760 ILCS 3/ Illinois Trust Code.

(760 ILCS 3/Art. 8 heading) Article 8. Duties and Powers of Trustee. (Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/801)

Sec. 801. Duty to administer trust. Upon acceptance of a trusteeship, the trustee shall administer the trust in good faith, in accordance with its purposes and the terms of the trust, and in accordance with this Code.

(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/802)

Sec. 802. Duty of loyalty.

(a) Subject to the rights of persons dealing with or assisting the trustee as provided in Section 1012, a sale, encumbrance, or other transaction involving the investment or management of trust property entered into by the trustee for the trustee's own personal account or that is otherwise affected by a conflict between the trustee's fiduciary and personal interests is voidable by a beneficiary affected by the transaction and a trustee must disgorge to the trust any profit from such transaction if voided, unless:

(1) the transaction was authorized by the trust instrument or applicable law;

(2) the transaction was approved by the court or by nonjudicial settlement agreement in accordance with Section 111;

(3) the beneficiary did not commence a judicial proceeding within the time allowed by Section 1005;

(4) the beneficiary consented to the trustee's conduct, ratified the transaction, or released the trustee in compliance with Section 1009; or

(5) the transaction involves a contract entered into or claim acquired by the trustee before the person became or contemplated becoming trustee.

(b) A sale, encumbrance, or other transaction involving the investment or management of trust property is presumed to be affected by a conflict between personal and fiduciary interests if it is entered into by the trustee with:

(1) the trustee's spouse;

(2) the trustee's descendants, siblings, parents, or their spouses; or

(3) a corporation or other person or enterprise in which the trustee, or a person that owns a significant interest in the trustee, has an interest that might affect the trustee's best judgment, except as otherwise authorized by law.

(c) A transaction between a trustee and a beneficiary that does not concern trust property, that occurs during the existence of the trust and from which the trustee obtains an advantage, is voidable by the beneficiary unless the trustee establishes that the transaction was fair to the beneficiary.

(d) A transaction not concerning trust property in which the trustee engages in the trustee's individual capacity involves a conflict between personal and fiduciary interests if the transaction concerns an opportunity properly belonging to the trust.

(e) An investment by a trustee in securities of an investment company or investment trust to which the trustee, or its affiliate, provides services in a capacity other than as trustee is not presumed to be affected by a conflict between personal and fiduciary interests if the investment otherwise complies with the prudent investor rule. In addition to its compensation for acting as trustee, the trustee may be compensated by the investment company or investment trust for providing those services out of fees charged to the trust so long as the total compensation paid by the trust as trustee's fees and mutual fund or other investment fees is reasonable.

(f) In voting shares of stock or in exercising powers of control over similar interests in other forms of enterprise, the trustee shall act in the best interests of the beneficiaries.

(g) This Section does not preclude the following transactions, if fair to the beneficiaries:

(1) an agreement between a trustee and a beneficiary relating to the appointment or compensation of the trustee;

(2) payment of reasonable compensation to the trustee;

(3) a transaction between a trust and another trust, decedent's estate, or guardianship of which the trustee is a fiduciary or in which a beneficiary has an interest;

(4) the entry of an agreement for a bank or other deposit account, safe deposit box, custodian, agency, or depository arrangement for all or any part of the trust property, including an agreement for services provided by a bank operated by or affiliated with the trustee, and the payment of reasonable compensation for those services, including compensation to the bank operated by or affiliated with the trustee, except that nothing in this paragraph shall be construed as removing any depository arrangements from the requirements of the prudent investor rule; or

(5) an advance by the trustee of money for the protection of the trust.

(h) The court may appoint a special fiduciary to make a decision with respect to any proposed transaction that might violate this Section if entered into by the trustee.

(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/803)

Sec. 803. Impartiality. If a trust has 2 or more beneficiaries, the trustee shall act impartially in investing, managing, and distributing the trust property giving due regard to the beneficiaries respective interests. The trustee must treat the beneficiaries equitably in light of the purposes and terms of the trust, including any manifestation of an intention to favor one or more beneficiaries.

(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/804)

Sec. 804. Prudent administration. A trustee shall administer the trust as a prudent person would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.

(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/805)

Sec. 805. Costs of administration. In administering a trust, the trustee may incur only costs that are reasonable in relation to the trust property and the purposes of the trust.

(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/806)

Sec. 806. (Reserved).

(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/807)

Sec. 807. Delegation by trustee.

(a) Except as provided in subsection (b), the trustee has a duty not to delegate to others the performance of any acts involving the exercise of judgment and discretion.

(b) A trustee may delegate duties and powers that a prudent trustee of comparable skills could properly delegate under the circumstances. The trustee shall exercise reasonable care, skill, and caution in:

(1) selecting an agent;

(2) establishing the scope and terms of the delegation, consistent with the purposes of the trust and the trust instrument; and

(3) periodically reviewing the agent's actions in order to monitor the agent's performance and compliance with the terms of the delegation.

(c) In performing a delegated function, an agent owes a duty to the trust to exercise reasonable care to comply with the terms of the delegation.

(d) A trustee who complies with subsection (b) is not liable to the beneficiaries or to the trust for an action of the agent to whom the function was delegated.

(e) By accepting a delegation of powers or duties from the trustee of a trust that is subject to the law of this State, an agent submits to the jurisdiction of the courts of this State.

(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/808)

Sec. 808. Directed trusts.

