IRREVOCABLE TRUST AGREEMENT
(State of Georgia)
[// GUIDANCE: This template is designed for practitioners licensed in Georgia. Confirm all bracketed placeholders and adapt substantive provisions to the specific transaction and client objectives.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Operative Provisions
3.1 Creation and Funding
3.2 Trustee Powers and Duties
3.3 Beneficiary Rights and Distributions
3.4 Tax Matters
3.5 Irrevocability; Amendment; Termination
3.6 Successor Trustees - Representations & Warranties
- Covenants & Restrictions
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
1.1 Title
IRREVOCABLE TRUST AGREEMENT (the “Agreement” or “Trust Instrument”)
1.2 Parties
This Agreement is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:
a. [SETTLOR FULL LEGAL NAME], of [SETTLOR ADDRESS] (“Settlor”); and
b. [TRUSTEE FULL LEGAL NAME], of [TRUSTEE ADDRESS], in the capacity of Trustee (the “Trustee”).
[// GUIDANCE: Insert additional Co-Trustees or a Trust Protector if desired.]
1.3 Recitals
A. Settlor desires to create an irrevocable trust pursuant to the Georgia Trust Code, O.C.G.A. Title 53, Chapter 12, to hold and administer the Trust Estate for the benefit of the Beneficiaries named herein.
B. Settlor is transferring the property described in Schedule A attached hereto (the “Initial Trust Property”) to Trustee, to be held, managed, and distributed pursuant to the terms of this Agreement.
C. Trustee is willing to accept the trusteeship and to hold the Trust Estate subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Settlor and Trustee agree as follows:
2. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings set forth below. All defined terms are intended to be used consistently throughout the Agreement.
“Accounting Period” means each calendar year ending December 31, or such other fiscal year as the Trustee may adopt.
“Beneficiary” or “Beneficiaries” means each person or entity identified in Schedule B or otherwise determined under Article 3.3, and any successor Beneficiary pursuant to the terms herein.
“Code” means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.
“Georgia Trust Code” means O.C.G.A. Title 53, Chapter 12, as amended from time to time.
“Trust” means the irrevocable trust created by this Agreement.
“Trust Estate” means all property, real or personal, tangible or intangible, now or hereafter held by the Trustee under this Agreement, including all income, proceeds, and substitutions therefor.
[// GUIDANCE: Insert additional defined terms—e.g., “Trust Protector,” “Qualified Appointee,” etc.—if relevant to the engagement.]
3. OPERATIVE PROVISIONS
3.1 Creation and Funding
3.1.1 Establishment. Settlor hereby establishes the Trust as an irrevocable trust under the Georgia Trust Code.
3.1.2 Transfer of Property. Concurrently with execution, Settlor irrevocably assigns, conveys, and delivers the Initial Trust Property to the Trustee, to constitute the principal of the Trust Estate. Additional property may be transferred to the Trustee at any time by Settlor or any other person, subject to Trustee’s acceptance.
3.1.3 Separate Trust Estate. The Trust Estate shall be held, administered, and distributed solely in accordance with this Agreement and shall not merge with any other estate or trust.
3.2 Trustee Powers and Duties
3.2.1 General Powers. Subject to fiduciary duties imposed by the Georgia Trust Code, the Trustee shall have all powers granted to a trustee under O.C.G.A. Title 53, Chapter 12, Article 8, including, without limitation, the power to invest and reinvest assets, sell or otherwise dispose of Trust property, borrow funds, and execute ancillary instruments.
3.2.2 Standard of Care. The Trustee shall administer the Trust Estate with the care, skill, and caution of a prudent person dealing with the property of another, consistent with the Uniform Prudent Investor Act as adopted in Georgia (O.C.G.A. §§ 53-12-340 et seq.).
3.2.3 Duty to Inform and Report. The Trustee shall provide the Beneficiaries with annual accounts within 90 days after the close of each Accounting Period and shall comply with O.C.G.A. § 53-12-243 regarding information and accountings to qualified beneficiaries.
3.2.4 Delegation. Trustee may delegate investment and administrative functions as permitted under O.C.G.A. § 53-12-366, provided that the Trustee exercises reasonable care in selecting the agent and periodically reviews the agent’s performance.
3.3 Beneficiary Rights and Distributions
3.3.1 Beneficiary Classes. The Beneficiaries are set forth on Schedule B and are divided into the following classes:
a. Primary Beneficiaries: [LIST];
b. Secondary Beneficiaries: [LIST].
3.3.2 Mandatory Income Distributions. Commencing on the Effective Date, the Trustee shall distribute all net income of the Trust Estate at least annually to the Primary Beneficiaries, per capita.
3.3.3 Discretionary Principal Distributions. Trustee may, in Trustee’s sole discretion, distribute principal to or for the health, education, maintenance, or support of any Beneficiary, considering other financial resources available to such Beneficiary.
