Recent Changes to Trust Laws in the State of Illinois
Illinois has recently made a change to laws governing trusts pursuant to the Illinois Trust Code (“ITC”) enacted in the State. The Illinois Trust Code is an adaptation of the Uniform Trust Code (“UTC”) that had already been implemented in 33 other states.
Many of the provisions of the new law are optional and can be modified or waived by trusts themselves, but there are some parts of the new law than cannot be avoided (for example the information a trustee must provide to beneficiaries). The law will be applied to trusts created in the future and to trusts that have already been created. Some examples of the changes to the previous law include:
- Beneficiary notifications. Trustees are required to notify each beneficiary of the trust’s existence within 90 days of a trust becoming irrevocable (such as when the settlor (trust creator) of the trust passes away).
- Trustees are to also provide notice to all beneficiaries regarding annual accountings, change in trustee information, trustee contact information, and information regarding trustee compensation.
- Reduced restrictions on trustee delegation of discretionary powers.
- The ITC shortens the limitation periods for claims against trustees to two years, as opposed to the current state law which allows claims for three years.
- The limitations period to contest the validity of a trust that is irrevocable upon the settlor’s death will also be reduced. The contest must be commenced in less than two years after the settlor’s death or six months from the date the trustee sends notice of the trust to the beneficiaries.
These examples represent merely a minor overview of the ITC – which will have a significant impact on how trusts are administered. in Illinois. Given the recent change in Illinois law, now is a beneficial time to create or have your current estate plan reviewed.
Please contact the Estate Planning attorneys at Bruning & Associates, P.C. at 815-455-3000 to schedule your complimentary consultation to discuss your options with your estate plan.