(760 ILCS 3/103)
In this Code:
(1) "Action", with respect to an act of a trustee, includes a failure to act.
(2) "Ascertainable standard" means a standard relating to an individual's health, education, support, or maintenance within the meaning of Section 2041(b)(1)(A) or 2514(c)(1) of the Internal Revenue Code and any applicable regulations.
(3) "Beneficiary" means a person that:
(A) has a present or future beneficial interest in a
trust, vested or contingent, assuming nonexercise of powers of appointment;
(B) in a capacity other than that of trustee, holds
a power of appointment over trust property; or
(C) is an identified charitable organization that
will or may receive distributions under the terms of the trust.
(4) "Charitable interest" means an interest in a trust that:
(A) is held by an identified charitable organization
and makes the organization a qualified beneficiary;
(B) benefits only charitable organizations and, if
the interest were held by an identified charitable organization, would make the organization a qualified beneficiary; or
(C) is held solely for charitable purposes and, if
the interest were held by an identified charitable organization, would make the organization a qualified beneficiary.
(5) "Charitable organization" means:
(A) a person, other than an individual, organized
and operated exclusively for charitable purposes; or
(B) a government or governmental subdivision,
agency, or instrumentality, to the extent it holds funds exclusively for a charitable purpose.
(6) "Charitable purpose" means the relief of poverty, the advancement of education or religion, the promotion of health, municipal or other governmental purpose, or another purpose the achievement of which is beneficial to the community.
(7) "Charitable trust" means a trust, or portion of a trust, created for a charitable purpose.
(8) "Community property" means all personal property, wherever situated, that was acquired as or became, and remained, community property under the laws of another jurisdiction, and all real property situated in another jurisdiction that is community property under the laws of that jurisdiction.
(9) "Current beneficiary" means a beneficiary that on the date the beneficiary's qualification is determined is a distributee or permissible distributee of trust income or principal. The term "current beneficiary" includes the holder of a presently exercisable general power of appointment but does not include a person who is a beneficiary only because the person holds any other power of appointment.
(10) "Directing party" means any investment trust advisor, distribution trust advisor, or trust protector.
(11) "Donor", with reference to a power of appointment, means a person that creates a power of appointment.
(12) "Environmental law" means a federal, state, or local law, rule, regulation, or ordinance relating to protection of the environment.
(13) "General power of appointment" means a power of appointment exercisable in favor of a powerholder, the powerholder's estate, a creditor of the powerholder, or a creditor of the powerholder's estate.
(14) "Guardian of the estate" means a person appointed by a court to administer the estate of a minor or adult individual.
(15) "Guardian of the person" means a person appointed by a court to make decisions regarding the support, care, education, health, and welfare of a minor or adult individual.
(16) "Incapacitated" or "incapacity" means the inability of an individual to manage property or business affairs because the individual is a minor, adjudicated incompetent, has an impairment in the ability to receive and evaluate information or make or communicate decisions even with the use of technological assistance; or
is at a location that is unknown and not reasonably ascertainable. Without limiting the ways in which incapacity may be established, an individual is incapacitated if:
(i) a plenary guardian has been appointed for the
individual under subsection (c) of Section 11a-12 of the Probate Act of 1975;
(ii) a limited guardian has been appointed for the
individual under subsection (b) of Section 11a-12 of the Probate Act of 1975 and the court has found that the individual lacks testamentary capacity; or
(iii) the individual was examined by a licensed
physician who determined that the individual was incapacitated and the physician made a signed written record of the physician's determination within 90 days after the examination and no licensed physician subsequently made a signed written record of the physician's determination that the individual was not incapacitated within 90 days after examining the individual.
(17) "Internal Revenue Code" means the Internal Revenue Code of 1986 as amended from time to time and includes corresponding provisions of any subsequent federal tax law.
(18) "Interested persons" means: (A) the trustee; and (B) all beneficiaries, or their respective representatives determined after giving effect to the provisions of Article 3, whose consent or joinder would be required in order to achieve a binding settlement were the settlement to be approved by the court. "Interested persons" includes a trust advisor, investment advisor, distribution advisor, trust protector, or other holder, or committee of holders, of fiduciary or nonfiduciary powers, if the person then holds powers material to a particular question or dispute to be resolved or affected by a nonjudicial settlement in accordance with Section 111 or by a judicial proceeding.
