|
decision to
convert the trust to a total return trust, |
specifying a prospective effective
date for the conversion |
and including a copy of this Section, to the following
|
beneficiaries, determined as of the date the notice is sent |
and assuming
nonexercise of all powers of appointment:
|
(A) all of the legally competent beneficiaries who |
are currently
receiving or eligible to receive income |
from the trust; and
|
(B) all of the legally competent beneficiaries who |
would receive or be
eligible to receive a distribution |
of principal or income if the current
interests of |
beneficiaries currently receiving or eligible to |
receive income
ended;
|
(4) there are one or more legally competent income |
beneficiaries
under subdivision (3)(A) of this subsection |
(a) and one or more legally
competent remainder |
beneficiaries under subdivision (3)(B) of this subsection
|
(a), determined as of the date of sending the notice;
|
(5) no beneficiary objects to the conversion to a total |
return trust in a
writing delivered to the trustee within |
60 days after the notice is sent; and
|
(6) the trustee has signed acknowledgments of receipt |
confirming that
notice was received by each beneficiary |
required to be sent notice under
subdivision (3) of this |
subsection (a).
|
(b) Conversion by agreement. Conversion to a total return |
|
trust may be made
by agreement between a trustee and (i) all |
primary beneficiaries, acting either individually or by their |
respective representatives in accordance with Section |
subsection 16.1(a)(2) of this Act, or (ii) all beneficiaries |
currently eligible to receive income or principal from the |
trust and all beneficiaries who are presumptive remaindermen, |
either individually or by their respective representatives in |
accordance with subsection 16.1(a)(3) of this Act. The |
agreement may include any actions a court
could properly order |
under subsection (g) of this Section; however, any
distribution |
percentage determined by the agreement may not be less than 3%
|
nor greater than 5%.
|
(c) Conversion or reconversion by court.
|
(1) The trustee may for any reason elect to petition |
the court to order
conversion to a total return trust, |
including without limitation the reason
that conversion |
under subsection (a) is unavailable because:
|
(A) a beneficiary timely objects to the conversion |
to a total return
trust;
|
(B) there are no legally competent beneficiaries |
described in
subdivision (3)(A) of subsection (a); or
|
(C) there are no legally competent beneficiaries |
described in
subdivision (3)(B) of subsection (a).
|
(2) A beneficiary may request the trustee to convert to |
a total return
trust or adjust the distribution percentage. |
If the trustee declines or fails
to act within 6 months |
|
after receiving
a written request to do so, the beneficiary |
may petition the court to order the
conversion or |
adjustment.
|
(3) The trustee may petition the court prospectively to |
reconvert from a
total return trust or adjust the |
distribution percentage if the trustee
determines that the |
reconversion or adjustment will enable
the trustee to |
better carry out the purposes of the trust. A beneficiary |
may
request the trustee to petition the court prospectively |
to reconvert from a
total return trust or adjust the |
distribution percentage. If the trustee
declines or fails |
to act within 6 months
after receiving a written request to |
do so, the beneficiary may petition the
court to order the |
reconversion or adjustment.
|
(4) In a judicial proceeding under this subsection (c), |
the trustee may,
but need not, present the trustee's |
opinions and reasons (A) for supporting or
opposing |
conversion to (or reconversion from or adjustment of the |
distribution
percentage of) a total return trust, |
including
whether the trustee believes conversion (or |
reconversion
or adjustment of the distribution
percentage)
|
would enable the
trustee to better carry out the purposes |
of the trust, and (B) about any other
matters relevant to |
the proposed conversion (or reconversion
or adjustment of |
the distribution
percentage).
