Georgia Non Judicial Settlement Agreement
Following a national trend, Georgia has modernized its law amending irrevocable trusts with effect from July 1, 2018. The new legislation significantly expands the possibility of amending an otherwise irrevocable trust. In the past, the ability to amend an irrevocable trust was quite limited if the authority was not already included in the trust agreement itself. However, irrevocable trusts can now be modified or even terminated in accordance with (1) the terms of the trust agreement itself; (2) a change of jurisdiction; (3) out-of-court settlement agreements; (4) decantation; and (5) termination of small trusts. Irrevocable trust can now be altered to reap many more benefits, and is only limited to some extent by imagination, tax implications, and buy-in from the right parties. In addition, Georgian legislation now provides for an easier way to inform proposed changes in accordance with virtual representation and to reach an agreement, as well as an expanded power to have the parties represented in court by other parties. When deciding whether an irrevocable trust should be amended, consider the existing provisions of the trust agreement that may allow for the desired changes or, if not available, the state laws that should be used to achieve the desired changes. Each state trust amendment technique has different requirements. For example, a settling is made by the trustee, while a fiduciary change is made by the settlor during his or her lifetime and all beneficiaries. In addition, depending on the facts, a judicial change may be necessary, or it may be possible to avoid legal action altogether by decanting or using an out-of-court agreement. (e) An agreement entered into in accordance with this section of the Code shall be final and binding on the interested persons as if it had been ordered by a court having jurisdiction over the trust, the assets of the trust and the interested persons. (b) Except as otherwise provided in paragraph (c) of this section of the Code, interested parties may enter into an enforceable alternative settlement agreement with respect to any matter relating to a trust. (2) Does not apply to an amendment or termination of a non-ridiculous irrevocable trust if the consent of the trustee would be required to reach a binding settlement, if such a settlement were to be approved by a court.
The decision involving judicial intervention may be influenced by persons who need to be informed and who must give their consent either directly, through judicial representation or through virtual representation. Finally, one or more parties may decide that, from a tax or fiduciary point of view, it is more certain that the court will approve such an amendment, even if, otherwise, the intervention of the judiciary could be avoided. 2. Does it not apply to the modification or termination of an undescribed irrevocable trust if the consent of the trustees was required to reach a binding settlement, if such a transaction were to be approved by a court? Second, the new laws allow for the out-of-court settlement of fiduciary matters. Generally, parties who could agree to a court settlement agreement in relation to a trust may also agree to resolve certain trust issues without litigation. (b) In the absence of paragraph (c) of this section of the Code, interested parties may enter into an enforceable out-of-court settlement agreement for all matters relating to a trust. (a) As used in this section of the Code, the term « interested persons » means the representative and any other person whose consent would be required to reach a binding agreement if the transaction were approved by the court. Under current law, the ability to modify or terminate an irrevocable trust is very limited, as the desired change or termination is not already permitted under the terms of the irrevocable trust itself. (a) As used in this section of the Code, the term « interested persons » means the syndic and any other person whose consent would be required to reach an enforceable settlement if the settlement were approved by the Court. (d) Any interested person may apply to the court for approval of an out-of-court settlement agreement, whether representation was appropriate in accordance with article 53(12)(8) of the Code or whether such an agreement contains conditions that the court could have duly approved.
(1) Applies only to the extent that it does not violate an essential purpose of the Trust and contains terms that could be duly approved by the court under this Code or any other applicable law; and……