This year, Illinois lawmakers made a series of important changes to the Illinois Trust Code, which could have a significant impact on the rights of beneficiaries when it comes to notice and accounting rights, while also giving individuals the ability to customize their trusts and avoid conflicts at a later date. To learn more about these changes and how they could affect your own estate plan, please contact Alan G. Orlowsky today.
Notice and Accounting Requirements
Prior to January 1, 2020, the surviving spouses of those who established trusts on their behalf were not required to give a notice or accounting of the contents of that trust to their children during their lifetime. For instance, take a couple’s estate plan, which states that upon one spouse’s death, that person’s assets would be held in trust by the surviving spouse until he/she died, at which time, the couple’s children would become the beneficiaries of the trust. Under prior law, the surviving spouse in this case would not legally be obligated to give those children notice or an accounting of the contents of the trust.
Starting this year, the Illinois Trusts and Trustees Act was replaced by the Illinois Trust Code (ITC). Under the new law, trustees are required to send each beneficiary a notice within 90 days of a trust becoming irrevocable, explaining:
● That the trust exists;
● That they have a right to request a copy of the trust instrument; and
● Whether the beneficiary has the right to a trust accounting.
In addition to these disclosure requirements, the ITC also requires trustees send a trust accounting to all remainder beneficiaries, describing the assets, receipts and disbursements of the trust. These rules apply to both current qualified remainder beneficiaries and presumptive beneficiaries or their designated representatives. Before this year’s changes, beneficiaries didn’t have a right to information about a trust unless the creator of the trust provided that right in the trust instrument itself.
Planning Opportunities
Illinois’ recently enacted trust law also gives trustors the chance to opt out of the new accounting and notice default rules. However, this is only possible for those who amend their estate plans to affirmatively state their beneficiaries will not have the right to receive a trust accounting while they are still alive. It’s important to make this change early, as it may be too late to do so once one spouse has passed away. Those who fail to abide by these rules are at risk of having their estate contested. In fact, the ITC even gives beneficiaries three (3) years to file a lawsuit against a trustee.
An Experienced Chicagoland Contested Estates Lawyer
If you are concerned your own estate will be contested by a beneficiary or have questions about contesting the estate of a loved one, please call Alan G. Orlowsky at 847-325-5559 today to speak with a contested estates attorney about the best way to protect your legal interests.
