Georgia is not one of the states that has adopted the Uniform Trust Code. However, a person who is creating a revocable trust with contingent beneficiaries should still be aware that those contingent beneficiaries may have rights in some circumstances. Traditionally, revocable trusts have been used to allow the settlor, or creator, to keep control of the property in the trust. However, this might not always be the case.
In some other countries and some U.S. states, contingent beneficiaries may have rights. This was the finding of the Michigan courts in a case that involved a woman who became incapacitated. At that point, her husband took the role of successor trustee. He then sold the part of the trust that was the family business to the couple's son. Their daughter challenged this and sought for her father to be removed as successor trustee.
Her brother and father said that since she was only a contingent beneficiary, she lacked the power to bring action. The Michigan Court of Appeals argued that as an interested party, she did have this power. The second opinion by the Court of Appeals hinged on an interpretation of Section 603 of the Universal Trust Code. In light of the issues raised by this decision, trustees should ensure that their instructions from settlors do not contradict trust terms.
This is a complex area of trust law, so someone creating a revocable trust may want to consult an attorney to learn more about how it might be interpreted in their jurisdiction. Another option is an irrevocable trust. A disadvantage of this type of trust is that the settlor usually has to completely relinquish control over assets in the trust. However, an irrevocable trust does offer some advantages, such as protecting assets from creditors.