Restrictive Agreements and Ownership Rules

If you own property, a business, or any significant asset in Atlanta, Georgia, there is a good chance that a restrictive agreement or ownership rule affects what you can do with it. These rules show up in buy-sell agreements, LLC operating agreements, property deed restrictions, and trust documents. They can limit who you can sell to, when you can sell, and how your assets pass to your heirs. Understanding how these rules work, and how they connect to your estate plan, can save your family from serious problems down the road. At Slowik Estate Planning, based in Atlanta, Georgia, we help clients build estate plans that work with these restrictions, not against them.

Table of Contents

• What Are Restrictive Agreements and Why Do They Matter in Georgia?
• How Buy-Sell Agreements Affect Business Ownership in Georgia
• Georgia Property Ownership Rules and Deed Restrictions
• How Trusts Interact With Restrictive Agreements and Ownership Rules
• Corporate Transparency and Ownership Disclosure Rules in 2026
• FAQs About Restrictive Agreements and Ownership Rules in Atlanta, Georgia

What Are Restrictive Agreements and Why Do They Matter in Georgia?

A restrictive agreement is a legally binding contract that limits what you can do with your property or ownership interest. In Georgia, these agreements appear in many forms. You might have a deed restriction on your home that controls how the property is used. You might have a buy-sell agreement with your business partners that controls what happens to your ownership stake when you die. You might even have a trust document that places conditions on how your beneficiaries can use inherited assets.

Under O.C.G.A. § 13-8-51, a “restrictive covenant” is defined as an agreement between two or more parties that exists to protect the first party’s interest in property, confidential information, customer goodwill, business relationships, employees, or any other economic advantages. This broad definition covers a wide range of agreements that Georgia property and business owners deal with every day.

Why does this matter for estate planning? Because a restrictive agreement can directly override what your will says. Imagine leaving your business interest to your child in your will, only to find out that your buy-sell agreement requires that interest to be sold back to your partners. A will and a company’s operating agreement do not always line up. For instance, your will may leave shares to a child, while the business agreement requires those shares to be sold to a partner. That kind of conflict usually lands in probate court, creating delays and tension. Catching these conflicts before they happen is one of the most important things a good estate plan does. If you have not reviewed your agreements alongside your estate plan recently, now is the time to do it.

Georgia courts take restrictive agreements seriously. A purchaser of land is conclusively charged with notice of restrictive agreements or covenants contained in a deed which constitutes one of the muniments of the purchaser’s own title. This means you cannot simply ignore a restriction because you did not read it carefully when you bought the property.

How Buy-Sell Agreements Affect Business Ownership in Georgia

If you co-own a business in Atlanta, a buy-sell agreement is one of the most powerful documents in your estate plan. It controls what happens to your ownership stake when you die, become disabled, retire, or want to exit the business. Without one, your heirs and your business partners could end up in a costly dispute about who owns what.

A buy-sell agreement can spell out who buys your share, at what price, and how it will be funded, often through life insurance. This clarity protects everyone involved. Your family gets fair value for your ownership stake. Your partners keep control of the business. Nobody ends up stuck with a co-owner they never agreed to work with.

Most buy-sell agreements include rights of first refusal, which restrict the ability of an owner to transfer ownership without first offering it back to the other members on comparable terms and conditions. This is a key ownership rule that you need to understand before you try to transfer any business interest as part of your estate plan. If your plan involves placing your business interest in a trust, for example, you need to check whether the buy-sell agreement allows that kind of transfer.

A Georgia shareholders agreement can exist for up to twenty years. That is a long time. Business owners often sign these agreements and then forget about them for years. Meanwhile, their family situation changes, their business grows, and their estate planning goals shift. Reviewing your buy-sell agreement regularly, and making sure it aligns with your current estate plan, is a step many people skip. The attorneys at Slowik Estate Planning in Atlanta, Georgia, can help you identify conflicts between your business agreements and your estate planning documents before they become problems for your family.

