diff --git a/lib/POMDPTools/src/ModelTools/ModelTools.jl b/lib/POMDPTools/src/ModelTools/ModelTools.jl
index f8d6340d..2524f352 100644
--- a/lib/POMDPTools/src/ModelTools/ModelTools.jl
+++ b/lib/POMDPTools/src/ModelTools/ModelTools.jl
@@ -40,7 +40,10 @@ export
     terminalstate
 include("terminal_state.jl")
 
-export GenerativeBeliefMDP
+export GenerativeBeliefMDP,
+    DefaultGBMDPTerminalBehavior,
+    ContinueTerminalBehavior,
+    TerminalStateTerminalBehavior
 include("generative_belief_mdp.jl")
 
 export FullyObservablePOMDP
@@ -78,4 +81,8 @@ export
     reward_vectors
 include("matrices.jl")
 
+export
+    gbmdp_handle_terminal
+include("deprecated.jl")
+
 end
diff --git a/lib/POMDPTools/src/ModelTools/deprecated.jl b/lib/POMDPTools/src/ModelTools/deprecated.jl
new file mode 100644
index 00000000..f2d08480
--- /dev/null
+++ b/lib/POMDPTools/src/ModelTools/deprecated.jl
@@ -0,0 +1 @@
+gbmdp_handle_terminal(pomdp, updater, b, s, a, rng) = nothing
diff --git a/lib/POMDPTools/src/ModelTools/generative_belief_mdp.jl b/lib/POMDPTools/src/ModelTools/generative_belief_mdp.jl
index 0b11f517..4e37ae4c 100644
--- a/lib/POMDPTools/src/ModelTools/generative_belief_mdp.jl
+++ b/lib/POMDPTools/src/ModelTools/generative_belief_mdp.jl
@@ -1,26 +1,36 @@
 """
     GenerativeBeliefMDP(pomdp, updater)
+    GenerativeBeliefMDP(pomdp, updater, terminal_behavior)
 
 Create a generative model of the belief MDP corresponding to POMDP `pomdp` with belief updates performed by `updater`.
 """
-struct GenerativeBeliefMDP{P<:POMDP, U<:Updater, B, A} <: MDP{B, A}
+struct GenerativeBeliefMDP{P<:POMDP, U<:Updater, T, B, A} <: MDP{B, A}
     pomdp::P
     updater::U
+    terminal_behavior::T
 end
 
-function GenerativeBeliefMDP(pomdp::P, up::U) where {P<:POMDP, U<:Updater}
-    # XXX hack to determine belief type
-    b0 = initialize_belief(up, initialstate(pomdp))
-    GenerativeBeliefMDP{P, U, typeof(b0), actiontype(pomdp)}(pomdp, up)
+function GenerativeBeliefMDP(pomdp, updater; terminal_behavior=DefaultGBMDPTerminalBehavior(pomdp, updater))
+    B = determine_gbmdp_state_type(pomdp, updater, terminal_behavior)
+    GenerativeBeliefMDP{typeof(pomdp),
+                        typeof(updater),
+                        typeof(terminal_behavior),
+                        B,
+                        actiontype(pomdp)
+                       }(pomdp, updater, terminal_behavior)
+end
+
+function initialstate(bmdp::GenerativeBeliefMDP)
+    return Deterministic(initialize_belief(bmdp.updater, initialstate(bmdp.pomdp)))
 end
 
 function POMDPs.gen(bmdp::GenerativeBeliefMDP, b, a, rng::AbstractRNG)
     s = rand(rng, b)
     if isterminal(bmdp.pomdp, s)
-        bp = gbmdp_handle_terminal(bmdp.pomdp, bmdp.updater, b, s, a, rng::AbstractRNG)::typeof(b)
+        bp = bmdp.terminal_behavior(b, s, a, rng)
         return (sp=bp, r=0.0)
     end
-    sp, o, r = @gen(:sp, :o, :r)(bmdp.pomdp, s, a, rng) # maybe this should have been generate_or?
+    o, r = @gen(:o, :r)(bmdp.pomdp, s, a, rng)
     bp = update(bmdp.updater, b, a, o)
     return (sp=bp, r=r)
 end
@@ -28,28 +38,47 @@ end
 actions(bmdp::GenerativeBeliefMDP{P,U,B,A}, b::B) where {P,U,B,A} = actions(bmdp.pomdp, b)
 actions(bmdp::GenerativeBeliefMDP) = actions(bmdp.pomdp)
 
-isterminal(bmdp::GenerativeBeliefMDP, b) = all(isterminal(bmdp.pomdp, s) for s in support(b))
+isterminal(bmdp::GenerativeBeliefMDP, b) = all(s -> isterminal(bmdp.pomdp, s) || pdf(b, s) == 0.0, support(b))
+isterminal(bmdp::GenerativeBeliefMDP, ts::TerminalState) = true
 
 discount(bmdp::GenerativeBeliefMDP) = discount(bmdp.pomdp)
 
-# override this if you want to handle it in a special way
-function gbmdp_handle_terminal(pomdp::POMDP, updater::Updater, b, s, a, rng)
-    @warn("""
-         Sampled a terminal state for a GenerativeBeliefMDP transition - not sure how to proceed, but will try.
+function determine_gbmdp_state_type(pomdp, updater)
+    b0 = initialize_belief(updater, initialstate(pomdp))
+    return typeof(b0)
+end
 
-         See $(@__FILE__) and implement a new method of POMDPToolbox.gbmdp_handle_terminal if you want special behavior in this case.
+determine_gbmdp_state_type(pomdp, updater, terminal_behavior) = determine_gbmdp_state_type(pomdp, updater)
 
