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Full Text of SB1295  97th General Assembly

SB1295eng 97TH GENERAL ASSEMBLY

  
  
  

 


 
SB1295 EngrossedLRB097 00011 AJO 40080 b

1    AN ACT concerning civil law.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Trusts and Trustees Act is amended by
5changing Sections 5.3 and 16.1 as follows:
 
6    (760 ILCS 5/5.3)
7    Sec. 5.3. Total return trusts.
8    (a) Conversion by trustee. A trustee may convert a trust to
9a total return trust as described in this Section if all of the
10following apply:
11        (1) The trust describes the amount that may or must be
12    distributed to a beneficiary by referring to the trust's
13    income, and the trustee determines that conversion to a
14    total return trust will enable the trustee to better carry
15    out the purposes of the trust and the conversion is in the
16    best interests of the beneficiaries;
17        (2) conversion to a total return trust means the
18    trustee will invest and manage trust assets seeking a total
19    return without regard to whether that return is from income
20    or appreciation of principal, and will make distributions
21    in accordance with this Section (such a trust is called a
22    "total return trust" in this Section);
23        (3) the trustee sends a written notice of the trustee's

 

 

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1    decision to convert the trust to a total return trust,
2    specifying a prospective effective date for the conversion
3    and including a copy of this Section, to the following
4    beneficiaries, determined as of the date the notice is sent
5    and assuming nonexercise of all powers of appointment:
6            (A) all of the legally competent beneficiaries who
7        are currently receiving or eligible to receive income
8        from the trust; and
9            (B) all of the legally competent beneficiaries who
10        would receive or be eligible to receive a distribution
11        of principal or income if the current interests of
12        beneficiaries currently receiving or eligible to
13        receive income ended;
14        (4) there are one or more legally competent income
15    beneficiaries under subdivision (3)(A) of this subsection
16    (a) and one or more legally competent remainder
17    beneficiaries under subdivision (3)(B) of this subsection
18    (a), determined as of the date of sending the notice;
19        (5) no beneficiary objects to the conversion to a total
20    return trust in a writing delivered to the trustee within
21    60 days after the notice is sent; and
22        (6) the trustee has signed acknowledgments of receipt
23    confirming that notice was received by each beneficiary
24    required to be sent notice under subdivision (3) of this
25    subsection (a).
26    (b) Conversion by agreement. Conversion to a total return

 

 

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1trust may be made by agreement between a trustee and (i) all
2primary beneficiaries, acting either individually or by their
3respective representatives in accordance with Section
4subsection 16.1(a)(2) of this Act, or (ii) all beneficiaries
5currently eligible to receive income or principal from the
6trust and all beneficiaries who are presumptive remaindermen,
7either individually or by their respective representatives in
8accordance with subsection 16.1(a)(3) of this Act. The
9agreement may include any actions a court could properly order
10under subsection (g) of this Section; however, any distribution
11percentage determined by the agreement may not be less than 3%
12nor greater than 5%.
13    (c) Conversion or reconversion by court.
14        (1) The trustee may for any reason elect to petition
15    the court to order conversion to a total return trust,
16    including without limitation the reason that conversion
17    under subsection (a) is unavailable because:
18            (A) a beneficiary timely objects to the conversion
19        to a total return trust;
20            (B) there are no legally competent beneficiaries
21        described in subdivision (3)(A) of subsection (a); or
22            (C) there are no legally competent beneficiaries
23        described in subdivision (3)(B) of subsection (a).
24        (2) A beneficiary may request the trustee to convert to
25    a total return trust or adjust the distribution percentage.
26    If the trustee declines or fails to act within 6 months

 

 

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1    after receiving a written request to do so, the beneficiary
2    may petition the court to order the conversion or
3    adjustment.
4        (3) The trustee may petition the court prospectively to
5    reconvert from a total return trust or adjust the
6    distribution percentage if the trustee determines that the
7    reconversion or adjustment will enable the trustee to
8    better carry out the purposes of the trust. A beneficiary
9    may request the trustee to petition the court prospectively
10    to reconvert from a total return trust or adjust the
11    distribution percentage. If the trustee declines or fails
12    to act within 6 months after receiving a written request to
13    do so, the beneficiary may petition the court to order the
14    reconversion or adjustment.
15        (4) In a judicial proceeding under this subsection (c),
16    the trustee may, but need not, present the trustee's
17    opinions and reasons (A) for supporting or opposing
18    conversion to (or reconversion from or adjustment of the
19    distribution percentage of) a total return trust,
20    including whether the trustee believes conversion (or
21    reconversion or adjustment of the distribution percentage)
22    would enable the trustee to better carry out the purposes
23    of the trust, and (B) about any other matters relevant to
24    the proposed conversion (or reconversion or adjustment of
25    the distribution percentage). A trustee's actions in
26    accordance with this subsection (c) shall not be deemed

