The deposits you hold are not your money
Under Georgia law, a security deposit is held in trust for the tenant. It is not income. It is not part of what you own. You are just holding it until the tenant moves out.
The rule comes from O.C.G.A. § 44-7-31. It says most landlords must place every deposit in a separate escrow account at a bank. You must also tell each tenant, in writing, where that account is.
This matters for your estate plan. Because the deposit is not yours, it should not go to your heirs. It still belongs to your tenants. But that only works cleanly if someone can legally reach the account after you are gone.
What actually freezes when you die
Most escrow accounts are opened in the owner’s personal name. When the bank learns the owner has died, it often freezes the account until it sees legal proof of who is now in charge.
That freeze is the danger. Rent still comes in. Tenants still move out. Repairs still need approval. But the person trying to run your property may have no power to sign anything or touch a dollar.
If a tenant moves out during that gap and asks for their deposit back, no one can return it. The clock is running and the account is locked. That is how a simple deposit turns into a lawsuit against your estate.
Who can return deposits, and who has to wait
The answer depends on how you set up your estate. There are two very different paths.
1
A successor trustee acts on Day 1
If your property sits in a funded revocable trust, the person you named as successor trustee takes over the moment you die. They can reach the escrow account, return deposits, and keep the property running with no court delay.
2
An executor has to wait for the court
If your property is only in a will, no one has power until a judge appoints your executor. That can take months. During the wait, the escrow account may stay frozen and deposits cannot be returned.
3
With no plan, the wait is longest
If you die with no will and no trust, the court must first decide who is in charge. This is the slowest path of all, and every deposit deadline keeps running the entire time.
The 30 day clock does not stop for your death
Georgia law does not pause deadlines because a landlord died. Under O.C.G.A. § 44-7-34, whoever holds the property must return a deposit, or send an itemized list of deductions, within 30 days after the tenant moves out.
If that deadline is missed, the penalty is steep. Under O.C.G.A. § 44-7-35, a landlord who holds a deposit in bad faith can be ordered to pay the tenant three times the amount, plus the tenant’s attorney fees.
Your estate inherits this risk. If your successor cannot reach the account in time, that three times penalty comes out of what your family would have received.
The 10 unit line that changes your rules
There is one exception worth knowing. If you own ten or fewer rental units and do not use an outside manager, § 44-7-31 says you do not have to keep deposits in a bank escrow account.
But the exemption is smaller than it sounds. You still must return every deposit on time, and you still owe the same penalties if you fail. The money is still your tenant’s, not yours.
Most apartment and multifamily owners are over that line anyway. Once you cross ten units, or hire a property manager, the escrow account is required, and so is the plan for who controls it after you die.
How to keep the deposit duty from failing
The fix is not complicated. It is about making sure someone has the power to act the day you are gone.
1
Put the property in a revocable trust
Move your rental property into a funded revocable living trust. This is what lets your successor trustee step in without waiting for a court.
2
Title the escrow account to the trust
Open or move the security deposit escrow account so it is held by the trust, not your personal name. Then it does not freeze when you die.
3
Leave a written deposit record
Keep a simple list of every tenant, their deposit amount, and the account location. Your successor cannot return what they cannot find.
4
Name a successor who can manage property
Pick a successor trustee who can actually handle tenants, repairs, and deadlines, or who will hire a manager fast. Authority only helps if the person uses it.
Done right, the transition is invisible to your tenants. Deposits stay protected, deadlines stay met, and your family never faces a three times penalty for something you could have prevented.