(a) In this Section:

(1) "Distribution trust advisor" means any one or more persons given authority by the trust instrument to direct, consent to, veto, or otherwise exercise all or any portion of the distribution powers and discretions of the trust, including, but not limited to, authority to make discretionary distribution of income or principal.

(2) "Excluded fiduciary" means any fiduciary that by the trust instrument is directed to act in accordance with the exercise of specified powers by a directing party, in which case the specified powers are deemed granted not to the fiduciary but to the directing party and the fiduciary is deemed excluded from exercising the specified powers. If a trust instrument provides that a fiduciary as to one or more specified matters is to act, omit action, or make decisions only with the consent of a directing party, then the fiduciary is an excluded fiduciary with respect to the matters. Notwithstanding any provision of this Section, a person does not fail to qualify as an excluded fiduciary solely by reason of having effectuated, participated in, or consented to a transaction, including, but not limited to, any transaction described in Section 111 or 411 or Article 12 invoking this Section with respect to any new or existing trust.

(3) "Fiduciary" means any person expressly given one or more fiduciary duties by the trust instrument, including, but not limited to, a trustee.

(4) "Investment trust advisor" means any one or more persons given authority by the trust instrument to direct, consent to, veto, or otherwise exercise all or any portion of the investment powers of the trust.

(5) "Power" means authority to take or withhold an action or decision, including, but not limited to, an expressly specified power, the implied power necessary to exercise a specified power, and authority inherent in a general grant of discretion.

(6) "Trust protector" means any one or more persons given any one or more of the powers specified in subsection (d), regardless of whether the power is designated with the title of trust protector by the trust instrument.

(b) An investment trust advisor may be designated in the trust instrument of a trust. The powers of an investment trust advisor may be exercised or not exercised in the sole and absolute discretion of the investment trust advisor, and are binding on all other persons, including, but not limited to, each beneficiary, fiduciary, excluded fiduciary, and any other party having an interest in the trust. The trust instrument may use the title "investment trust advisor" or any similar name or description demonstrating the intent to provide for the office and function of an investment trust advisor. Unless the terms of the trust provide otherwise, the investment trust advisor has the authority to:

(1) direct the trustee with respect to the retention, purchase, transfer, assignment, sale, or encumbrance of trust property and the investment and reinvestment of principal and income of the trust;

(2) direct the trustee with respect to all management, control, and voting powers related directly or indirectly to trust assets, including, but not limited to, voting proxies for securities held in trust;

(3) select and determine reasonable compensation of one or more advisors, managers, consultants, or counselors, including the trustee, and to delegate to them any of the powers of the investment trust advisor in accordance with Section 807; and

(4) determine the frequency and methodology for valuing any asset for which there is no readily available market value.

(c) A distribution trust advisor may be designated in the trust instrument of a trust. The powers of a distribution trust advisor may be exercised or not exercised in the sole and absolute discretion of the distribution trust advisor, and are binding on all other persons, including, but not limited to, each beneficiary, fiduciary, excluded fiduciary, and any other party having an interest in the trust. The trust instrument may use the title "distribution trust advisor" or any similar name or description demonstrating the intent to provide for the office and function of a distribution trust advisor. Unless the terms of the trust provide otherwise, the distribution trust advisor has authority to direct the trustee with regard to all decisions relating directly or indirectly to discretionary distributions to or for one or more beneficiaries.

(d) A trust protector may be designated in the trust instrument of a trust. The powers of a trust protector may be exercised or not exercised in the sole and absolute discretion of the trust protector, and are binding on all other persons, including, but not limited to, each beneficiary, investment trust advisor, distribution trust advisor, fiduciary, excluded fiduciary, and any other party having an interest in the trust. The trust instrument may use the title "trust protector" or any similar name or description demonstrating the intent to provide for the office and function of a trust protector. The powers granted to a trust protector by the trust instrument may include but are not limited to authority to do any one or more of the following:

(1) modify or amend the trust instrument to achieve favorable tax status or respond to changes in the Internal Revenue Code, federal laws, state law, or the rulings and regulations under such laws;

(2) increase, decrease, or modify the interests of any beneficiary or beneficiaries of the trust;

(3) modify the terms of any power of appointment granted by the trust; however, such modification or amendment may not grant a beneficial interest to any individual, class of individuals, or other parties not specifically provided for under the trust instrument;

(4) remove, appoint, or remove and appoint, a trustee, investment trust advisor, distribution trust advisor, another directing party, investment committee member, or distribution committee member, including designation of a plan of succession for future holders of any such office;

(5) terminate the trust, including determination of how the trustee shall distribute the trust property to be consistent with the purposes of the trust;

(6) change the situs of the trust, the governing law of the trust, or both;

(7) appoint one or more successor trust protectors, including designation of a plan of succession for future trust protectors;

(8) interpret terms of the trust at the request of the trustee;

(9) advise the trustee on matters concerning a beneficiary; or

(10) amend or modify the trust instrument to take advantage of laws governing restraints on alienation, distribution of trust property, or to improve the administration of the trust.

If a trust contains a charitable interest, a trust protector must give notice to the Attorney General's Charitable Trust Bureau at least 60 days before taking any of the actions authorized under paragraph (2), (3), (4), (5), or (6) of this subsection. The Attorney General may waive this notice requirement.

(e) A directing party is a fiduciary of the trust subject to the same duties and standards applicable to a trustee.