(19) "Interests of the beneficiaries" means the beneficial interests provided in the trust instrument.
(20) "Jurisdiction", with respect to a geographic area, includes a State or country.
(21) "Legal capacity" means that the person is not incapacitated.
(22) "Nongeneral power of appointment" means a power of appointment that is not a general power of appointment.
(23) "Person" means an individual, estate, business or nonprofit entity, public corporation, government or governmental subdivision, agency, or instrumentality, or other legal entity.
(24) "Power of appointment" means a power that enables a powerholder acting in a nonfiduciary capacity to designate a recipient of an ownership interest in or another power of appointment over the appointive property. The term "power of appointment" does not include a power of attorney.
(25) "Power of withdrawal" means a presently exercisable general power of appointment other than a power:
(A) exercisable by the powerholder as trustee that is
limited by an ascertainable standard; or
(B) exercisable by another person only upon consent
of the trustee or a person holding an adverse interest.
(26) "Powerholder" means a person in which a donor creates a power of appointment.
(27) "Presently exercisable power of appointment" means a power of appointment exercisable by the powerholder at the relevant time. The term "presently exercisable power of appointment":
(A) includes a power of appointment exercisable only
after the occurrence of a specified event, the satisfaction of an ascertainable standard, or the passage of a specified time only after:
(i) the occurrence of the specified event;
(ii) the satisfaction of the ascertainable
(iii) the passage of the specified time; and
(B) does not include a power exercisable only at the
(28) "Presumptive remainder beneficiary" means a beneficiary of a trust, as of the date of determination and assuming nonexercise of all powers of appointment, who either: (A) would be eligible to receive a distribution of income or principal if the trust terminated on that date; or (B) would be eligible to receive a distribution of income or principal if the interests of all beneficiaries currently eligible to receive income or principal from the trust ended on that date without causing the trust to terminate.
(29) "Property" means anything that may be the subject of ownership, whether real or personal, legal or equitable, or any interest therein.
(30) "Qualified beneficiary" means a beneficiary who, on the date the beneficiary's qualification is determined and assuming nonexercise of powers of appointment:
(A) is a distributee or permissible distributee of
trust income or principal;
(B) would be a distributee or permissible
distributee of trust income or principal if the interests of the distributees described in subparagraph (A) terminated on that date without causing the trust to terminate; or
(C) would be a distributee or permissible
distributee of trust income or principal if the trust terminated on that date.
(31) "Revocable", as applied to a trust, means revocable by the settlor without the consent of the trustee or a person holding an adverse interest. A revocable trust is deemed revocable during the settlor's lifetime.
(32) "Settlor", except as otherwise provided in Sections 113 and 1225, means a person, including a testator, who creates, or contributes property to, a trust. If more than one person creates or contributes property to a trust, each person is a settlor of the portion of the trust property attributable to that person's contribution except to the extent another person has the power to revoke or withdraw that portion.
(33) "Sign" means, with present intent to authenticate or adopt a record:
(A) to execute or adopt a tangible symbol; or
(B) to attach to or logically associate with the
record an electronic symbol, sound, or process.
(34) "Spendthrift provision" means a term of a trust that restrains both voluntary and involuntary transfer of a beneficiary's interest.
(35) "State" means a State of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. The term "state" includes an Indian tribe or band recognized by federal law or formally acknowledged by a state.
(36) "Terms of the trust" means:
(A) except as otherwise provided in paragraph (B),
the manifestation of the settlor's intent regarding a trust's provisions as:
(i) expressed in the trust instrument; or
(ii) established by other evidence that would be
admissible in a judicial proceeding; or
(B) the trust's provisions as established,
determined, or modified by:
(i) a trustee or other person in accordance with
(ii) a court order; or
(iii) a nonjudicial settlement agreement under
(37) "Trust" means a trust created by will, deed, agreement, declaration, or other written instrument.
(38) "Trust accounting" means one or more written communications from the trustee with respect to the accounting year that describe: (A) the trust property, liabilities, receipts, and disbursements, including the amount of the trustee's compensation; (B) the value of the trust assets on hand at the close of the accounting period, to the extent feasible; and (C) all other material facts related to the trustee's administration of the trust.