A trustee's
actions in |
accordance with this subsection (c) shall not be deemed |
|
improper or
inconsistent with the trustee's duty of |
impartiality unless the court finds
from all the evidence |
that the trustee acted in bad faith.
|
(5) The court shall order conversion to (or |
reconversion prospectively
from
or adjustment of the |
distribution percentage
of)
a total return trust if the |
court determines that the conversion (or
reconversion or |
adjustment of the distribution percentage) will enable the
|
trustee to better carry out the purposes of the
trust and |
the conversion
(or reconversion or adjustment of the
|
distribution percentage)
is in the best interests of the |
beneficiaries.
|
(6) Notwithstanding any other provision of this |
Section, a trustee has no
duty to inform beneficiaries |
about the availability of this Section and has no
duty to |
review the trust to determine whether any action should be |
taken under
this Section unless requested to do so in |
writing by a beneficiary described in
subdivision (3) of |
subsection (a).
|
(d) Post conversion. While a trust is a total return trust, |
all
of the following shall apply to the trust:
|
(1) the trustee shall make income distributions in |
accordance with the
governing instrument subject to the |
provisions of this Section;
|
(2) the term "income" in the governing instrument means |
an annual amount
(the "distribution amount") equal to a |
|
percentage (the "distribution
percentage") of the net fair |
market value of the trust's assets, whether the
assets are |
considered income or principal under the Principal and |
Income Act,
averaged over the lesser of:
|
(i) the 3 preceding years; or
|
(ii) the period during which the trust has been in |
existence;
|
(3) the distribution percentage for any trust |
converted to a total return
trust by a trustee in |
accordance with subsection (a) shall be 4%;
|
(4) the trustee shall pay to a beneficiary (in the case |
of an
underpayment) and shall recover from a beneficiary |
(in the case of an
overpayment) an amount equal to the |
difference between the amount properly
payable and the |
amount actually paid, plus interest compounded annually at |
a
rate per annum equal to the distribution percentage in |
the year or years while
the underpayment or overpayment |
exists; and
|
(5) a change in the method of determining a reasonable |
current return by converting to a total return trust in |
accordance with this Section and substituting the |
distribution amount for net trust accounting income is a |
proper change in the definition of trust income |
notwithstanding any contrary provision of the Principal |
and Income Act, and the distribution amount shall be deemed |
a reasonable current return that fairly apportions the |
|
total return of a total return trust.
|
(e) Administration. The trustee, in the trustee's |
discretion, may determine
any of the following matters in |
administering a total return trust as the
trustee from time to |
time determines necessary or helpful for the
proper functioning |
of the trust:
|
(1) the effective date of a conversion to a total |
return trust;
|
(2) the manner of prorating the distribution amount for |
a short year in
which a beneficiary's interest commences or |
ceases;
|
(3) whether distributions are made in cash or in kind;
|
(4) the manner of adjusting valuations and |
calculations of the
distribution amount to account for |
other payments from or contributions to the
trust;
|
(5) whether to value the trust's assets annually or |
more frequently;
|
(6) what valuation dates and how many valuation dates |
to use;
|
(7) valuation decisions about any asset for which there |
is no
readily available market value, including:
|
(A) how frequently to value such an asset;
|
(B) whether and how often to engage a professional |
appraiser
to value such an asset; and
|
(C) whether to exclude the value of such an asset |
from the net
fair market value of the trust's assets |
|
under subdivision (d)(2) for
purposes of determining |
the distribution amount. Any such asset so
excluded is |
referred to as an "excluded asset" in this subsection
|
(e), and the trustee shall distribute any net income |
received from
the excluded asset as provided for in the |
governing instrument,
subject to the following |
principles:
|
(i) unless the trustee determines there are |
compelling reasons to the
contrary considering all |
relevant factors including the best interests of |
the
beneficiaries, the trustee shall treat each |
asset for which there is no readily
available |
market value as an excluded asset;
|
(ii) if tangible personal property or real |
property is possessed or
occupied by a |
beneficiary, the trustee shall not limit or |
restrict any right of
the beneficiary to use the |
property in accordance with the governing |
instrument
whether or not the trustee treats the |
property as an excluded asset;
|
(iii) examples of assets for which there is a |
readily available market
value include: cash and |
cash equivalents; stocks, bonds, and other |
securities
and instruments for which there is an |
established market on a stock exchange,
in an |
over-the-counter market, or otherwise; and any |
|
other property that can
reasonably be expected to |
be sold within one week of the decision to sell
|
without extraordinary efforts by the seller;
|
(iv) examples of assets for which there is no |
readily available market
value include: stocks, |
bonds, and other securities and instruments for |
which
there is no established market on a stock |
exchange, in an over-the-counter
market, or |
otherwise; real property; tangible personal |
property; and artwork
and other collectibles; and
|
(8) any other administrative matters as the trustee |
determines necessary
or helpful for the proper functioning |
of the total return trust.
