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1 | AN ACT in relation to financial regulation.
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2 | Be it enacted by the People of the State of Illinois, | ||||||
3 | represented in the General Assembly:
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4 | Section 5. The Trusts and Trustees Act is amended by | ||||||
5 | changing Section 5.3 and adding Section 5.5 as follows:
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6 | (760 ILCS 5/5.3)
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7 | Sec. 5.3. Total return trusts.
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8 | (a) Conversion by trustee. A trustee may convert a trust to | ||||||
9 | a
total return trust as described in this Section if all of the
| ||||||
10 | following apply:
| ||||||
11 | (1) The trust describes the amount that may or must
be | ||||||
12 | distributed to a beneficiary by referring to the
trust's | ||||||
13 | income, and the trustee determines that
conversion to a | ||||||
14 | total return trust will enable the
trustee to better carry | ||||||
15 | out the purposes of the trust and the conversion is in
the | ||||||
16 | best interests of the beneficiaries;
| ||||||
17 | (2) conversion to a total return trust means the | ||||||
18 | trustee will invest and
manage trust assets seeking a total | ||||||
19 | return without regard to whether that
return is from income | ||||||
20 | or appreciation of principal, and will make distributions
| ||||||
21 | in accordance with this Section (such a trust is called a | ||||||
22 | "total return trust"
in this Section);
| ||||||
23 | (3) the trustee sends a written notice of the trustee's | ||||||
24 | decision to
convert the trust to a total return trust, | ||||||
25 | specifying a prospective effective
date for the conversion | ||||||
26 | and including a copy of this Section, to the following
| ||||||
27 | beneficiaries, determined as of the date the notice is sent | ||||||
28 | and assuming
nonexercise of all powers of appointment:
| ||||||
29 | (A) all of the legally competent beneficiaries who | ||||||
30 | are currently
receiving or eligible to receive income | ||||||
31 | from the trust; and
| ||||||
32 | (B) all of the legally competent beneficiaries who |
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1 | would receive or be
eligible to receive a distribution | ||||||
2 | of principal or income if the current
interests of | ||||||
3 | beneficiaries currently receiving or eligible to | ||||||
4 | receive income
ended;
| ||||||
5 | (4) there are one or more legally competent income | ||||||
6 | beneficiaries
under subdivision (3)(A) of this subsection | ||||||
7 | (a) and one or more legally
competent remainder | ||||||
8 | beneficiaries under subdivision (3)(B) of this subsection
| ||||||
9 | (a), determined as of the date of sending the notice;
| ||||||
10 | (5) no beneficiary objects to the conversion to a total | ||||||
11 | return trust in a
writing delivered to the trustee within | ||||||
12 | 60 days after the notice is sent; and
| ||||||
13 | (6) the trustee has signed acknowledgments of receipt | ||||||
14 | confirming that
notice was received by each beneficiary | ||||||
15 | required to be sent notice under
subdivision (3) of this | ||||||
16 | subsection (a).
| ||||||
17 | (b) Conversion by agreement. Conversion to a total return | ||||||
18 | trust may be made
by agreement between a trustee and all the | ||||||
19 | primary beneficiaries of the trust
under the virtual | ||||||
20 | representation provisions of Section 16.1 of this Act if
those | ||||||
21 | provisions otherwise apply. The agreement may include any | ||||||
22 | actions a court
could properly order under subsection (g) of | ||||||
23 | this Section; however, any
distribution percentage determined | ||||||
24 | by the agreement may not be less than 3%
nor greater than 5%.
| ||||||
25 | (c) Conversion or reconversion by court.
| ||||||
26 | (1) The trustee may for any reason elect to petition | ||||||
27 | the court to order
conversion to a total return trust, | ||||||
28 | including without limitation the reason
that conversion | ||||||
29 | under subsection (a) is unavailable because:
| ||||||
30 | (A) a beneficiary timely objects to the conversion | ||||||
31 | to a total return
trust;
| ||||||
32 | (B) there are no legally competent beneficiaries | ||||||
33 | described in
subdivision (3)(A) of subsection (a); or
| ||||||
34 | (C) there are no legally competent beneficiaries | ||||||
35 | described in
subdivision (3)(B) of subsection (a).
