If you have a residence outside of Illinois, you’re probably aware that the state laws surrounding wills and estate plans can be markedly different. If you have a family home in nearby Gary, Indiana, or frequently travel north to Wisconsin, which state law takes precedence if you die there?
Estate laws vary widely from state to state, and some may be contradictory to ours. As of January 1, 2020, Illinois now follows the Universal Trust Code, an informal set of nonbinding model laws intended to bring some uniformity to various state laws regarding estate planning. Known as the Illinois Trust Code, it follows the model laws set out by the National Conference of Commissioners on Uniform State Laws (NCUSL.)
Also known as the Uniform Law Commission, the NCUSL is a group of law professors, attorneys, judges, and other members of the bar who study and work to see which state laws could come together and be more uniform. These laws are simply suggestions and are not effective until a state legislature adopts and implements it.
Why Use This Code?
As of January 1, 2020, a total of 34 states have adopted their own version of the Trust Code, with Illinois and Connecticut joining this year. Drafted by the NCUSL in 2000, Kansas was the first to adopt it in 2002.
The idea is to bring more standardization to the wildly disparate nature of state trust laws since they are increasingly being used in place of wills for the primary aspect of estate planning.
The Illinois Trust Code
Illinois’ version of the Uniform Trust code brings these changes to estate plans:
- The two-year statute of limitations for contesting validity—the time limit for breach of trust claims has been shortened to two years after the death of the settlor, or six months after the date that a trustee sends out notices of the trust to the beneficiaries.
- “Secret Trusts” for beneficiaries under 30—creators can now create trusts without notifying beneficiaries until they turn 30, giving them time to become a little more mature before receiving any potential windfall. This new law allows creators to add a clause that prohibits trustees from notifying any under-30 beneficiary of the trust until after they turn 30. They must provide trust information and accounting to a “designated representative” of the beneficiary. Once the beneficiary reaches 30, or if there is no representative, the trustee must then notify the beneficiary of the trust.
- Less Court Approval For Decanting A Trust—until now, only an authorized trustee could decant a trust. Under the new rules, an “Authorized Fiduciary” may exercise his or her decanting power, without court approval or anyone’s consent, unless otherwise noted in the ITC. Beneficiaries must also file a notice with the court to stop decanting; objecting is no longer enough.
These are just some of the changes that the new Illinois Trust Code brings to estate planning. To learn more about how they affect your estate plan, speak with your Illinois estate planning attorney.
James C. Provenza, Chicago Estate Planning Attorney
How does the new Illinois Trust Code impact your estate plan? If your estate plan includes one or more trusts, you should review them and see how the new Code may affect them. You may need to update any trusts to make sure they fall within the guidelines.
Talk to an estate planning attorney who understands the law and is happy to work with you to ensure that your estate plan is exactly as you want it. James C. Provenza is an Illinois estate planning attorney with more than 25 years of estate planning experience. Call our firm today at (847) 729-3939, or use our online contact form.