Illinois General Assembly - Full Text of HB1795
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Full Text of HB1795  102nd General Assembly

HB1795enr 102ND GENERAL ASSEMBLY

  
  
  

 


 
HB1795 EnrolledLRB102 10214 LNS 15537 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 Mental Health and Developmental
5Disabilities Code is amended by changing Sections 3-605,
63-819, and 5-105 as follows:
 
7    (405 ILCS 5/3-605)  (from Ch. 91 1/2, par. 3-605)
8    Sec. 3-605. (a) In counties with a population of 3,000,000
9or more, upon receipt of a petition and certificate prepared
10pursuant to this Article, the county sheriff of the county in
11which a respondent is found shall take a respondent into
12custody and transport him to a mental health facility, or may
13make arrangements with another public or private entity
14including a licensed ambulance service to transport the
15respondent to the mental health facility. In the event it is
16determined by such facility that the respondent is in need of
17commitment or treatment at another mental health facility, the
18county sheriff shall transport the respondent to the
19appropriate mental health facility, or the county sheriff may
20make arrangements with another public or private entity
21including a licensed ambulance service to transport the
22respondent to the mental health facility.
23    (b) The county sheriff may delegate his duties under

 

 

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1subsection (a) to another law enforcement body within that
2county if that law enforcement body agrees.
3    (b-5) In counties with a population under 3,000,000, upon
4receipt of a petition and certificate prepared pursuant to
5this Article, the Department shall make arrangements to
6appropriately transport the respondent to a mental health
7facility. In the event it is determined by the facility that
8the respondent is in need of commitment or treatment at
9another mental health facility, the Department shall make
10arrangements to appropriately transport the respondent to
11another mental health facility. The making of such
12arrangements and agreements with public or private entities is
13independent of the Department's role as a provider of mental
14health services and does not indicate that the respondent is
15admitted to any Department facility. In making such
16arrangements and agreements with other public or private
17entities, the Department shall include provisions to ensure
18(i) the provision of trained personnel and the use of an
19appropriate vehicle for the safe transport of the respondent
20and (ii) that the respondent's insurance carrier as well as
21other programs, both public and private, that provide payment
22for such transportation services are fully utilized to the
23maximum extent possible.
24    The Department may not make arrangements with an existing
25hospital or grant-in-aid or fee-for-service community provider
26for transportation services under this Section unless the

 

 

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1hospital or provider has voluntarily submitted a proposal for
2its transportation services. This requirement does not
3eliminate or reduce any responsibility on the part of a
4hospital or community provider to ensure transportation that
5may arise independently through other State or federal law or
6regulation.
7    (c) The transporting authority acting in good faith and
8without negligence in connection with the transportation of
9respondents shall incur no liability, civil or criminal, by
10reason of such transportation.
11    (d) The respondent and the estate of that respondent are
12liable for the payment of transportation costs for
13transporting the respondent to a mental health facility. If
14the respondent is a beneficiary of a trust described in
15Section 509 1213 of the Illinois Trust Code, the trust shall
16not be considered a part of the respondent's estate and shall
17not be subject to payment for transportation costs for
18transporting the respondent to a mental health facility under
19this Section except to the extent permitted under Section 509
201213 of the Illinois Trust Code. If the respondent is unable to
21pay or if the estate of the respondent is insufficient, the
22responsible relatives are severally liable for the payment of
23those sums or for the balance due in case less than the amount
24owing has been paid. If the respondent is covered by
25insurance, the insurance carrier shall be liable for payment
26to the extent authorized by the respondent's insurance policy.

 

 

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1(Source: P.A. 101-48, eff. 1-1-20.)
 
2    (405 ILCS 5/3-819)  (from Ch. 91 1/2, par. 3-819)
3    Sec. 3-819. (a) In counties with a population of 3,000,000
4or more, when a recipient is hospitalized upon court order,
5the order may authorize a relative or friend of the recipient
6to transport the recipient to the facility if such person is
7able to do so safely and humanely. When the Department
8indicates that it has transportation to the facility
9available, the order may authorize the Department to transport
10the recipient there. The court may order the sheriff of the
11county in which such proceedings are held to transport the
12recipient to the facility. When a recipient is hospitalized
13upon court order, and the recipient has been transported to a
14mental health facility, other than a state-operated mental
15health facility, and it is determined by the facility that the
16recipient is in need of commitment or treatment at another
17mental health facility, the court shall determine whether a
18relative or friend of the recipient or the Department is
19authorized to transport the recipient between facilities, or
20whether the county sheriff is responsible for transporting the
21recipient between facilities. The sheriff may make
22arrangements with another public or private entity including a
23licensed ambulance service to transport the recipient to the
24facility. The transporting entity acting in good faith and
25without negligence in connection with the transportation of

 

 

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1recipients shall incur no liability, civil or criminal, by
2reason of such transportation.
3    (a-5) In counties with a population under 3,000,000, when
4a recipient is hospitalized upon court order, the order may
5authorize a relative or friend of the recipient to transport
6the recipient to the facility if the person is able to do so
7safely and humanely. The court may order the Department to
8transport the recipient to the facility. When a recipient is
9hospitalized upon court order, and the recipient has been
10transported to a mental health facility other than a
11State-operated mental health facility, and it is determined by
12the facility that the recipient is in need of commitment or
13treatment at another mental health facility, the court shall
14determine whether a relative or friend of the recipient is
15authorized to transport the recipient between facilities, or
16whether the Department is responsible for transporting the
17recipient between facilities. If the court determines that the
18Department is responsible for the transportation, the
19Department shall make arrangements either directly or through
20agreements with another public or private entity, including a
21licensed ambulance service, to appropriately transport the
22recipient to the facility. The making of such arrangements and
23agreements with public or private entities is independent of
24the Department's role as a provider of mental health services
25and does not indicate that the recipient is admitted to any
26Department facility. In making such arrangements and

 

 

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1agreements with other public or private entities, the
2Department shall include provisions to ensure (i) the
3provision of trained personnel and the use of an appropriate
4vehicle for the safe transport of the recipient and (ii) that
5the recipient's insurance carrier as well as other programs,
6both public and private, that provide payment for such
7transportation services are fully utilized to the maximum
8extent possible.
9    The Department may not make arrangements with an existing
10hospital or grant-in-aid or fee-for-service community provider
11for transportation services under this Section unless the
12hospital or provider has voluntarily submitted a proposal for
13its transportation services. This requirement does not
14eliminate or reduce any responsibility on the part of a
15hospital or community provider to ensure transportation that
16may arise independently through other State or federal law or
17regulation.
18    A transporting entity acting in good faith and without
19negligence in connection with the transportation of a
20recipient incurs no liability, civil or criminal, by reason of
21that transportation.
22    (b) The transporting entity may bill the recipient, the
23estate of the recipient, legally responsible relatives, or
24insurance carrier for the cost of providing transportation of
25the recipient to a mental health facility. The recipient and
26the estate of the recipient are liable for the payment of

 

 

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1transportation costs for transporting the recipient to a
2mental health facility. If the recipient is a beneficiary of a
3trust described in Section 509 1213 of the Illinois Trust
4Code, the trust shall not be considered a part of the
5recipient's estate and shall not be subject to payment for
6transportation costs for transporting the recipient to a
7mental health facility under this section, except to the
8extent permitted under Section 509 1213 of the Illinois Trust
9Code. If the recipient is unable to pay or if the estate of the
10recipient is insufficient, the responsible relatives are
11severally liable for the payment of those sums or for the
12balance due in case less than the amount owing has been paid.
13If the recipient is covered by insurance, the insurance
14carrier shall be liable for payment to the extent authorized
15by the recipient's insurance policy.
16    (c) Upon the delivery of a recipient to a facility, in
17accordance with the procedure set forth in this Article, the
18facility director of the facility shall sign a receipt
19acknowledging custody of the recipient and for any personal
20property belonging to him, which receipt shall be filed with
21the clerk of the court entering the hospitalization order.
22(Source: P.A. 101-48, eff. 1-1-20.)
 
23    (405 ILCS 5/5-105)  (from Ch. 91 1/2, par. 5-105)
24    Sec. 5-105. Each recipient of services provided directly
25or funded by the Department and the estate of that recipient is

 

 

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1liable for the payment of sums representing charges for
2services to the recipient at a rate to be determined by the
3Department in accordance with this Act. If a recipient is a
4beneficiary of a trust described in Section 509 1213 of the
5Illinois Trust Code, the trust shall not be considered a part
6of the recipient's estate and shall not be subject to payment
7for services to the recipient under this Section except to the
8extent permitted under Section 509 1213 of the Illinois Trust
9Code. If the recipient is unable to pay or if the estate of the
10recipient is insufficient, the responsible relatives are
11severally liable for the payment of those sums or for the
12balance due in case less than the amount prescribed under this
13Act has been paid. If the recipient is under the age of 18, the
14recipient and responsible relative shall be liable for medical
15costs on a case-by-case basis for services for the diagnosis
16and treatment of conditions other than that child's disabling
17condition. The liability shall be the lesser of the cost of
18medical care or the amount of responsible relative liability
19established by the Department under Section 5-116. Any person
2018 through 21 years of age who is receiving services under the
21Education for All Handicapped Children Act of 1975 (Public Law
2294-142) or that person's responsible relative shall only be
23liable for medical costs on a case-by-case basis for services
24for the diagnosis and treatment of conditions other than the
25person's disabling condition. The liability shall be the
26lesser of the cost of medical care or the amount of responsible

 

 

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1relative liability established by the Department under Section
25-116. In the case of any person who has received residential
3services from the Department, whether directly from the
4Department or through a public or private agency or entity
5funded by the Department, the liability shall be the same
6regardless of the source of services. The maximum services
7charges for each recipient assessed against responsible
8relatives collectively may not exceed financial liability
9determined from income in accordance with Section 5-116. Where
10the recipient is placed in a nursing home or other facility
11outside the Department, the Department may pay the actual cost
12of services in that facility and may collect reimbursement for
13the entire amount paid from the recipient or an amount not to
14exceed those amounts determined under Section 5-116 from
15responsible relatives according to their proportionate ability
16to contribute to those charges. The liability of each
17responsible relative for payment of services charges ceases
18when payments on the basis of financial ability have been made
19for a total of 12 years for any recipient, and any portion of
20that 12 year period during which a responsible relative has
21been determined by the Department to be financially unable to
22pay any services charges must be included in fixing the total
23period of liability. No child is liable under this Act for
24services to a parent. No spouse is liable under this Act for
25the services to the other spouse who willfully failed to
26contribute to the spouse's support for a period of 5 years

 

 

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1immediately preceding his or her admission. Any spouse
2claiming exemption because of willful failure to support
3during any such 5 year period must furnish the Department with
4clear and convincing evidence substantiating the claim. No
5parent is liable under this Act for the services charges
6incurred by a child after the child reaches the age of
7majority. Nothing in this Section shall preclude the
8Department from applying federal benefits that are
9specifically provided for the care and treatment of a person
10with a disability toward the cost of care provided by a State
11facility or private agency.
12(Source: P.A. 101-48, eff. 1-1-20.)
 