| ||||||
36 | (2) A beneficiary may request the trustee to convert to |
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| |||||||
1 | a total return
trust or adjust the distribution percentage. | ||||||
2 | If the trustee declines or fails
to act within 6 months | ||||||
3 | after receiving
a written request to do so, the beneficiary | ||||||
4 | may petition the court to order the
conversion or | ||||||
5 | adjustment.
| ||||||
6 | (3) The trustee may petition the court prospectively to | ||||||
7 | reconvert from a
total return trust or adjust the | ||||||
8 | distribution percentage if the trustee
determines that the | ||||||
9 | reconversion or adjustment will enable
the trustee to | ||||||
10 | better carry out the purposes of the trust. A beneficiary | ||||||
11 | may
request the trustee to petition the court prospectively | ||||||
12 | to reconvert from a
total return trust or adjust the | ||||||
13 | distribution percentage. If the trustee
declines or fails | ||||||
14 | to act within 6 months
after receiving a written request to | ||||||
15 | do so, the beneficiary may petition the
court to order the | ||||||
16 | reconversion or adjustment.
| ||||||
17 | (4) In a judicial proceeding under this subsection (c), | ||||||
18 | the trustee may,
but need not, present the trustee's | ||||||
19 | opinions and reasons (A) for supporting or
opposing | ||||||
20 | conversion to (or reconversion from or adjustment of the | ||||||
21 | distribution
percentage of) a total return trust, | ||||||
22 | including
whether the trustee believes conversion (or | ||||||
23 | reconversion
or adjustment of the distribution
percentage)
| ||||||
24 | would enable the
trustee to better carry out the purposes | ||||||
25 | of the trust, and (B) about any other
matters relevant to | ||||||
26 | the proposed conversion (or reconversion
or adjustment of | ||||||
27 | the distribution
percentage).
A trustee's
actions in | ||||||
28 | accordance with this subsection (c) shall not be deemed | ||||||
29 | improper or
inconsistent with the trustee's duty of | ||||||
30 | impartiality unless the court finds
from all the evidence | ||||||
31 | that the trustee acted in bad faith.
| ||||||
32 | (5) The court shall order conversion to (or | ||||||
33 | reconversion prospectively
from
or adjustment of the | ||||||
34 | distribution percentage
of)
a total return trust if the | ||||||
35 | court determines that the conversion (or
reconversion or | ||||||
36 | adjustment of the distribution percentage) will enable the
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1 | trustee to better carry out the purposes of the
trust and | ||||||
2 | the conversion
(or reconversion or adjustment of the
| ||||||
3 | distribution percentage)
is in the best interests of the | ||||||
4 | beneficiaries.
| ||||||
5 | (6) Notwithstanding any other provision of this | ||||||
6 | Section, a trustee has no
duty to inform beneficiaries | ||||||
7 | about the availability of this Section and has no
duty to | ||||||
8 | review the trust to determine whether any action should be | ||||||
9 | taken under
this Section unless requested to do so in | ||||||
10 | writing by a beneficiary described in
subdivision (3) of | ||||||
11 | subsection (a).
| ||||||
12 | (d) Post conversion. While a trust is a total return trust, | ||||||
13 | all
of the following shall apply to the trust:
| ||||||
14 | (1) the trustee shall make income distributions in | ||||||
15 | accordance with the
governing instrument subject to the | ||||||
16 | provisions of this Section;
| ||||||
17 | (2) the term "income" in the governing instrument means | ||||||
18 | an annual amount
(the "distribution amount") equal to a | ||||||
19 | percentage (the "distribution
percentage") of the net fair | ||||||
20 | market value of the trust's assets, whether the
assets are | ||||||
21 | considered income or principal under the Principal and | ||||||
22 | Income Act,
averaged over the lesser of:
| ||||||
23 | (i) the 3 preceding years; or
| ||||||
24 | (ii) the period during which the trust has been in | ||||||
25 | existence;
| ||||||
26 | (3) the distribution percentage for any trust | ||||||
27 | converted to a total return
trust by a trustee in | ||||||
28 | accordance with subsection (a) shall be 4%; and
| ||||||
29 | (4) the trustee shall pay to a beneficiary (in the case | ||||||
30 | of an
underpayment) and shall recover from a beneficiary | ||||||
31 | (in the case of an
overpayment) an amount equal to the | ||||||
32 | difference between the amount properly
payable and the | ||||||
33 | amount actually paid, plus interest compounded annually at | ||||||
34 | a
rate per annum equal to the distribution percentage in | ||||||
35 | the year or years while
the underpayment or overpayment | ||||||
36 | exists ; and .
