SB2984 98TH GENERAL ASSEMBLY

LRB098 12960 HEP 49929 b

98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
SB2984

Introduced 2/4/2014, by Sen. Kirk W. Dillard

SYNOPSIS AS INTRODUCED:

760 ILCS 5/16.4

Amends the Trusts and Trustees Act. In the Section concerning conditions and requirements for the distribution of trust principal to a second trust, changes definitions. Changes references to "trustee" to references to "authorized trustee". Relocates a provision that an authorized trustee's actions may not be deemed improper or inconsistent with the authorized trustee's duty of impartiality unless the court finds from all the evidence that the authorized trustee acted in bad faith. Makes technical and substantive changes in subsections concerning: purpose; distribution to the second trust; notice; court involvement; term of the second trust; divided discretion; distribution in future trust; authority to distribute; restrictions upon an authorized trustee; tax limitations; the written instrument; remedies; and application of the Section. Repeals a subsection concerning an exception to certain restrictions upon an authorized trustee. Relocates and makes technical and substantive changes to provisions concerning limits on the compensation of an authorized trustee.

A BILL FOR

AN ACT concerning civil law.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Trusts and Trustees Act is amended by changing Section 16.4 as follows:

(760 ILCS 5/16.4)

Sec. 16.4. Distribution of trust principal in further trust.

(a) Definitions. In this Section:

"Absolute discretion" means the right to distribute principal that is not limited or modified in any manner to or for the benefit of one or more beneficiaries of the trust, whether or not the term "absolute" is used. A power to distribute principal that includes purposes such as best interests, welfare, or happiness shall constitute absolute discretion, regardless of any requirement to take into account other resources of the beneficiaries.

"Authorized trustee" means a fiduciary an entity or individual, other than the settlor, who has authority under the terms of the first trust to distribute the principal of the trust to for the benefit of one or more current beneficiaries other than by exercise of a power of appointment held in a nonfiduciary capacity.

"Code" means the United States Internal Revenue Code of 1986, as amended from time to time, including corresponding provisions of subsequent internal revenue laws and corresponding provisions of State law.

"Current beneficiary" means a person who is currently receiving or eligible to receive a distribution of principal or income from the trustee on the date of the determination exercise of the power.

"Distribute" means the power to pay directly to the beneficiary of a trust or make application for the benefit of the beneficiary.

"First trust" means an existing irrevocable inter vivos or testamentary trust part or all of the principal of which is or will be distributed in further trust under subsection (c) or (d).

"Presumptive remainder beneficiary" means a beneficiary of a trust, as of the date of determination and assuming non-exercise of all powers of appointment, who either (i) would be eligible to receive a distribution of income or principal if the trust terminated on that date, or (ii) would be eligible to receive a distribution of income or principal if the interests of all beneficiaries currently eligible to receive income or principal from the trust ended on that date without causing the trust to terminate.

"Principal" includes the income of the trust at the time of the exercise of the power that is not currently required to be distributed, including accrued and accumulated income.

"Second trust" means any irrevocable trust to which principal is or will be distributed in accordance with subsection (c) or (d).

"Successor beneficiary" means any beneficiary other than the current and presumptive remainder beneficiaries, including a person who may become a beneficiary in the future by reason of inclusion in a class, but does not include a potential appointee of a power of appointment held by a beneficiary if the appointee is not otherwise a beneficiary.

(b) Purpose. An authorized independent trustee who has discretion to distribute principal, including any distribution under subsection (c) or (d) of this Section, to one or more to make distributions to the beneficiaries shall exercise that discretion in the trustee's fiduciary capacity, whether the trustee's discretion is absolute or not, to further limited to ascertainable standards, in furtherance of the purposes of the trust. An authorized trustee's actions in accordance with this Section may not be deemed improper or inconsistent with the authorized trustee's duty of impartiality unless the court finds from all the evidence that the authorized trustee acted in bad faith.

(c) Distribution to second trust if absolute discretion. An authorized trustee who has the absolute discretion to distribute the principal of a trust to one or more of the current beneficiaries may distribute part or all of the principal of the first trust in favor of a trustee of a second trust, provided that the current beneficiaries of the second trust include only one or more for the benefit of one, more than one, or all of the current beneficiaries of the first trust and the presumptive remainder beneficiaries and successor beneficiaries of the second trust include only one or more for the benefit of one, more than one, or all of the current beneficiaries, presumptive successor and remainder beneficiaries, and successor beneficiaries of the first trust.