 

 

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1    improper or inconsistent with the trustee's duty of
2    impartiality unless the court finds from all the evidence
3    that the trustee acted in bad faith.
4        (5) The court shall order conversion to (or
5    reconversion prospectively from or adjustment of the
6    distribution percentage of) a total return trust if the
7    court determines that the conversion (or reconversion or
8    adjustment of the distribution percentage) will enable the
9    trustee to better carry out the purposes of the trust and
10    the conversion (or reconversion or adjustment of the
11    distribution percentage) is in the best interests of the
12    beneficiaries.
13        (6) Notwithstanding any other provision of this
14    Section, a trustee has no duty to inform beneficiaries
15    about the availability of this Section and has no duty to
16    review the trust to determine whether any action should be
17    taken under this Section unless requested to do so in
18    writing by a beneficiary described in subdivision (3) of
19    subsection (a).
20    (d) Post conversion. While a trust is a total return trust,
21all of the following shall apply to the trust:
22        (1) the trustee shall make income distributions in
23    accordance with the governing instrument subject to the
24    provisions of this Section;
25        (2) the term "income" in the governing instrument means
26    an annual amount (the "distribution amount") equal to a

 

 

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1    percentage (the "distribution percentage") of the net fair
2    market value of the trust's assets, whether the assets are
3    considered income or principal under the Principal and
4    Income Act, averaged over the lesser of:
5            (i) the 3 preceding years; or
6            (ii) the period during which the trust has been in
7        existence;
8        (3) the distribution percentage for any trust
9    converted to a total return trust by a trustee in
10    accordance with subsection (a) shall be 4%;
11        (4) the trustee shall pay to a beneficiary (in the case
12    of an underpayment) and shall recover from a beneficiary
13    (in the case of an overpayment) an amount equal to the
14    difference between the amount properly payable and the
15    amount actually paid, plus interest compounded annually at
16    a rate per annum equal to the distribution percentage in
17    the year or years while the underpayment or overpayment
18    exists; and
19        (5) a change in the method of determining a reasonable
20    current return by converting to a total return trust in
21    accordance with this Section and substituting the
22    distribution amount for net trust accounting income is a
23    proper change in the definition of trust income
24    notwithstanding any contrary provision of the Principal
25    and Income Act, and the distribution amount shall be deemed
26    a reasonable current return that fairly apportions the

 

 

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1    total return of a total return trust.
2    (e) Administration. The trustee, in the trustee's
3discretion, may determine any of the following matters in
4administering a total return trust as the trustee from time to
5time determines necessary or helpful for the proper functioning
6of the trust:
7        (1) the effective date of a conversion to a total
8    return trust;
9        (2) the manner of prorating the distribution amount for
10    a short year in which a beneficiary's interest commences or
11    ceases;
12        (3) whether distributions are made in cash or in kind;
13        (4) the manner of adjusting valuations and
14    calculations of the distribution amount to account for
15    other payments from or contributions to the trust;
16        (5) whether to value the trust's assets annually or
17    more frequently;
18        (6) what valuation dates and how many valuation dates
19    to use;
20        (7) valuation decisions about any asset for which there
21    is no readily available market value, including:
22            (A) how frequently to value such an asset;
23            (B) whether and how often to engage a professional
24        appraiser to value such an asset; and
25            (C) whether to exclude the value of such an asset
26        from the net fair market value of the trust's assets

 

 