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1 | (5) a change in the method of determining a reasonable | ||||||
2 | current return by converting to a total return trust in | ||||||
3 | accordance with this Section and substituting the | ||||||
4 | distribution amount for net trust accounting income is a | ||||||
5 | proper change in the definition of trust income | ||||||
6 | notwithstanding any contrary provision of the Principal | ||||||
7 | and Income Act, and the distribution amount shall be deemed | ||||||
8 | a reasonable current return that fairly apportions the | ||||||
9 | total return of a total return trust.
| ||||||
10 | (e) Administration. The trustee, in the trustee's | ||||||
11 | discretion, may determine
any of the following matters in | ||||||
12 | administering a total return trust as the
trustee from time to | ||||||
13 | time determines necessary or helpful for the
proper functioning | ||||||
14 | of the trust:
| ||||||
15 | (1) the effective date of a conversion to a total | ||||||
16 | return trust;
| ||||||
17 | (2) the manner of prorating the distribution amount for | ||||||
18 | a short year in
which a beneficiary's interest commences or | ||||||
19 | ceases;
| ||||||
20 | (3) whether distributions are made in cash or in kind;
| ||||||
21 | (4) the manner of adjusting valuations and | ||||||
22 | calculations of the
distribution amount to account for | ||||||
23 | other payments from or contributions to the
trust;
| ||||||
24 | (5) whether to value the trust's assets annually or | ||||||
25 | more frequently;
| ||||||
26 | (6) what valuation dates and how many valuation dates | ||||||
27 | to use;
| ||||||
28 | (7) valuation decisions about any asset for which there | ||||||
29 | is no
readily available market value, including:
| ||||||
30 | (A) how frequently to value such an asset;
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31 | (B) whether and how often to engage a professional | ||||||
32 | appraiser
to value such an asset; and
| ||||||
33 | (C) whether to exclude the value of such an asset | ||||||
34 | from the net
fair market value of the trust's assets | ||||||
35 | under subdivision (d)(2) for
purposes of determining | ||||||
36 | the distribution amount. Any such asset so
excluded is |
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1 | referred to as an "excluded asset" in this subsection
| ||||||
2 | (e), and the trustee shall distribute any net income | ||||||
3 | received from
the excluded asset as provided for in the | ||||||
4 | governing instrument,
subject to the following | ||||||
5 | principles:
| ||||||
6 | (i) unless the trustee determines there are | ||||||
7 | compelling reasons to the
contrary considering all | ||||||
8 | relevant factors including the best interests of | ||||||
9 | the
beneficiaries, the trustee shall treat each | ||||||
10 | asset for which there is no readily
available | ||||||
11 | market value as an excluded asset;
| ||||||
12 | (ii) if tangible personal property or real | ||||||
13 | property is possessed or
occupied by a | ||||||
14 | beneficiary, the trustee shall not limit or | ||||||
15 | restrict any right of
the beneficiary to use the | ||||||
16 | property in accordance with the governing | ||||||
17 | instrument
whether or not the trustee treats the | ||||||
18 | property as an excluded asset;
| ||||||
19 | (iii) examples of assets for which there is a | ||||||
20 | readily available market
value include: cash and | ||||||
21 | cash equivalents; stocks, bonds, and other | ||||||
22 | securities
and instruments for which there is an | ||||||
23 | established market on a stock exchange,
in an | ||||||
24 | over-the-counter market, or otherwise; and any | ||||||
25 | other property that can
reasonably be expected to | ||||||
26 | be sold within one week of the decision to sell
| ||||||
27 | without extraordinary efforts by the seller;
| ||||||
28 | (iv) examples of assets for which there is no | ||||||
29 | readily available market
value include: stocks, | ||||||
30 | bonds, and other securities and instruments for | ||||||
31 | which
there is no established market on a stock | ||||||
32 | exchange, in an over-the-counter
market, or | ||||||
33 | otherwise; real property; tangible personal | ||||||
34 | property; and artwork
and other collectibles; and
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35 | (8) any other administrative matters as the trustee | ||||||
36 | determines necessary
or helpful for the proper functioning |
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1 | of the total return trust.
| ||||||
2 | (f) Allocations.