It is also worth noting that the use of a buy-sell agreement may result in the loss of certain estate tax benefits, such as the extension of time to pay estate taxes on the business under IRC Section 6166, and special use valuation discounting under IRC Section 2032A. These are real tax consequences that require careful planning.

Georgia Property Ownership Rules and Deed Restrictions

In Georgia, the way you hold title to your property has a direct impact on how it passes at your death. There are several common forms of property ownership, and each comes with its own set of rules. Choosing the right one for your situation is a key part of good estate planning.

If there is just one owner of the entire property, that is called sole ownership. If two or more people own the property simultaneously, that is a form of co-ownership called tenants in common. If the ownership rights are equal, that form of co-ownership is called joint tenancy. In the case of death, the decedent’s interest passes to the surviving joint tenant or tenants. Understanding these distinctions matters because they determine whether your property goes through probate, who gets it, and how quickly your heirs can access it.

Beyond title structure, deed restrictions can also limit what property owners can do with their land. The Georgia General Assembly has found that reasonable restrictive covenants contained in employment and commercial contracts serve the legitimate purpose of protecting legitimate business interests and creating an environment favorable to attracting commercial enterprises to Georgia. The General Assembly also desires to provide statutory guidance so that all parties may be certain of the validity and enforceability of such provisions.

For homeowners in subdivisions, deed restrictions are enforced through homeowners associations. Under O.C.G.A. § 44-5-60(d)(4), covenants imposing greater restrictions on the use of land cannot be enforced against a property owner without that owner’s consent. This is important to know if you are buying property in a community that wants to add new restrictions after you purchase your home.

Georgia also now allows transfer-on-death (TOD) deeds, which let you name a beneficiary for your real estate without going through probate. Each tenant in common can separately designate a beneficiary for their undivided interest. One tenant in common can file or revoke a TOD deed on their share without consent from the other owners. Working with an estate planning attorney in Atlanta helps you choose the right ownership structure and deed strategy for your specific goals.

How Trusts Interact With Restrictive Agreements and Ownership Rules

Trusts are one of the most flexible tools in estate planning, but they do not exist in a vacuum. When you transfer assets into a trust, you need to make sure the trust complies with any restrictive agreements that apply to those assets. This is especially true for business interests and real estate.

For example, if you want to place your LLC interest into a revocable living trust, you need to check the operating agreement first. LLC interests can potentially transfer at death via a TOD-like method, but only if it aligns with the LLC’s operating agreement and Georgia’s laws. Many operating agreements have specific clauses about what happens on an owner’s death. If your LLC’s governing documents are silent on such transfers or require certain conditions, you must address those issues carefully.

The type of trust you use also matters for business ownership. Some business structures limit who can hold ownership, and S Corporations are particularly strict about what kind of trusts can hold shares. Your estate plan must comply with Georgia state law to avoid triggering unwanted tax consequences or rendering your business structure invalid.

There is also an important federal tax rule that affects irrevocable trusts. Under IRS Revenue Ruling 2023-2, if you transfer assets to an irrevocable trust and the assets are not included in your gross estate at death, those assets do not receive a stepped-up basis under IRC § 1014. This means your trust beneficiaries could face higher capital gains taxes when they sell inherited assets from certain irrevocable trusts. This is a real planning consideration that you should discuss with your attorney before choosing a trust structure.

Trusts can also hold a wide variety of assets, including interests in businesses, real estate, and even pet guardianships. Proper trust administration requires that the trustee understand and comply with all restrictive agreements that apply to trust assets. Failing to do so can expose the trustee to personal liability and cause serious problems for the beneficiaries.

Corporate Transparency and Ownership Disclosure Rules in 2026

Business owners in Atlanta also need to understand the current state of federal ownership disclosure rules under the Corporate Transparency Act (CTA). These rules have changed significantly, and staying current is important for anyone who owns a business entity as part of their estate plan.