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1        under subdivision (d)(2) for purposes of determining
2        the distribution amount. Any such asset so excluded is
3        referred to as an "excluded asset" in this subsection
4        (e), and the trustee shall distribute any net income
5        received from the excluded asset as provided for in the
6        governing instrument, subject to the following
7        principles:
8                (i) unless the trustee determines there are
9            compelling reasons to the contrary considering all
10            relevant factors including the best interests of
11            the beneficiaries, the trustee shall treat each
12            asset for which there is no readily available
13            market value as an excluded asset;
14                (ii) if tangible personal property or real
15            property is possessed or occupied by a
16            beneficiary, the trustee shall not limit or
17            restrict any right of the beneficiary to use the
18            property in accordance with the governing
19            instrument whether or not the trustee treats the
20            property as an excluded asset;
21                (iii) examples of assets for which there is a
22            readily available market value include: cash and
23            cash equivalents; stocks, bonds, and other
24            securities and instruments for which there is an
25            established market on a stock exchange, in an
26            over-the-counter market, or otherwise; and any

 

 

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1            other property that can reasonably be expected to
2            be sold within one week of the decision to sell
3            without extraordinary efforts by the seller;
4                (iv) examples of assets for which there is no
5            readily available market value include: stocks,
6            bonds, and other securities and instruments for
7            which there is no established market on a stock
8            exchange, in an over-the-counter market, or
9            otherwise; real property; tangible personal
10            property; and artwork and other collectibles; and
11        (8) any other administrative matters as the trustee
12    determines necessary or helpful for the proper functioning
13    of the total return trust.
14    (f) Allocations.
15        (1) Expenses, taxes, and other charges that would be
16    deducted from income if the trust were not a total return
17    trust shall not be deducted from the distribution amount.
18        (2) Unless otherwise provided by the governing
19    instrument, the trustee shall fund the distribution amount
20    each year from the following sources for that year in the
21    order listed: first from net income (as the term would be
22    determined if the trust were not a total return trust),
23    then from other ordinary income as determined for federal
24    income tax purposes, then from net realized short-term
25    capital gains as determined for federal income tax
26    purposes, then from net realized long-term capital gains as

 

 

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1    determined for federal income tax purposes, then from trust
2    principal comprised of assets for which there is a readily
3    available market value, and then from other trust
4    principal.
5    (g) Court orders. The court may order any of the following
6actions in a proceeding brought by a trustee or a beneficiary
7in accordance with subdivision (c)(1), (c)(2), or (c)(3):
8        (1) select a distribution percentage other than 4%;
9        (2) average the valuation of the trust's net assets
10    over a period other than 3 years;
11        (3) reconvert prospectively from or adjust the
12    distribution percentage of a total return trust;
13        (4) direct the distribution of net income (determined
14    as if the trust were not a total return trust) in excess of
15    the distribution amount as to any or all trust assets if
16    the distribution is necessary to preserve a tax benefit; or
17        (5) change or direct any administrative procedure as
18    the court determines necessary or helpful for the proper
19    functioning of the total return trust.
20    Nothing in this subsection (g) limits the equitable powers
21of the court to grant other relief.
22    (h) Restrictions. Conversion to a total return trust does
23not affect any provision in the governing instrument:
24        (1) directing or authorizing the trustee to distribute
25    principal;
26        (2) directing or authorizing the trustee to distribute

 

 

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1    a fixed annuity or a fixed fraction of the value of trust
2    assets;
3        (3) authorizing a beneficiary to withdraw a portion or
4    all of the principal; or
5        (4) in any manner that would diminish an amount
6    permanently set aside for charitable purposes under the
7    governing instrument unless both income and principal are
8    so set aside.
9    (i) Tax limitations. If a particular trustee is a
10beneficiary of the trust and conversion or failure to convert
11would enhance or diminish the beneficial interest of the
12trustee, or if possession or exercise of the conversion power
13by a particular trustee would alone cause any individual to be
14treated as owner of a part of the trust for income tax purposes
15or cause a part of the trust to be included in the gross estate
16of any individual for estate tax purposes, then that particular
17trustee may not participate as a trustee in the exercise of the
18conversion power; however:
19        (1) the trustee may petition the court under
20    subdivision (c)(1) to order conversion in accordance with
21    this Section; and
22        (2) if the trustee has one or more co-trustees to whom
23    this subsection (i) does not apply, the co-trustee or
24    co-trustees may convert the trust to a total return trust
25    in accordance with this Section.
26    (j) Releases. A trustee may irrevocably release the power

 

 