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3 | (1) Expenses, taxes, and other charges that would be | ||||||
4 | deducted from income
if the trust were not a total return | ||||||
5 | trust shall not be deducted from the
distribution amount.
| ||||||
6 | (2) Unless otherwise provided by the governing | ||||||
7 | instrument, the trustee
shall fund the distribution amount | ||||||
8 | each year from the following sources for
that year in the | ||||||
9 | order listed: first from net income (as the term would be
| ||||||
10 | determined if the trust were not a total return trust), | ||||||
11 | then from other
ordinary income as determined for federal | ||||||
12 | income tax purposes, then from net
realized short-term | ||||||
13 | capital gains as determined for federal income tax
| ||||||
14 | purposes, then from net realized long-term capital gains as | ||||||
15 | determined for
federal income tax purposes, then from trust | ||||||
16 | principal comprised of assets for
which there is a readily | ||||||
17 | available market value, and then from other trust
| ||||||
18 | principal.
| ||||||
19 | (g) Court orders. The court may order any of the following | ||||||
20 | actions in a
proceeding brought by a trustee or a beneficiary | ||||||
21 | in accordance with subdivision
(c)(1), (c)(2),
or (c)(3):
| ||||||
22 | (1) select a distribution percentage other than 4%;
| ||||||
23 | (2) average the valuation of the trust's net assets | ||||||
24 | over a period other
than 3 years;
| ||||||
25 | (3) reconvert prospectively from
or adjust the | ||||||
26 | distribution percentage
of
a total return trust;
| ||||||
27 | (4) direct the distribution of net income (determined | ||||||
28 | as if the trust were
not a total return trust) in excess of | ||||||
29 | the distribution amount as to any or all
trust assets if | ||||||
30 | the distribution is necessary to preserve a tax benefit; or
| ||||||
31 | (5) change or direct any administrative procedure as | ||||||
32 | the court determines
necessary or helpful for the proper | ||||||
33 | functioning of the total return trust.
| ||||||
34 | Nothing in this subsection (g) limits the equitable powers | ||||||
35 | of the court to
grant
other
relief.
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36 | (h) Restrictions. The distribution amount may not be less |
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1 | than the net
income of the trust, determined without regard to | ||||||
2 | the provisions of this
Section, for either a trust for which an | ||||||
3 | estate tax or a gift tax marital
deduction was or may be | ||||||
4 | claimed in whole or in part (but only during the
lifetime of | ||||||
5 | the spouse for whom the trust was created), or a trust that was
| ||||||
6 | exempt in whole or in part from generation-skipping transfer | ||||||
7 | tax on the
effective date of this amendatory Act of the 92nd | ||||||
8 | General Assembly by reason of
any effective date or transition | ||||||
9 | rule. Conversion to a total return trust does
not affect any | ||||||
10 | provision in the governing instrument:
| ||||||
11 | (1) directing or authorizing the trustee to distribute | ||||||
12 | principal;
| ||||||
13 | (2) directing or authorizing the trustee to distribute | ||||||
14 | a fixed annuity or
a fixed fraction of the value of trust | ||||||
15 | assets;
| ||||||
16 | (3) authorizing a beneficiary to withdraw a portion or | ||||||
17 | all of the
principal; or
| ||||||
18 | (4) in any manner that would diminish an amount | ||||||
19 | permanently set aside for
charitable purposes under the | ||||||
20 | governing instrument unless both income and
principal are | ||||||
21 | so set aside.