(f) The excluded fiduciary shall act in accordance with the trust instrument and comply with the directing party's exercise of the powers granted to the directing party by the trust instrument. Unless otherwise provided in the trust instrument, an excluded fiduciary has no duty to monitor, review, inquire, investigate, recommend, evaluate, or warn with respect to a directing party's exercise or failure to exercise any power granted to the directing party by the trust instrument, including, but not limited to, any power related to the acquisition, disposition, retention, management, or valuation of any asset or investment. Except as otherwise provided in this Section or the trust instrument, an excluded fiduciary is not liable, either individually or as a fiduciary, for any action, inaction, consent, or failure to consent by a directing party, including, but not limited to, any of the following:

(1) if a trust instrument provides that an excluded fiduciary is to follow the direction of a directing party, and such excluded fiduciary acts in accordance with such a direction, then except in cases of willful misconduct on the part of the excluded fiduciary in complying with the direction of the directing party, the excluded fiduciary is not liable for any loss resulting directly or indirectly from following any such direction, including but not limited to compliance regarding the valuation of assets for which there is no readily available market value;

(2) if a trust instrument provides that an excluded fiduciary is to act or omit to act only with the consent of a directing party, then except in cases of willful misconduct on the part of the excluded fiduciary, the excluded fiduciary is not liable for any loss resulting directly or indirectly from any act taken or omitted as a result of such directing party's failure to provide such consent after having been asked to do so by the excluded fiduciary; or

(3) if a trust instrument provides that, or for any other reason, an excluded fiduciary is required to assume the role or responsibilities of a directing party, or if the excluded fiduciary appoints a directing party or successor to a directing party other than in a nonjudicial settlement agreement under Section 111 or in a second trust under Article 12, then the excluded fiduciary shall also assume the same fiduciary and other duties and standards that applied to such directing party.

(g) By accepting an appointment to serve as a directing party of a trust that is subject to the laws of this State, the directing party submits to the jurisdiction of the courts of this State even if investment advisory agreements or other related agreements provide otherwise, and the directing party may be made a party to any action or proceeding if issues relate to a decision or action of the directing party.

(h) Each directing party shall keep the excluded fiduciary and any other directing party reasonably informed regarding the administration of the trust with respect to any specific duty or function being performed by the directing party to the extent that the duty or function would normally be performed by the excluded fiduciary or to the extent that providing such information to the excluded fiduciary or other directing party is reasonably necessary for the excluded fiduciary or other directing party to perform its duties, and the directing party shall provide such information as reasonably requested by the excluded fiduciary or other directing party. Neither the performance nor the failure to perform of a directing party's duty to inform as provided in this subsection affects whatsoever the limitation on the liability of the excluded fiduciary as provided in this Section.

(i) Other required notices.

(1) A directing party shall:

(A) within 90 days after becoming a directing party, notify each qualified beneficiary of the acceptance and of the directing party's name, address, and telephone number, except that the notice requirement of this subdivision (A) does not apply with respect to a succession of a business entity by merger or consolidation with another business entity or by transfer between holding company affiliates if there is no change in the contact information for the directing party, in which case the successor entity has discretion to determine what timing and manner of notice is appropriate;

(B) notify each qualified beneficiary in advance of any change in the rate of or the method of determining the directing party's compensation; and

(C) notify each qualified beneficiary of the directing party's resignation.

(2) In the event of the incapacity, death, disqualification, or removal of any directing party, a directing party who continues acting as directing party following such an event shall notify each qualified beneficiary of the incapacity, death, disqualification, or removal of any other directing party within 90 days after the event.

(j) An excluded fiduciary may, but is not required to, obtain and rely upon an opinion of counsel on any matter relevant to this Section.

(k) On and after January 1, 2013, this Section applies to:

(1) all existing and future trusts that appoint or provide for a directing party, including, but not limited to, a party granted power or authority effectively comparable in substance to that of a directing party as provided in this Section; or

(2) any existing or future trust that:

(A) is modified in accordance with applicable law or the terms of the trust to appoint or provide for a directing party; or

(B) is modified to appoint or provide for a directing party, including, but not limited to, a party granted power or authority effectively comparable in substance to that of a directing party, in accordance with: (i) a court order; (ii) a nonjudicial settlement agreement made in accordance with Section 111; or (iii) an exercise of decanting power under Article 12, regardless of whether the order, agreement, or second-trust instrument specifies that this Section governs the responsibilities, actions, and liabilities of a person designated as a directing party or excluded fiduciary.

(Source: P.A. 101-48, eff. 1-1-20; 102-279, eff. 1-1-22.)

(760 ILCS 3/809)

Sec. 809. Control and protection of trust property. A trustee shall take reasonable steps to take control of and protect the trust property. If a corporation is acting as co-trustee with one or more individuals, the corporate trustee shall have custody of the trust estate unless all the trustees otherwise agree.

(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/810)

Sec. 810. Recordkeeping and identification of trust property.

(a) A trustee shall keep adequate records of the administration of the trust.

(b) A trustee shall keep trust property separate from the trustee's own property.

(c) Except as otherwise provided in subsection (d), a trustee not subject to federal or state banking regulation shall cause the trust property to be designated so that the interest of the trust, to the extent feasible, appears in records maintained by a party other than a trustee or beneficiary to whom the trustee has delivered the property.

(d) If the trustee maintains records clearly indicating the respective interests, a trustee may invest as a whole the property of 2 or more separate trusts.

(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/811)

Sec. 811. Enforcement and defense of claims. A trustee shall take reasonable steps to enforce claims of the trust and to defend claims against the trust. It may be reasonable for a trustee not to enforce a claim, not to defend an action, to settle an action, or to suffer a default, depending upon the likelihood of recovery and the cost of suit and enforcement.