13    Section 7. The Illinois Marriage and Dissolution of
14Marriage Act is amended by changing Section 513.5 as follows:
 
15    (750 ILCS 5/513.5)
16    Sec. 513.5. Support for a non-minor child with a
17disability.
18    (a) The court may award sums of money out of the property
19and income of either or both parties or the estate of a
20deceased parent, as equity may require, for the support of a
21child of the parties who has attained majority when the child
22is mentally or physically disabled and not otherwise
23emancipated. The sums awarded may be paid to one of the
24parents, to a trust created by the parties for the benefit of

 

 

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1the non-minor child with a disability, or irrevocably to a
2trust for a beneficiary with a disability special needs trust,
3established by the parties and for the sole benefit of the
4non-minor child with a disability, pursuant to subdivisions
5(d)(4)(A) or (d)(4)(C) of 42 U.S.C. 1396p, Section 509 1213 of
6the Illinois Trust Code, and applicable provisions of the
7Social Security Administration Program Operating Manual
8System. An application for support for a non-minor disabled
9child may be made before or after the child has attained
10majority. Unless an application for educational expenses is
11made for a mentally or physically disabled child under Section
12513, the disability that is the basis for the application for
13support must have arisen while the child was eligible for
14support under Section 505 or 513 of this Act.
15    (b) In making awards under this Section, or pursuant to a
16petition or motion to decrease, modify, or terminate any such
17award, the court shall consider all relevant factors that
18appear reasonable and necessary, including:
19        (1) the present and future financial resources of both
20    parties to meet their needs, including, but not limited
21    to, savings for retirement;
22        (2) the standard of living the child would have
23    enjoyed had the marriage not been dissolved. The court may
24    consider factors that are just and equitable;
25        (3) the financial resources of the child; and
26        (4) any financial or other resource provided to or for

 

 

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1    the child including, but not limited to, any Supplemental
2    Security Income, any home-based support provided pursuant
3    to the Home-Based Support Services Law for Mentally
4    Disabled Adults, and any other State, federal, or local
5    benefit available to the non-minor disabled child.
6    (c) As used in this Section:
7    A "disabled" individual means an individual who has a
8physical or mental impairment that substantially limits a
9major life activity, has a record of such an impairment, or is
10regarded as having such an impairment.
11    "Disability" means a mental or physical impairment that
12substantially limits a major life activity.
13(Source: P.A. 101-48, eff. 1-1-20.)
 
14    Section 10. The Illinois Trust Code is amended by changing
15Sections 103, 105, 107, 111, 301, 302, 401, 402, 403, 408, 416,
16505, 605, 808, 813.1, 813.2, 817, 913, 1103, 1202, 1211, 1215,
171302, 1324, and 1506 as follows:
 
18    (760 ILCS 3/103)
19    Sec. 103. Definitions. In this Code:
20    (1) "Action", with respect to an act of a trustee,
21includes a failure to act.
22    (1.5) "Appointive property" means the property or property
23interest subject to a power of appointment.
24    (2) "Ascertainable standard" means a standard relating to

 

 

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1an individual's health, education, support, or maintenance
2within the meaning of Section 2041(b)(1)(A) or 2514(c)(1) of
3the Internal Revenue Code and any applicable regulations.
4    (3) "Beneficiary" means a person that:
5        (A) has a present or future beneficial interest in a
6    trust, vested or contingent, assuming nonexercise of
7    powers of appointment, excluding the right of a settlor to
8    be reimbursed for tax obligations as provided in paragraph
9    (3) of subsection (a) of Section 505;
10        (B) in a capacity other than that of trustee, holds a
11    power of appointment over trust property; or
12        (C) is an identified charitable organization that will
13    or may receive distributions under the terms of the trust.
14"Beneficiary" does not include a permissible appointee of
15power of appointment, other than the holder of a presently
16exercisable general power of appointment, until the power is
17exercised in favor of such appointee.
18    (4) "Charitable interest" means an interest in a trust
19that:
20        (A) is held by an identified charitable organization
21    and makes the organization a qualified beneficiary;
22        (B) benefits only charitable organizations and, if the
23    interest were held by an identified charitable
24    organization, would make the organization a qualified
25    beneficiary; or
26        (C) is held solely for charitable purposes and, if the

 

 

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1    interest were held by an identified charitable
2    organization, would make the organization a qualified
3    beneficiary.
4    (5) "Charitable organization" means:
5        (A) a person, other than an individual, organized and
6    operated exclusively for charitable purposes; or
7        (B) a government or governmental subdivision, agency,
8    or instrumentality, to the extent it holds funds
9    exclusively for a charitable purpose.
10    (6) "Charitable purpose" means the relief of poverty, the
11advancement of education or religion, the promotion of health,
12municipal or other governmental purpose, or another purpose
13the achievement of which is beneficial to the community.
14    (7) "Charitable trust" means a trust, or portion of a
15trust, created for a charitable purpose.
16    (8) "Community property" means all personal property,
17wherever situated, that was acquired as or became, and
18remained, community property under the laws of another
19jurisdiction, and all real property situated in another
20jurisdiction that is community property under the laws of that
21jurisdiction.
22    (9) "Current beneficiary" means a beneficiary that on the
23date the beneficiary's qualification is determined is a
24distributee or permissible distributee of trust income or
25principal. The term "current beneficiary" includes the holder
26of a presently exercisable general power of appointment but

 

 

HB1795 Enrolled- 15 -LRB102 10214 LNS 15537 b

1does not include a person who is a beneficiary only because the
2person holds any other power of appointment. In a revocable
3trust, "current beneficiary" does not include a person who may
4receive trust assets only through the exercise of a power to
5make a gift on behalf of the settlor.
6    (10) "Directing party" means any investment trust advisor,
7distribution trust advisor, or trust protector.
8    (11) "Donor", with reference to a power of appointment,
9means a person that creates a power of appointment.
10    (12) "Environmental law" means a federal, state, or local
11law, rule, regulation, or ordinance relating to protection of
12the environment.
13    (13) "General power of appointment" means a power of
14appointment exercisable in favor of a powerholder, the
15powerholder's estate, a creditor of the powerholder, or a
16creditor of the powerholder's estate.
17    (14) "Guardian of the estate" means a person appointed by
18a court to administer the estate of a minor or adult
19individual.
20    (15) "Guardian of the person" means a person appointed by
21a court to make decisions regarding the support, care,
22education, health, and welfare of a minor or adult individual.
23    (16) "Incapacitated" or "incapacity" means the inability
24of an individual to manage property or business affairs
25because the individual is a minor, adjudicated incompetent,
26has an impairment in the ability to receive and evaluate

 

 

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1information or make or communicate decisions even with the use
2of technological assistance; or is at a location that is
3unknown and not reasonably ascertainable. Without limiting the
4ways in which incapacity may be established, an individual is
5incapacitated if:
6        (i) a plenary guardian has been appointed for the
7    individual under subsection (c) of Section 11a-12 of the
8    Probate Act of 1975;
9        (ii) a limited guardian has been appointed for the
10    individual under subsection (b) of Section 11a-12 of the
11    Probate Act of 1975 and the court has found that the
12    individual lacks testamentary capacity; or
13        (iii) the individual was examined by a licensed
14    physician who determined that the individual was
15    incapacitated and the physician made a signed written
16    record of the physician's determination within 90 days
17    after the examination and no licensed physician
18    subsequently made a signed written record of the
19    physician's determination that the individual was not
20    incapacitated within 90 days after examining the
21    individual.
22    (17) "Internal Revenue Code" means the Internal Revenue
23Code of 1986 as amended from time to time and includes
24corresponding provisions of any subsequent federal tax law.
25    (18) "Interested persons" means: (A) the trustee; and (B)
26all beneficiaries, or their respective representatives

 

 

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1determined after giving effect to the provisions of Article 3,
2whose consent or joinder would be required in order to achieve
3a binding settlement were the settlement to be approved by the
4court. "Interested persons" includes a trust advisor,
5investment advisor, distribution advisor, trust protector, or
6other holder, or committee of holders, of fiduciary or
7nonfiduciary powers, if the person then holds powers material
8to a particular question or dispute to be resolved or affected
9by a nonjudicial settlement in accordance with Section 111 or
10by a judicial proceeding.
11    (19) "Interests of the beneficiaries" means the beneficial
12interests provided in the trust instrument.
13    (20) "Jurisdiction", with respect to a geographic area,
14includes a State or country.
15    (21) "Legal capacity" means that the person is not
16incapacitated.
17    (22) "Nongeneral power of appointment" means a power of
18appointment that is not a general power of appointment.
19    (22.5) "Permissible appointee" means a person in whose
20favor a powerholder may exercise a power of appointment.
21    (23) "Person" means an individual, estate, trust, business
22or nonprofit entity, public corporation, government or
23governmental subdivision, agency, or instrumentality, or other
24legal entity.
25    (24) "Power of appointment" means a power that enables a
26powerholder acting in a nonfiduciary capacity to designate a

 

 

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1recipient of an ownership interest in or another power of
2appointment over the appointive property. The term "power of
3appointment" does not include a power of attorney.
4    (25) "Power of withdrawal" means a presently exercisable
5general power of appointment other than a power:
6        (A) exercisable by the powerholder as trustee that is
7    limited by an ascertainable standard; or
8        (B) exercisable by another person only upon consent of
9    the trustee or a person holding an adverse interest.
10    (26) "Powerholder" means a person in which a donor creates
11a power of appointment.
12    (27) "Presently exercisable power of appointment" means a
13power of appointment exercisable by the powerholder at the
14relevant time. The term "presently exercisable power of
15appointment":
16        (A) includes a power of appointment exercisable only
17    after the occurrence of a specified event, the
18    satisfaction of an ascertainable standard, or the passage
19    of a specified time only after:
20            (i) the occurrence of the specified event;
21            (ii) the satisfaction of the ascertainable
22        standard; or
23            (iii) the passage of the specified time; and
24        (B) does not include a power exercisable only at the
25    powerholder's death.
26    (28) "Presumptive remainder beneficiary" means a

 

 

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1beneficiary of a trust, as of the date of determination and
2assuming nonexercise of all powers of appointment, who either:
3(A) would be a distributee or permissible distributee eligible
4to receive a distribution of trust income or principal if the
5trust terminated on that date; or (B) would be a distributee or
6permissible distributee eligible to receive a distribution of
7trust income or principal if the interests of all distributees
8beneficiaries currently eligible to receive income or
9principal from the trust terminated ended on that date without
10causing the trust to terminate.
11    (29) "Property" means anything that may be the subject of
12ownership, whether real or personal, legal or equitable, or
13any interest therein.
14    (30) "Qualified beneficiary" means each current
15beneficiary and presumptive remainder beneficiary. a
16beneficiary who, on the date the beneficiary's qualification
17is determined and assuming nonexercise of powers of
18appointment:
19        (A) is a distributee or permissible distributee of
20    trust income or principal;
21        (B) would be a distributee or permissible distributee
22    of trust income or principal if the interests of the
23    distributees described in subparagraph (A) terminated on
24    that date without causing the trust to terminate; or
25        (C) would be a distributee or permissible distributee
26    of trust income or principal if the trust terminated on