| ||||||
22 | (i) Tax limitations. If a particular trustee is a | ||||||
23 | beneficiary of the trust
and conversion or failure to convert | ||||||
24 | would enhance or diminish the beneficial
interest of the | ||||||
25 | trustee, or if possession or exercise of the conversion power
| ||||||
26 | by a particular trustee would alone cause any individual to be | ||||||
27 | treated as owner
of a part of the trust for income tax purposes | ||||||
28 | or cause a part of the trust to
be included in the gross estate | ||||||
29 | of any individual for estate tax purposes, then
that particular | ||||||
30 | trustee may not participate as a trustee in the exercise of the
| ||||||
31 | conversion power; however:
| ||||||
32 | (1) the trustee may petition the court under | ||||||
33 | subdivision (c)(1) to order
conversion in accordance with | ||||||
34 | this Section; and
| ||||||
35 | (2) if the trustee has one or more co-trustees to whom | ||||||
36 | this subsection (i)
does not apply, the co-trustee or |
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| |||||||
1 | co-trustees may convert the trust to a total
return trust | ||||||
2 | in accordance with this Section.
| ||||||
3 | (j) Releases. A trustee may irrevocably release the power | ||||||
4 | granted by this
Section if the trustee reasonably believes the | ||||||
5 | release is in the best interests
of the trust and its | ||||||
6 | beneficiaries. The release may be personal to the
releasing | ||||||
7 | trustee or may apply generally to some or all subsequent | ||||||
8 | trustees,
and the release may be for any specified period, | ||||||
9 | including a period measured by
the life of an individual.
| ||||||
10 | (k) Remedies. A trustee who reasonably and in good faith | ||||||
11 | takes or omits to
take any action under this Section is not | ||||||
12 | liable to any person interested in
the trust.
If a trustee | ||||||
13 | reasonably and
in good faith takes or omits to take any action | ||||||
14 | under this Section and a person
interested in the trust opposes | ||||||
15 | the act or omission, the person's exclusive
remedy is to obtain | ||||||
16 | an order of the court directing the trustee to convert the
| ||||||
17 | trust to a total return trust, to reconvert from a total return | ||||||
18 | trust, to
change the distribution percentage, or to order any | ||||||
19 | administrative procedures
the court determines necessary or | ||||||
20 | helpful for the proper functioning of the
trust. An act or | ||||||
21 | omission by a trustee under this Section is presumed taken or
| ||||||
22 | omitted reasonably and in good faith unless it is
determined by | ||||||
23 | the court to have been an abuse of discretion. Any claim by any
| ||||||
24 | person interested in the trust that an act or omission by a | ||||||
25 | trustee under this
Section was an abuse of discretion is barred | ||||||
26 | if not asserted in a proceeding
commenced by or on behalf of | ||||||
27 | the person within 2 years after the trustee has
sent to the | ||||||
28 | person or the person's personal representative a notice or
| ||||||
29 | report in writing sufficiently disclosing facts fundamental to | ||||||
30 | the claim such
that the person knew or reasonably should have | ||||||
31 | known of the claim.
The preceding sentence shall not apply to a | ||||||
32 | person who was under a legal
disability at the time the notice | ||||||
33 | or report was sent and who then had no
personal representative. | ||||||
34 | For purposes of this subsection (k), a personal
representative | ||||||
35 | refers to a court appointed guardian or conservator of the
| ||||||
36 | estate of a person.
|
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1 | (l) Application. This Section is available to trusts in | ||||||
2 | existence on the
effective date of this amendatory Act of the | ||||||
3 | 92nd General Assembly or created
after that date. This Section | ||||||
4 | shall be construed as pertaining to the
administration of a | ||||||
5 | trust and shall be available to any trust that
is administered | ||||||
6 | in Illinois under Illinois law or that
is governed by Illinois | ||||||
7 | law with respect to the meaning and effect of
its terms unless:
| ||||||
8 | (1) the trust is a trust described in Internal
Revenue | ||||||
9 | Code Section 642(c)(5),
170(f)(2)(B), 664(d), 1361(d),
| ||||||
10 | 2702(a)(3), or 2702(b); or
| ||||||
11 | (2) the governing instrument expressly prohibits use | ||||||
12 | of this Section by
specific reference to this Section. A | ||||||
13 | provision in the governing instrument in
the form: "Neither | ||||||
14 | the provisions of Section 5.3 of the Trusts and Trustees | ||||||
15 | Act
nor any corresponding provision of future law may be | ||||||
16 | used in the administration
of this trust" or a similar | ||||||
17 | provision demonstrating that intent is sufficient
to | ||||||
18 | preclude the use of this Section.
| ||||||
19 | (m) Application to express trusts.