(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/812)

Sec. 812. Powers and duties of successor; liability for acts of predecessor; approval of accounts.

(a) A successor trustee shall have all the rights, powers, and duties that are granted to or imposed on the predecessor trustee.

(b) A successor trustee is under no duty to inquire into the acts or doings of a predecessor trustee, and is not liable for any act or failure to act of a predecessor trustee.

(c) With the approval of a majority in interest of the beneficiaries then entitled to receive or eligible to have the benefit of the income from the trust, a successor trustee may accept the account rendered by, and the property received from, the predecessor trustee as a full and complete discharge of the predecessor trustee without incurring any liability.

(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/813.1)

Sec. 813.1. Duty to inform and account; trusts irrevocable and trustees accepting appointment after effective date of Code.

(a) This Section applies to all trusts created under a trust instrument that became irrevocable after the effective date of this Code and, subject to Section 603, to all revocable trusts except with respect to a trustee of a revocable trust who accepted such trustee's trusteeship before the effective date of this Code. This Section is prospective only and does not apply to any trust created under a trust instrument that became irrevocable before the effective date of this Code. Subject to Section 105, this Section supplants any common law duty of a trustee to inform and account to trust beneficiaries.

(b) General principles.

(1) The trustee shall notify each qualified beneficiary:

(A) of the trust's existence;

(B) of the beneficiary's right to request a complete copy of the trust instrument or, if the trust instrument so provides, only the portion of the trust instrument that set forth the terms of the trust in which the qualified beneficiary has an interest as a qualified beneficiary, as applicable; and

(C) whether the beneficiary has a right to receive or request trust accountings.

The notice required by this paragraph (1) must be given: (i) within 90 days of the trust becoming irrevocable or if no trustee is then acting within 90 days of the trustee's acceptance of the trusteeship; (ii) within 90 days of the trustee acquiring knowledge that a qualified beneficiary has a representative under Article 3 who did not previously receive notice; (iii) within 90 days of the trustee acquiring knowledge that a qualified beneficiary who previously had a representative under Article 3 no longer has a representative under Article 3; and (iv) within 90 days of the trustee acquiring knowledge that there is a new qualified beneficiary.

(2) A trustee shall send at least annually a trust accounting to all current beneficiaries.

(3) A trustee shall send at least annually a trust accounting to all presumptive remainder beneficiaries.

(4) Upon termination of a trust, a trustee shall send a trust accounting to all beneficiaries entitled to receive a distribution of the residue of the trust.

(5) Notwithstanding any other provision, a trustee in its discretion may provide notice, information, trust accountings, reports, or a complete copy of the trust instrument to any beneficiary of the trust regardless of whether the communication is otherwise required to be provided.

(6) Upon the reasonable request of a qualified beneficiary, the trustee shall promptly furnish to the qualified beneficiary a complete copy of the trust instrument.

(7) Notwithstanding any other provision, a trustee is deemed to have fully and completely discharged the trustee's duties under this Section to inform and account to all beneficiaries, at common law or otherwise, if the trustee provides the notice required under paragraph (1) to each qualified beneficiary and if the trustee provides at least annually and on termination of the trust a trust accounting required by paragraph (2), (3), or (4) to each beneficiary entitled to a trust accounting.

(8) For each asset or class of assets described in a trust accounting for which there is no readily available market value, the trustee, in the trustee's discretion, may determine whether to estimate the value or use a nominal carrying value for such an asset, how to estimate the value of such an asset, and whether and how often to engage a professional appraiser to value such an asset.

(c) Upon a vacancy in a trusteeship, unless a co-trustee remains in office, the trust accounting required by subsection (b) must be sent to the beneficiaries entitled to the accounting by the former trustee. A personal representative, guardian of the estate, or guardian of the person may send the trust accounting to the beneficiaries entitled to the accounting on behalf of a deceased or incapacitated trustee.

(d) Other required notices.

(1) A trustee shall:

(A) within 90 days after accepting a trusteeship, notify each qualified beneficiary of the acceptance and of the trustee's name, address, and telephone number, except that the notice requirement of this subdivision (A) does not apply with respect to a succession of a corporate trustee by merger or consolidation with another corporate fiduciary or by transfer between holding company affiliates if there is no change in the contact information for the trustee, in which case the successor trustee has discretion to determine what timing and manner of notice is appropriate;

(B) notify each qualified beneficiary in advance of any change in the rate of or the method of determining the trustee's compensation; and

(C) notify each qualified beneficiary of the trustee's resignation.

(2) In the event of the incapacity, death, disqualification, or removal of any trustee, a trustee who continues acting as trustee following such an event shall notify each qualified beneficiary of the incapacity, death, disqualification, or removal of any other trustee within 90 days after the event.

(3) A trustee shall notify each qualified beneficiary of any change in the address, telephone number, or other contact information for the trustee no later than 90 days after the change goes into effect.

(e) Each request for information under this Section must be with respect to a single trust that is sufficiently identified to enable the trustee to locate the trust's records. A trustee may charge a reasonable fee for providing information under this Section to:

(1) a beneficiary who is not a qualified beneficiary;

(2) a qualified beneficiary for providing information that was previously provided to the qualified beneficiary or a representative under Article 3 for the qualified beneficiary; or

(3) a representative under Article 3 for a qualified beneficiary for information that was previously provided to the qualified beneficiary or a representative under Article 3 for the qualified beneficiary.