(1) If the authorized trustee exercises the power under this subsection, the second trust may, but need not, grant to a beneficiary the same power of appointment that was granted to such beneficiary under the first trust.

(2) If the authorized trustee exercises the power under this subsection, the second trust may grant a power of appointment (including a presently exercisable power of appointment) in the second trust to one or more of the current beneficiaries of the first trust to whom the trustee has the absolute discretion to distribute principal, and , provided that the beneficiary granted a power to appoint could receive the principal outright under the terms of the first trust. (2) If the authorized trustee grants a power of appointment, the class of permissible appointees in favor of whom the a beneficiary may exercise the power of appointment granted in the second trust may be broader than or otherwise different from the current, successor, and presumptive remainder and successor beneficiaries of the first trust. beneficiaries of the first trust.

(3) (Blank). If the beneficiary or beneficiaries of the first trust are described as a class of persons, the beneficiary or beneficiaries of the second trust may include one or more persons of such class who become includible in the class after the distribution to the second trust.

(d) Distribution to second trust if no absolute discretion.

(1) An authorized trustee who has the power to distribute the principal of a trust but does not have the absolute discretion to distribute the principal of the trust may distribute part or all of the principal of the first trust in favor of a trustee of a second trust, provided that the interests of each beneficiary of the second trust are substantially similar to the interests of the beneficiary in the first trust. For purposes of this subsection, a power to make distributions for the benefit of a beneficiary shall be considered materially the same as a power to make distributions to that beneficiary. current beneficiaries of the second trust shall be the same as the current beneficiaries of the first trust and the successor and remainder beneficiaries of the second trust shall be the same as the successor and remainder beneficiaries of the first trust.

(1) If the authorized trustee exercises the power under this subsection (d), the second trust shall include the same language authorizing the trustee to distribute the income or principal of a trust as set forth in the first trust.

(2) If the beneficiary or beneficiaries of the first trust are described as a class of persons, the beneficiary or beneficiaries of the second trust shall include all persons who become includible in the class after the distribution to the second trust.

(3) If the authorized trustee exercises the power under this subsection (d) and if the first trust grants a power of appointment to a beneficiary of the trust, the second trust shall grant such power of appointment in the second trust and the class of permissible appointees shall be the same as in the first trust.

(2) (4) Supplemental Needs Trusts.

(i) Notwithstanding paragraph (1) of this the other provisions of this subsection (d), the authorized trustee may distribute part or all of the principal of a disabled beneficiary's interest in the first trust in favor of a trustee of a second trust which is a supplemental needs trust if the authorized trustee determines that to do so would be in the best interests of the disabled beneficiary.

(ii) Definitions. For purposes of this subsection (d):

"Best interests" of a disabled beneficiary include, without limitation, consideration of the financial impact to the disabled beneficiary's family.

"Disabled beneficiary" means a current beneficiary, presumptive remainder beneficiary, or successor beneficiary of the first trust who the authorized trustee determines has a disability that substantially impairs the beneficiary's ability to provide for his or her own care or custody and that constitutes a substantial handicap, whether or not the beneficiary has been adjudicated a "disabled person".

"Governmental benefits" means financial aid or services from any State, Federal, or other public agency.

"Supplemental needs second trust" means a trust that complies with subparagraph paragraph (iii) of this paragraph (2) (4) and that relative to the first trust contains either lesser or greater restrictions on the trustee's power to distribute trust income or principal and which the trustee believes would, if implemented, allow the disabled beneficiary to receive a greater degree of governmental benefits than the disabled beneficiary will receive if no distribution is made.

(iii) Remainder beneficiaries. A supplemental needs second trust may name presumptive remainder and successor beneficiaries other than the disabled beneficiary's estate, provided that the second trust names the same presumptive remainder beneficiaries and successor beneficiaries to the disabled beneficiary's interest, and in the same proportions, as exist in the first trust. In addition to the foregoing, where the first trust was created by the disabled beneficiary or the trust property has been distributed directly to or is otherwise under the control of the disabled beneficiary, the authorized trustee may distribute to a "pooled trust" as defined by federal Medicaid law for the benefit of the disabled beneficiary or the supplemental needs second trust must contain pay back provisions complying with Medicaid reimbursement requirements of federal law.

(iv) Reimbursement. A supplemental needs second trust shall not be liable to pay or reimburse the State or any public agency for financial aid or services to the disabled beneficiary except as provided in the supplemental needs second trust.