|
(f) Allocations.
|
(1) Expenses, taxes, and other charges that would be |
deducted from income
if the trust were not a total return |
trust shall not be deducted from the
distribution amount.
|
(2) Unless otherwise provided by the governing |
instrument, the trustee
shall fund the distribution amount |
each year from the following sources for
that year in the |
order listed: first from net income (as the term would be
|
determined if the trust were not a total return trust), |
then from other
ordinary income as determined for federal |
income tax purposes, then from net
realized short-term |
capital gains as determined for federal income tax
|
purposes, then from net realized long-term capital gains as |
|
determined for
federal income tax purposes, then from trust |
principal comprised of assets for
which there is a readily |
available market value, and then from other trust
|
principal.
|
(g) Court orders. The court may order any of the following |
actions in a
proceeding brought by a trustee or a beneficiary |
in accordance with subdivision
(c)(1), (c)(2),
or (c)(3):
|
(1) select a distribution percentage other than 4%;
|
(2) average the valuation of the trust's net assets |
over a period other
than 3 years;
|
(3) reconvert prospectively from
or adjust the |
distribution percentage
of
a total return trust;
|
(4) direct the distribution of net income (determined |
as if the trust were
not a total return trust) in excess of |
the distribution amount as to any or all
trust assets if |
the distribution is necessary to preserve a tax benefit; or
|
(5) change or direct any administrative procedure as |
the court determines
necessary or helpful for the proper |
functioning of the total return trust.
|
Nothing in this subsection (g) limits the equitable powers |
of the court to
grant
other
relief.
|
(h) Restrictions. Conversion to a total return trust does
|
not affect any provision in the governing instrument:
|
(1) directing or authorizing the trustee to distribute |
principal;
|
(2) directing or authorizing the trustee to distribute |
|
a fixed annuity or
a fixed fraction of the value of trust |
assets;
|
(3) authorizing a beneficiary to withdraw a portion or |
all of the
principal; or
|
(4) in any manner that would diminish an amount |
permanently set aside for
charitable purposes under the |
governing instrument unless both income and
principal are |
so set aside.
|
(i) Tax limitations. If a particular trustee is a |
beneficiary of the trust
and conversion or failure to convert |
would enhance or diminish the beneficial
interest of the |
trustee, or if possession or exercise of the conversion power
|
by a particular trustee would alone cause any individual to be |
treated as owner
of a part of the trust for income tax purposes |
or cause a part of the trust to
be included in the gross estate |
of any individual for estate tax purposes, then
that particular |
trustee may not participate as a trustee in the exercise of the
|
conversion power; however:
|
(1) the trustee may petition the court under |
subdivision (c)(1) to order
conversion in accordance with |
this Section; and
|
(2) if the trustee has one or more co-trustees to whom |
this subsection (i)
does not apply, the co-trustee or |
co-trustees may convert the trust to a total
return trust |
in accordance with this Section.
|
(j) Releases. A trustee may irrevocably release the power |
|
granted by this
Section if the trustee reasonably believes the |
release is in the best interests
of the trust and its |
beneficiaries. The release may be personal to the
releasing |
trustee or may apply generally to some or all subsequent |
trustees,
and the release may be for any specified period, |
including a period measured by
the life of an individual.
|
(k) Remedies. A trustee who reasonably and in good faith |
takes or omits to
take any action under this Section is not |
liable to any person interested in
the trust.
If a trustee |
reasonably and
in good faith takes or omits to take any action |
under this Section and a person
interested in the trust opposes |
the act or omission, the person's exclusive
remedy is to obtain |
an order of the court directing the trustee to convert the
|
trust to a total return trust, to reconvert from a total return |
trust, to
change the distribution percentage, or to order any |
administrative procedures
the court determines necessary or |
helpful for the proper functioning of the
trust. An act or |
omission by a trustee under this Section is presumed taken or
|
omitted reasonably and in good faith unless it is
determined by |
the court to have been an abuse of discretion. Any claim by any
|
person interested in the trust that an act or omission by a |
trustee under this
Section was an abuse of discretion is barred |
if not asserted in a proceeding
commenced by or on behalf of |
the person within 2 years after the trustee has
sent to the |
person or the person's personal representative a notice or
|
report in writing sufficiently disclosing facts fundamental to |
|
the claim such
that the person knew or reasonably should have |
known of the claim.