(f) If a trustee is bound by any confidentiality restrictions regarding a trust asset, then, before receiving the information, a beneficiary eligible under this Section to receive any information about that asset must agree to be bound by the same confidentiality restrictions. The trustee has no duty or obligation to disclose to any beneficiary any information that is otherwise prohibited to be disclosed by applicable law.

(g) A qualified beneficiary may waive the right to receive information otherwise required to be furnished under this Section, such as a trust accounting, by an instrument in writing delivered to the trustee. A qualified beneficiary may at any time, by an instrument in writing delivered to the trustee, withdraw a waiver previously given with respect to future trust accountings.

(h) Receipt of information, notices, or a trust accounting by a beneficiary is presumed if the trustee has procedures in place requiring the mailing or delivery of information, notices, or trust accountings to the beneficiary. This presumption applies to the mailing or delivery of information, notices, or trust accountings by electronic means or the provision of access to an account by electronic means for so long as the beneficiary has agreed to receive electronic delivery or access.

(i) A trustee may request approval of the trustee's current or final trust accounting in a judicial proceeding at the trustee's election, with all reasonable and necessary costs of the proceeding payable by the trust and allocated between income and principal in accordance with the Principal and Income Act.

(j) Notwithstanding any other provision, this Section is not intended to and does not impose on any trustee a duty to inform any beneficiary in advance of transactions relating to the trust property.

(Source: P.A. 101-48, eff. 1-1-20; 102-279, eff. 1-1-22.)

(760 ILCS 3/813.2)

Sec. 813.2. Duty to inform and account for pre-2020 trusts.

(a) This Section applies to all trusts created under a trust instrument that became irrevocable before the effective date of this Code and to a trustee of a revocable trust who accepted the trustee's trusteeship before the effective date of this Code.

(b) Every trustee at least annually shall furnish to the beneficiaries then entitled to receive or receiving the income from the trust estate, or, if none, then to those beneficiaries eligible to have the benefit of the income from the trust estate, a current account showing the receipts, disbursements, and inventory of the trust estate.

(c) Every trustee shall on termination of the trust furnish to the beneficiaries then entitled to distribution of the trust estate a final account for the period from the date of the last current account to the date of distribution showing the inventory of the trust estate, the receipts, disbursements, and distributions and shall make available to the beneficiaries copies of prior accounts not previously furnished.

(d) If a beneficiary is incapacitated, the account shall be provided to the representative of the estate of the beneficiary. If no representative for the estate of a beneficiary under legal disability has been appointed, the account shall be provided to a spouse, parent, adult child, or guardian of the person of the beneficiary.

(e) For each asset or class of assets described in the account for which there is no readily available market value, the trustee, in the trustee's discretion, may determine whether to estimate the value or use a nominal carrying value for such an asset, how to estimate the value of such an asset, and whether and how often to engage a professional appraiser to value such an asset.

(Source: P.A. 101-48, eff. 1-1-20; 102-279, eff. 1-1-22.)

(760 ILCS 3/814)

Sec. 814. Discretionary powers; tax savings.

(a) Notwithstanding the breadth of discretion granted to a trustee or other fiduciary in the trust instrument, including the use of such terms as "absolute", "sole", or "uncontrolled", such fiduciary shall exercise a discretionary power in good faith and in accordance with the terms and purposes of the trust instrument.

(b) Subject to subsection (e), and unless the trust instrument expressly indicates that a rule in this subsection does not apply:

(1) a person other than a settlor who is a beneficiary and a trustee or other fiduciary of a trust that confers on that fiduciary a power to make discretionary distributions to or for that fiduciary's personal benefit may exercise the power only in accordance with an ascertainable standard; and

(2) a trustee or other fiduciary may not exercise a power to make discretionary distributions to satisfy a legal obligation of support that such fiduciary personally owes another person.

(c) Subject to subsections (d) and (e), if a beneficiary of a trust, in an individual, trustee, or other capacity, removes a fiduciary and appoints a successor fiduciary who would be related or subordinate to that beneficiary within the meaning of Section 672(c) of the Internal Revenue Code if the beneficiary were the grantor, that successor fiduciary's discretionary powers are limited as follows:

(1) the fiduciary's discretionary power to make distributions to or for the benefit of that beneficiary is limited to an ascertainable standard;

(2) the fiduciary's discretionary power may not be exercised to satisfy any of that beneficiary's legal obligations for support or other purposes; and

(3) the fiduciary's discretionary power may not be exercised to grant to that beneficiary a general power of appointment.

(d) Subsection (c) does not apply if:

(1) the appointment of the trustee or other fiduciary by the beneficiary may be made only in conjunction with another person having a substantial interest in the property of the trust subject to the power that is adverse to the interest of the beneficiary within the meaning of Section 2041(b)(1)(C)(ii) of the Internal Revenue Code; or

(2) the appointment is in conformity with a procedure governing appointments approved by the court before the effective date of this Code.

(e) Subsections (b) and (c) do not apply to:

(1) a person other than a settlor who is a beneficiary and trustee or other fiduciary of a trust that confers on such fiduciary a power exercisable only in conjunction with another person having a substantial interest in the property subject to the power that is adverse to the interest of that fiduciary within the meaning of Section 2041(b)(1)(C)(ii) of the Internal Revenue Code;

(2) a power held by the settlor's spouse who is the trustee or other fiduciary of a trust for which a marital deduction, as defined in Section 2056(b)(5) or 2523(e) of the Internal Revenue Code, was previously allowed;

(3) any trust during any period that the trust may be revoked or amended by its settlor;

(4) a trust if contributions to the trust qualify for the annual exclusion under Section 2503(c) of the Internal Revenue Code; or

(5) any portion of a trust over which the trustee or other fiduciary is expressly granted in the trust instrument a presently exercisable or testamentary general power of appointment.