(e) Notice. An authorized trustee may exercise the power to distribute in favor of a second trust under subsection subsections (c) or and (d) without the consent of any person the settlor or the beneficiaries of the first trust and without court approval, provided that an if: (1) there are one or more legally competent current beneficiaries and one or more legally competent presumptive remainder beneficiaries and the authorized trustee shall provide sends written notice of the intended exercise of the power under subsection (c) or (d), trustee's decision, specifying the manner in which the trustee intends to exercise the power and the prospective effective date for the distribution not later than 60 days prior to the exercise (the "notice period") to: , to all of the

(i) the settlor of the first trust, if living and legally competent;

(ii) all legally competent current beneficiaries and all legally competent presumptive remainder beneficiaries of the first trust, determined as of the date the notice is sent; and assuming non-exercise of all powers of appointment; and

(2) no beneficiary to whom notice was sent objects to the distribution in writing delivered to the trustee within 60 days after the notice is sent ("notice period").

(iii) any person who currently has the right to remove or replace the authorized trustee; and

(iv) all trustees of the first trust who are not authorized trustees.

The distribution may be made prior to the expiration of the notice period if all persons receiving notice waive the notice period. An authorized A trustee is not required to provide a copy of the notice to a person beneficiary who is known to the authorized trustee but who cannot be located by the authorized trustee after reasonable diligence or who is not known to the authorized trustee. If a charity is a current beneficiary or presumptive remainder beneficiary of the trust, the notice shall also be given to the Attorney General's Charitable Trust Bureau. The authorized trustee's giving of notice of an intended exercise of the power under subsection (c) or (d) or the waiver or expiration of the notice period does not limit the right of the notice recipient to object to the exercise of the power under to subsection (u).

(f) Court involvement. (1) The authorized trustee may for any reason elect to petition the court to order a the distribution under subsection (c) or (d). In a judicial proceeding under this subsection (f), the authorized trustee has the burden of proving the proposed exercise of the power furthers the purposes of the trust. , including, without limitation, the reason that the trustee's exercise of the power to distribute under this Section is unavailable, such as:

(a) a beneficiary timely objects to the distribution in a writing delivered to the trustee within the time period specified in the notice; or

(b) there are no legally competent current beneficiaries or legally competent presumptive remainder beneficiaries.

(2) If the trustee receives a written objection within the notice period, either the trustee or the beneficiary may petition the court to approve, modify, or deny the exercise of the trustee's powers. The trustee has the burden of proving the proposed exercise of the power furthers the purposes of the trust.

(3) In a judicial proceeding under this subsection (f), the trustee may, but need not, present the trustee's opinions and reasons for supporting or opposing the proposed distribution, including whether the trustee believes it would enable the trustee to better carry out the purposes of the trust. A trustee's actions in accordance with this Section shall not be deemed improper or inconsistent with the trustee's duty of impartiality unless the court finds from all the evidence that the trustee acted in bad faith.

(g) Term of the second trust. The second trust to which an authorized trustee distributes the assets of the first trust may have a term that is longer than the term set forth in the first trust, including, but not limited to, a term measured by the lifetime of a current beneficiary; provided, however, that the second trust shall be limited to the same permissible period of the rule against perpetuities that applied to the first trust, or a shorter period, unless the first trust expressly permits the trustee to extend or lengthen its perpetuities period.

(h) Divided discretion. If an entity or individual authorized trustee has absolute discretion to distribute the principal of a trust and the same entity or individual trustee or another entity or individual trustee has the power to distribute principal under the trust instrument that which power is not absolute discretion, the entity or individual such authorized trustee having absolute discretion may exercise the power to distribute under subsection (c).

(i) Later discovered assets. To the extent the authorized trustee does not provide otherwise:

(1) The distribution of all of the assets comprising the principal of the first trust in favor of a second trust shall be deemed to include subsequently discovered assets otherwise belonging to the first trust and undistributed principal paid to or acquired by the first trust subsequent to the distribution in favor of the second trust.

(2) The distribution of part but not all of the assets comprising the principal of the first trust in favor of a second trust shall not include subsequently discovered assets belonging to the first trust and principal paid to or acquired by the first trust subsequent to the distribution in favor of a second trust; such assets shall remain the assets of the first trust.