The preceding sentence shall not apply to a |
person who was under a legal
disability at the time the notice |
or report was sent and who then had no
personal representative. |
For purposes of this subsection (k), a personal
representative |
refers to a court appointed guardian or conservator of the
|
estate of a person.
|
(l) Application. This Section is available to trusts in |
existence on the
effective date of this amendatory Act of the |
92nd General Assembly or created
after that date. This Section |
shall be construed as pertaining to the
administration of a |
trust and shall be available to any trust that
is administered |
in Illinois under Illinois law or that
is governed by Illinois |
law with respect to the meaning and effect of
its terms unless:
|
(1) the trust is a trust described in Internal
Revenue |
Code Section 642(c)(5), 664(d),
2702(a)(3), or 2702(b); or
|
(2) the governing instrument expressly prohibits use |
of this Section by
specific reference to this Section. A |
provision in the governing instrument in
the form: "Neither |
the provisions of Section 5.3 of the Trusts and Trustees |
Act
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.
|
(m) Application to express trusts.
|
(1) This subsection (m) does not apply to a charitable |
|
remainder unitrust as defined by Section 664(d), Internal |
Revenue Code of 1986 (26 U.S.C. Section 664), as amended.
|
(2) In this subsection (m):
|
(A) "Unitrust" means a trust the terms of which |
require distribution of a unitrust amount, without |
regard to whether the trust has been converted to a |
total return trust in accordance with this Section or |
whether the trust is established by express terms of |
the governing instrument.
|
(B) "Unitrust amount" means an amount equal to a |
percentage of a trust's assets that may or must be |
distributed to one or more beneficiaries annually in |
accordance with the terms of the trust. The unitrust |
amount may be determined by reference to the net fair |
market value of the trust's assets as of a particular |
date or as an average determined on a multiple year |
basis.
|
(3) A unitrust changes the definition of income by |
substituting the unitrust amount for net trust accounting |
income as the method of determining current return and |
shall be given effect notwithstanding any contrary |
provision of the Principal and Income Act. By way of |
example and not limitation, a unitrust amount determined by |
a percentage of not less than 3% nor greater than 5% is |
conclusively presumed a reasonable current return that |
fairly apportions the total return of a unitrust.
|
|
(4) The allocations provision of subdivision (2) of |
subsection (f) of Section 5.3 applies to a unitrust except |
to the extent its governing instrument expressly provides |
otherwise.
|
(Source: P.A. 96-479, eff. 1-1-10.)
|
(760 ILCS 5/16.1)
|
Sec. 16.1. Virtual representation.
|
(a) Representation by a beneficiary with a person having |
substantially similar identical interest, by the primary |
beneficiaries and by others ; contingent remainder |
beneficiaries. |
(1) To the extent there is no conflict of interest |
between the representative and the person represented |
beneficiary with respect to the particular question or |
dispute, a beneficiary who is a minor, or a disabled, or |
unborn beneficiary person, or a beneficiary person whose |
identity or location is unknown and not reasonably |
ascertainable (hereinafter referred to as an |
"unascertainable beneficiary"), may for all purposes be |
represented by and bound by another beneficiary individual |
having a substantially similar identical interest with |
respect to the particular question or dispute; provided, |
however, that the represented beneficiary such person is |
not otherwise represented by a court appointed guardian or |
agent in accordance with subdivision (a)(4) or by a parent |
|
in accordance with subdivision (a)(5) as provided in the |
next sentence. If a person is represented by a court |
appointed guardian of the estate or, if none, by a court |
appointed guardian of the person, the actions of such |
guardian shall represent and bind that person for purposes |
of this subsection (a)(1). |
(2) If all primary beneficiaries of a trust either have |
legal capacity are adults and not disabled, or have |
representatives in accordance with this subsection (a)(1) |
who have legal capacity are adults and not disabled, the |
actions of such primary beneficiaries, in each case either |
by the beneficiary or by the beneficiary's representative |
or their respective representatives, shall represent and |
bind all other beneficiaries persons who have a successor, |
contingent, future, or other interest in the trust and who |
would become primary beneficiaries only by reason of |
surviving a primary beneficiary. |
For purposes of this Section, "primary beneficiary" |
means a beneficiary who is either: (i) currently eligible |
to receive income or principal from the trust or (ii) |
assuming nonexercise of all powers of appointment, will be |
eligible to receive a distribution of principal from the |