(39) "Trust instrument" means the written instrument stating the terms of a trust, including any amendment, any court order or nonjudicial settlement agreement establishing, construing, or modifying the terms of the trust in accordance with Section 111, Sections 410 through 416, or other applicable law, and any additional trust instrument under Article 12.
(40) "Trustee" includes an original, additional, and successor trustee, and a co-trustee.
(41) "Unascertainable beneficiary" means a beneficiary whose identity is uncertain or not reasonably ascertainable.
(Source: P.A. 101-48, eff. 1-1-20
(760 ILCS 3/105)
Default and mandatory rules.
(a) The trust instrument may specify the rights, powers, duties, limitations, and immunities applicable to the trustee, beneficiary, and others and those terms, if not otherwise contrary to law, shall control, except to the extent specifically provided otherwise in this Section. The provisions of this Code apply to the trust to the extent that they are not inconsistent with specific terms of the trust.
(b) Specific terms of the trust prevail over any provision of this Code except:
(1) the requirements for creating a trust;
(2) the duty of a trustee to act in good faith;
(3) the requirement that a trust have a purpose that
is lawful and not contrary to public policy;
(4) the rules governing designated representatives
as provided in Section 307;
(5) the 21-year limitation contained in subsection
(6) the power of the court to modify or terminate a
trust under Sections 411 through 417;
(7) the effect of a spendthrift provision and the
rights of certain creditors and assignees to reach a trust as provided in Article 5;
(8) the requirement under subsection (e) of Section
602 that an agent under a power of attorney must have express authorization in the agency to exercise a settlor's powers with respect to a revocable trust;
(9) the power of the court under subsection (b) of
Section 708 to adjust a trustee's compensation specified in the trust instrument that is unreasonably low or high;
(10) for trusts becoming irrevocable after the
effective date of this Code, the trustee's duty under paragraph (b)(1) of Section 813.1 to provide information to the qualified beneficiaries;
(11) for trusts becoming irrevocable after the
effective date of this Code, the trustee's duty under paragraph (b)(2) of Section 813.1 to provide accountings to the current beneficiaries of the trust;
(12) for trusts becoming irrevocable after the
effective date of this Code, the trustee's duty under paragraph (b)(4) of Section 813.1 to provide accountings to beneficiaries receiving a distribution of the residue of the trust upon a trust's termination;
(13) the effect of an exculpatory term under Section
(14) the rights under Sections 1010 through 1013 of
a person other than a trustee or beneficiary; and
(15) the power of the court to take such action and
exercise such jurisdiction as may be necessary in the interests of equity.
(Source: P.A. 101-48, eff. 1-1-20
(760 ILCS 3/108)
Principal place of administration.
(a) Without precluding other means for establishing a sufficient connection with the designated jurisdiction, the terms of a trust designating the principal place of administration are valid and controlling if:
(1) a trustee's principal place of business is
located in or a trustee is a resident of the designated jurisdiction; or
(2) all or part of the administration occurs in the
(b) A trustee is under a continuing duty to administer the trust at a place appropriate to its purposes, its administration, and the interests of the beneficiaries.
(c) Without precluding the right of the court to order, approve, or disapprove a transfer, the trustee, in furtherance of the duty prescribed by subsection (b), may transfer the trust's principal place of administration to another State or to a jurisdiction outside of the United States.
(d) The trustee shall notify the qualified beneficiaries of a proposed transfer of a trust's principal place of administration not less than 60 days before initiating the transfer. The notice of proposed transfer must include:
(1) the name of the jurisdiction to which the
principal place of administration is to be transferred;
(2) the address and telephone number at the new
location at which the trustee can be contacted;
(3) an explanation of the reasons for the proposed
(4) the date on which the proposed transfer is
anticipated to occur; and
(5) the date, not less than 60 days after the giving
of the notice, by which the qualified beneficiary must notify the trustee of an objection to the proposed transfer.
(e) The authority of a trustee under this Section to transfer a trust's principal place of administration terminates if a qualified beneficiary notifies the trustee of an objection to the proposed transfer on or before the date specified in the notice.
(f) Notwithstanding any other provision of this Code, the trustee has no duty to inform the beneficiaries, or any other interested party, about the availability of this Section and further has no duty to review the trust instrument to determine whether any action should be taken under this Section unless requested to do so by a qualified beneficiary.