 

 

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1    that date.
2    (31) "Revocable", as applied to a trust, means revocable
3by the settlor without the consent of the trustee or a person
4holding an adverse interest. A revocable trust is deemed
5revocable during the settlor's lifetime.
6    (32) "Settlor", except as otherwise provided in Sections
7113 and 1225, means a person, including a testator, who
8creates, or contributes property to, a trust. If more than one
9person creates or contributes property to a trust, each person
10is a settlor of the portion of the trust property attributable
11to that person's contribution except to the extent another
12person has the power to revoke or withdraw that portion.
13    (33) "Sign" means, with present intent to authenticate or
14adopt a record:
15        (A) to execute or adopt a tangible symbol; or
16        (B) to attach to or logically associate with the
17    record an electronic symbol, sound, or process.
18    (34) "Spendthrift provision" means a term of a trust that
19restrains both voluntary and involuntary transfer of a
20beneficiary's interest.
21    (35) "State" means a State of the United States, the
22District of Columbia, Puerto Rico, the United States Virgin
23Islands, or any territory or insular possession subject to the
24jurisdiction of the United States. The term "state" includes
25an Indian tribe or band recognized by federal law or formally
26acknowledged by a state.

 

 

HB1795 Enrolled- 21 -LRB102 10214 LNS 15537 b

1    (36) "Terms of the trust" means:
2        (A) except as otherwise provided in paragraph (B), the
3    manifestation of the settlor's intent regarding a trust's
4    provisions as:
5            (i) expressed in the trust instrument; or
6            (ii) established by other evidence that would be
7        admissible in a judicial proceeding; or
8        (B) the trust's provisions as established, determined,
9    or modified by:
10            (i) a trustee or other person in accordance with
11        applicable law;
12            (ii) a court order; or
13            (iii) a nonjudicial settlement agreement under
14        Section 111.
15    (37) "Trust" means (A) a trust created by will, deed,
16agreement, declaration, or other written instrument, or (B) an
17oral trust under Section 407.
18    (38) "Trust accounting" means one or more written
19communications from the trustee with respect to the accounting
20year that describe: (A) the trust property, liabilities,
21receipts, and disbursements, including the amount of the
22trustee's compensation; (B) the value of the trust assets on
23hand at the close of the accounting period, to the extent
24feasible; and (C) all other material facts related to the
25trustee's administration of the trust.
26    (39) "Trust instrument" means the written instrument

 

 

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1stating the terms of a trust, including any amendment, any
2court order or nonjudicial settlement agreement establishing,
3construing, or modifying the terms of the trust in accordance
4with Section 111, Sections 410 through 416, or other
5applicable law, and any additional trust instrument under
6Article 12.
7    (40) "Trustee" includes an original, additional, and
8successor trustee, and a co-trustee.
9    (41) "Unascertainable beneficiary" means a beneficiary
10whose identity is uncertain or not reasonably ascertainable.
11(Source: P.A. 101-48, eff. 1-1-20.)
 
12    (760 ILCS 3/105)
13    Sec. 105. Default and mandatory rules.
14    (a) The trust instrument may specify the rights, powers,
15duties, limitations, and immunities applicable to the trustee,
16beneficiary, and others and those terms, if not otherwise
17contrary to law, shall control, except to the extent
18specifically provided otherwise in this Section. The
19provisions of this Code apply to the trust to the extent that
20they are not inconsistent with the specific terms of the
21trust.
22    (b) Terms Specific terms of the trust prevail over any
23provision of Articles 1 through 10 of this Code except:
24        (1) the requirements for creating a trust;
25        (2) the duty of a trustee to act in good faith;

 

 

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1        (3) the requirement that a trust have a purpose that
2    is lawful and not contrary to public policy;
3        (4) the rules governing designated representatives as
4    provided in Section 307;
5        (5) the 21-year limitation contained in subsection (b)
6    (a) of Section 409;
7        (6) the power of the court to modify or terminate a
8    trust under Sections 411 through 416 417;
9        (7) the effect of a spendthrift provision and the
10    rights of certain creditors and assignees to reach a trust
11    as provided in Article 5;
12        (8) the requirement under subsection (e) of Section
13    602 that an agent under a power of attorney must have
14    express authorization in the agency to exercise a
15    settlor's powers with respect to a revocable trust;
16        (9) the power of the court under subsection (b) of
17    Section 708 to adjust a trustee's compensation specified
18    in the trust instrument that is unreasonably low or high;
19        (10) for trusts becoming irrevocable after the
20    effective date of this Code, the trustee's duty under
21    paragraph (b)(1) of Section 813.1 to provide information
22    to the qualified beneficiaries;
23        (11) for trusts becoming irrevocable after the
24    effective date of this Code, the trustee's duty under
25    paragraph (b)(2) of Section 813.1 to provide accountings
26    to the current beneficiaries of the trust;

 

 

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1        (12) for trusts becoming irrevocable after the
2    effective date of this Code, the trustee's duty under
3    paragraph (b)(4) of Section 813.1 to provide accountings
4    to beneficiaries receiving a distribution of the residue
5    of the trust upon a trust's termination;
6        (12.5) for trusts becoming irrevocable after the
7    effective date of this Code, the right of a qualified
8    beneficiary under paragraph (6) of subsection (b) of
9    Section 813.1 to request the portions of the trust
10    instrument that set forth the terms of the trust in which
11    the qualified beneficiary has an interest as a qualified
12    beneficiary;
13        (13) the effect of an exculpatory term under Section
14    1008;
15        (14) the rights under Sections 1010 through 1013 of a
16    person other than a trustee or beneficiary; and
17        (15) the power of the court to take such action and
18    exercise such jurisdiction as may be necessary in the
19    interests of equity.
20(Source: P.A. 101-48, eff. 1-1-20.)
 
21    (760 ILCS 3/107)
22    Sec. 107. Governing law.
23    (a) The meaning and effect of a trust instrument are
24determined by:
25        (1) the law of the jurisdiction designated in the

 

 

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1    trust instrument; or
2        (2) in the absence of a designation in the trust
3    instrument, the law of the jurisdiction having the most
4    significant relationship to the matter at issue.
5    (b) Except as otherwise expressly provided by the trust
6instrument or by court order, the laws of this State govern the
7administration of a trust while the principal place of
8administration is trust is administered in this State.
9(Source: P.A. 101-48, eff. 1-1-20.)
 
10    (760 ILCS 3/111)
11    Sec. 111. Nonjudicial settlement agreements.
12    (a) Interested persons, or their respective
13representatives determined after giving effect to Article 3,
14may enter into a binding nonjudicial settlement agreement with
15respect to any matter listed in subsection (b) involving a
16trust as provided in this Section.
17    (b) The following matters may be resolved by a nonjudicial
18settlement agreement:
19        (1) Validity, interpretation, or construction of the
20    terms of the trust.
21        (2) Approval of a trustee's report or accounting.
22        (3) Exercise or nonexercise of any power by a trustee.
23        (4) The grant to a trustee of any necessary or
24    desirable administrative power if the grant does not
25    conflict with a clear material purpose of the trust.

 

 

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1        (5) Questions relating to property or an interest in
2    property held by the trust if the resolution does not
3    conflict with a clear material purpose of the trust.
4        (6) Removal, appointment, or removal and appointment
5    of a trustee, trust advisor, investment advisor,
6    distribution advisor, trust protector, or other holder, or
7    committee of holders, of fiduciary or nonfiduciary powers,
8    including without limitation designation of a plan of
9    succession or procedure to determine successors to any
10    such office.
11        (7) Determination of a trustee's or other fiduciary's
12    compensation.
13        (8) Transfer of a trust's principal place of
14    administration, including, without limitation, to change
15    the law governing administration of the trust.
16        (9) Liability or indemnification of a trustee for an
17    action relating to the trust.
18        (10) Resolution of bona fide disputes related to trust
19    administration, investment, distribution, or other
20    matters.
21        (11) Modification of the terms of the trust pertaining
22    to the administration of the trust.
23        (12) Determining whether the aggregate interests of
24    each beneficiary in severed trusts are substantially
25    equivalent to the beneficiary's interests in the trusts
26    before severance.

 

 

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1        (13) Termination of the trust, except that court
2    approval of the termination must be obtained in accordance
3    with subsection (d), and the court must find that
4    continuance of the trust is not necessary to achieve any
5    clear material purpose of the trust. The court shall
6    consider spendthrift provisions as a factor in making a
7    decision under this subsection, but a spendthrift
8    provision is not necessarily a material purpose of a
9    trust, and the court is not precluded from modifying or
10    terminating a trust because the trust instrument contains
11    spendthrift provisions. Upon termination, the court shall
12    order the distribution of the trust property as agreed by
13    the parties to the agreement, or if the parties cannot
14    agree, then as the court determines is equitable and
15    consistent with the purposes of the trust.
16    (c) If a trust contains a charitable interest, the parties
17to any proposed nonjudicial settlement agreement affecting the
18trust shall deliver to the Attorney General written notice of
19the proposed agreement at least 60 days before its effective
20date. The Bureau is not required to take action, but if it
21objects in a writing delivered to one or more of the parties
22before the proposed effective date, the agreement shall not
23take effect unless the parties obtain court approval.
24    (d) Any beneficiary or other interested person may request
25the court to approve any part or all of a nonjudicial
26settlement agreement, including, without limitation, whether

 

 

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1any representation is adequate and without material conflict
2of interest, if the petition for approval is filed within 60
3days after the effective date of the agreement.
4    (e) An agreement entered into in accordance with this
5Section, or a judicial proceeding pursued in accordance with
6this Section, is final and binding on the trustee, on all
7beneficiaries of the trust, both current and future, and on
8all other interested persons as if ordered by a court with
9competent jurisdiction over the trust, the trust property, and
10all interested persons parties in interest.
11    (f) In the trustee's sole discretion, the trustee may, but
12is not required to, obtain and rely upon an opinion of counsel
13on any matter relevant to this Section, including, without
14limitation:
15        (1) if required by this Section, that the agreement
16    proposed to be made in accordance with this Section does
17    not conflict with a clear material purpose of the trust;
18        (2) in the case of a trust termination, that
19    continuance of the trust is not necessary to achieve any
20    clear material purpose of the trust;
21        (3) that there is no material conflict of interest
22    between a representative and the person represented with
23    respect to the particular question or dispute; and
24        (4) that the representative and the person represented
25    have substantially similar interests with respect to the
26    particular question or dispute.