(j) Other authority to distribute in further trust. This Section shall not be construed to abridge the right of any trustee or other person to distribute property in further trust that arises under the terms of the governing instrument of a trust, any provision of applicable law, or a court order. In addition, distribution of trust principal to a second trust may be made by a nonjudicial settlement agreement between a trustee and all primary beneficiaries of a first trust, acting either individually or by their respective representatives in accordance with Section 16.1 of this Act.

(k) Need to distribute not required. An authorized trustee may exercise the power to distribute in favor of a second trust under subsection subsections (c) or and (d) whether or not there is a current need to distribute principal under the terms of the first trust.

(l) No duty to distribute. Nothing in this Section is intended to create or imply a duty to exercise a power to distribute principal, and no inference of impropriety shall be made as a result of an authorized trustee not exercising the power conferred under subsection (c) or (d). Notwithstanding any other provision of this Section, neither an authorized trustee nor any other a trustee has a no duty to inform beneficiaries about the availability of this Section and no duty to review the trust to determine whether any action should be taken under this Section.

(m) Express prohibition. A power authorized by subsection (c) or (d) may not be exercised if expressly prohibited by the terms of the governing instrument, but a general prohibition of the amendment or revocation of the first trust or a provision that constitutes a spendthrift clause shall not preclude the exercise of a power under subsection (c) or (d).

(n) Restrictions. An authorized trustee may not exercise a power authorized by subsection (c) or (d) to affect any of the following:

(1) to reduce, limit or modify any beneficiary's current right to a mandatory distribution of income or principal, a mandatory annuity or unitrust interest, a right to withdraw a percentage of the value of the trust or a right to withdraw a specified dollar amount provided that such mandatory right has come into effect with respect to the beneficiary, except with respect to a second trust which is a supplemental needs trust;

(2) to increase, or change the method of determining, the compensation of the authorized trustee unless the increase in, or change in the method of determining, that compensation has been consented to by all of the legally competent current beneficiaries (and there is at least one such beneficiary) and legally competent presumptive remainder beneficiaries (and there is at least one such beneficiary) of the second trust or is approved by the court. However, an increase in compensation of the authorized trustee arising solely because the duration of the second trust is longer than the duration of the first trust is not considered an increase in, or a change in the method of determining, the compensation of the authorized trustee. No authorized trustee or other trustee may receive any commission or other compensation imposed upon assets distributed due to the distribution of property from the first trust to a second trust under subsection (c) or (d);

(3) (2) to decrease or indemnify against a trustee's liability or exonerate a trustee from liability for failure to exercise reasonable care, diligence, and prudence; except to indemnify or exonerate one party from liability for actions of another party with respect to distribution that unbundles the governance structure of a trust to divide and separate fiduciary and nonfiduciary responsibilities among several parties, including without limitation one or more trustees, distribution advisors, investment advisors, trust protectors, or other parties, provided however that such modified governance structure may reallocate fiduciary responsibilities from one party to another but may not reduce them; or

(4) (3) to modify eliminate a provision granting another person the right to remove or replace the authorized trustee exercising the power under subsection (c) or (d), unless either (i) the ; provided, however, such person currently holding the right consents to the modification or (ii) the court approves the modification and the modification grants the right to another person who is independent of and nonsubservient to the authorized trustee. 's right to remove or replace the authorized trustee may be eliminated if a separate independent, non-subservient individual or entity, such as a trust protector, acting in a nonfiduciary capacity has the right to remove or replace the authorized trustee;

(4) to reduce, limit or modify the perpetuities provision specified in the first trust in the second trust, unless the first trust expressly permits the trustee to do so.

For purposes of this subsection (n), a beneficiary's current right to a distribution of income is not considered to be mandatory if, under the terms of the first trust, current distributions of principal may be made to any person other than that current beneficiary.

(o) (Blank). Exception. Notwithstanding the provisions of paragraph (1) of subsection (n) but subject to the other limitations in this Section, an authorized trustee may exercise a power authorized by subsection (c) or (d) to distribute to a second trust; provided, however, that the exercise of such power does not subject the second trust to claims of reimbursement by any private or governmental body and does not at any time interfere with, reduce the amount of, or jeopardize an individual's entitlement to government benefits.