(g) In connection with a transfer of the trust's principal place of administration, the trustee may transfer some or all of the trust property to a successor trustee designated in the terms of the trust or appointed pursuant to Section 704.
(Source: P.A. 101-48, eff. 1-1-20
(760 ILCS 3/111)
Nonjudicial settlement agreements.
(a) Interested persons, or their respective representatives determined after giving effect to Article 3, may enter into a binding nonjudicial settlement agreement with respect to any matter involving a trust as provided in this Section.
(b) The following matters may be resolved by a nonjudicial settlement agreement:
(1) Validity, interpretation, or construction of the
(2) Approval of a trustee's report or
(3) Exercise or nonexercise of any power by a
(4) The grant to a trustee of any necessary or
desirable administrative power if the grant does not conflict with a clear material purpose of the trust.
(5) Questions relating to property or an
interest in property held by the trust if the resolution does not conflict with a clear material purpose of the trust.
(6) Removal, appointment, or removal and
appointment of a trustee, trust advisor, investment advisor, distribution advisor, trust protector, or other holder, or committee of holders, of fiduciary or nonfiduciary powers, including without limitation designation of a plan of succession or procedure to determine successors to any such office.
(7) Determination of a trustee's or other
(8) Transfer of a trust's principal place of
administration, including, without limitation, to change the law governing administration of the trust.
(9) Liability or indemnification of a trustee
for an action relating to the trust.
(10) Resolution of bona fide disputes related
to trust administration, investment, distribution, or other matters.
(11) Modification of the terms of the trust
pertaining to the administration of the trust.
(12) Determining whether the aggregate
interests of each beneficiary in severed trusts are substantially equivalent to the beneficiary's interests in the trusts before severance.
(13) Termination of the trust, except that
court approval of the termination must be obtained in accordance with subsection (d), and the court must find that continuance of the trust is not necessary to achieve any clear material purpose of the trust. The court shall consider spendthrift provisions as a factor in making a decision under this subsection, but a spendthrift provision is not necessarily a material purpose of a trust, and the court is not precluded from modifying or terminating a trust because the trust instrument contains spendthrift provisions. Upon termination, the court shall order the distribution of the trust property as agreed by the parties to the agreement, or if the parties cannot agree, then as the court determines is equitable and consistent with the purposes of the trust.
(c) If a trust contains a charitable interest, the parties to any proposed nonjudicial settlement agreement affecting the trust shall deliver to the Attorney General written notice of the proposed agreement at least 60 days before its effective date. The Bureau is not required to take action, but if it objects in a writing delivered to one or more of the parties before the proposed effective date, the agreement shall not take effect unless the parties obtain court approval.
(d) Any beneficiary or other interested person may request the court to approve any part or all of a nonjudicial settlement agreement, including, without limitation, whether any representation is adequate and without material conflict of interest, if the petition for approval is filed within 60 days after the effective date of the agreement.
(e) An agreement entered into in accordance with this Section, or a judicial proceeding pursued in accordance with this Section, is final and binding on the trustee, on all beneficiaries of the trust, both current and future, and on all other interested persons as if ordered by a court with competent jurisdiction over the trust, the trust property, and all parties in interest.
(f) In the trustee's sole discretion, the trustee may, but is not required to, obtain and rely upon an opinion of counsel on any matter relevant to this Section, including, without limitation:
(1) if required by this Section, that the agreement
proposed to be made in accordance with this Section does not conflict with a clear material purpose of the trust;
(2) in the case of a trust termination, that
continuance of the trust is not necessary to achieve any clear material purpose of the trust;
(3) that there is no material conflict of interest
between a representative and the person represented with respect to the particular question or dispute; and
(4) that the representative and the person
represented have substantially similar interests with respect to the particular question or dispute.
(g) This Section shall be construed as pertaining to the administration of a trust and shall be available to any trust that is administered in this State or that is governed by Illinois law with respect to the meaning and effect of its terms, except to the extent the trust instrument expressly prohibits the use of this Section by specific reference to this Section or a prior corresponding law. A provision in the trust instrument in the form: "Neither the provisions of Section 111 of the Illinois Trust Code nor any corresponding provision of future law may be used in the administration of this trust", or a similar provision demonstrating that intent, is sufficient to preclude the use of this Section.
(Source: P.A. 101-48, eff. 1-1-20