trust if the beneficiary survives to the final date of |
distribution with respect to the beneficiary's share. |
(3) For purposes of this Act: |
(A) "Primary beneficiary" means a beneficiary of a |
|
trust who as of the date of determination is either: |
(i) currently eligible to receive income or principal |
from the trust, or (ii) a presumptive remainder |
beneficiary. If all presumptive remainder |
beneficiaries either are adults and not disabled, or |
have representatives in accordance with subsection |
(a)(1) who are adults and not disabled, the actions of |
such presumptive remainder beneficiaries, or their |
respective representatives, shall represent and bind |
all other beneficiaries who have a successor, |
contingent, or other future interest in the trust. For |
purposes of this Section, "presumptive remainder |
beneficiaries" means, |
(B) "Presumptive remainder beneficiary" means a |
beneficiary of a trust, as of the date of determination |
and assuming nonexercise of all powers of appointment, |
all beneficiaries who either: (i) (A) would be eligible |
to receive a distribution of income or principal if the |
trust terminated on that date, or (ii) (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. |
(C) "Disabled person" as of any date means either a |
disabled person within the meaning of Section 11a-2 of |
|
the Probate Act of 1975 or a person who, within the 365 |
days immediately preceding that date, was examined by a |
licensed physician who determined that the person |
lacked the capacity to make prudent financial |
decisions, and the physician made a written record of |
the physician's determination and signed the written |
record within 90 days after the examination. |
(D) A person has legal capacity unless the person |
is a minor or a disabled person. |
(4) If a trust beneficiary is represented by a court |
appointed guardian of the estate or, if none, guardian of |
the person, the guardian shall represent and bind the |
beneficiary. If a trust beneficiary is a disabled person, |
an agent under a power of attorney for property who has |
authority to act with respect to the particular question or |
dispute and who does not have a conflict of interest with |
respect to the particular question or dispute may represent |
and bind the principal. An agent is deemed to have such |
authority if the power of attorney grants the agent the |
power to settle claims and to exercise powers with respect |
to trusts and estates, even if the powers do not include |
powers to make a will, to revoke or amend a trust, or to |
require the trustee to pay income or principal. Absent a |
court order pursuant to the Illinois Power of Attorney Act |
directing a guardian to exercise powers of the principal |
under an agency that survives disability, an agent under a |
|
power of attorney for property who in accordance with this |
subdivision has authority to represent and bind a disabled |
principal takes precedence over a court appointed guardian |
unless the court specifies otherwise. This subdivision |
applies to all agencies, whenever and wherever executed. |
The consent of a person who may represent and bind another |
person in accordance with this Section is binding on the |
person represented, and notice to a person who may |
represent and bind another person in accordance with this |
Section has the same effect as if notice were given |
directly to the other person. |
(5) If a trust beneficiary is a minor or a disabled or |
unborn person and is not represented by a guardian or agent |
in accordance with subdivision (a)(4), then a parent of the |
beneficiary may represent and bind the beneficiary, |
provided that there is no conflict of interest between the |
represented person and either of the person's parents with |
respect to the particular question or dispute. If a |
disagreement arises between parents who otherwise qualify |
to represent a child in accordance with this subsection (a) |
and who are seeking to represent the same child, the parent |
who is a lineal descendant of the settlor of the trust that |
is the subject of the representation is entitled to |
represent the child; or if none, the parent who is a |
beneficiary of the trust is entitled to represent the |
child. |
|
(6) A guardian, agent or parent who is the |
representative for a beneficiary under subdivision (a)(4) |
or (a)(5) may, for all purposes, represent and bind any |
other beneficiary who is a minor or a disabled, unborn, or |
unascertainable beneficiary who has an interest, with |
respect to the particular question or dispute, that is |
substantially similar to the interest of the beneficiary |
represented by the representative, but only to the extent |
that there is no conflict of interest between the |
beneficiary represented by the representative and the |
other beneficiary with respect to the particular question |
or dispute; provided, however, that the other beneficiary |
is not otherwise represented by a guardian or agent in |
accordance with subdivision (a)(4) or by a parent in |
accordance with subdivision (a)(5). |