(p) Tax limitations. The exercise of a power authorized by subsection (c) or (d) is subject to the following additional limitations: If any contribution to the first trust qualified for the annual exclusion under Section 2503(b) of the Code, the marital deduction under Section 2056(a) or 2523(a) of the Code, or the charitable deduction under Section 170(a), 642(c), 2055(a) or 2522(a) of the Code, is a direct skip qualifying for treatment under Section 2642(c) of the Code, or qualified for any other specific tax benefit that would be lost by the existence of the authorized trustee's authority under subsection (c) or (d) for income, gift, estate, or generation-skipping transfer tax purposes under the Code, then the authorized trustee shall not have the power to distribute the principal of a trust pursuant to subsection (c) or (d) in a manner that would prevent the contribution to the first trust from qualifying for or would reduce the exclusion, deduction, or other tax benefit that was originally claimed with respect to that contribution.

(1) If any transfer to the first trust qualified, or if not for the provisions of subsection (c) or (d) would have qualified, for a marital or charitable deduction for purposes of any federal income, gift, or estate tax under the Code, or for purposes of any state income, gift, estate, or inheritance tax, the governing instrument for the second trust may not include or omit any term that, if included in or omitted from the trust instrument for the first trust, would have prevented the first trust from qualifying for that deduction, or would have reduced the amount of the deduction, under the same provisions of the Code or under the same provisions of the applicable state law under which the transfer to the first trust so qualified.

(2) If any transfer to the first trust has been treated, or if not for the provisions of subsection (c) or (d) would have been treated, as a gift qualifying for the exclusion from the gift tax described in Section 2503(b) of the Code, the governing instrument for the second trust may not include or omit any term that, if included in or omitted from the trust instrument for the first trust, would have prevented any gift to the first trust from so qualifying under the same provisions of Section 2503 of the Code under which the transfer to the first trust so qualified.

(3) If the assets of the first trust include any shares of stock in an S corporation, as defined in Section 1361 of the Code, and the first trust is, or if not for the provisions of subsection (c) or (d) would be, a permitted shareholder under any provision of Section 1361 of the Code, an authorized trustee may not exercise a power authorized by subsection (c) or (d) to distribute part or all of the S corporation stock to a second trust that is not a permitted shareholder under Section 1361(c)(2) of the Code. If the assets of the first trust include any shares of stock in an S corporation, as defined in Section 1361 of the Code, and the first trust is, or if not for the provisions of subsection (c) or (d) would be, a qualified Subchapter S trust, an authorized trustee may not exercise a power authorized by subsection (c) or (d) to distribute part or all of the principal of the trust to a second trust whose governing instrument includes or omits any term that prevents the second trust from qualifying as a qualified Subchapter S trust.

(4) If any transfer to the first trust has been treated, or if not for the provisions of subsection (c) or (d) would have been treated, as a gift qualifying for a zero inclusion ratio for purposes of the federal generation-skipping transfer tax under Section 2642(c) of the Code, the governing instrument for the second trust may not include or omit any term that, if included in or omitted from the trust instrument for the first trust, would have prevented the transfer to the first trust from so qualifying.

(5) If the assets of the first trust include any interest subject to the minimum distribution rules of Section 401(a)(9) of the Code and the Treasury regulations issued under that Section, the governing instrument for the second trust may not include or omit any term that, if included in or omitted from the trust instrument for the first trust, would have shortened the maximum distribution period otherwise allowable under Section 401(a)(9) of the Code and the Treasury regulations with respect to that interest under the first trust.

(6) If the trust instrument for the first trust expressly indicates an intention to qualify for any tax benefit or if the terms of the trust instrument for the first trust are clearly designed to enable the first trust to qualify for a tax benefit, and if the first trust did qualify, or if not for the provisions of subsection (c) and (d) would have qualified, for any tax benefit, the governing instrument for the second trust may not include or omit any term that, if included in or omitted from the trust instrument for the first trust, would have prevented the first trust from qualifying for that tax benefit. For purposes of this subdivision (p)(6), "tax benefit" means any federal or state tax deduction, exemption, exclusion, or other tax benefit not otherwise listed in this subsection (p).

(7) (1) Notwithstanding the provisions of this subsection (p), but subject to paragraph (3) of this subsection (p), the authorized trustee may exercise the power to distribute the principal of pay the first trust to a second trust as to which the settlor of the first trust is not considered the owner under Subpart E of Part I of Subchapter J of Chapter 1 of Subtitle A of the Code even if the settlor is considered such owner of the first trust. Nothing in this Section shall be construed as preventing the authorized trustee from distributing part or all of the first trust to a second trust that is a trust as to which the settlor of the first trust is considered the owner under Subpart E of Part I of Subchapter J of Chapter 1 of Subtitle A of the Code.