On March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) announced an interim final rule that made major changes to beneficial ownership reporting requirements. Under this rule, FinCEN revised the definition of “reporting company” so that it now applies only to entities formed under the law of a foreign country that have registered to do business in a U.S. state. All entities created in the United States, including those previously known as “domestic reporting companies,” are now exempt from the requirement to report beneficial ownership information (BOI) to FinCEN. This interim final rule was published on March 26, 2025.

What does this mean for you as a Georgia business owner? If your LLC, corporation, or other business entity was formed in Georgia or another U.S. state, you no longer need to file a BOI report with FinCEN under the CTA. This is a significant change from the rules that were in place in prior years. However, if you have foreign-formed entities in your estate plan, those entities may still have reporting obligations. You should confirm your current obligations with a qualified attorney.

This change does not mean you can ignore ownership structure entirely. Georgia still requires businesses to maintain proper records and comply with state law. Businesses must maintain compliance with Georgia corporate law. For instance, an LLC might need an operating agreement outlining its business structure, property ownership, and division of business interests. A well-drafted operating agreement, combined with a current estate plan, keeps your ownership structure clear and your assets protected. Reach out to Slowik Estate Planning in Atlanta, Georgia, to make sure your business ownership documents are up to date and aligned with your estate planning goals.

FAQs About Restrictive Agreements and Ownership Rules in Atlanta, Georgia

What happens if my will conflicts with my buy-sell agreement in Georgia?

Your buy-sell agreement will generally control what happens to your business interest. Georgia courts have consistently upheld properly drafted buy-sell agreements, even when they conflict with a will. For example, if your will leaves your LLC interest to your child but your operating agreement requires that interest to be offered to your co-owners first, the operating agreement wins. This is why it is so important to review all of your business agreements alongside your estate plan. An attorney at Slowik Estate Planning in Atlanta can help you identify and resolve these conflicts before they become a problem for your family.

Can I put my Georgia business interest into a trust?

Yes, in many cases you can transfer a business interest into a trust, but you must check the governing documents of your business first. LLC operating agreements often restrict transfers or require the consent of other members. S Corporations have strict rules about what types of trusts can hold shares. If you transfer a business interest into a trust that is not permitted under the operating agreement or applicable law, the transfer could be voided or could trigger unintended legal and tax consequences. Always work with a qualified estate planning attorney before making this kind of transfer.

Do deed restrictions in Georgia expire?

Some deed restrictions in Georgia do expire, but others do not. Under O.C.G.A. § 44-5-60, certain restrictive covenants on real property can be renewed, and some run with the land indefinitely. Whether a specific restriction expires depends on the language in the deed or declaration and whether the relevant community has taken steps to renew it. If you are buying property or planning to transfer property as part of your estate plan, it is important to review all deed restrictions carefully to understand what limitations apply and for how long.

Do I still need to file a beneficial ownership report with FinCEN in 2026?

As of March 2026, U.S. domestic companies are no longer required to file beneficial ownership information (BOI) reports with FinCEN under the Corporate Transparency Act. FinCEN issued an interim final rule in March 2025 that exempts all entities formed in the United States from this requirement. Only foreign-formed entities that have registered to do business in a U.S. state are still subject to the BOI reporting requirement. If you have questions about whether your specific entity has any remaining obligations, you should consult with an attorney who stays current on federal regulatory changes.

How does IRS Revenue Ruling 2023-2 affect my estate plan?

IRS Revenue Ruling 2023-2 clarified that assets transferred to certain irrevocable trusts, where those assets are not included in your taxable estate at death, do not receive a stepped-up basis under IRC § 1014. This matters because a stepped-up basis reduces or eliminates capital gains taxes when your heirs sell inherited assets. If your irrevocable trust is structured so that the assets stay out of your estate for estate tax purposes, your beneficiaries may owe more in capital gains taxes when they sell those assets. This trade-off between estate tax savings and income tax costs is a real planning issue that requires careful analysis. Slowik Estate Planning in Atlanta, Georgia, can help you weigh these options and build a plan that works for your family’s specific situation.

More Resources About Trusts for Professional Practices

• Trust Planning for Physicians Dentists and Attorneys
• Practice Sale Planning and Trusts