3.3.4 Termination Event. Upon the earlier of (a) the death of the last surviving Primary Beneficiary, or (b) [SPECIFIED DATE/EVENT], the Trust shall terminate and the remaining Trust Estate shall be distributed outright to the then-living Secondary Beneficiaries, per stirpes.
3.3.5 Spendthrift Provision. No interest of any Beneficiary shall be subject to voluntary or involuntary transfer, assignment, pledge, seizure, or attachment by creditors, pursuant to O.C.G.A. § 53-12-80.
3.4 Tax Matters
3.4.1 Income Tax Status. It is the Settlor’s intent that the Trust be treated as a [SELECT: “grantor trust” / “non-grantor trust”] for federal and Georgia income tax purposes under Sections 671–679 of the Code. The Trustee shall file all required tax returns and furnish K-1s or other statements to Beneficiaries.
3.4.2 Tax Elections. The Trustee is authorized to make such elections under the Code and applicable Georgia law as Trustee deems advisable, including elections under Sections 643(e), 645, 754, and 1031, to best effectuate the purposes of the Trust and minimize aggregate tax liabilities.
3.4.3 Payment of Taxes. All taxes attributable to the Trust Estate shall be paid from the Trust assets unless otherwise provided herein or required by law.
[// GUIDANCE: Consult tax counsel for generation-skipping transfers, qualified Subchapter S trust elections, or other specialized tax planning elements.]
3.5 Irrevocability; Amendment; Termination
3.5.1 Irrevocability. This Trust is irrevocable. Settlor expressly relinquishes any and all rights, powers, or privileges, whether alone or in conjunction with others, to alter, amend, revoke, or terminate the Trust, except as expressly permitted herein or under the Georgia Trust Code.
3.5.2 Judicial or Non-Judicial Modification. Notwithstanding Section 3.5.1, the Trust may be modified or reformed (i) by non-judicial settlement agreement under O.C.G.A. § 53-12-9, or (ii) by court order under O.C.G.A. § 53-12-61, upon a showing that modification will further the purposes of the Trust and that such modification is not inconsistent with any material purpose of the Trust.
3.5.3 Termination by Court. The Trust may be terminated by a Georgia probate court of competent jurisdiction if continuation becomes uneconomical or contrary to public policy, subject to O.C.G.A. § 53-12-64.
3.6 Successor Trustees
3.6.1 Resignation. The Trustee may resign upon 30 days’ written notice to Settlor (if living) and all qualified Beneficiaries.
3.6.2 Removal. A majority in interest of the adult Beneficiaries may remove the Trustee for cause, defined as (i) breach of trust, (ii) incapacity, or (iii) persistent failure to perform.
3.6.3 Appointment of Successor. Upon resignation, removal, incapacity, or death of the Trustee, [SUCCESSOR TRUSTEE NAME] shall serve. If no named successor is able or willing, a majority of adult Beneficiaries may appoint a corporate trustee having fiduciary powers under Georgia law.
4. REPRESENTATIONS & WARRANTIES
4.1 Settlor represents and warrants to Trustee and Beneficiaries that:
a. Settlor has full legal capacity and authority to create this Trust and to transfer the Initial Trust Property.
b. The Initial Trust Property is free and clear of all liens and encumbrances, except as disclosed on Schedule A.
4.2 Trustee represents and warrants to Settlor and Beneficiaries that:
a. Trustee has the requisite capacity and, if an entity, is duly organized and in good standing.
b. Trustee will accept and faithfully discharge fiduciary duties in accordance with this Agreement and applicable law.
4.3 Survival. The representations and warranties contained in this Article 4 shall survive the execution of this Agreement and continue for the duration of the Trust.
5. COVENANTS & RESTRICTIONS
5.1 Affirmative Covenants of Trustee. Trustee shall:
a. Administer the Trust solely in the interests of the Beneficiaries;
b. Maintain accurate books and records available for inspection under Section 3.2.3;
c. Keep Trust assets separated from Trustee’s own property.
5.2 Negative Covenants of Settlor. Settlor shall not:
a. Attempt directly or indirectly to amend or revoke the Trust;
b. Exercise any retained power in a manner that would disqualify the Trust’s intended tax status.
5.3 Notice and Cure. In the event of an alleged breach of covenant, the breaching party shall have 30 days from written notice to cure, except where immediate action is required to prevent irreparable harm.
6. DEFAULT & REMEDIES
6.1 Events of Default. The following constitute Events of Default:
a. Trustee’s material breach of fiduciary duty, including misappropriation or self-dealing;
b. Failure to provide required accountings within 60 days after written demand;
c. Insolvency or bankruptcy of the Trustee that threatens Trust assets.
6.2 Remedies. Upon an Event of Default, any Beneficiary may:
a. Petition the probate court for removal of Trustee;
b. Seek surcharge of the Trustee to restore losses;
c. Obtain injunctive relief to protect the Trust Estate.
