Illinois General Assembly

  Bills & Resolutions  
  Compiled Statutes  
  Public Acts  
  Legislative Reports  
  IL Constitution  
  Legislative Guide  
  Legislative Glossary  

 Search By Number
 (example: HB0001)
Search Tips

Search By Keyword

Illinois Compiled Statutes

Information maintained by the Legislative Reference Bureau
Updating the database of the Illinois Compiled Statutes (ILCS) is an ongoing process. Recent laws may not yet be included in the ILCS database, but they are found on this site as Public Acts soon after they become law. For information concerning the relationship between statutes and Public Acts, refer to the Guide.

Because the statute database is maintained primarily for legislative drafting purposes, statutory changes are sometimes included in the statute database before they take effect. If the source note at the end of a Section of the statutes includes a Public Act that has not yet taken effect, the version of the law that is currently in effect may have already been removed from the database and you should refer to that Public Act to see the changes made to the current law.

PROPERTY
(765 ILCS 305/) Statute Concerning Perpetuities.

765 ILCS 305/1

    (765 ILCS 305/1) (from Ch. 30, par. 191)
    Sec. 1. Title.
    This Act shall be known and may be cited as the "Statute Concerning Perpetuities".
(Source: P.A. 76-1428.)

765 ILCS 305/2

    (765 ILCS 305/2) (from Ch. 30, par. 192)
    Sec. 2. Purpose.
    This Act modifies the common law rule of property known as the rule against perpetuities, which, except as modified by statutes in force at the effective date of this Act and by this Act, shall remain in full force and effect.
(Source: P.A. 76-1428.)

765 ILCS 305/3

    (765 ILCS 305/3) (from Ch. 30, par. 193)
    Sec. 3. Definitions and Terms.
    As used in this Act unless the context otherwise requires:
    (a) "Trust" means any trust created by any written instrument, including, without limitation, a trust created by the exercise of a power of appointment.
    (a-5) "Qualified perpetual trust" means any trust created by any written instrument executed on or after January 1, 1998, including an amendment to an instrument in existence prior to that date and the exercise of a power of appointment granted by an instrument executed or amended on or after that date:
        (i) to which, by the specific terms governing the
    
trust, the rule against perpetuities does not apply; and
        (ii) the power of the trustee (or other person to
    
whom the power is properly granted or delegated) to sell property of which is not limited by the governing trust instrument or any provision of law for any period of time beyond the period of the rule against perpetuities.
    (b) "Trustee" includes the original trustee of any trust and also any succeeding or added trustee.
    (c) "Instrument" means any writing pursuant to which any legal or equitable interest in property or in the income therefrom is affected, disposed of or created.
    (d) "Beneficiary" includes any person to whom any interest, whether vested or contingent, is given by an instrument.
    (e) Any reference in this Act to income to be "paid" or to income "payments" or to "receiving" income includes income payable or distributable to or applicable for the benefit of a beneficiary.
    (f) Words importing the masculine gender include the feminine and neuter, and words importing the singular number include the plural and words importing the plural number include the singular.
(Source: P.A. 90-472, eff. 8-17-97; 90-796, eff. 12-15-98.)

765 ILCS 305/4

    (765 ILCS 305/4) (from Ch. 30, par. 194)
    Sec. 4. Application of the Rule Against Perpetuities.
    (a) The rule against perpetuities shall not apply:
        (1) to any disposition of property or interest
    
therein which, at the effective date of this Act, does not violate, or is exempted by statute from the operation of, the common law rule against perpetuities;
        (2) to powers of a trustee to sell, lease or mortgage
    
property or to powers which relate to the administration or management of trust assets, including, without limitation, discretionary powers of a trustee to determine what receipts constitute principal and what receipts constitute income and powers to appoint a successor trustee;
        (3) to mandatory powers of a trustee to distribute
    
income, or to discretionary powers of a trustee to distribute principal prior to termination of a trust, to a beneficiary having an interest in the principal which is irrevocably vested in quality and quantity;
        (4) to discretionary powers of a trustee to allocate
    
income and principal among beneficiaries, but no exercise of any such power after the expiration of the period of the rule against perpetuities is valid;
        (5) to leases to commence in the future or upon the
    
happening of a future event, but no such lease shall be valid unless the term thereof actually commences in possession within 40 years from the date of execution of the lease;
        (6) to commitments (A) by a lessor to enter into a
    
lease with a subtenant or with the holder of a leasehold mortgage or (B) by a lessee or sublessee to enter into a lease with the holder of a mortgage;
        (7) to options in gross or to preemptive rights in
    
the nature of a right of first refusal, but no option in gross shall be valid for more than 40 years from the date of its creation; or
        (8) to qualified perpetual trusts as defined in
    