(7) The action or consent of a representative who may |
represent and bind a beneficiary in accordance with this |
Section is binding on the beneficiary represented, and |
notice or service of process to the representative has the |
same effect as if the notice or service of process were |
given directly to the beneficiary represented. |
(8) Nothing in this Section limits the discretionary |
power of a court in a judicial proceeding to appoint a |
guardian ad litem for any minor, disabled, unborn, or |
unascertainable beneficiary with respect to a particular |
question or dispute, but appointment of a guardian ad litem |
|
need not be considered and is not necessary if such |
beneficiary is otherwise represented in accordance with |
this Section. |
(b) Total return trusts. This Section shall apply to enable |
conversion to a total return trust by agreement in accordance |
with subsection (b) 5.3(b) of the total return trust provisions |
of Section 5.3 of this Act, by whether such agreement is made |
between the trustee and (A) all primary beneficiaries of the |
trust, in each case either by the beneficiary or by the |
beneficiary's representative in accordance with this Section , |
either individually or by their respective representatives in |
accordance with subsection (a)(1), or (B) all beneficiaries |
currently eligible to receive income or principal from the |
trust and all beneficiaries who are presumptive remaindermen of |
the trust, in each case either individually or by their |
respective representatives in accordance with subsection |
(a)(1). |
(c) Representation of charity. If a trust provides a |
beneficial interest or expectancy for one or more charities or |
charitable purposes that are not specifically named or |
otherwise represented (the "charitable interest"), the |
Illinois Attorney General may, in accordance with this Section, |
represent, bind, and act on behalf of the charitable interest |
with respect to any particular question or dispute, including |
without limitation representing the charitable interest in a |
nonjudicial settlement agreement or in an agreement to convert |
|
a trust to a total return trust in accordance with subsection |
(b) 5.3(b) of the total return trust provisions of Section 5.3 |
of this Act. A charity that is specifically named as |
beneficiary of a trust or that otherwise has an express |
beneficial interest in a trust may act for itself. This |
subsection (c) shall be construed as being declarative of |
existing law and not as a new enactment. Notwithstanding any |
other provision, nothing in this Section shall be construed to |
limit or affect the Illinois Attorney General's authority to |
file an action or take other steps as he or she deems advisable |
at any time to enforce or protect the general public interest |
as to a trust that provides a beneficial interest or expectancy |
for one or more charities or charitable purposes whether or not |
a specific charity is named in the trust. This subsection (c) |
shall be construed as being declarative of existing law and not |
as a new enactment. |
(d) Nonjudicial settlement agreements. |
(1) For purposes of this Section, "interested persons" |
means the trustee and all beneficiaries, or their |
respective representatives determined after giving effect |
to the preceding provisions of this Section, other persons |
and parties in interest 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" also 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 agreement in |
accordance with this Section or by the court. |
(2) Interested Except as otherwise provided in |
subsection (d)(3), interested persons, or their respective |
representatives determined after giving effect to the |
preceding provisions of this Section, may enter into a |
binding nonjudicial settlement agreement with respect to |
any matter involving a trust as provided in this Section. |
(3) (Blank). A nonjudicial settlement agreement is |
valid only to the extent its terms and conditions could be |
properly approved under applicable law by a court of |
competent jurisdiction. |
(4) The following matters Matters that may be resolved |
by a nonjudicial settlement agreement include but are not |
limited to: |
(A) Validity, interpretation, or construction of |
the terms of the trust. ; |
(B) Approval approval of a trustee's report or |
accounting. ; |
(C) Exercise exercise or nonexercise of any power |
by a trustee. ; |
(D) The the grant to a trustee of any necessary or |
desirable administrative power, provided the grant |
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does not conflict with a clear material purpose of the |
trust. ; |
(E) Questions questions relating to property or an |
interest in property held by the trust, provided the |
resolution does not conflict with a clear material |
purpose of the trust. ; |
(F) 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. resignation |
or appointment of a trustee; |
(G) Determination determination of a trustee's |
compensation. ; |
(H) Transfer transfer of a trust's principal place |
of administration, including without limitation to |
