instead of preserving it for distribution to the trust beneficiaries.

Second, trustees have an obligation to comply with the terms of the trust and Georgia law in administering the trust assets and accounting for such trust assets.  Generally, a trustee is obligated to provide either an annual accounting or a statement of receipts and disbursements at least annually and often quarterly to the trust beneficiaries.  It is not uncommon for trustees to fail in this obligation.  It is not uncommon for it to occur when the trustee has acted in a fraudulent manner and intends to conceal his or her actions from the beneficiaries. It is essential that a beneficiary obtain a copy of the trust agreement, read same and take timely steps to enforce rights and require performance in compliance with the trust.  After written demand to the trustee, this step is generally accomplished by filing a “petition” in the superior court or, in some cases, a “citation” in the probate court, for an accounting.  Trustees often attempt to hide behind the definition of those persons entitled to receive account statements or trust financial information and, consequently, it is generally important that a beneficiary seek legal counsel and advice to assess his or her rights under the trust and to determine the impact of Georgia law on their rights.

Third, a trustee must exercise the judgment and care under the circumstances then prevailing of a prudent person acting in a like capacity and familiar with such matters, considering the purposes, provisions and distribution requirements of the trust.  It is not uncommon for the trustee to also be a beneficiary and make mistakes in managing and distributing trust assets.  We provide legal counsel to many trustees in Georgia to assist in maintaining the “utmost good faith” principle in administering trust assets. 

Regardless, trustees sometimes engage in self-dealing transactions, gross mismanagement of investments, and fraudulent mismanagement of trust assets followed by the concealment of the wrongdoing.  Our attorneys aggressively pursue the rights of beneficiaries and have extensive experience in holding trustees liable for damages caused beneficiaries and demanding the removal of the trustee breaching the trust.

Effective July 1, 2010, the revised Georgia Trust Code of 2010 was adopted and identified that, “except to the extent it would impair vested rights and except as otherwise provided by law, the provisions contained in this chapter shall apply to any trust regardless of the date such trust was created”.  Consequently, a number of new legal considerations have become important and worthy of examination in addressing trust claims in Georgia.  The perpetual practice in the trust and estate arena by the law firm of Aitkens & Aitkens, P.C. provides the client an experienced platform for assessing their legal rights and options in trust disputes.  Let us know if our attorneys can be of assistant to you in your trust and estate claims.

1. A fiduciary duty is a legal duty to act solely in another party’s interests. Parties owing this duty are called fiduciaries. The individuals to whom they owe a duty are called principals. Fiduciaries may not profit from their relationship with their principals unless they have the principals’ express informed consent. They also have a duty to avoid any conflicts of interest between themselves and their principals or between their principals and the fiduciaries’ other clients. A fiduciary duty is the strictest duty of care recognized by the US legal system. (http://www.law.cornell.edu/wex/fiduciary_duty)