(2) During any period when the first trust owns subchapter S corporation stock, an authorized trustee may not exercise a power authorized by paragraph (c) or (d) to distribute part or all of the S corporation stock to a second trust that is not a permitted shareholder under Section 1361(c)(2) of the Code.

(3) During any period when the first trust owns an interest in property subject to the minimum distribution rules of Section 401(a)(9) of the Code, an authorized trustee may not exercise a power authorized by subsection (c) or (d) to distribute part or all of the interest in such property to a second trust that would result in the shortening of the minimum distribution period to which the property is subject in the first trust.

(q) (Blank). Limits on compensation of trustee.

(1) Unless the court upon application of the trustee directs otherwise, an authorized trustee may not exercise a power authorized by subsection (c) or (d) solely to change the provisions regarding the determination of the compensation of any trustee; provided, however, an authorized trustee may exercise the power authorized in subsection (c) or (d) in conjunction with other valid and reasonable purposes to bring the trustee's compensation into accord with reasonable limits in accord with Illinois law in effect at the time of the exercise.

(2) The compensation payable to the trustee or trustees of the first trust may continue to be paid to the trustees of the second trust during the terms of the second trust and may be determined in the same manner as otherwise would have applied in the first trust; provided, however, that no trustee shall receive any commission or other compensation imposed upon assets distributed due to the distribution of property from the first trust to a second trust pursuant to subsection (c) or (d).

(r) Written instrument. The exercise of a power to distribute principal under subsection (c) or (d) must be made by an instrument in writing, signed and acknowledged by the authorized trustee, and filed with the records of the first trust and the second trust.

(s) Terms of second trust. Any reference to the governing instrument or terms of the governing instrument in this Act includes the terms of a second trust established in accordance with this Section.

(t) Settlor. The settlor of a first trust is considered for all purposes to be the settlor of any second trust established in accordance with this Section. If the settlor of a first trust is not also the settlor of a second trust, then the settlor of the first trust shall be considered the settlor of the second trust, but only with respect to the portion of second trust distributed from the first trust in accordance with this Section.

(u) Remedies. An authorized A trustee who reasonably and in good faith takes or omits to take any action under this Section, including petitioning the court under subsection (f), is not liable to any person interested in the trust. An act or omission by an authorized a trustee under this Section is presumed taken or omitted reasonably and in good faith unless it is determined by the court to have been an abuse of discretion. If an authorized a trustee reasonably and in good faith takes or omits to take any action under this Section and a person interested in the trust opposes the act or omission, the person's exclusive remedy is to obtain an order of the court directing the authorized trustee to exercise authority in accordance with this Section in such manner as the court determines necessary or helpful for the proper functioning of the trust, including without limitation prospectively to modify or reverse a prior exercise of such authority. Any claim by any person interested in the trust that an act or omission by an authorized a trustee under this Section was an abuse of discretion is barred if not asserted in a proceeding commenced by or on behalf of the person within 2 years after the authorized trustee has sent to the person or the person's personal representative a notice or report in writing sufficiently disclosing facts fundamental to the claim such that the person knew or reasonably should have known of the claim. Except for a distribution of trust principal from a first trust to a second trust made by agreement in accordance with Section 16.1 of this Act, the preceding sentence shall not apply to a person who was under a legal disability at the time the notice or report was sent and who then had no personal representative. For purposes of this subsection (u), a personal representative refers to a court appointed guardian or conservator of the estate of a person.

(v) Application. This Section is available to trusts in existence on January 1, 2013 (the effective date of P.A. 97-920) the effective date of this amendatory Act of the 97th General Assembly or created on or after January 1, 2013 the effective date of this amendatory Act of the 97th General Assembly. This Section shall be construed as pertaining to the administration of a trust and shall be available to any trust that is administered in Illinois under Illinois law or that is governed by Illinois law with respect to the meaning and effect of its terms, including a trust whose governing law for purposes of administration has been changed to the laws of this State, unless the governing instrument expressly prohibits use of this Section by specific reference to this Section. A provision in the governing instrument in the form: "Neither the provisions of Section 16.4 of the Trusts and Trustees Act nor any corresponding provision of future law may be used in the administration of this trust" or a similar provision demonstrating that intent is sufficient to preclude the use of this Section.

(Source: P.A. 97-920, eff. 1-1-13.)