change the law governing administration of the trust. ; |
(I) Liability liability or indemnification of a |
trustee for an action relating to the trust. ; |
(J) Resolution of bona fide resolution of disputes |
or issues related to administration, investment, |
distribution or other matters. ; |
(K) Modification modification of terms of the |
trust pertaining to administration of the trust. ; and |
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(L) Termination termination of the trust, provided |
that court approval of such termination must be |
obtained in accordance with subdivision subsection |
(d)(5) of this Section, and the court must conclude |
continuance of the trust is not necessary to achieve |
any clear material purpose of the trust. ; upon The |
court may consider spendthrift provisions as a factor |
in making a decision under this subdivision, but a |
spendthrift provision is not necessarily a clear |
material purpose of a trust, and the court is not |
precluded from modifying or terminating a trust |
because the trust instrument contains a spendthrift |
provision. Upon such termination the court may order |
the trust property distributed as agreed by the parties |
to the agreement or otherwise as the court determines |
equitable consistent with the purposes of the trust. |
(M) Any other matter involving a trust to the |
extent the terms and conditions of the nonjudicial |
settlement agreement could be properly approved under |
applicable law by a court of competent jurisdiction. |
(4.5) If a charitable interest or a specifically named |
charity is a current beneficiary, is a presumptive |
remainder beneficiary, or has any vested interest in a |
trust, the parties to any proposed nonjudicial settlement |
agreement affecting the trust shall deliver to the Attorney |
General's Charitable Trust Bureau written notice of the |
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proposed agreement at least 60 days prior to its effective |
date. The Bureau need take no action, but if it objects in |
a writing delivered to one or more of the parties prior to |
the proposed effective date, the agreement shall not take |
effect unless the parties obtain court approval. |
(5) Any beneficiary or other interested person may |
request the court to approve any part or all of a |
nonjudicial settlement agreement, including whether any |
representation is adequate and without conflict of |
interest, provided that the petition for such approval must |
be filed before or within 60 days after the effective date |
of the agreement. |
(6) An agreement entered into in accordance with this |
Section shall be final and binding on the trustee, on and |
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. |
(7) 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: (i) where required by this Section, |
that the any agreement proposed to be made in accordance |
with this Section does not conflict with a clear material |
purpose of the trust or could be properly approved by the |
court under applicable law; (ii) in the case of a trust |
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termination, that continuance of the trust is not necessary |
to achieve any clear material purpose of the trust; (iii) , |
or that there is no conflict of interest between a |
representative and the person represented with respect to |
the particular question or dispute; or (iv) that the |
representative and the person represented have |
substantially similar interests with respect to the or |
among those being represented with respect to a particular |
question or dispute. |
(e) Application. On and after its effective date, this |
Section applies to all existing and future trusts, judicial |
proceedings, or agreements entered into in accordance with this |
Section on or after the effective date.
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(f) 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 governing instrument expressly |
prohibits the use of this Section by specific reference to this |
Section. A provision in the governing instrument in the form: |
"Neither the provisions of Section 16.1 of the Illinois Trusts |
and Trustees Act 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. |
(g) The changes made by this amendatory Act of the 98th |
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General Assembly apply to all trusts in existence on the |
effective date of this amendatory Act of the 98th General |
Assembly or created after that date, and are applicable to |
judicial proceedings and nonjudicial matters involving such |
trusts. For purposes of this Section: |
(i) judicial proceedings include any proceeding before |
a court or administrative tribunal of this State and any |
arbitration or mediation proceedings; and |
(ii) nonjudicial matters include, but are not limited |
to, nonjudicial settlement agreements entered into in |
accordance with this Section and the grant of any consent, |
release, ratification, or indemnification. |
(Source: P.A. 96-479, eff. 1-1-10.)
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