Wednesday, September 18, 2019
Fiduciaries and estate planners in Illinois need to be made aware that starting January 1, 2020, the new Illinois Trust Code (ITC) will replace the Illinois Trusts and Trustees Act, ushering in several changes of note.
Before the ITC, all trustees had to account directly to all current income beneficiaries not under a legal disability. Now, settlor's can create so-called "silent trusts," in which a settlor may opt to (1) waive the trustee’s duty to account or provide information about the trust to beneficiaries under age 30, and (2) nominate “designated representative,” a fiduciary to whom the trustee must account and provide required trust information on behalf of the represented beneficiary during the trust’s silent period. The silent period must end once the represented beneficiary turns 30.
The ITC also creates two different trust accounting standards, with he key difference between the rules applicable to pre-ITC trusts and trustees and post-ITC trusts and trustees is that the ITC will give effect to a settlor’s waiver of the duty to provide annual accountings in a pre-ITC trust instrument.
The new Code will also make it easier for a trustee to delegate discretionary powers and it shortens limitations periods for claims against trustees in certain instances. There will now be a rebuttable presumption that any exculpatory clause in a trust instrument will be invalid if the trustee drafted the document or otherwise procured the inclusion of the exculpatory provision.
See Peter B. Allport, Nicole K. Mann, Jared R. Cloud, & Margaret Elizabeth Sanne, Illinois Enacts New Trust Code: What Fiduciaries Need to Know, MWE.com, September 16, 2019.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.