Effective January 1, 2020, the Illinois Trust Code changes many laws governing trusts in Naperville. The new statutes include provisions from the Uniform Trust Code, a set of recommended standards aimed at standardizing trust laws across the states.
Adoption of the Uniform Trust Code provisions could mean substantial changes for the creation, amendment, dissolution, and administration of certain trusts. A trusts lawyer could explain how the Naperville Uniform Trust Code could affect a particular trust or situation.
The Uniform Trust Code was created and published by the National Conference of Commissioners on Uniform State Laws, also known in Naperville as the Uniform Law Commission. This organization has been researching, preparing, and recommending sets of uniform laws on a variety of topics since 1892. The uniform codes drafted by the Commission serve as models and do not have a binding legal effect unless and until governments enact the provisions.
The most widely known provisions created by the Commission are those in the Uniform Commercial Code, which has been adopted by every U.S. state. However, some proposals recommended by the Commission, including uniform laws regarding real property, have been almost universally rejected.
The Uniform Trust Code contains several articles with model laws covering topics such as:
The Naperville Uniform Trust Code differs from the Commission’s Uniform Trust Code in a few areas, including mandatory provisions, to mesh with current state laws and practices. In addition, the Naperville version of the Uniform Trust Code contains an expanded section covering nonjudicial settlement agreements.
Compared with prior law in effect in Naperville, the Uniform Trust Code provisions as adopted in the Illinois Trust Code specify some duties of trustees that had not been codified in detail but were generally in effect due to case law. These include a duty to account, a duty of loyalty, and a duty to administer prudently.
The duty to account and inform is expanded to require trustees to provide notice and annual accountings to more beneficiaries.
Additionally, under the Naperville Uniform Trust Code, exculpation clauses in trust documents that exonerate trustees from personal liability are presumed invalid if the trustee either wrote the clause or requested its inclusion. If the person creating the trust was represented by independent counsel and the clause is fair under the circumstances, it may be held valid.
One major change for trustees is the power to delegate duties involving discretion or judgment. The UTC allows trustees to delegate duties and powers so long as reasonable care is taken in the selection and supervision of the delegee. However, the Naperville Uniform Trust Code also contains provisions that limit the discretion of trustees in certain situations.
The Uniform Trust Code has been enacted in 34 states, but is too new in Naperville to have a body of interpretative case law showing how the provisions function in this jurisdiction. It is possible to examine the effects of UTC provisions in other states to predict some of the effects likely to affect trusts in Naperville.
Those concerned about the implementation of the Naperville Uniform Trust Code are advised to consult a knowledgeable trusts and estates lawyer. An attorney who has studied the UTC provisions could analyze the potential effects on existing and new trusts. Call today for a consultation.
