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Sec. 804. Prudent administration. A trustee shall administer the trust as a prudent person would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.
This law imposes certain duties on trustees (see chart below). Language in your trust can modify some of these provisions, but not others. This document contains a highly detailed analysis of the rules, what you can change, what you cannot change, and what to do when you become a trustee. Important terms to know:
The ITC codifies the familiar duties of trustees, including the duty of loyalty, the duty for prudent administration, and the duty to account. Previously, these duties and their scope were a product of court decisions and treatises.
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- General Powers of Trustee
- Specific Powers of Trustee
- Limitations Set by Trust Instrument
- Exercise of Powers; Fiduciary Duties
- Conclusion
While prior Illinois law (e.g., the Illinois Trusts and Trustees Act) contained a list of specific powers granted to a trustee, it did not provide guidance as to the general scope of a trustee’s powers. Trustees relied on court decisions, common law principles and treatises in navigating their general authority to manage a trust’s property. The ITC...
The ITC expands the list of specific powers granted to a trustee. Some of the new powers granted to a trustee include (a) the authority to make elections regarding the distribution of retirement plans, annuities and life insurance as well as the authority to exercise collection and indemnification rights typically given to individuals; (b) the abil...
While the ITC codifies a general standard and the specific powers of a trustee, these powers remain limited by the terms of the trust instrument. Therefore, prior to utilizing any of the new powers granted under the ITC a trustee should conduct a thorough review of the trust instrument to determine how the provisions of the trust instrument may be ...
While fiduciary duties are not covered in this Alert, a trustee should take care not to violate such duties when exercising any general or specific power granted under the ITC. The trustee should consider the impact on the interests of the trust’s current beneficiaries as well as future beneficiaries. Moreover, a trustee may consider whether it is ...
The ITC codifies a new general standard and expands upon the specific powers previously granted to trustees under Illinois law. While the ITC expands a trustee’s powers, the powers remain subject to the terms of the trust instrument and must be exercised in combination with a trustee’s fiduciary duties. Corporate and individual trustees may want to...
CHANGES TO LAW. The ITC introduced many new changes to the law from the old Illinois Trusts and Trustees Act. One of the most significant changes is evident in Sections 813.1 and 813.2 regarding the duty to inform and account.
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Upon the adoption and passage of the resolution and the election or appointment by the school board of its own school treasurer: (1) the trustees of schools in the township shall no longer have or exercise any powers or duties with respect to the school district or with respect to the school business, operations, or assets of the school district...
People also ask
What can a trustee do under the Illinois Trust Code?
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How does a trustee administer a trust?
As of January 1, 2020, the Illinois Trusts and Trustees Act is no more. The Illinois Trust Code (ITC) now governs the obligations of trust fiduciaries and rights of beneficiaries, and its modifications to prior law have significant implications for trust preparation and administration.