 

 

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1    (g) This Section shall be construed as pertaining to the
2administration of a trust and shall be available to any trust
3that has its principal place of administration is administered
4in this State, including a trust whose principal place of
5administration has been changed to this State, or that is
6governed by the Illinois law of this State for the purpose of
7determining with respect to the meaning and effect of its
8terms of the trust or construction of terms of the trust,
9except to the extent the trust instrument expressly prohibits
10the use of this Section by specific reference to this Section
11or a prior corresponding law. A provision in the trust
12instrument in the form: "Neither the provisions of Section 111
13of the Illinois Trust Code nor any corresponding provision of
14future law may be used in the administration of this trust", or
15a similar provision demonstrating that intent, is sufficient
16to preclude the use of this Section.
17(Source: P.A. 101-48, eff. 1-1-20.)
 
18    (760 ILCS 3/301)
19    Sec. 301. Representation: basic effect.
20    (a) Except as provided in Section 602 and subsection (c):
21        (1) Notice, information, accountings, or reports given
22    to a person who may represent and bind another person
23    under this Article have the same effect as if given
24    directly to the person represented.
25        (2) Actions, including, but not limited to, the

 

 

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1    execution of an agreement, taken by a person who may
2    represent and bind another person under this Article are
3    binding on the person represented to the same extent as if
4    the actions had been taken by the person represented.
5    (b) Except as otherwise provided in Section 602, a person
6under this Article who represents a settlor who is
7incapacitated may, on the settlor's behalf: (i) receive
8notice, information, accountings, or reports; (ii) give a
9binding consent; or (iii) enter a binding agreement.
10    (c) A settlor may not represent and bind a beneficiary
11under this Article with respect to a nonjudicial settlement
12agreement under Section 111, the termination or modification
13of a trust under subsection (a) of Section 411, or an exercise
14of the decanting power under Article 12.
15    (d) If pursuant to this Article a person may be
16represented by 2 or more representatives, then the first of
17the following representative who has legal capacity and is
18willing to act as representative, in the following order of
19priority, shall represent and bind the person:
20        (1) a representative or guardian ad litem appointed by
21    a court under Section 305;
22        (2) the holder of a power of appointment under Section
23    302;
24        (3) a designated representative under Section 307;
25        (4) a court-appointed guardian of the estate, or, if
26    none, a court-appointed guardian of the person under

 

 

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1    subsection (b) of Section 303;
2        (5) an agent under a power of attorney for property
3    under subsection (c) of Section 303;
4        (6) a parent of a person under subsection (d) of
5    Section 303;
6        (7) another person having a substantially similar
7    interest with respect to the particular question or
8    dispute under subsection (a) of Section 304; and
9        (8) a representative under this Article for a person
10    who has a substantially similar interest to a person who
11    has a representative under subsection (b) of Section 304.
12    (e) A trustee is not liable for giving notice,
13information, accountings, or reports to a person who is
14represented by another person under this Article, and nothing
15in this Article prohibits the trustee from giving notice,
16information, accountings, or reports to the person
17represented.
18(Source: P.A. 101-48, eff. 1-1-20.)
 
19    (760 ILCS 3/302)
20    Sec. 302. Representation by holders of certain powers.
21    (a) The holder of a testamentary or a presently
22exercisable power of appointment that is: (1) a general power
23of appointment; or (2) exercisable in favor of all persons
24other than the powerholder, the powerholder's estate, a
25creditor of the powerholder, or a creditor of the

 

 

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1powerholder's estate, may represent and bind all persons,
2including permissible appointees and takers in default, whose
3interests may be eliminated by the exercise or nonexercise of
4the power.
5    (b) To the extent there is no conflict of interest between
6a holder and the persons represented with respect to the
7particular question or dispute, the holder of a testamentary
8or presently exercisable power of appointment, other than a
9power described in subsection (a), may represent and bind all
10persons, including permissible appointees and takers in
11default, whose interests may be eliminated by the exercise or
12nonexercise of the power.
13    (c) Subsection (a), except with respect to a presently
14exercisable general power of appointment, and subsection (b)
15do not apply to:
16        (1) any matter determined by the court to involve
17    fraud or bad faith by the trustee; or
18        (2) a power of appointment held by a person while the
19    person is the sole trustee.
20(Source: P.A. 101-48, eff. 1-1-20.)
 
21    (760 ILCS 3/401)
22    Sec. 401. Methods of creating trust. A trust may be
23created by:
24        (1) transfer of property to another person as trustee
25    during the settlor's lifetime or by will or other

 

 

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1    disposition taking effect upon the settlor's death;
2        (2) declaration by the owner of property that the
3    owner holds identifiable property as trustee; or
4        (3) exercise of a power of appointment in favor of a
5    trustee;
6        (4) order of a court; or
7        (5) exercise by an authorized fiduciary of the powers
8    granted in Article 12.
9(Source: P.A. 101-48, eff. 1-1-20.)
 
10    (760 ILCS 3/402)
11    Sec. 402. Requirements for creation.
12    (a) A trust is created only if:
13        (1) the settlor or other person creating the trust has
14    capacity to create a trust;
15        (2) the settlor or other person creating the trust
16    indicates an intention to create the trust;
17        (3) the trust has a definite beneficiary or is:
18            (A) a charitable trust;
19            (B) a trust for the care of an animal, as provided
20        in Section 408; or
21            (C) a trust for a noncharitable purpose, as
22        provided in Section 409;
23        (4) the trustee has duties to perform; and
24        (5) the same person is not the sole trustee and sole
25    beneficiary.

 

 

HB1795 Enrolled- 34 -LRB102 10214 LNS 15537 b

1    (b) A beneficiary is definite if the beneficiary can be
2ascertained now or in the future, subject to any applicable
3rule against perpetuities.
4    (c) A power in a trustee to select a beneficiary from an
5indefinite class is valid. If the power is not exercised
6within a reasonable time, the power fails and the property
7subject to the power passes to the persons who would have taken
8the property had the power not been conferred.
9(Source: P.A. 101-48, eff. 1-1-20.)
 
10    (760 ILCS 3/403)
11    Sec. 403. Trusts created in other jurisdictions. A trust
12not created by will is validly created if its creation
13complies with the law of the jurisdiction in which the trust
14instrument was executed, or the law of the jurisdiction in
15which, at the time of creation:
16        (1) the person creating the trust settlor was
17    domiciled, had a place of abode, or was a national;
18        (2) a trustee was domiciled or had a place of
19    business; or
20        (3) any trust property was located.
21(Source: P.A. 101-48, eff. 1-1-20.)
 
22    (760 ILCS 3/408)
23    Sec. 408. Trusts for domestic or pet animals.
24    (a) A trust for the care of one or more designated domestic

 

 

HB1795 Enrolled- 35 -LRB102 10214 LNS 15537 b

1or pet animals is valid. The trust terminates when no living
2animal is covered by the trust. A trust instrument shall be
3liberally construed to bring the transfer within this Section,
4to presume against a merely precatory or honorary nature of
5its disposition, and to carry out the general intent of the
6transferor. Extrinsic evidence is admissible in determining
7the transferor's intent.
8    (b) A trust for the care of one or more designated domestic
9or pet animals is subject to the following provisions:
10        (1) Except as expressly provided otherwise in the
11    trust instrument creating the trust, no portion of the
12    principal or income of the trust may be converted to the
13    use of the trustee or to a use other than for the trust's
14    purposes or for the benefit of a covered animal.
15        (2) Upon termination, the trustee shall transfer the
16    unexpended trust property in the following order:
17            (A) as directed in the trust instrument;
18            (B) to the settlor, if then living;
19            (C) if there is no direction in the trust
20        instrument and if the trust was created in a
21        non-residuary clause in the transferor's will, then
22        under the residuary clause in the transferor's will;
23            (D) to the transferor's heirs under Section 2-1 of
24        the Probate Act of 1975.
25        (3) The intended use of the principal or income may be
26    enforced by an individual designated for that purpose in

 

 

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1    the trust instrument or, if none, by an individual
2    appointed by a court having jurisdiction of the matter and
3    parties, upon petition to it by an individual.
4        (4) Except as ordered by the court or required by the
5    trust instrument, no filing, report, registration,
6    periodic accounting, separate maintenance of funds,
7    appointment, or fee is required by reason of the existence
8    of the fiduciary relationship of the trustee.
9        (5) The court may reduce the amount of the property
10    transferred if it determines that the amount substantially
11    exceeds the amount required for the intended use. The
12    amount of the reduction, if any, passes as unexpended
13    trust property under paragraph (2).
14        (6) If a trustee is not designated or no designated
15    trustee is willing and able to serve, the court shall name
16    a trustee. The court may order the transfer of the
17    property to another trustee if the transfer is necessary
18    to ensure that the intended use is carried out, and if a
19    successor trustee is not designated in the trust
20    instrument or if no designated successor trustee agrees to
21    serve and is able to serve. The court may also make other
22    orders and determinations as are advisable to carry out
23    the intent of the transferor and the purpose of this
24    Section.
25        (7) The trust is exempt from the operation of the
26    common law rule against perpetuities.

 

 

HB1795 Enrolled- 37 -LRB102 10214 LNS 15537 b

1(Source: P.A. 101-48, eff. 1-1-20.)
 
2    (760 ILCS 3/416)
3    Sec. 416. Modification to achieve settlor's tax
4objectives. To achieve the settlor's tax objectives or
5objective to qualify for government benefits, the court may
6modify the terms of a trust in a manner that is not contrary to
7the settlor's probable intention. The court may provide that
8the modification has retroactive effect.
9(Source: P.A. 101-48, eff. 1-1-20.)
 
10    (760 ILCS 3/505)
11    Sec. 505. Creditor's claim against settlor.
12    (a) Whether or not the terms of a trust contain a
13spendthrift provision, the following rules apply:
14        (1) During the lifetime of the settlor, the property
15    of a revocable trust is subject to claims of the settlor's
16    creditors to the extent the property would not otherwise
17    be exempt by law if owned directly by the settlor.
18        (2) With respect to an irrevocable trust, a creditor
19    or assignee of the settlor may reach the maximum amount
20    that can be distributed to or for the settlor's benefit.
21    If a trust has more than one settlor, the amount the
22    creditor or assignee of a particular settlor may reach may
23    not exceed the settlor's interest in the portion of the
24    trust attributable to that settlor's contribution.

