(760 ILCS 3/1404)
Application of rule against perpetuities.
(a) The rule against perpetuities does not apply:
(1) to any disposition of property or interest
therein that, at the effective date of this Code, does not violate, or is exempted by statute from the operation of, the common law rule against perpetuities;
(2) to powers of a trustee to sell, lease, or
mortgage property or to powers that relate to the administration or management of trust assets, including, but not limited to, discretionary powers of a trustee to determine what receipts constitute principal and what receipts constitute income and powers to appoint a successor trustee;
(3) to mandatory powers of a trustee to distribute
income, or to discretionary powers of a trustee to distribute principal before termination of a trust, to a beneficiary having an interest in the principal that is irrevocably vested in quality and quantity;
(4) to discretionary powers of a trustee to allocate
income and principal among beneficiaries, but no exercise of any such power after the expiration of the period of the rule against perpetuities is valid;
(5) to leases to commence in the future or upon the
happening of a future event, but no such lease is valid unless the term of the lease actually commences in possession within 40 years from the date of execution of the lease;
(6) to commitments (A) by a lessor to enter into a
lease with a subtenant or with the holder of a leasehold mortgage or (B) by a lessee or sublessee to enter into a lease with the holder of a mortgage;
(7) to options in gross or to preemptive rights in
the nature of a right of first refusal, but no option in gross shall be valid for more than 40 years from the date of its creation; or
(8) to qualified perpetual trusts as defined in
(b) The period of the rule against perpetuities shall not commence to run in connection with any disposition of property or interest therein, and no instrument shall be regarded as becoming effective for purposes of the rule against perpetuities, and no interest or power shall be deemed to be created for purposes of the rule against perpetuities as long as, by the terms of the instrument, the maker of the instrument has the power to revoke the instrument or to transfer or direct to be transferred to himself or herself the entire legal and equitable ownership of the property or interest therein.
(c) In determining whether an interest violates the rule against perpetuities:
(1) it is presumed:
(A) that the interest was intended to be valid;
(B) in the case of an interest conditioned upon
the probate of a will, the appointment of an executor, administrator or trustee, the completion of the administration of an estate, the payment of debts, the sale or distribution of property, the determination of federal or state tax liabilities or the happening of any administrative contingency, that the contingency must occur, if at all, within the period of the rule against perpetuities; and
(C) if the instrument creates an interest in the
"widow", "widower", or "spouse" of another person, that the maker of the instrument intended to refer to a person who was living at the date that the period of the rule against perpetuities commences to run;
(2) if any interest, but for this subsection, would
be invalid because it is made to depend upon any person attaining or failing to attain an age in excess of 21 years, the age specified shall be reduced to 21 years as to every person to whom the age contingency applies;
(3) notwithstanding paragraphs (1) and (2), if the
validity of any interest depends upon the possibility of the birth or adoption of a child, the following apply:
(A) no person shall be deemed capable of having a
child until he or she has attained the age of 13 years;
(B) any person who has attained the age of 65
years shall be deemed incapable of having a child;
(C) evidence is admissible as to the incapacity
of having a child by a living person who has not attained the age of 65 years; and
(D) the possibility of having a child or more
remote descendant by adoption shall be disregarded.
(d) Paragraphs (2), (3), and (6) of subsection (a) and subsection (b) are declaratory of existing law.
(Source: P.A. 101-48, eff. 1-1-20
(760 ILCS 3/1405)
(a) Subject to subsections (e) and (f), a trust containing any limitation that, but for this subsection, would violate the rule against perpetuities as modified by Section 1404 shall terminate at the expiration of a period of:
(1) 21 years after the death of the last to die of
all of the beneficiaries of the instrument who were living at the date when the period of the rule against perpetuities commenced to run; or
(2) 21 years after that date if no beneficiary of the
instrument was then living, unless events occur that cause an earlier termination in accordance with the terms of the instrument and then the principal shall be distributed as provided by the instrument.
(b) Subject to subsections (c), (d) and (e), when a trust terminates because of the application of subsection (a), the trustee shall distribute the principal to those persons who would be the heirs at law of the maker of the instrument if he or she died at the expiration of the period specified in subsection (a) and in the proportions then specified by statute, unless the trust was created by the exercise of a power of appointment and then the principal shall be distributed to the person who would have received it if the power had not been exercised.
(c) Before any distribution of principal is made pursuant to subsection (b), the trustee shall distribute, out of principal, to each living beneficiary who, but for termination of the trust because of the application of subsection (a), would have been entitled to be paid income after the expiration of the period specified in subsection (a), an amount equal to the present value (determined as provided in subsection (d)) of the income that the beneficiary would have been entitled to be paid after the expiration of that period.
(d) In determining the present value of income for purposes of any distribution to a beneficiary pursuant to subsection (c):
(1) when income payments would have been subject in
whole or in part to any discretionary power, it shall be assumed:
(A) that the income that would have been paid to
an individual income beneficiary would have been the maximum amount of income that could have been paid to him or her in the exercise of the power;
(B) if the income would or might have been
payable to more than one beneficiary, that (except as hereinafter provided) each beneficiary would have received an equal share of the income, unless the instrument specifies less than an equal share as the maximum amount or proportion of income that would have been paid to any beneficiary in the exercise of the power, in which event the maximum specified shall control; and
(C) if the income would or might have been
payable to the descendants of the maker of the instrument or of another person, that, unless the instrument provides otherwise, the descendants would have received the income per stirpes;
(2)(A) present value shall be computed on an
actuarial basis and there shall be assumed a return of 5%, at simple interest, on the value of the principal from which the beneficiary would have been entitled to receive income; and
(B) if the interest in income was to be for the life
of the beneficiary or for the life of another, the computation shall be made on the expectancy set forth in the most recently published American Experience Tables of Mortality and no other evidence of duration or expectancy shall be considered;
(3) if the trustee cannot determine the present
value of any income interest in accordance with the provisions of the instrument and the foregoing rules concerning income payments, the present value of the interest shall be deemed to be zero.
(e) This Section applies only when a trust would violate the rule against perpetuities as modified by Section 1404 and does not apply to any trust that would have been valid apart from this Article.
(f) This Section does not apply when a trust violates the rule against perpetuities because the trust estate may not vest in the trustee within the period of the rule.
(Source: P.A. 101-48, eff. 1-1-20