| ||||||
20 | (1) This subsection (m) does not apply to a charitable | ||||||
21 | remainder unitrust as defined by Section 664(d), Internal | ||||||
22 | Revenue Code of 1986 (26 U.S.C. Section 664), as amended.
| ||||||
23 | (2) In this subsection (m):
| ||||||
24 | (A) "Unitrust" means a trust the terms of which | ||||||
25 | require distribution of a unitrust amount, without | ||||||
26 | regard to whether the trust has been converted to a | ||||||
27 | total return trust in accordance with this Section or | ||||||
28 | whether the trust is established by express terms of | ||||||
29 | the governing instrument.
| ||||||
30 | (B) "Unitrust amount" means an amount equal to a | ||||||
31 | percentage of a trust's assets that may or must be | ||||||
32 | distributed to one or more beneficiaries annually in | ||||||
33 | accordance with the terms of the trust. The unitrust | ||||||
34 | amount may be determined by reference to the net fair | ||||||
35 | market value of the trust's assets as of a particular | ||||||
36 | date or as an average determined on a multiple year |
| |||||||
| |||||||
1 | basis.
| ||||||
2 | (3) A unitrust changes the definition of income by | ||||||
3 | substituting the unitrust amount for net trust accounting | ||||||
4 | income as the method of determining current return and | ||||||
5 | shall be given effect notwithstanding any contrary | ||||||
6 | provision of the Principal and Income Act. By way of | ||||||
7 | example and not limitation, a unitrust amount determined by | ||||||
8 | a percentage of not less than 3% nor greater than 5% is | ||||||
9 | conclusively presumed a reasonable current return that | ||||||
10 | fairly apportions the total return of a unitrust.
| ||||||
11 | (4) The allocations provision of subdivision (2) of | ||||||
12 | subsection (f) of Section 5.3 applies to a unitrust except | ||||||
13 | to the extent its governing instrument expressly provides | ||||||
14 | otherwise.
| ||||||
15 | (Source: P.A. 92-838, eff. 8-22-02.)
| ||||||
16 | (760 ILCS 5/5.5 new) | ||||||
17 | Sec. 5.5. Gift to a deceased beneficiary under an inter | ||||||
18 | vivos trust. Unless the settlor expressly provides otherwise in | ||||||
19 | his or her trust: | ||||||
20 | (1) if a gift of a present or future interest is to a | ||||||
21 | descendant of the settlor who dies before or after the | ||||||
22 | settlor, the descendants of the deceased beneficiary | ||||||
23 | living when the gift is to take effect in possession or | ||||||
24 | enjoyment take per stirpes the gift so bequeathed;
| ||||||
25 | (2) if a gift of a present or future interest is to a | ||||||
26 | class and any member of the class dies before or after the | ||||||
27 | settlor, the members of the class living when the gift is | ||||||
28 | to take effect in possession or enjoyment take the share or | ||||||
29 | shares that the deceased member would have taken if he or | ||||||
30 | she were then living, except that, if the deceased member | ||||||
31 | of the class is a descendant of the settlor, the | ||||||
32 | descendants of the deceased member then living shall take | ||||||
33 | per stirpes the share or shares that the deceased member | ||||||
34 | would have taken if he or she were then living; and
| ||||||
35 | (3) except as above provided in items (1) and (2), if |
| |||||||
| |||||||
1 | the gift is not to a descendant of the settlor or is not to | ||||||
2 | a class as provided in items (1) and (2) and if the | ||||||
3 | beneficiary dies either before or after the settlor and | ||||||
4 | before the gift is to take effect in possession or | ||||||
5 | enjoyment, then the gift shall lapse. If the gift lapses by | ||||||
6 | reason of the death of the beneficiary before the gift is | ||||||
7 | to take possession or enjoyment, then the gift so given | ||||||
8 | shall be included in and pass as part of the residue of the | ||||||
9 | trust under the trust. If the gift is or becomes part of | ||||||
10 | the residue, the gift so bequeathed shall pass to and be | ||||||
11 | taken by the beneficiaries remaining, if any, of the | ||||||
12 | residue in proportions and upon trusts corresponding to | ||||||
13 | their respective interests in the residue of the trust.