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1granted by this Section if the trustee reasonably believes the
2release is in the best interests of the trust and its
3beneficiaries. The release may be personal to the releasing
4trustee or may apply generally to some or all subsequent
5trustees, and the release may be for any specified period,
6including a period measured by the life of an individual.
7    (k) Remedies. A trustee who reasonably and in good faith
8takes or omits to take any action under this Section is not
9liable to any person interested in the trust. If a trustee
10reasonably and in good faith takes or omits to take any action
11under this Section and a person interested in the trust opposes
12the act or omission, the person's exclusive remedy is to obtain
13an order of the court directing the trustee to convert the
14trust to a total return trust, to reconvert from a total return
15trust, to change the distribution percentage, or to order any
16administrative procedures the court determines necessary or
17helpful for the proper functioning of the trust. An act or
18omission by a trustee under this Section is presumed taken or
19omitted reasonably and in good faith unless it is determined by
20the court to have been an abuse of discretion. Any claim by any
21person interested in the trust that an act or omission by a
22trustee under this Section was an abuse of discretion is barred
23if not asserted in a proceeding commenced by or on behalf of
24the person within 2 years after the trustee has sent to the
25person or the person's personal representative a notice or
26report in writing sufficiently disclosing facts fundamental to

 

 

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1the claim such that the person knew or reasonably should have
2known of the claim. The preceding sentence shall not apply to a
3person who was under a legal disability at the time the notice
4or report was sent and who then had no personal representative.
5For purposes of this subsection (k), a personal representative
6refers to a court appointed guardian or conservator of the
7estate of a person.
8    (l) Application. This Section is available to trusts in
9existence on the effective date of this amendatory Act of the
1092nd General Assembly or created after that date. This Section
11shall be construed as pertaining to the administration of a
12trust and shall be available to any trust that is administered
13in Illinois under Illinois law or that is governed by Illinois
14law with respect to the meaning and effect of its terms unless:
15        (1) the trust is a trust described in Internal Revenue
16    Code Section 642(c)(5), 664(d), 2702(a)(3), or 2702(b); or
17        (2) the governing instrument expressly prohibits use
18    of this Section by specific reference to this Section. A
19    provision in the governing instrument in the form: "Neither
20    the provisions of Section 5.3 of the Trusts and Trustees
21    Act nor any corresponding provision of future law may be
22    used in the administration of this trust" or a similar
23    provision demonstrating that intent is sufficient to
24    preclude the use of this Section.
25    (m) Application to express trusts.
26        (1) This subsection (m) does not apply to a charitable

 

 

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1    remainder unitrust as defined by Section 664(d), Internal
2    Revenue Code of 1986 (26 U.S.C. Section 664), as amended.
3        (2) In this subsection (m):
4            (A) "Unitrust" means a trust the terms of which
5        require distribution of a unitrust amount, without
6        regard to whether the trust has been converted to a
7        total return trust in accordance with this Section or
8        whether the trust is established by express terms of
9        the governing instrument.
10            (B) "Unitrust amount" means an amount equal to a
11        percentage of a trust's assets that may or must be
12        distributed to one or more beneficiaries annually in
13        accordance with the terms of the trust. The unitrust
14        amount may be determined by reference to the net fair
15        market value of the trust's assets as of a particular
16        date or as an average determined on a multiple year
17        basis.
18        (3) A unitrust changes the definition of income by
19    substituting the unitrust amount for net trust accounting
20    income as the method of determining current return and
21    shall be given effect notwithstanding any contrary
22    provision of the Principal and Income Act. By way of
23    example and not limitation, a unitrust amount determined by
24    a percentage of not less than 3% nor greater than 5% is
25    conclusively presumed a reasonable current return that
26    fairly apportions the total return of a unitrust.

 

 

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1        (4) The allocations provision of subdivision (2) of
2    subsection (f) of Section 5.3 applies to a unitrust except
3    to the extent its governing instrument expressly provides
4    otherwise.
5(Source: P.A. 96-479, eff. 1-1-10.)
 
6    (760 ILCS 5/16.1)
7    Sec. 16.1. Virtual representation.
8    (a) Representation by a beneficiary with a person having
9substantially similar identical interest, by the primary
10beneficiaries and by others ; contingent remainder
11beneficiaries.
12        (1) To the extent there is no material conflict of
13    interest between the representative and the person
14    represented beneficiary with respect to the particular
15    question or dispute, a minor, disabled, or unborn
16    beneficiary person, or a beneficiary person whose identity
17    or location is unknown and not reasonably ascertainable
18    (hereinafter referred to as an "unascertainable
19    beneficiary"), may for all purposes be represented by and
20    bound by another beneficiary individual having a
21    substantially similar identical interest with respect to
22    the particular question or dispute; provided, however,
23    that the represented beneficiary such person is not
24    otherwise represented by a court appointed guardian ad
25    litem or other guardian as provided in the next sentence.