Section 3 of this Act.
    (b) The period of the rule against perpetuities shall not commence to run in connection with any disposition of property or interest therein, and no instrument shall be regarded as becoming effective for purposes of the rule against perpetuities, and no interest or power shall be deemed to be created for purposes of the rule against perpetuities as long as, by the terms of the instrument, the maker of the instrument has the power to revoke the instrument or to transfer or direct to be transferred to himself the entire legal and equitable ownership of the property or interest therein.
    (c) In determining whether an interest violates the rule against perpetuities:
        (1) it shall be presumed (A) that the interest was
    
intended to be valid, (B) in the case of an interest conditioned upon the probate of a will, the appointment of an executor, administrator or trustee, the completion of the administration of an estate, the payment of debts, the sale or distribution of property, the determination of federal or state tax liabilities or the happening of any administrative contingency, that the contingency must occur, if at all, within the period of the rule against perpetuities, and (C) where the instrument creates an interest in the "widow", "widower", or "spouse" of another person, that the maker of the instrument intended to refer to a person who was living at the date that the period of the rule against perpetuities commences to run;
        (2) where any interest, but for this subparagraph (c)
    
(2), would be invalid because it is made to depend upon any person attaining or failing to attain an age in excess of 21 years, the age specified shall be reduced to 21 years as to every person to whom the age contingency applies;
        (3) if, notwithstanding the provisions of
    
subparagraphs (c) (1) and (2) of this Section, the validity of any interest depends upon the possibility of the birth or adoption of a child, (A) no person shall be deemed capable of having a child until he has attained the age of 13 years, (B) any person who has attained the age of 65 years shall be deemed incapable of having a child, (C) evidence shall be admissible as to the incapacity of having a child by a living person who has not attained the age of 65 years, and (D) the possibility of having a child or more remote descendant by adoption shall be disregarded.
    (d) Subparagraphs (a) (2), (3) and (6) and paragraph (b) of this Section shall be deemed to be declaratory of the law prevailing in this State at the effective date of this Act.
(Source: P.A. 90-472, eff. 8-17-97; 90-796, eff. 12-15-98.)

765 ILCS 305/5

    (765 ILCS 305/5) (from Ch. 30, par. 195)
    Sec. 5. Trusts.
    (a) Subject to the provisions of paragraphs (e) and (f) of this Section a trust containing any limitation which, but for this paragraph (a), would violate the rule against perpetuities (as modified by Section 4) shall terminate at the expiration of a period of (A) 21 years after the death of the last to die of all of the beneficiaries of the instrument who were living at the date when the period of the rule against perpetuities commenced to run or (B) 21 years after that date if no beneficiary of the instrument was then living, unless events occur which cause an earlier termination in accordance with the terms of the instrument and then the principal shall be distributed as provided by the instrument.
    (b) Subject to the provisions of paragraphs (c), (d) and (e) of this Section when a trust terminates because of the application of paragraph (a) of this Section, the trustee shall distribute the principal to those persons who would be the heirs at law of the maker of the instrument if he died at the expiration of the period specified in paragraph (a) of this Section and in the proportions then specified by statute, unless the trust was created by the exercise of a power of appointment and then the principal shall be distributed to the person who would have received it if the power had not been exercised.
    (c) Before any distribution of principal is made pursuant to paragraph (b) of this Section, the trustee shall distribute, out of principal, to each living beneficiary who, but for termination of the trust because of the application of paragraph (a) of this Section, would have been entitled to be paid income after the expiration of the period specified in paragraph (a) of this Section, an amount equal to the present value (determined as provided in paragraph (d) of this Section of the income which the beneficiary would have been entitled to be paid after the expiration of that period.
    (d) In determining the present value of income for purposes of any distribution to a beneficiary pursuant to paragraph (c) of this Section:
        (1) when income payments would have been subject in
    
whole or in part to any discretionary power, it shall be assumed (A) that the income which would have been paid to an individual income beneficiary would have been the maximum amount of income which could have been paid to him in the exercise of the power, (B) if the income would or might have been payable to more than one beneficiary, that (except as hereinafter provided) each beneficiary would have received an equal share of the income, unless the instrument specifies less than an equal share as the maximum amount or proportion of income which would have been paid to any beneficiary in the exercise of the power, in which event the maximum specified shall control, and (C) if the income would or might have been payable to the descendants of the maker of the instrument or of another person, that, unless the instrument provides otherwise, the descendants would have received the income per stirpes;
        (2) (A) present value shall be computed on an
    
actuarial basis and there shall be assumed a return of 5%, at simple interest, on the value of the principal from which the beneficiary would have been entitled to receive income, and (B) where the interest in income was to be for the life of the beneficiary or for the life of another, the computation shall be made on the expectancy set forth in the most recently published American Experience Tables of Mortality and no other evidence of duration or expectancy shall be considered;
        (3) if the trustee cannot determine the present value
    
of any income interest in accordance with the provisions of the instrument and the foregoing rules concerning income payments, the present value of the interest shall be deemed to be zero.
    (e) This Section applies only when a trust would violate the rule against perpetuities as modified by Section 4 and does not apply to any trust which would have been valid apart from this Act.
    (f) This Section does not apply when a trust violates the rule against perpetuities because the trust estate may not vest in the trustee within the period of the rule.
(Source: P.A. 76-1428.)

765 ILCS 305/6

    (765 ILCS 305/6) (from Ch. 30, par. 196)
    Sec. 6. Effective date. This Act shall apply only to instruments, including instruments which exercise a power of appointment, which become effective after the effective date of this Act.
(Source: P.A. 76-1428.)