 

 

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1        (3) Notwithstanding paragraph (2), the assets of an
2    irrevocable trust may not be subject to the claims of an
3    existing or subsequent creditor or assignee of the
4    settlor, in whole or in part, solely because of the
5    existence of a discretionary power granted to the trustee
6    by the terms of the trust, or any other provision of law,
7    to pay directly to the taxing authorities or to reimburse
8    the settlor for any tax on trust income or principal that
9    is payable by the settlor under the law imposing the tax.
10        (4) Paragraph (2) does not apply to the assets of an
11    irrevocable trust established for the benefit of a person
12    with a disability that meets the requirements of 42 U.S.C.
13    1396p(d)(4) or similar federal law governing the transfer
14    to such a trust.
15        (5) After the death of a settlor, and subject to the
16    settlor's right to direct the source from which
17    liabilities will be paid, the property of a trust that was
18    revocable at the settlor's death is subject to claims of
19    the settlor's creditors, costs of administration of the
20    settlor's estate, the expenses of the settlor's funeral
21    and disposal of remains, and statutory awards allowances
22    to a surviving spouse and children to the extent the
23    settlor's probate estate is inadequate to satisfy those
24    claims, costs, expenses, and awards allowances.
25    Distributees of the trust take property distributed after
26    payment of such claims; subject to the following

 

 

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1    conditions:
2            (A) sums recovered by the personal representative
3        of the settlor's estate must be administered as part
4        of the decedent's probate estate, and the liability
5        created by this subsection does not apply to any
6        assets to the extent that the assets are otherwise
7        exempt under the laws of this State or under federal
8        law;
9            (B) with respect to claims, expenses, and taxes in
10        connection with the settlement of the settlor's
11        estate, any claim of a creditor that would be barred
12        against the personal representative of a settlor's
13        estate or the estate of the settlor is barred against
14        the trust property of a trust that was revocable at the
15        settlor's death, the trustee of the revocable trust,
16        and the beneficiaries of the trust; and
17            (C) Sections 18-10 and 18-13 of the Probate Act of
18        1975, detailing the classification and priority of
19        payment of claims, expenses, and taxes from the
20        probate estate of a decedent, or comparable provisions
21        of the law of the deceased settlor's domicile at death
22        if not Illinois, apply to a revocable trust to the
23        extent the assets of the settlor's probate estate are
24        inadequate and the personal representative or creditor
25        or taxing authority of the settlor's estate has
26        perfected its right to collect from the settlor's

 

 

HB1795 Enrolled- 40 -LRB102 10214 LNS 15537 b

1        revocable trust.
2        (6) After the death of a settlor, a trustee of a trust
3    that was revocable at the settlor's death is released from
4    liability under this Section for any assets distributed to
5    the trust's beneficiaries in accordance with the governing
6    trust instrument if:
7            (A) the trustee made the distribution 9 6 months
8        or later after the settlor's death; and
9            (B) the trustee did not receive a written notice
10        from the decedent's personal representative asserting
11        that the decedent's probate estate is or may be
12        insufficient to pay allowed claims or, if the trustee
13        received such a notice, the notice was withdrawn by
14        the personal representative or revoked by the court
15        before the distribution.
16    (b) For purposes of this Section:
17        (1) during the period the power may be exercised, the
18    holder of a power of withdrawal is treated in the same
19    manner as the settlor of a revocable trust to the extent of
20    the property subject to the power; and
21        (2) upon the lapse, release, or waiver of the power,
22    the holder is treated as the settlor of the trust only to
23    the extent the value of the property affected by the
24    lapse, release, or waiver exceeds the greater of the
25    amount specified in Section 2041(b)(2) or 2514(e) of the
26    Internal Revenue Code.

 

 

HB1795 Enrolled- 41 -LRB102 10214 LNS 15537 b

1(Source: P.A. 101-48, eff. 1-1-20.)
 
2    (760 ILCS 3/605)
3    Sec. 605. Revocation of provisions in revocable trust by
4divorce or annulment.
5    (a) As used in this Section:
6        (1) "Judicial termination of marriage" includes, but
7    is not limited to, divorce, dissolution, annulment or
8    declaration of invalidity of marriage.
9        (2) "Provision pertaining to the settlor's former
10    spouse" includes, but is not limited to, every present or
11    future gift or interest or power of appointment given to
12    the settlor's former spouse or right of the settlor's
13    former spouse to serve in a fiduciary capacity.
14        (3) "Trust" means a trust created by a nontestamentary
15    instrument executed after January 1, 1982.
16        (4) Notwithstanding the definition of "revocable" in
17    Section 103, a provision is revocable by the settlor if
18    the settlor has the power at the time of the entry of the
19    judgment of or judicial termination of marriage of the
20    settlor to revoke, modify, or amend the provision, either
21    alone or in conjunction with any other person or persons.
22    (b) Unless the trust instrument or the judgment of
23judicial termination of marriage expressly provides otherwise,
24judicial termination of marriage of the settlor of a trust
25revokes every provision that is revocable by the settlor

 

 

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1pertaining to the settlor's former spouse in a trust
2instrument or amendment executed by the settlor before the
3entry of the judgment of judicial termination of marriage of
4the settlor and any such trust shall be administered and
5construed as if the settlor's former spouse had died upon
6entry of the judgment of judicial termination of marriage.
7    (c) A trustee who has no actual knowledge of a judgment of
8judicial termination of marriage of the settlor is not liable
9for any action taken or omitted in good faith on the assumption
10that the settlor is married. The preceding sentence is
11intended to affect only the liability of the trustee and shall
12not affect the disposition of beneficial interests in any
13trust.
14    (d) Notwithstanding Section 102, this Section may be made
15applicable by specific reference in the trust instrument to
16this Section in any (1) land trust; (2) voting trust; (3)
17security instrument such as a trust deed or mortgage; (4)
18liquidation trust; (5) escrow; (6) instrument under which a
19nominee, custodian for property or paying or receiving agent
20is appointed; or (7) trust created by a deposit arrangement in
21a bank or savings institution, commonly known as "Totten
22Trust".
23    (e) If provisions of a trust are revoked solely by this
24Section, they are revived by the settlor's remarriage to the
25former spouse.
26(Source: P.A. 101-48, eff. 1-1-20.)
 

 

 

HB1795 Enrolled- 43 -LRB102 10214 LNS 15537 b

1    (760 ILCS 3/808)
2    Sec. 808. Directed trusts.
3    (a) In this Section:
4        (1) "Distribution trust advisor" means any one or more
5    persons given authority by the trust instrument to direct,
6    consent to, veto, or otherwise exercise all or any portion
7    of the distribution powers and discretions of the trust,
8    including, but not limited to, authority to make
9    discretionary distribution of income or principal.
10        (2) "Excluded fiduciary" means any fiduciary that by
11    the trust instrument is directed to act in accordance with
12    the exercise of specified powers by a directing party, in
13    which case the specified powers are deemed granted not to
14    the fiduciary but to the directing party and the fiduciary
15    is deemed excluded from exercising the specified powers.
16    If a trust instrument provides that a fiduciary as to one
17    or more specified matters is to act, omit action, or make
18    decisions only with the consent of a directing party, then
19    the fiduciary is an excluded fiduciary with respect to the
20    matters. Notwithstanding any provision of this Section, a
21    person does not fail to qualify as an excluded fiduciary
22    solely by reason of having effectuated, participated in,
23    or consented to a transaction, including, but not limited
24    to, any transaction described in Section 111 or 411 or
25    Article 12 invoking this Section with respect to any new

 

 

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1    or existing trust.
2        (3) "Fiduciary" means any person expressly given one
3    or more fiduciary duties by the trust instrument,
4    including, but not limited to, a trustee.
5        (4) "Investment trust advisor" means any one or more
6    persons given authority by the trust instrument to direct,
7    consent to, veto, or otherwise exercise all or any portion
8    of the investment powers of the trust.
9        (5) "Power" means authority to take or withhold an
10    action or decision, including, but not limited to, an
11    expressly specified power, the implied power necessary to
12    exercise a specified power, and authority inherent in a
13    general grant of discretion.
14        (6) "Trust protector" means any one or more persons
15    given any one or more of the powers specified in
16    subsection (d), regardless of whether the power is
17    designated with the title of trust protector by the trust
18    instrument.
19    (b) An investment trust advisor may be designated in the
20trust instrument of a trust. The powers of an investment trust
21advisor may be exercised or not exercised in the sole and
22absolute discretion of the investment trust advisor, and are
23binding on all other persons, including, but not limited to,
24each beneficiary, fiduciary, excluded fiduciary, and any other
25party having an interest in the trust. The trust instrument
26may use the title "investment trust advisor" or any similar

 

 

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1name or description demonstrating the intent to provide for
2the office and function of an investment trust advisor. Unless
3the terms of the trust provide otherwise, the investment trust
4advisor has the authority to:
5        (1) direct the trustee with respect to the retention,
6    purchase, transfer, assignment, sale, or encumbrance of
7    trust property and the investment and reinvestment of
8    principal and income of the trust;
9        (2) direct the trustee with respect to all management,
10    control, and voting powers related directly or indirectly
11    to trust assets, including, but not limited to, voting
12    proxies for securities held in trust;
13        (3) select and determine reasonable compensation of
14    one or more advisors, managers, consultants, or
15    counselors, including the trustee, and to delegate to them
16    any of the powers of the investment trust advisor in
17    accordance with Section 807; and
18        (4) determine the frequency and methodology for
19    valuing any asset for which there is no readily available
20    market value.
21    (c) A distribution trust advisor may be designated in the
22trust instrument of a trust. The powers of a distribution
23trust advisor may be exercised or not exercised in the sole and
24absolute discretion of the distribution trust advisor, and are
25binding on all other persons, including, but not limited to,
26each beneficiary, fiduciary, excluded fiduciary, and any other

 

 

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1party having an interest in the trust. The trust instrument
2may use the title "distribution trust advisor" or any similar
3name or description demonstrating the intent to provide for
4the office and function of a distribution trust advisor.
5Unless the terms of the trust provide otherwise, the
6distribution trust advisor has authority to direct the trustee
7with regard to all decisions relating directly or indirectly
8to discretionary distributions to or for one or more
9beneficiaries.
10    (d) A trust protector may be designated in the trust
11instrument of a trust. The powers of a trust protector may be
12exercised or not exercised in the sole and absolute discretion
13of the trust protector, and are binding on all other persons,
14including, but not limited to, each beneficiary, investment
15trust advisor, distribution trust advisor, fiduciary, excluded
16fiduciary, and any other party having an interest in the
17trust. The trust instrument may use the title "trust
18protector" or any similar name or description demonstrating
19the intent to provide for the office and function of a trust
20protector. The powers granted to a trust protector by the
21trust instrument may include but are not limited to authority
22to do any one or more of the following:
23        (1) modify or amend the trust instrument to achieve
24    favorable tax status or respond to changes in the Internal
25    Revenue Code, federal laws, state law, or the rulings and
26    regulations under such laws;

 

 

