Tuesday, February 25, 2020
Oak Lawn Estate Planning | It may be time to review your Trust
Effective January 1st of this year, the Illinois Legislature enacted new Trust laws. These laws will mostly relate to newly drafted trusts but if you already have an existing trust, this would be a good time to go back to your lawyer’s office to ensure your existing trust is still in compliance with existing law and determine if these new provisions could provide additional opportunities to further your estate planning goals.
One important change is that trustees are now allowed to change the place of administration of the trust after providing notice to beneficiaries. This can be helpful to ease the administration of your trust, especially if your beneficiaries and successor trustee live in another state.
The new trust law, Section 760 § 414(a-b) also allows for the modification or termination of a trust if the burden of administering the trust outweighs the purpose of the trust. Your successor trustee may terminate your trust if the value of the trust property is under $100,000.00 and the costs of continuing the trust will substantially impair accomplishing the purpose of the trust. The court could also modify or terminate a trust or remove a trustee and appoint a different trustee if it determines that the value of the assets in the trust are insufficient to justify the cost of its administration. Pet lovers take note, this will not apply to trusts for domestic or pet animals. You should ensure your attorney adds these provisions into your trust to ensure the best financial care for your pet.
Another new provision of the code is that the trustees will now have up to 120 days to determine if they want the role. If your trust outlines a method for a successor trustee to accept trusteeship, that method will be honored. If the trust does not provide a method of accepting trusteeship, the potential successor trustee has up to 120 days to accept that position. If he or she does not accept that position within the prescribed time frame, they are deemed to have declined the trusteeship. Additionally, any potential successor trustee may inspect the trust property to determine if there are any potential liabilities under environmental, or other laws. He or she may choose to act to preserve trust assets without accepting the trusteeship if the successor trustee acts within the 120 days and in good faith. These provisions are outlined in Section 760 § 701 of the act.
Finally, the trust code now creates additional duties to inform and account to beneficiaries of an irrevocable trust. The trustee shall notify each qualified beneficiary of the trust’s existence, the right to receive a complete copy of the trust instrument, and whether the beneficiary has a right to receive or request trust accounting. The trustee must also inform qualified beneficiaries within 90 days of their name, address, phone number, or later any change in their contact information. The trustee must notify the beneficiaries in advance regarding a change in their compensation or of their anticipated resignation. A trustee must send a trust accounting “at least annually” to all current beneficiaries.