 

 

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1    If a beneficiary person is represented by a court appointed
2    guardian of the estate for the beneficiary or, if none, by
3    a court appointed guardian of the person, for the
4    beneficiary, actions of such guardian shall represent and
5    bind the beneficiary that person for purposes of this
6    subsection (a)(1).
7        (2) If all primary beneficiaries of a trust either have
8    legal capacity are adults and not disabled, or have
9    representatives in accordance with this subsection (a)(1)
10    who have legal capacity are adults and not disabled, the
11    actions of such primary beneficiaries, in each case either
12    by the beneficiary or by the beneficiary's representative
13    or their respective representatives, shall represent and
14    bind all other persons who have a successor, contingent,
15    future, or other interest in the trust and who would become
16    primary beneficiaries only by reason of surviving a primary
17    beneficiary.
18        For purposes of this Section, "primary beneficiary"
19    means a beneficiary who is either: (i) currently eligible
20    to receive income or principal from the trust or (ii)
21    assuming nonexercise of all powers of appointment, will be
22    eligible to receive a distribution of principal from the
23    trust if the beneficiary survives to the final date of
24    distribution with respect to the beneficiary's share.
25        (3) (Blank). If all presumptive remainder
26    beneficiaries either are adults and not disabled, or have

 

 

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1    representatives in accordance with subsection (a)(1) who
2    are adults and not disabled, the actions of such
3    presumptive remainder beneficiaries, or their respective
4    representatives, shall represent and bind all other
5    beneficiaries who have a successor, contingent, or other
6    future interest in the trust. For purposes of this Section,
7    "presumptive remainder beneficiaries" means,
8        (3.5) For purposes of this Act:
9            (A) "Primary beneficiary" means a beneficiary of a
10        trust who as of the date of determination is either:
11        (i) currently eligible to receive income or principal
12        from the trust or (ii) is a presumptive remainder
13        beneficiary.
14            (B) "Presumptive remainder beneficiary" means a
15        beneficiary of a trust, as of the date of determination
16        and assuming nonexercise of all powers of appointment,
17        all beneficiaries who either (i) (A) would be eligible
18        to receive a distribution of income or principal if the
19        trust terminated on that date, or (ii) (B) would be
20        eligible to receive a distribution of income or
21        principal if the interests of all beneficiaries
22        currently eligible to receive income or principal from
23        the trust ended on that date without causing the trust
24        to terminate.
25            (C) "Disabled person" as of any date either means a
26        disabled person within the meaning of Section 11a-2 of

 

 

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1        the Probate Act of 1975 or means a person who, within
2        the 365 days immediately preceding that date, (i) was
3        examined by a licensed physician who determined that
4        such person lacked the capacity to make prudent
5        financial decisions, and (ii) such physician made a
6        written record of the physician's determination and
7        signed the written record within 90 days after the
8        examination.
9            (D) A person has legal capacity unless the person
10        is a minor or a disabled person.
11        (4) If a trust beneficiary is a disabled person who is
12    not represented by another in accordance with any preceding
13    provision of this Section, an agent under a power of
14    attorney for property who has authority to act with respect
15    to the particular question or dispute and who does not have
16    a material conflict of interest with respect to the
17    particular question or dispute may represent and bind the
18    principal. An agent is deemed to have such authority if the
19    power of attorney grants the agent the power to settle
20    claims and to exercise powers with respect to trusts and
21    estates even if such power does not include the power to
22    revoke or amend a trust. The consent of a person who may
23    represent and bind another person in accordance with this
24    Section is binding on the person represented, and notice to
25    a person who may represent and bind another person in
26    accordance with this Section has the same effect as if

 

 