-         """, maxlog=1)
-    sp, o, r = @gen(:sp, :o, :r)(pomdp, s, a, rng)
-    bp = update(updater, b, a, o)
-    return bp
+struct DefaultGBMDPTerminalBehavior{M, U}
+    pomdp::M
+    updater::U
 end
 
-function initialstate(bmdp::GenerativeBeliefMDP)
-    return Deterministic(initialize_belief(bmdp.updater, initialstate(bmdp.pomdp)))
+function (tb::DefaultGBMDPTerminalBehavior)(b, s, a, rng)
+
+    # This code block is only to handle backwards compatibility for the deprecated gbmdp_handle_terminal function
+    bp = gbmdp_handle_terminal(tb.pomdp, tb.updater, b, s, a, rng)
+    if bp != nothing # user has implemented gbmdp_handle_terminal
+        Base.depwarn("Using gbmdp_handle_terminal to specify terminal behavior for a GenerativeBeliefMDP is deprecated. Use the terminal_behavior keyword argument instead.", :gbmdp_handle_terminal)
+        return bp
+    end
+
+    return TerminalStateTerminalBehavior()(b, s, a, rng)
+end
+
+determine_gbmdp_state_type(pomdp, updater, tb::DefaultGBMDPTerminalBehavior) = determine_gbmdp_state_type(pomdp, updater, TerminalStateTerminalBehavior())
+
+struct ContinueTerminalBehavior{M, U}
+    pomdp::M
+    updater::U
 end
 
-# deprecated in POMDPs v0.9
-function initialstate(bmdp::GenerativeBeliefMDP, rng::AbstractRNG)
-    return initialize_belief(bmdp.updater, initialstate(bmdp.pomdp))
+function (tb::ContinueTerminalBehavior)(b, s, a, rng)
+    o, r = @gen(:o, :r)(tb.pomdp, s, a, rng)
+    return update(tb.updater, b, a, o)
 end
+
+struct TerminalStateTerminalBehavior end
+(tb::TerminalStateTerminalBehavior)(args...) = terminalstate
+determine_gbmdp_state_type(pomdp, updater, tb::TerminalStateTerminalBehavior) = promote_type(determine_gbmdp_state_type(pomdp, updater), TerminalState)
diff --git a/lib/POMDPTools/test/model_tools/test_generative_belief_mdp.jl b/lib/POMDPTools/test/model_tools/test_generative_belief_mdp.jl
index d02ce0c0..2c3ac647 100644
--- a/lib/POMDPTools/test/model_tools/test_generative_belief_mdp.jl
+++ b/lib/POMDPTools/test/model_tools/test_generative_belief_mdp.jl
@@ -1,7 +1,65 @@
 let
-    pomdp = BabyPOMDP()
-    up = updater(pomdp)
+    @testset "GenerativeBeliefMDP" begin
+        @testset "Baby" begin
+            pomdp = BabyPOMDP()
+            up = updater(pomdp)
 
-    bmdp = GenerativeBeliefMDP(pomdp, up)
-    b = initialstate(bmdp, Random.default_rng())
+            bmdp = GenerativeBeliefMDP(pomdp, up)
+            b = rand(initialstate(bmdp))
+            @test rand(b) isa statetype(pomdp)
+
+            @test simulate(RolloutSimulator(max_steps=10), bmdp, RandomPolicy(bmdp)) <= 0
+        end
+
+        terminal_test_m = QuickPOMDP(
+            states = 1:2,
+            actions = 1:2,
+            observations = 1:2,
+            transition = (s, a) -> Deterministic(1),
+            observation = (a, sp) -> Deterministic(sp),
+            reward = s -> 0.0,
+            isterminal = ==(1),
+            initialstate = Deterministic(2)
+        )
+
+        @testset "Terminal Default" begin
+            up = DiscreteUpdater(terminal_test_m)
+            bm = GenerativeBeliefMDP(terminal_test_m, up)
+
+            hist = collect(stepthrough(bm, RandomPolicy(bm), "s,sp", max_steps=10))
+            @test length(hist) == 1
+            @test only(hist).s == DiscreteBelief(terminal_test_m, [0.0, 1.0])
+            @test only(hist).sp == DiscreteBelief(terminal_test_m, [1.0, 0.0])
+            @test !isterminal(bm, only(hist).s)
+            @test isterminal(bm, only(hist).sp)
+        end
+
+        @testset "Terminal Uninformative Update" begin
+            struct UninformativeUpdater{M} <: Updater
+                m::M
+            end
+
+            POMDPs.update(up::UninformativeUpdater, b, a, o) = Uniform(states(up.m))
+            POMDPs.initialize_belief(up::UninformativeUpdater, d::Deterministic) = Uniform(rand(d))
+
+            up = UninformativeUpdater(terminal_test_m)
+
+            # default terminal behavior
+            bm = GenerativeBeliefMDP(terminal_test_m, up)
+            hist = collect(stepthrough(bm, RandomPolicy(bm), "s,sp")
+            @test isterminal(bm, last(hist).sp)
+
+            behavior = TerminalStateTerminalBehavior()
+            bm = GenerativeBeliefMDP(terminal_test_m, up)
+            hist = collect(stepthrough(bm, RandomPolicy(bm), "s,sp")
+            @test last(hist).sp === terminalstate
+            @test isterminal(bm, last(hist).sp)
+
+            behavior = ContinueTerminalBehavior(terminal_test_m, up)
+            bm = GenerativeBeliefMDP(terminal_test_m, up, terminal_behavior=behavior)
+            hist = collect(stepthrough(bm, RandomPolicy(bm), "s,sp", max_steps=10))
+            @test length(hist) == 10
+        end
+
+    end
 end