(f) A power whose exercise is limited or prohibited by subsections (b) and (c) may be exercised by a majority of the remaining trustees or other fiduciaries whose exercise of the power is not so limited or prohibited. If the power of all trustees or other fiduciaries is so limited or prohibited, the court may appoint a special fiduciary with authority to exercise the power.

(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/815)

Sec. 815. General powers of trustee.

(a) A trustee, without authorization by the court, may exercise:

(1) powers conferred by the trust instrument; or

(2) except as limited by the trust instrument:

(A) all powers over the trust property that an unmarried owner with legal capacity has over individually owned property;

(B) any other powers appropriate to achieve the proper investment, management, and distribution of the trust property; and

(C) any other powers conferred by this Code.

(b) The exercise of a power is subject to the fiduciary duties prescribed by this Code.

(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/816)

Sec. 816. Specific powers of trustee. Without limiting the authority conferred by Section 815, a trustee may:

(1) collect trust property and accept or reject additions to the trust property from a settlor or any other person;

(2) acquire or sell property, for cash or on credit, at public or private sale;

(3) exchange, partition, or otherwise change the character of trust property;

(4) deposit trust money in an account in a regulated financial-service institution;

(5) borrow money, with or without security, and mortgage or pledge or otherwise encumber trust property for a period within or extending beyond the duration of the trust;

(6) with respect to an interest in a proprietorship, partnership, limited liability company, business trust, corporation, or other form of business or enterprise, continue the business or other enterprise and take any action that may be taken by shareholders, members, or property owners, including merging, dissolving, pledging other trust assets or guaranteeing a debt obligation of the business or enterprise, or otherwise changing the form of business organization or contributing additional capital;

(7) with respect to stocks or other securities, exercise the rights of an absolute owner, including the right to:

(A) vote, or give proxies to vote, with or without power of substitution, or enter into or continue a voting trust agreement;

(B) hold a security in the name of a nominee or in other form without disclosure of the trust so that title may pass by delivery;

(C) pay calls, assessments, and other sums chargeable or accruing against the securities, and sell or exercise stock subscription or conversion rights;

(D) deposit the securities with a depository or other regulated financial-service institution; and

(E) participate in mergers, consolidations, foreclosures, reorganizations, and liquidations;

(8) with respect to an interest in real property, construct, or make ordinary or extraordinary repairs to, alterations to, or improvements in, buildings or other structures, demolish improvements, raze existing or erect new party walls or buildings, subdivide or develop land, dedicate any interest in real estate, dedicate land to public use or grant public or private easements, enter into contracts relating to real estate, and make or vacate plats and adjust boundaries;

(9) enter into a lease for any purpose as lessor or lessee, including a lease or other arrangement for exploration and removal of natural resources, with or without the option to purchase or renew, for a period within or extending beyond the duration of the trust;

(10) grant an option involving a sale, lease, or other disposition of trust property or acquire an option for the acquisition of property, including an option exercisable beyond the duration of the trust, and exercise an option so acquired;

(11) insure the property of the trust against damage or loss and insure the trustee, the trustee's agents, and beneficiaries against liability arising from the administration of the trust;

(12) abandon or decline to administer property of no value or of insufficient value to justify its collection or continued administration;

(13) with respect to possible liability for violation of environmental law:

(A) inspect or investigate property the trustee holds or has been asked to hold, or property owned or operated by an organization in which the trustee holds or has been asked to hold an interest, for the purpose of determining the application of environmental law with respect to the property;

(B) take action to prevent, abate, or otherwise remedy any actual or potential violation of any environmental law affecting property held directly or indirectly by the trustee, whether taken before or after the assertion of a claim or the initiation of governmental enforcement;

(C) decline to accept property into trust or disclaim any power with respect to property that is or may be burdened with liability for violation of environmental law;

(D) compromise claims against the trust that may be asserted for an alleged violation of environmental law; and

(E) pay the expense of any inspection, review, abatement, or remedial action to comply with environmental law;

(14) pay, contest, prosecute, or abandon any claim, settle a claim or charges in favor of or against the trust, and release, in whole or in part, a claim belonging to the trust;

(15) pay taxes, assessments, compensation of the trustee and of employees and agents of the trust, and other expenses incurred in the administration of the trust;

(16) exercise elections with respect to federal, state, and local taxes;

(17) select a mode of payment under any employee benefit or retirement plan, annuity, or life insurance payable to the trustee, exercise rights related to the employee benefit or retirement plan, annuity, or life insurance payable to the trustee, including exercise the right to indemnification for expenses and against liabilities, and take appropriate action to collect the proceeds;

(18) make loans out of trust property, including loans to a beneficiary on terms and conditions the trustee considers to be fair and reasonable under the circumstances, and the trustee has a lien on future distributions for repayment of those loans;

(19) pledge trust property to guarantee loans made by others to the beneficiary;

(20) appoint a trustee to act in another jurisdiction to act as sole or co-trustee with respect to any part or all of trust property located in the other jurisdiction, confer upon the appointed trustee any or all of the rights, powers, and duties of the appointing trustee, require that the appointed trustee furnish security, and remove any trustee so appointed;