6.3 Attorneys’ Fees and Costs. The prevailing party in any action to enforce this Agreement shall be entitled to reasonable attorneys’ fees and costs, payable from (i) the Trust Estate if Trustee prevails, or (ii) the share of the unsuccessful Beneficiary if Trustee does not prevail.
7. RISK ALLOCATION
7.1 Trustee Indemnification
7.1.1 Scope. The Trust Estate shall indemnify and hold the Trustee harmless from and against any liability, loss, or expense, including attorneys’ fees, arising from the performance of Trustee’s duties, except for losses resulting from Trustee’s gross negligence, willful misconduct, or bad faith.
7.1.2 Procedure. Trustee shall promptly notify the Beneficiaries of any claim subject to indemnification. Failure to give notice shall not relieve the Trust of its indemnification obligations except to the extent of actual prejudice.
7.2 Limitation of Liability
The Trustee’s liability to Beneficiaries for breach of trust shall be limited in the aggregate to the total value of the Trust Estate at the time of final adjudication. Under no circumstances shall the Trustee be liable for consequential, punitive, or exemplary damages.
7.3 Insurance
The Trustee may purchase and maintain, at the expense of the Trust Estate, fiduciary liability insurance and any other insurance reasonably necessary to protect the Trust and Trustee.
7.4 Force Majeure
The Trustee shall not be liable for delay or failure in performance caused by acts of God, war, pandemic, governmental action, or any other event beyond the Trustee’s reasonable control; provided, however, that the Trustee shall use commercially reasonable efforts to resume performance promptly.
8. DISPUTE RESOLUTION
8.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Georgia, without regard to its conflict-of-laws principles.
8.2 Forum Selection. Exclusive jurisdiction and venue shall lie in the probate court of [COUNTY NAME], Georgia, for all proceedings relating to the administration of the Trust.
8.3 Arbitration (Optional). Any non-probate dispute arising under this Agreement may, by written agreement of all parties, be submitted to binding arbitration under the Commercial Arbitration Rules of the American Arbitration Association. Judgment on the award may be entered in any court of competent jurisdiction.
8.4 Jury Waiver. To the extent a matter is not within the exclusive jurisdiction of the probate court and is otherwise triable to a jury, the parties knowingly waive the right to a jury trial.
8.5 Injunctive Relief. Notwithstanding any other provision, the probate court shall retain authority to issue temporary, preliminary, or permanent injunctive relief as necessary to enforce the terms of this Trust.
9. GENERAL PROVISIONS
9.1 Amendments and Waivers. Except as expressly provided in Section 3.5, no amendment or waiver of any provision shall be effective unless in writing and executed by the Trustee and all qualified Beneficiaries, and, where required, approved by the probate court.
9.2 Assignment. No party may assign rights or delegate obligations hereunder except as expressly permitted by this Agreement or by law.
9.3 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.
9.4 Severability. If any provision is held invalid or unenforceable, the remaining provisions shall remain in full force, and the invalid provision shall be reformed to fulfill the parties’ original intent to the maximum extent permitted by law.
9.5 Entire Agreement. This Agreement, together with Schedules A and B, constitutes the entire understanding among the parties with respect to its subject matter and supersedes all prior agreements or understandings, whether written or oral.
9.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together constitute one instrument. Signatures transmitted electronically or by facsimile shall be deemed original signatures for all purposes.
9.7 Notices. All notices required or permitted under this Agreement shall be in writing and delivered (i) by certified U.S. mail, return receipt requested, (ii) by nationally recognized overnight courier, or (iii) by electronic mail with confirmation of receipt, to the addresses set forth in Section 1.2, or to such other address as a party may designate by notice.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, Settlor and Trustee have executed this Irrevocable Trust Agreement as of the Effective Date.
SETTLOR
[SETTLOR NAME]
TRUSTEE
[TRUSTEE NAME], Trustee
[// GUIDANCE: If a corporate trustee, include authorized signatory block.]
NOTARY ACKNOWLEDGMENT
State of Georgia
County of ____
On this _ day of __, 20__, before me, _______, a Notary Public in and for said State, personally appeared [SETTLOR NAME] and [TRUSTEE NAME] (or duly authorized representative), known to me or proven on the basis of satisfactory evidence to be the person(s) whose name(s) are subscribed to the foregoing instrument, and acknowledged that they executed the same for the purposes therein contained.
Witness my hand and official seal.
Notary Public
My commission expires: ____
WITNESSES (if required)
SCHEDULE A – INITIAL TRUST PROPERTY
[Detailed description of cash, securities, real estate, or other assets transferred to the Trust]
SCHEDULE B – BENEFICIARIES
[Insert names, addresses, birthdates, and class (Primary/Secondary) of each Beneficiary]
[// GUIDANCE: Review local recording requirements if real property is included. File Form 56 with the IRS to notify of fiduciary relationship. Consider separate Trust Identification Number unless trust is a grantor trust using Settlor’s SSN.]