| ||||||
14 | The provisions of items (1) and (2) do not apply to a | ||||||
15 | future interest that is or becomes indefeasibly vested at the | ||||||
16 | settlor's death or at any time thereafter before it takes | ||||||
17 | effect in possession or enjoyment. | ||||||
18 | The provisions of this Section apply on and after January | ||||||
19 | 1, 2005 for any gifts to a deceased beneficiary under an inter | ||||||
20 | vivos trust where the deceased beneficiary dies after January | ||||||
21 | 1, 2005 and before the gift is to take effect in possession or | ||||||
22 | enjoyment.
| ||||||
23 | Section 10. The Uniform TOD Security Registration Act is | ||||||
24 | amended by changing Section 1 as follows:
| ||||||
25 | (815 ILCS 10/1)
| ||||||
26 | Sec. 1. Definitions. In this Act, unless the
context | ||||||
27 | otherwise requires:
| ||||||
28 | (1) "Beneficiary form" means a registration of a
security | ||||||
29 | which indicates the present owner of the
security and the | ||||||
30 | intention of the owner regarding the
person who will become the | ||||||
31 | owner of the security upon
the death of the owner.
| ||||||
32 | (2) "Devisee" means any person designated in a
will to | ||||||
33 | receive a disposition of real or personal
property.
| ||||||
34 | (3) "Heirs" means those persons, including the
surviving |
| |||||||
| |||||||
1 | spouse, who are entitled under the statutes of
intestate | ||||||
2 | succession to the property of a decedent.
| ||||||
3 | (4) "Person" means an individual, a corporation,
an | ||||||
4 | organization, or other legal entity.
| ||||||
5 | (5) "Personal representative" includes executor,
| ||||||
6 | administrator, successor personal representative,
special | ||||||
7 | administrator, and persons who perform
substantially the same | ||||||
8 | function under the law governing
their status.
| ||||||
9 | (6) "Property" includes both real and personal
property or | ||||||
10 | any interest therein and means anything that
may be the subject | ||||||
11 | of ownership.
| ||||||
12 | (7) "Register", including its derivatives, means
to issue a | ||||||
13 | certificate showing the ownership of a
certificated security | ||||||
14 | or, in the case of an
uncertificated security, to initiate or | ||||||
15 | transfer an
account showing ownership of securities.
| ||||||
16 | (8) "Registering entity" means a person who
originates or | ||||||
17 | transfers a security title by
registration, and includes a | ||||||
18 | broker maintaining security
accounts for customers and a | ||||||
19 | transfer agent or other
person acting for or as an issuer of | ||||||
20 | securities.
| ||||||
21 | (9) "Security" means a share, participation, or
other | ||||||
22 | interest in property, in a business, or in an
obligation of an | ||||||
23 | enterprise or other issuer, and
includes a certificated | ||||||
24 | security, an uncertificated
security, and a security account.
| ||||||
25 | (10) "Security account" means (i) a reinvestment
account | ||||||
26 | associated with a security, a securities account
with a broker, | ||||||
27 | a cash balance in a brokerage account,
cash, interest, | ||||||
28 | earnings, or dividends earned or
declared on a security in an | ||||||
29 | account, a reinvestment
account, or a brokerage account, | ||||||
30 | whether or not credited
to the account before the owner's | ||||||
31 | death, or (ii) an investment management or custody account with | ||||||
32 | a trust company or trust division of a bank with trust powers, | ||||||
33 | including the securities in the account, a cash balance in the | ||||||
34 | account, and cash, equivalents, interest, earnings, or | ||||||
35 | dividends earned or declared on a security in the account, | ||||||
36 | whether or not credited to the account before the owner's |
| |||||||
| |||||||
1 | death, or (iii) a cash
balance or other property held for or | ||||||
2 | due to the owner
of a security as a replacement for or product | ||||||
3 | of an
account security, whether or not credited to the account
| ||||||
4 | before the owner's death.
| ||||||
5 | (11) "State" includes any state of the United
States, the | ||||||
6 | District of Columbia, the Commonwealth of
Puerto Rico, and any | ||||||
7 | territory or possession subject to
the legislative authority of | ||||||
8 | the United States.
| ||||||
9 | (Source: P.A. 88-577, eff. 1-1-95.)
| ||||||
10 | Section 99. Effective date. This Act takes effect upon | ||||||
11 | becoming law. |