(21) distribute income and principal in one or more of the following ways, without being required to see to the application of any distribution, as the trustee believes to be for the best interests of any beneficiary who at the time of distribution is incapacitated or in the opinion of the trustee is unable to manage property or business affairs because of incapacity:

(A) directly to the beneficiary;

(B) to the guardian of the estate, or if none, the guardian of the person of the beneficiary;

(C) to a custodian for the beneficiary under any state's Uniform Transfers to Minors Act, Uniform Gifts to Minors Act or Uniform Custodial Trust Act, and, for that purpose, to create a custodianship or custodial trust;

(D) to an adult relative of the beneficiary to be expended on the beneficiary's behalf;

(E) by expending the money or using the property directly for the benefit of the beneficiary;

(F) to a trust, created before the distribution becomes payable, for the sole benefit of the beneficiary and those dependent upon the beneficiary during his or her lifetime, to be administered as a part of the trust, except that any amount distributed to the trust under this subparagraph (F) shall be separately accounted for by the trustee of the trust and shall be indefeasibly vested in the beneficiary so that if the beneficiary dies before complete distribution of the amounts, the amounts and the accretions, earnings, and income, if any, shall be paid to the beneficiary's estate, except that this subparagraph (F) does not apply to the extent that it would cause a trust otherwise qualifying for the federal estate tax marital deduction not to qualify; and

(G) by managing it as a separate fund on the beneficiary's behalf, subject to the beneficiary's continuing right to withdraw the distribution;

(22) on distribution of trust property or the division or termination of a trust, make distributions in divided or undivided interests, allocate particular assets in proportionate or disproportionate shares, value the trust property for those purposes, and adjust for resulting differences in valuation;

(23) resolve a dispute concerning the interpretation of the trust or its administration by judicial proceeding, nonjudicial settlement agreement under Section 111, mediation, arbitration, or other procedure for alternative dispute resolution;

(24) prosecute or defend an action, claim, or judicial proceeding in any jurisdiction to protect trust property and the trustee in the performance of the trustee's duties;

(25) execute contracts, notes, conveyances, and other instruments that are useful to achieve or facilitate the exercise of the trustee's powers, regardless of whether the instruments contain covenants and warranties binding upon and creating a charge against the trust estate or excluding personal liability;

(26) on termination of the trust, exercise the powers appropriate to wind up the administration of the trust and distribute the trust property to the persons entitled to it;

(27) enter into agreements for bank or other deposit accounts, safe deposit boxes, or custodian, agency, or depository arrangements for all or any part of the trust estate, including, to the extent fair to the beneficiaries, agreements for services provided by a bank operated by or affiliated with the trustee, and to pay reasonable compensation for those services, including, to the extent fair to the beneficiaries, compensation to the bank operated by or affiliated with the trustee, except that nothing in this Section shall be construed as removing any depository arrangements from the requirements of the prudent investor rule;

(28) engage attorneys, auditors, financial advisors, and other agents and pay reasonable compensation to such persons;

(29) invest in or hold undivided interests in property;

(30) if fair to the beneficiaries, deal with the executor, trustee, or other representative of any other trust or estate in which a beneficiary of the trust has an interest, even if the trustee is an executor, trustee, or other representative of the other trust or estate;

(31) make equitable division or distribution in cash or in kind, or both, and for that purpose may value any property divided or distributed in kind;

(32) rely upon an affidavit, certificate, letter, or other evidence reasonably believed to be genuine and on the basis of any such evidence to make any payment or distribution in good faith without liability;

(33) except as otherwise directed by the court, have all of the rights, powers, and duties given to or imposed upon the trustee by law and the terms of the trust during the period between the termination of the trust and the distribution of the trust assets and during any period in which any litigation is pending that may void or invalidate the trust in whole or in part or affect the rights, powers, duties, or discretions of the trustee;

(34) plant and harvest crops; breed, raise, purchase, and sell livestock; lease land, equipment, or livestock for cash or on shares, purchase and sell, exchange or otherwise acquire or dispose of farm equipment and farm produce of all kinds; make improvements, construct, repair, or demolish and remove any buildings, structures, or fences, engage agents, managers, and employees and delegate powers to them; engage in drainage and conservation programs; terrace, clear, ditch, and drain lands and install irrigation systems; replace improvements and equipment; fertilize and improve the soil; engage in the growing, improvement, and sale of trees and other forest crops; participate or decline to participate in governmental agricultural or land programs; and perform such acts as the trustee deems appropriate using such methods as are commonly employed by other farm owners in the community in which the farm property is located;

(35) drill, mine, and otherwise operate for the development of oil, gas, and other minerals; enter into contracts relating to the installation and operation of absorption and repressuring plants; enter into unitization or pooling agreements for any purpose including primary, secondary, or tertiary recovery; place and maintain pipelines; execute oil, gas, and mineral leases, division and transfer orders, grants, deeds, releases and assignments, and other instruments; participate in a cooperative coal marketing association or similar entity; and perform such other acts as the trustee deems appropriate using such methods as are commonly employed by owners of similar interests in the community in which the interests are located;

(36) continue an unincorporated business and participate in its management by having the trustee or one or more agents of the trustee act as a manager with appropriate compensation from the business and incorporate the business;

(37) continue a business in the partnership form and participate in its management by having the trustee or one or more agents of the trustee act as a partner, limited partner, or employee with appropriate compensation from the business; enter into new partnership agreements and incorporate the business; and, with respect to activities under this paragraph (37), the trustee or the agent or agents of the trustee shall not be personally liable to third persons with respect to actions not sounding in tort unless the trustee or agent fails to identify the trust estate and disclose that the trustee or agent is acting in a representative capacity, except that nothing in this paragraph impairs in any way the liability of the trust estate with respect to activities under this paragraph (37) to the extent of the assets of the trust estate;

