Updates to Illinois Trust Law in 2015
Provided By: Alan G. Orlowsky
Around 220 new laws went into effect in Illinois for 2015, and some of those laws pertained to updating laws regarding trusts established in the state. Three different public acts that went into law for this year involve the expansion of virtual representation, participation by trustees in directed trusts, easing the conversion of trusts, and updating provisions of the Illinois Trust and Trustees Act.
Expanding Virtual Representation
Known as Public Act 098-0946, this new law expands the availability of virtual representation agreements. Modifying the Virtual Representation Statute, 760 ILCS 5/16.1, the new law allows a trustee and adult beneficiaries of a trust to enter into an agreement without court involvement. These agreements concern the administration of the trust, duties, powers, and responsibilities of the trustee. It applies to all current and future beneficiaries of the trust, including minors, disabled people, or beneficiaries not yet born.
The amended law redefines who may be virtually represented in court proceedings and in connection with out-of-court settlement agreements. It also adds to the class of permissible representatives and expands the scope of agreements allowed under the statute. Finally, the new law provides a list of issues that are permissible subjects for out of court settlement agreements, without the need for court approval and without regard to whether they could have been approved by a court in the absence of the statute.
Participation of Trustees in Directed Trusts
Passed as PA 98-0866 (SB 2002), this law clarifies the role and fiduciary relationship of a trustee in a directed trust. A directed trust allows for up to three types of participants to join the trustee in a trust management team. They were created to allow for greater flexibility in administering a trust in addition to placing fiduciary duties on the people with specific tasks within the trust management team.
The new law addresses the role of the trustee in a directed trust. It allows for the trustee to participate in a virtual representation agreement to create a directed trust. At the same time, the new law shields the trustee from liability when he acts on another advisor’s direction from within the trust management team.
Easing Conversions of Trusts
Finally, SB 2894 makes converting a trust into a total return trust much easier in Illinois. The new law amends section 760 ILCS 5/5.3 to provide that the conversion of a trust to a total return trust may be made with the trustee and all of the primary beneficiaries. This differs from the previous law which required the trustee, all beneficiaries, and any presumptive remaindermen beneficiaries to agree to the conversion of the trust to a total return trust.
Call an Illinois Trusts Attorney Now
If you have questions about how these new laws may affect the trust that you have established in Illinois or have other questions regarding wills and trusts in Northbrook, Evanston, Skokie, Glenview, Glencoe, or Highland Park, let the attorneys at Orlowsky & Wilson, Ltd. help. Call the office or contact us today for a free and confidential review of your case.