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1    notice were given directly to the other person.
2        (5) If a trust beneficiary is a minor or a disabled
3    person who is not represented by another in accordance with
4    any preceding provision of this Section, a parent of the
5    beneficiary may represent and bind the beneficiary,
6    provided that there is no material conflict of interest
7    between the minor or disabled person and either of such
8    person's parents with respect to the particular question or
9    dispute. Furthermore, such representative may, for all
10    purposes, represent and bind an unborn beneficiary or an
11    unascertainable beneficiary who has an interest, with
12    respect to the particular question or dispute, that is
13    substantially similar to the interest of the minor or
14    disabled person represented by the representative, but
15    only to the extent that there is no material conflict of
16    interest between the minor or disabled person represented
17    by the representative and the unborn or unascertainable
18    person with respect to the particular question or dispute.
19    If a disagreement arises between parents who otherwise
20    qualify to represent a child in accordance with this
21    subsection (a) and who are seeking to represent the same
22    child, the parent who is a lineal descendant of the settlor
23    of the trust that is the subject of the representation is
24    entitled to represent the child; or if none, the parent who
25    is a beneficiary of such trust is entitled to represent the
26    child.

 

 

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1        (6) The action or consent of a representative who may
2    represent and bind a beneficiary in accordance with this
3    Section is binding on the beneficiary represented, and
4    notice to such representative has the same effect as if
5    notice were given directly to the beneficiary represented.
6    (b) Total return trusts. This Section shall apply to enable
7conversion to a total return trust by agreement in accordance
8with subsection 5.3(b) of the total return trust provisions of
9Section 5.3 of this Act, by whether such agreement is made
10between the trustee and (A) all primary beneficiaries of the
11trust, in each case either by the beneficiary or by the
12beneficiary's representative in accordance with this Section ,
13either individually or by their respective representatives in
14accordance with subsection (a)(1), or (B) all beneficiaries
15currently eligible to receive income or principal from the
16trust and all beneficiaries who are presumptive remaindermen of
17the trust, in each case either individually or by their
18respective representatives in accordance with subsection
19(a)(1).
20    (c) Representation of charity. If a trust provides a
21beneficial interest or expectancy for one or more charities or
22charitable purposes that are not specifically named or
23otherwise represented (the "charitable interest"), the
24Illinois Attorney General may, in accordance with this Section,
25represent, bind, and act on behalf of the charitable interest
26with respect to any particular question or dispute, including

 

 

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1without limitation representing the charitable interest in a
2nonjudicial settlement agreement or in an agreement to convert
3a trust to a total return trust in accordance with subsection
45.3(b) of the total return trust provisions of Section 5.3 of
5this Act. This subsection (c) shall be construed as being
6declarative of existing law and not as a new enactment.
7Notwithstanding any other provision, nothing in this Section
8shall be construed to limit or affect the Illinois Attorney
9General's authority to file an action or take other steps as he
10or she deems advisable at any time to enforce or protect the
11general public interest as to a trust that provides a
12beneficial interest or expectancy for one or more charities or
13charitable purposes whether or not a specific charity is named
14in the trust.
15    (d) Nonjudicial settlement agreements.
16        (1) For purposes of this Section, "interested persons"
17    means the trustee and all beneficiaries, or their
18    respective representatives determined after giving effect
19    to the preceding provisions of this Section, other persons
20    and parties in interest whose consent or joinder would be
21    required in order to achieve a binding settlement were the
22    settlement to be approved by the court. Interested persons
23    shall also include a trust advisor, investment advisor,
24    distribution advisor, trust protector or other holder, or
25    committee of holders, of fiduciary or nonfiduciary powers,
26    if such person then holds powers material to a particular

 

 

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1    question or dispute resolved by the settlement.
2        (2) Interested Except as otherwise provided in
3    subsection (d)(3), interested persons, or their respective
4    representatives determined after giving effect to the
5    preceding provisions of this Section, may enter into a
6    binding nonjudicial settlement agreement with respect to
7    any matter involving a trust.
8        (3) (Blank). A nonjudicial settlement agreement is
9    valid only to the extent its terms and conditions could be
10    properly approved under applicable law by a court of
11    competent jurisdiction.
12        (4) The following matters Matters that may be resolved
13    by a nonjudicial settlement agreement include but are not
14    limited to:
15            (A) Interpretation interpretation or construction
16        of the terms of the trust. ;
17            (B) Approval approval of a trustee's report or
18        accounting. ;
19            (C) Exercise exercise or nonexercise of any power
20        by a trustee. ;
21            (D) The the grant to a trustee of any necessary or
22        desirable administrative power, if such grant does not
23        conflict with a clear material purpose of the trust. ;
24            (E) Questions questions relating to property or an
25        interest in property held by the trust, if such
26        resolution does not conflict with a clear material