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1        (2) increase, decrease, or modify the interests of any
2    beneficiary or beneficiaries of the trust;
3        (3) modify the terms of any power of appointment
4    granted by the trust; however, such modification or
5    amendment may not grant a beneficial interest to any
6    individual, class of individuals, or other parties not
7    specifically provided for under the trust instrument;
8        (4) remove, appoint, or remove and appoint, a trustee,
9    investment trust advisor, distribution trust advisor,
10    another directing party, investment committee member, or
11    distribution committee member, including designation of a
12    plan of succession for future holders of any such office;
13        (5) terminate the trust, including determination of
14    how the trustee shall distribute the trust property to be
15    consistent with the purposes of the trust;
16        (6) change the situs of the trust, the governing law
17    of the trust, or both;
18        (7) appoint one or more successor trust protectors,
19    including designation of a plan of succession for future
20    trust protectors;
21        (8) interpret terms of the trust at the request of the
22    trustee;
23        (9) advise the trustee on matters concerning a
24    beneficiary; or
25        (10) amend or modify the trust instrument to take
26    advantage of laws governing restraints on alienation,

 

 

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1    distribution of trust property, or to improve the
2    administration of the trust.
3If a trust contains a charitable interest, a trust protector
4must give notice to the Attorney General's Charitable Trust
5Bureau at least 60 days before taking any of the actions
6authorized under paragraph (2), (3), (4), (5), or (6) of this
7subsection. The Attorney General may waive this notice
8requirement.
9    (e) A directing party is a fiduciary of the trust subject
10to the same duties and standards applicable to a trustee of a
11trust as provided by applicable law unless the trust
12instrument provides otherwise, but the trust instrument may
13not, however, relieve or exonerate a directing party from the
14duty to act or withhold acting as the directing party in good
15faith reasonably believes is in the best interests of the
16trust.
17    (f) The excluded fiduciary shall act in accordance with
18the trust instrument and comply with the directing party's
19exercise of the powers granted to the directing party by the
20trust instrument. Unless otherwise provided in the trust
21instrument, an excluded fiduciary has no duty to monitor,
22review, inquire, investigate, recommend, evaluate, or warn
23with respect to a directing party's exercise or failure to
24exercise any power granted to the directing party by the trust
25instrument, including, but not limited to, any power related
26to the acquisition, disposition, retention, management, or

 

 

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1valuation of any asset or investment. Except as otherwise
2provided in this Section or the trust instrument, an excluded
3fiduciary is not liable, either individually or as a
4fiduciary, for any action, inaction, consent, or failure to
5consent by a directing party, including, but not limited to,
6any of the following:
7        (1) if a trust instrument provides that an excluded
8    fiduciary is to follow the direction of a directing party,
9    and such excluded fiduciary acts in accordance with such a
10    direction, then except in cases of willful misconduct on
11    the part of the excluded fiduciary in complying with the
12    direction of the directing party, the excluded fiduciary
13    is not liable for any loss resulting directly or
14    indirectly from following any such direction, including
15    but not limited to compliance regarding the valuation of
16    assets for which there is no readily available market
17    value;
18        (2) if a trust instrument provides that an excluded
19    fiduciary is to act or omit to act only with the consent of
20    a directing party, then except in cases of willful
21    misconduct on the part of the excluded fiduciary, the
22    excluded fiduciary is not liable for any loss resulting
23    directly or indirectly from any act taken or omitted as a
24    result of such directing party's failure to provide such
25    consent after having been asked to do so by the excluded
26    fiduciary; or

 

 

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1        (3) if a trust instrument provides that, or for any
2    other reason, an excluded fiduciary is required to assume
3    the role or responsibilities of a directing party, or if
4    the excluded fiduciary appoints a directing party or
5    successor to a directing party other than in a nonjudicial
6    settlement agreement under Section 111 or in a second
7    trust under Article 12, then the excluded fiduciary shall
8    also assume the same fiduciary and other duties and
9    standards that applied to such directing party.
10    (g) By accepting an appointment to serve as a directing
11party of a trust that is subject to the laws of this State, the
12directing party submits to the jurisdiction of the courts of
13this State even if investment advisory agreements or other
14related agreements provide otherwise, and the directing party
15may be made a party to any action or proceeding if issues
16relate to a decision or action of the directing party.
17    (h) Each directing party shall keep the excluded fiduciary
18and any other directing party reasonably informed regarding
19the administration of the trust with respect to any specific
20duty or function being performed by the directing party to the
21extent that the duty or function would normally be performed
22by the excluded fiduciary or to the extent that providing such
23information to the excluded fiduciary or other directing party
24is reasonably necessary for the excluded fiduciary or other
25directing party to perform its duties, and the directing party
26shall provide such information as reasonably requested by the

 

 

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1excluded fiduciary or other directing party. Neither the
2performance nor the failure to perform of a directing party's
3duty to inform as provided in this subsection affects
4whatsoever the limitation on the liability of the excluded
5fiduciary as provided in this Section.
6    (i) Other required notices.
7        (1) A directing party shall:
8            (A) within 90 days after becoming a directing
9        party, notify each qualified beneficiary of the
10        acceptance and of the directing party's name, address,
11        and telephone number, except that the notice
12        requirement of this subdivision (A) does not apply
13        with respect to a succession of a business entity by
14        merger or consolidation with another business entity
15        or by transfer between holding company affiliates if
16        there is no change in the contact information for the
17        directing party, in which case the successor entity
18        has discretion to determine what timing and manner of
19        notice is appropriate;
20            (B) notify each qualified beneficiary in advance
21        of any change in the rate of or the method of
22        determining the directing party's compensation; and
23            (C) notify each qualified beneficiary of the
24        directing party's resignation.
25        (2) In the event of the incapacity, death,
26    disqualification, or removal of any directing party, a

 

 

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1    directing party who continues acting as directing party
2    following such an event shall notify each qualified
3    beneficiary of the incapacity, death, disqualification, or
4    removal of any other directing party within 90 days after
5    the event.
6    (j) An excluded fiduciary may, but is not required to,
7obtain and rely upon an opinion of counsel on any matter
8relevant to this Section.
9    (k) On and after January 1, 2013, this Section applies to:
10        (1) all existing and future trusts that appoint or
11    provide for a directing party, including, but not limited
12    to, a party granted power or authority effectively
13    comparable in substance to that of a directing party as
14    provided in this Section; or
15        (2) any existing or future trust that:
16            (A) is modified in accordance with applicable law
17        or the terms of the trust to appoint or provide for a
18        directing party; or
19            (B) is modified to appoint or provide for a
20        directing party, including, but not limited to, a
21        party granted power or authority effectively
22        comparable in substance to that of a directing party,
23        in accordance with: (i) a court order; (ii) a
24        nonjudicial settlement agreement made in accordance
25        with Section 111; or (iii) an exercise of decanting
26        power under Article 12, regardless of whether the

 

 

HB1795 Enrolled- 53 -LRB102 10214 LNS 15537 b

1        order, agreement, or second-trust instrument specifies
2        that this Section governs the responsibilities,
3        actions, and liabilities of a person designated as a
4        directing party or excluded fiduciary.
5(Source: P.A. 101-48, eff. 1-1-20.)
 
6    (760 ILCS 3/813.1)
7    Sec. 813.1. Duty to inform and account; trusts irrevocable
8and trustees accepting appointment after effective date of
9Code.
10    (a) This Section applies to all trusts created under a
11trust instrument that became irrevocable after the effective
12date of this Code and, subject to Section 603, to all revocable
13trusts except with respect to a trustee of a revocable trust
14who accepted such trustee's trusteeship before the effective
15date of this Code. This Section is prospective only and does
16not apply to any trust created under a trust instrument that
17became was irrevocable before the effective date of this Code,
18or to a trustee who accepts a trusteeship before the effective
19date of this Code. Subject to Section 105, this Section
20supplants any common law duty of a trustee to inform and
21account to trust beneficiaries. This Section does not apply to
22trusts that became irrevocable before the effective date of
23this Code.
24    (b) General principles.
25        (1) The trustee shall notify each qualified

 

 

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1    beneficiary:
2            (A) of the trust's existence;
3            (B) of the beneficiary's right to request a
4        complete copy of the trust instrument or, if the trust
5        instrument so provides, only the portion of the trust
6        instrument that set forth the terms of the trust in
7        which the qualified beneficiary has an interest as a
8        qualified beneficiary, as applicable; and
9            (C) whether the beneficiary has a right to receive
10        or request trust accountings.
11        The notice required by this paragraph (1) must be
12    given: (i) within 90 days of the trust becoming
13    irrevocable or if no trustee is then acting within 90 days
14    of the trustee's acceptance of the trusteeship; (ii)
15    within 90 days of the trustee acquiring knowledge that a
16    qualified beneficiary has a representative under Article 3
17    who did not previously receive notice; (iii) within 90
18    days of the trustee acquiring knowledge that a qualified
19    beneficiary who previously had a representative under
20    Article 3 no longer has a representative under Article 3;
21    and (iv) within 90 days of the trustee acquiring knowledge
22    that there is a new qualified beneficiary.
23        (2) A trustee shall send at least annually a trust
24    accounting to all current beneficiaries.
25        (3) A trustee shall send at least annually a trust
26    accounting to all presumptive remainder beneficiaries.

 

 

HB1795 Enrolled- 55 -LRB102 10214 LNS 15537 b

1        (4) Upon termination of a trust, a trustee shall send
2    a trust accounting to all beneficiaries entitled to
3    receive a distribution of the residue of the trust.
4        (5) Notwithstanding any other provision, a trustee in
5    its discretion may provide notice, information, trust
6    accountings, or reports, or a complete copy of the trust
7    instrument to any beneficiary of the trust regardless of
8    whether the communication is otherwise required to be
9    provided.
10        (6) Upon the reasonable request of a qualified
11    beneficiary, the trustee shall promptly furnish to the
12    qualified beneficiary a complete copy of the trust
13    instrument.
14        (7) Notwithstanding any other provision, a trustee is
15    deemed to have fully and completely discharged the
16    trustee's duties under this Section to inform and account
17    to all beneficiaries, at common law or otherwise, if the
18    trustee provides the notice required under paragraph (1)
19    to each qualified beneficiary and if the trustee provides
20    at least annually and on termination of the trust a trust
21    accounting required by paragraph (2), (3), or (4) to each
22    beneficiary entitled to a trust accounting.
23        (8) For each asset or class of assets described in a
24    trust accounting for which there is no readily available
25    market value, the trustee, in the trustee's discretion,
26    may determine whether to estimate the value or use a

 

 

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1    nominal carrying value for such an asset, how to estimate
2    the value of such an asset, and whether and how often to
3    engage a professional appraiser to value such an asset.
4    (c) Upon a vacancy in a trusteeship, unless a co-trustee
5remains in office, the trust accounting required by subsection
6(b) must be sent to the beneficiaries entitled to the
7accounting by the former trustee. A personal representative,
8guardian of the estate, or guardian of the person may send the
9trust accounting to the beneficiaries entitled to the
10accounting on behalf of a deceased or incapacitated trustee.
11    (d) Other required notices.
12        (1) A trustee shall:
13            (A) within 90 days after accepting a trusteeship,
14        notify each qualified beneficiary of the acceptance
15        and of the trustee's name, address, and telephone
16        number, except that the notice requirement of this
17        subdivision (A) does not apply with respect to a
18        succession of a corporate trustee by merger or
19        consolidation with another corporate fiduciary or by
20        transfer between holding company affiliates if there
21        is no change in the contact information for the
22        trustee, in which case the successor trustee has
23        discretion to determine what timing and manner of
24        notice is appropriate;
25            (B) notify each qualified beneficiary in advance
26        of any change in the rate of or the method of

