Georgia law permits the use of in terrorem, or no-contest, clauses in trusts, but imposes important restrictions on their enforceability.
O.C.G.A. § 53-12-22 provides:
53-12-22. Trust purposes and conditions in terrorem.
(a) A trust may be created for any lawful purpose.
(b) A condition in terrorem shall be void unless there is a direction in the trust instrument as to the disposition of the property if the condition in terrorem is violated, in which event the direction in the trust instrument shall be carried out, except as otherwise provided in subsection (c) of this Code section.
(c) A condition in terrorem shall not be enforceable against an individual for:
(1) Bringing an action for interpretation or enforcement of a trust instrument;
(2) Bringing an action for an accounting, for removal, or for other relief against a trustee; or
(3) Entering into a settlement agreement.
Under this statute, an in terrorem clause is generally enforceable only if the trust instrument specifies how the property should be distributed if the condition is violated. Even then, Georgia law prohibits enforcement of such clauses when a beneficiary seeks:
To interpret or enforce the trust,
An accounting, removal of a trustee, or other relief, or
To enter into a settlement agreement.
By carving out these exceptions, Georgia law ensures that beneficiaries can challenge a trustee’s actions or seek clarification of trust terms without automatically forfeiting their inheritance.
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