(38) Release, by means of any written renunciation, relinquishment, surrender, refusal to accept, extinguishment, and any other form of release, any power granted to the trustee by applicable law or the terms of a trust and held by such trustee in its fiduciary capacity, including any power to invade property, any power to alter, amend, or revoke any instrument, whether or not such release causes a termination of any right or interest thereunder, and any power remaining where one or more partial releases have heretofore or hereafter been made with respect to such power, whether heretofore or hereafter created or reserved as to: (i) any property that is subject thereto; (ii) any one or more of the objects thereof; or (iii) limit in any other respect the extent to which it may be exercised. The release may be permanent or applicable only for a specific time and may apply only to the trustee executing the release or the trustee and all future trustees, successor trustees, and co-trustees of the trust acting at any time or from time to time.

(Source: P.A. 101-48, eff. 1-1-20; 102-558, eff. 8-20-21.)

(760 ILCS 3/817)

Sec. 817. Distribution upon termination. Upon the occurrence of an event terminating a trust in whole or in part, or upon the exercise by a beneficiary of a right to withdraw trust principal, the trustee shall proceed expeditiously to make the distribution to the beneficiary. The trustee has the right to require from the beneficiary a written approval of the trust accounting provided to the beneficiary and, at the trustee's election, a refunding agreement from the beneficiary for liabilities that would otherwise be payable from trust property to the extent of the beneficiary's share of the distribution. A trust accounting approved under this Section is binding on the beneficiary providing the approval and on the beneficiary's successors, heirs, representatives, and assigns. A trustee may elect to withhold a reasonable amount of a distribution or require a reasonable reserve for the payment of debts, expenses, and taxes payable from the trust pending the receipt of a written approval of the trust accounting provided to the beneficiary and refunding agreement from a beneficiary or a judicial settlement of accounts.

(Source: P.A. 101-48, eff. 1-1-20; 102-279, eff. 1-1-22.)

(760 ILCS 3/818)

Sec. 818. (Reserved).

(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/819)

Sec. 819. Nominee registration. The trustee may cause stocks, bonds, and other real or personal property belonging to the trust to be registered and held in the name of a nominee without mention of the trust in any instrument or record constituting or evidencing title thereto. The trustee is liable for the acts of the nominee with respect to any investment so registered. The records of the trustee shall show at all times the ownership of the investment by the trustee, and the stocks, bonds, and other similar investments shall be in the possession and control of the trustee and be kept separate and apart from assets that are the individual property of the trustee.

(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/820)

Sec. 820. Proceeds of eminent domain or partition. If a trustee is appointed by a court of this State to receive money under eminent domain or partition proceedings and to invest it for the benefit of the person who would be entitled to the real estate or its income if it had not been taken or sold, on petition of any interested person describing the real estate to be purchased, the price to be paid, the probable income to be derived and the state of the title, the court may authorize the trustee to invest all or any part of the money in other real estate in this State. Title to the real estate so purchased shall be taken in the name of the trustee. If the interest of the beneficiary in the real estate taken or sold was a legal interest, the court shall direct the trustee to convey to the beneficiary a legal estate upon the same conditions and limitations of title, but the conveyance by the trustee shall preserve any right of entry for condition broken, possibility of reverter created by the instrument of title or any reversion or other vested interest that arose by operation of law at the time the instrument took effect. The court shall not direct the conveyance by the trustee unless there is a person or class of persons in being who would have a vested interest in the real estate taken or sold under the instrument of title to the real estate and who would be entitled to possession of the real estate if it had not been taken or sold.

(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/821)

Sec. 821. Lands or estates subject to future interest or power of appointment; waste; appointment of trustee. If lands or any estate therein are subject to any legal or equitable future interest of any kind or to any power of appointment, whether a trust is involved or not, and it is made to appear that such lands or estate are liable to waste or depreciation in value, or that the sale thereof and the safe and proper investment of the proceeds will inure to the benefit and advantage of the persons entitled thereto, or that it is otherwise necessary for the conservation, preservation, or protection of the property or estate or of any present or future interest therein that such lands or estate be sold, mortgaged, leased, converted, exchanged, improved, managed or otherwise dealt with, the court may, pending the happening of the contingency, if any, and the vesting in possession of such future interest, declare a trust, and appoint a trustee or trustees for such lands or estate and vest in a trustee or trustees title to the property, and authorize and direct the sale of such property, either at a public sale or at private sale, and upon such terms and conditions as the court may direct, and in such case may authorize the trustee or trustees to make such sale and to receive, hold and invest the proceeds thereof under the direction of the court for the benefit of the persons entitled or who may become entitled thereto according to their respective rights and interests, authorize and direct that all or any portion of the property, or the proceeds thereof, so subject to such future interests or powers of appointment, be leased, mortgaged, converted, exchanged, improved, managed, invested, reinvested, or otherwise dealt with, as the rights and interests of the parties and the equities of the case may require, and to that end may confer all necessary powers on the trustee or trustees. All orders of every court entered pursuant to this Section after June 30, 1982 and before September 16, 1985 vesting title to property in a trustee are hereby validated and such title is vested in such trustee effective the day the court entered such order.

(Source: P.A. 101-48, eff. 1-1-20.)