 

 

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1        determining the trustee's compensation; and
2            (C) notify each qualified beneficiary of the
3        trustee's resignation.
4        (2) In the event of the incapacity, death,
5    disqualification, or removal of any trustee, a trustee who
6    continues acting as trustee following such an event shall
7    notify each qualified beneficiary of the incapacity,
8    death, disqualification, or removal of any other trustee
9    within 90 days after the event.
10        (3) A trustee shall notify each qualified beneficiary
11    of any change in the address, telephone number, or other
12    contact information for the trustee no later than 90 days
13    after the change goes into effect.
14    (e) Each request for information under this Section must
15be with respect to a single trust that is sufficiently
16identified to enable the trustee to locate the trust's
17records. A trustee may charge a reasonable fee for providing
18information under this Section to:
19        (1) a beneficiary who is not a qualified beneficiary;
20        (2) a qualified beneficiary for providing information
21    that was previously provided to the qualified beneficiary
22    or a representative under Article 3 for the qualified
23    beneficiary; or
24        (3) a representative under Article 3 for a qualified
25    beneficiary for information that was previously provided
26    to the qualified beneficiary or a representative under

 

 

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1    Article 3 for the qualified beneficiary.
2    (f) If a trustee is bound by any confidentiality
3restrictions regarding a trust asset, then, before receiving
4the information, a beneficiary eligible under this Section to
5receive any information about that asset must agree to be
6bound by the same confidentiality restrictions. The trustee
7has no duty or obligation to disclose to any beneficiary any
8information that is otherwise prohibited to be disclosed by
9applicable law.
10    (g) A qualified beneficiary may waive the right to receive
11information otherwise required to be furnished under this
12Section, such as a trust accounting, by an instrument in
13writing delivered to the trustee. A qualified beneficiary may
14at any time, by an instrument in writing delivered to the
15trustee, withdraw a waiver previously given with respect to
16future trust accountings.
17    (h) Receipt of information, notices, or a trust accounting
18by a beneficiary is presumed if the trustee has procedures in
19place requiring the mailing or delivery of information,
20notices, or trust accountings to the beneficiary. This
21presumption applies to the mailing or delivery of information,
22notices, or trust accountings by electronic means or the
23provision of access to an account by electronic means for so
24long as the beneficiary has agreed to receive electronic
25delivery or access.
26    (i) A trustee may request approval of the trustee's

 

 

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1current or final trust accounting in a judicial proceeding at
2the trustee's election, with all reasonable and necessary
3costs of the proceeding payable by the trust and allocated
4between income and principal in accordance with the Principal
5and Income Act.
6    (j) Notwithstanding any other provision, this Section is
7not intended to and does not impose on any trustee a duty to
8inform any beneficiary in advance of transactions relating to
9the trust property.
10(Source: P.A. 101-48, eff. 1-1-20.)
 
11    (760 ILCS 3/813.2)
12    Sec. 813.2. Duty to inform and account for pre-2020
13trusts ; trusts irrevocable and trustees accepting appointment
14before the effective date of Code.
15    (a) This Section applies to all trusts created under a
16trust instrument that became were irrevocable before the
17effective date of this Code and to a trustee of a revocable
18trust who accepted the trustee's accepts a trusteeship before
19the effective date of this Code.
20    (b) Every trustee at least annually shall furnish to the
21beneficiaries then entitled to receive or receiving the income
22from the trust estate, or, if none, then to those
23beneficiaries eligible to have the benefit of the income from
24the trust estate, a current account showing the receipts,
25disbursements, and inventory of the trust estate.

 

 

HB1795 Enrolled- 60 -LRB102 10214 LNS 15537 b

1    (c) Every trustee shall on termination of the trust
2furnish to the beneficiaries then entitled to distribution of
3the trust estate a final account for the period from the date
4of the last current account to the date of distribution
5showing the inventory of the trust estate, the receipts,
6disbursements, and distributions and shall make available to
7the beneficiaries copies of prior accounts not previously
8furnished.
9    (d) If a beneficiary is incapacitated, the account shall
10be provided to the representative of the estate of the
11beneficiary. If no representative for the estate of a
12beneficiary under legal disability has been appointed, the
13account shall be provided to a spouse, parent, adult child, or
14guardian of the person of the beneficiary.
15    (e) For each asset or class of assets described in the
16account for which there is no readily available market value,
17the trustee, in the trustee's discretion, may determine
18whether to estimate the value or use a nominal carrying value
19for such an asset, how to estimate the value of such an asset,
20and whether and how often to engage a professional appraiser
21to value such an asset.
22(Source: P.A. 101-48, eff. 1-1-20.)
 
23    (760 ILCS 3/817)
24    Sec. 817. Distribution upon termination. Upon the
25occurrence of an event terminating a trust in whole or in part,

 

 

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1or upon the exercise by a beneficiary of a right to withdraw
2trust principal, the trustee shall proceed expeditiously to
3make the distribution to the beneficiary. The trustee has the
4right to require from the beneficiary a written approval of
5the trust accounting trustee's accountings provided to the
6beneficiary and, at the trustee's election, a refunding
7agreement from the beneficiary for liabilities that would
8otherwise be payable from trust property to the extent of the
9beneficiary's share of the distribution. A trust An accounting
10approved under this Section is binding on the beneficiary
11providing the approval and on the beneficiary's successors,
12heirs, representatives, and assigns. A trustee may elect to
13withhold a reasonable amount of a distribution or require a
14reasonable reserve for the payment of debts, expenses, and
15taxes payable from the trust pending the receipt of a written
16approval of the trust accounting trustee's accountings
17provided to the beneficiary and refunding agreement from a
18beneficiary or a judicial settlement of accounts.
19(Source: P.A. 101-48, eff. 1-1-20.)
 
20    (760 ILCS 3/913)
21    Sec. 913. Life insurance.
22    (a) Notwithstanding any other provision, the duties of a
23trustee with respect to acquiring or retaining as a trust
24asset a contract of insurance upon the life of the settlor,
25upon the lives of the settlor and the settlor's spouse, or upon

 

 

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1the life of any person for which the trustee has an insurable
2interest in accordance with Section 113, do not include any of
3the following duties:
4        (1) to determine whether any contract of life
5    insurance in the trust, or to be acquired by the trust, is
6    or remains a proper investment, including, without
7    limitation, with respect to:
8            (A) the type of insurance contract;
9            (B) the quality of the insurance contract;
10            (C) the quality of the insurance company; or
11            (D) the investments held within the insurance
12        contract; .
13        (2) to diversify the investment among different
14    policies or insurers, among available asset classes, or
15    within an insurance contract;
16        (3) to inquire about or investigate into the health or
17    financial condition of an insured;
18        (4) to prevent the lapse of a life insurance contract
19    if the trust does not receive contributions or hold other
20    readily marketable assets to pay the life insurance
21    contract premiums; or
22        (5) to exercise any policy options, rights, or
23    privileges available under any contract of life insurance
24    in the trust, including any right to borrow the cash value
25    or reserve of the policy, acquire a paid-up policy, or
26    convert to a different policy.

 

 

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1    (b) The trustee is not liable to the beneficiaries of the
2trust, the beneficiaries of the contract of insurance, or to
3any other party for loss arising from the absence of these
4duties regarding insurance contracts under this Section.
5    (c) This Section applies to an irrevocable trust created
6after the effective date of this Code or to a revocable trust
7that becomes irrevocable after the effective date of this
8Code. This Section applies to a trust established before the
9effective date of this Code if the The trustee of a trust
10described under this Section notifies established before the
11effective date of this Code shall notify the settlor in
12writing that, unless the settlor provides written notice to
13the contrary to the trustee within 90 days of the trustee's
14notice, this Section applies to the trust effective as of the
15date of the trustee's written notice. This Section does not
16apply if, within 90 days of the trustee's notice, the settlor
17notifies the trustee in writing that this Section does not
18apply. If the settlor is deceased, then the trustee shall give
19notice to all of the legally competent current beneficiaries,
20and this Section applies to the trust unless the majority of
21the beneficiaries notify the trustee to the contrary in
22writing within 90 days of the trustee's notice.
23(Source: P.A. 101-48, eff. 1-1-20; revised 8-6-19.)
 
24    (760 ILCS 3/1103)
25    Sec. 1103. Conversion by agreement. Conversion to a total

 

 

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1return trust may be made by agreement between a trustee and all
2qualified beneficiaries. The agreement may include any actions
3a court could properly order under Section 1104 1108; however,
4any distribution percentage determined by the agreement may
5not be less than 3% nor greater than 5%.
6(Source: P.A. 101-48, eff. 1-1-20.)
 
7    (760 ILCS 3/1202)
8    Sec. 1202. Definitions. In this Article:
9    (1) (Blank). "Appointive property" means the property or
10property interest subject to a power of appointment.
11    (2) "Authorized fiduciary" means:
12        (A) a trustee or other fiduciary, other than a
13    settlor, that has discretion to distribute or direct a
14    trustee to distribute part or all of the principal of the
15    first trust to one or more current beneficiaries;
16        (B) a special fiduciary appointed under Section 1209;
17    or
18        (C) a special-needs fiduciary under Section 1213.
19    (3) "Court" means the court in this State having
20jurisdiction in matters relating to trusts.
21    (4) "Decanting power" or "the decanting power" means the
22power of an authorized fiduciary under this Article to
23distribute property of a first trust to one or more second
24trusts or to modify the terms of the first trust.
25    (5) "Expanded distributive discretion" means a

 

 

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1discretionary power of distribution that is not limited to an
2ascertainable standard or a reasonably definite standard.
3    (6) "First trust" means a trust over which an authorized
4fiduciary may exercise the decanting power.
5    (7) "First-trust instrument" means the trust instrument
6for a first trust.
7    (8) "Reasonably definite standard" means a clearly
8measurable standard under which a holder of a power of
9distribution is legally accountable within the meaning of
10Section 674(b)(5)(A) of the Internal Revenue Code, as amended,
11and any applicable regulations.
12    (9) "Record" means information that is inscribed on a
13tangible medium or that is stored in an electronic or other
14medium and is retrievable in perceivable form.
15    (10) "Second trust" means:
16        (A) a first trust after modification under this
17    Article; or
18        (B) a trust to which a distribution of property from a
19    first trust is or may be made under this Article.
20    (11) "Second-trust instrument" means the trust instrument
21for a second trust.
22(Source: P.A. 101-48, eff. 1-1-20.)
 
