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.