 

 

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1        purpose of the trust. ;
2            (F) Remove, appoint, or remove and appoint, a
3        trustee, trust advisor, investment advisor,
4        distribution advisor, trust protector or other holder,
5        or committee of holders, of fiduciary or nonfiduciary
6        powers, including without limitation designation of a
7        plan of succession or procedure to determine
8        successors to any such office. resignation or
9        appointment of a trustee;
10            (G) Determination determination of a trustee's
11        compensation. ;
12            (H) Transfer transfer of a trust's principal place
13        of administration, including to change the law
14        governing administration of the trust. ;
15            (I) Liability liability or indemnification of a
16        trustee for an action relating to the trust. ;
17            (J) Resolution of bona fide resolution of disputes
18        or issues related to administration, investment,
19        distribution or other matters. ;
20            (K) Modification modification of terms of the
21        trust pertaining to administration of the trust. ; and
22            (L) Termination termination of the trust, provided
23        that court approval of such termination must be
24        obtained in accordance with subdivision subsection
25        (d)(5), and the court must conclude continuance of the
26        trust is not necessary to achieve any clear material

 

 

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1        purpose of the trust. ; upon The court is not precluded
2        from terminating a trust because the trust instrument
3        contains a spendthrift provision. Upon such
4        termination the court may order the trust property
5        distributed as agreed by the parties to the agreement
6        or otherwise as the court determines equitable
7        consistent with the purposes of the trust.
8            (M) Any other matter involving a trust to the
9        extent the terms and conditions of the nonjudicial
10        settlement agreement could be properly approved under
11        applicable law by a court of competent jurisdiction.
12        (5) Any beneficiary or other interested person may
13    request the court to approve any part or all of a
14    nonjudicial settlement agreement, including whether any
15    representation is adequate and without conflict of
16    interest, provided that the petition for such approval must
17    be filed before or within 60 days after the effective date
18    of the agreement.
19        (6) An agreement entered into in accordance with this
20    Section shall be final and binding on the trustee and all
21    beneficiaries of the trust, both current and future, as if
22    ordered by a court with competent jurisdiction over the
23    trust, the trust property, and all parties in interest.
24        (7) In the trustee's sole discretion, the trustee may,
25    but is not required to, obtain and rely upon an opinion of
26    counsel on any matter relevant to this Section, including

 

 

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1    (i) where required by this Section that the any agreement
2    proposed to be made in accordance with this Section does
3    not conflict with a clear material purpose of the trust or
4    could be properly approved by the court under applicable
5    law, (ii) in the case of a trust termination, that
6    continuance of the trust is not necessary to achieve any
7    material purpose of the trust, (iii) or that there is no
8    material conflict of interest between a representative and
9    the person represented with respect to the particular
10    question or dispute, or (iv) that the representative and
11    the person represented have substantially similar
12    interests with respect to the or among those being
13    represented with respect to a particular question or
14    dispute.
15    (e) Application. This On and after its effective date, this
16Section applies to all trusts in existence on the effective
17date of this amendatory Act of the 97th General Assembly and to
18all trusts created after that date existing and future trusts,
19and is applicable to judicial proceedings and nonjudicial
20matters involving such trusts. For purposes of this Section,
21(i) judicial proceedings include any proceeding before a court
22or administrative tribunal of this State, and any arbitration
23or mediation proceedings; (ii) nonjudicial matters include,
24but are not limited to, nonjudicial settlement , or agreements
25entered into in accordance with this Section, and the grant of
26any consent, release, ratification, or indemnification on or

 

 

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1after the effective date. This Section shall be construed as
2pertaining to administration of a trust and shall be available
3to any trust that is administered in Illinois under Illinois
4law or that is governed by Illinois law with respect to the
5meaning and effect of its terms, except to the extent the
6governing instrument expressly prohibits use of this Section by
7specific reference to this Section. A provision in the
8governing instrument in the form: "Neither the provisions of
9Section 16.1 of the Illinois Trusts and Trustees Act nor any
10corresponding provision of future law may be used in the
11administration of this trust" or a similar provision
12demonstrating that intent is sufficient to preclude the use of
13this Section.
14(Source: P.A. 96-479, eff. 1-1-10.)
 
15    Section 99. Effective date. This Act takes effect upon
16becoming law.