23    (760 ILCS 3/1211)
24    Sec. 1211. Decanting power under expanded distributive
25discretion.

 

 

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1    (a) In this Section:
2        (1) "Noncontingent" right means a right that is not
3    subject to the exercise of discretion or the occurrence of
4    a specified event that is not certain to occur. The term
5    does not include a right held by a beneficiary if any
6    person has discretion to distribute property subject to
7    the right of any person other than the beneficiary or the
8    beneficiary's estate.
9        (2) "Successor beneficiary" means a beneficiary that
10    on the date the beneficiary's qualification is determined
11    is not a qualified beneficiary. The term does not include
12    a person that is a beneficiary only because the person
13    holds a nongeneral power of appointment.
14        (3) "Vested interest" means:
15            (A) a right to a mandatory distribution that is a
16        noncontingent right as of the date of the exercise of
17        the decanting power;
18            (B) a current and noncontingent right, annually or
19        more frequently, to a mandatory distribution of
20        income, a specified dollar amount, or a percentage of
21        value of some or all of the trust property;
22            (C) a current and noncontingent right, annually or
23        more frequently, to withdraw income, a specified
24        dollar amount, or a percentage of value of some or all
25        of the trust property;
26            (D) a presently exercisable general power of

 

 

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1        appointment; or
2            (E) a right to receive an ascertainable part of
3        the trust property on the trust's termination that is
4        not subject to the exercise of discretion or to the
5        occurrence of a specified event that is not certain to
6        occur.
7    (b) Subject to subsection (c) and Section 1214, an
8authorized fiduciary that has expanded distributive discretion
9to distribute the principal of a first trust to one or more
10current beneficiaries may exercise the decanting power over
11the principal of the first trust.
12    (c) Subject to Section 1213, in an exercise of the
13decanting power under this Section, a second trust may not:
14        (1) include as a current beneficiary a person that is
15    not a current beneficiary of the first trust, except as
16    otherwise provided in subsection (d) or in the terms of
17    the first trust;
18        (2) include as a presumptive remainder beneficiary or
19    successor beneficiary a person that is not a current
20    beneficiary, presumptive remainder beneficiary, or
21    successor beneficiary of the first trust, except as
22    otherwise provided in subsection (d); or
23        (3) reduce or eliminate a vested interest.
24    (d) Subject to subsection (c)(3) and Section 1214, in an
25exercise of the decanting power under this Section, a second
26trust may be a trust created or administered under the law of

 

 

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1any jurisdiction and may:
2        (1) retain a power of appointment granted in the first
3    trust;
4        (2) omit a power of appointment granted in the first
5    trust, other than a presently exercisable general power of
6    appointment;
7        (3) create or modify a power of appointment if the
8    powerholder is a current beneficiary of the first trust
9    and the authorized fiduciary has expanded distributive
10    discretion to distribute principal to the beneficiary; and
11        (4) create or modify a power of appointment if the
12    powerholder is a presumptive remainder beneficiary or
13    successor beneficiary of the first trust, but the exercise
14    of the power may take effect only after the powerholder
15    becomes, or would have become if then living, a current
16    beneficiary.
17    (e) A power of appointment described in subsection (d)(1)
18through (4) of subsection (d) may be general or nongeneral.
19The class of permissible appointees in favor of which the
20power may be exercised may be broader than or different from
21the beneficiaries of the first trust.
22    (f) If an authorized fiduciary has expanded distributive
23discretion to distribute part but not all of the principal of a
24first trust, the fiduciary may exercise the decanting power
25under this Section over that part of the principal over which
26the authorized fiduciary has expanded distributive discretion.

 

 

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1(Source: P.A. 101-48, eff. 1-1-20.)
 
2    (760 ILCS 3/1215)
3    Sec. 1215. Trust limitation on decanting.
4    (a) An authorized fiduciary may not exercise the decanting
5power to the extent the first-trust instrument expressly
6prohibits exercise of:
7        (1) the decanting power; or
8        (2) a power granted by state law to the fiduciary to
9    distribute part or all of the principal of the trust to
10    another trust or to modify the trust.
11    (b) Exercise of the decanting power is subject to any
12restriction in the first-trust instrument that expressly
13applies to exercise of:
14        (1) the decanting power; or
15        (2) a power granted by state law to a fiduciary to
16    distribute part or all of the principal of the trust to
17    another trust or to modify the trust.
18    (c) A general prohibition of the amendment or revocation
19of a first trust, a spendthrift provision clause, or a clause
20restraining the voluntary or involuntary transfer of a
21beneficiary's interest does not preclude exercise of the
22decanting power.
23    (d) Subject to subsections (a) and (b), an authorized
24fiduciary may exercise the decanting power under this Article
25even if the first-trust instrument permits the authorized

 

 

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1fiduciary or another person to modify the first-trust
2instrument or to distribute part or all of the principal of the
3first trust to another trust.
4    (e) If a first-trust instrument contains an express
5prohibition described in subsection (a) or an express
6restriction described in subsection (b), that provision must
7be included in the second-trust instrument.
8(Source: P.A. 101-48, eff. 1-1-20.)
 
9    (760 ILCS 3/1302)
10    Sec. 1302. Definitions. In this Article:
11    (1) "Appointee" means a person to which a powerholder
12makes an appointment of appointive property.
13    (2) (Blank). "Appointive property" means the property or
14property interest subject to a power of appointment.
15    (3) "Blanket-exercise clause" means a clause in an
16instrument that exercises a power of appointment and is not a
17specific-exercise clause. The term includes a clause that:
18        (A) expressly uses the words "any power" in exercising
19    any power of appointment the powerholder has;
20        (B) expressly uses the words "any property" in
21    appointing any property over which the powerholder has a
22    power of appointment; or
23        (C) disposes of all property subject to disposition by
24    the powerholder.
25    (4) "Exclusionary power of appointment" means a power of

 

 

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1appointment exercisable in favor of any one or more of the
2permissible appointees to the exclusion of the other
3permissible appointees.
4    (5) "Gift-in-default clause" means a clause identifying a
5taker in default of appointment.
6    (6) "Impermissible appointee" means a person that is not a
7permissible appointee.
8    (7) "Instrument" means a writing.
9    (8) (Blank). "Permissible appointee" means a person in
10whose favor a powerholder may exercise a power of appointment.
11    (9) "Record" means information that is inscribed on a
12tangible medium or that is stored in an electronic or other
13medium and is retrievable in perceivable form.
14    (10) "Specific-exercise clause" means a clause in an
15instrument that specifically refers to and exercises a
16particular power of appointment.
17    (11) "Taker in default of appointment" means a person that
18takes part or all of the appointive property to the extent the
19powerholder does not effectively exercise the power of
20appointment.
21    (12) "Terms of the instrument" means the manifestation of
22the intent of the maker of the instrument regarding the
23instrument's provisions as expressed in the instrument or as
24may be established by other evidence that would be admissible
25in a legal proceeding.
26(Source: P.A. 101-48, eff. 1-1-20.)
 

 

 

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1    (760 ILCS 3/1324)
2    Sec. 1324. Disposition of trust property subject to power.
3In disposing of trust property subject to a power of
4appointment, whether exercisable by a will or an instrument
5other than a will, a trustee acting in good faith shall have no
6liability to any appointee or taker in default of appointment
7for relying upon a will, regardless of whether it was admitted
8to probate, or an instrument believed to be genuine purporting
9to exercise a power of appointment or for assuming that there
10is no will or instrument exercising the power of appointment
11in the absence of actual knowledge thereof within 3 months of
12the death of the powerholder, in the case of a will, or 3
13months of the last date on which the power of appointment may
14be exercised, in the case of any other instrument. Nothing in
15this Section precludes a donor of a power or a trustee from
16requiring that a will be admitted to probate.
17(Source: P.A. 101-48, eff. 1-1-20.)
 
18    (760 ILCS 3/1506)
19    Sec. 1506. Application to existing relationships. Except
20as otherwise provided in this Code, on the effective date of
21this Code:
22        (1) This Code applies to all trusts created before,
23    on, or after its effective date.
24        (2) This Code applies to all judicial proceedings

 

 

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1    concerning trusts commenced on or after its effective
2    date. As used in this Section, "judicial proceedings"
3    includes any proceeding before a court or administrative
4    tribunal of this State and any arbitration or mediation
5    proceedings.
6        (3) This Code applies to all nonjudicial matters
7    concerning trusts commenced before, on, or after its
8    effective date. As used in this Section, "nonjudicial
9    matters" includes, but is not limited to, nonjudicial
10    settlement agreements entered into under Section 111 and
11    the grant of any consent, release, ratification, or
12    indemnification.
13        (4) This Code applies to judicial proceedings
14    concerning trusts commenced before its effective date
15    unless the court finds that application of a particular
16    provision of this Code would substantially interfere with
17    the effective conduct of the judicial proceedings or
18    prejudice the rights of the parties, in which case the
19    particular provision of this Code does not apply and the
20    superseded law applies.
21        (5) Any rule of construction or presumption provided
22    in this Code applies to trust instruments executed before
23    the effective date of this Code unless there is a clear
24    indication of a contrary intent in the trust instrument.
25        (6) An act done before the effective date of this Code
26    is not affected by this Code.

 

 

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1        (7) If a right is acquired, extinguished, or barred
2    upon the expiration of a prescribed period that has
3    commenced to run under any other statute before the
4    effective date of this Code, that statute continues to
5    apply to the right even if it has been repealed or
6    superseded.
7        (8) (Blank). This Code shall be construed as
8    pertaining to administration of a trust and applies to any
9    trust that is administered in Illinois under Illinois law
10    or that is governed by Illinois law with respect to the
11    meaning and effect of its terms, except to the extent the
12    trust instrument expressly prohibits use of this Code by
13    specific reference to this Code.
14(Source: P.A. 101-48, eff. 1-1-20.)

 

 

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1 INDEX
2 Statutes amended in order of appearance
3    405 ILCS 5/3-605from Ch. 91 1/2, par. 3-605
4    760 ILCS 3/103
5    760 ILCS 3/105
6    760 ILCS 3/107
7    760 ILCS 3/111
8    760 ILCS 3/301
9    760 ILCS 3/302
10    760 ILCS 3/401
11    760 ILCS 3/402
12    760 ILCS 3/403
13    760 ILCS 3/408
14    760 ILCS 3/416
15    760 ILCS 3/505
16    760 ILCS 3/605
17    760 ILCS 3/808
18    760 ILCS 3/813.1
19    760 ILCS 3/813.2
20    760 ILCS 3/817
21    760 ILCS 3/913
22    760 ILCS 3/1103
23    760 ILCS 3/1202
24    760 ILCS 3/1211
25    760 ILCS 3/1215

 

 

HB1795 Enrolled- 76 -LRB102 10214 LNS 15537 b

1    760 ILCS 3/1302
2    760 ILCS 3/1324
3    760 ILCS 3/1506