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90_HB1037
760 ILCS 5/5.1 from Ch. 17, par. 1675.1
Amends the Trusts and Trustees Act to remove the
requirement that a trustee send a written notice of its
intention to begin delegating investment functions to the
beneficiaries in order for the trustee to be able to delegate
investment functions.
LRB9004020NTsb
LRB9004020NTsb
1 AN ACT to amend the Trust and Trustee Act by changing
2 Section 5.1.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Trusts and Trustees Act is amended by
6 changing Section 5-1 as follows:
7 (760 ILCS 5/5.1) (from Ch. 17, par. 1675.1)
8 Sec. 5.1. Duty not to delegate.
9 (a) The trustee has a duty not to delegate to others the
10 performance of any acts involving the exercise of judgment
11 and discretion, except acts constituting investment functions
12 that a prudent investor of comparable skills might delegate
13 under the circumstances. The trustee may delegate those
14 investment functions to an investment agent as provided in
15 subsection (b).
16 (b) For a trustee to properly delegate investment
17 functions under subsection (a), all of the following
18 requirements apply:
19 (1) The trustee must exercise reasonable care,
20 skill, and caution in selecting the investment agent, in
21 establishing the scope and specific terms of any
22 delegation, and in periodically reviewing the agent's
23 actions in order to monitor overall performance and
24 compliance with the scope and specific terms of the
25 delegation.
26 (2) The trustee must conduct an inquiry into the
27 experience, performance history, professional licensing
28 or registration, if any, and financial stability of the
29 investment agent.
30 (3) The investment agent shall be subject to the
31 jurisdiction of the courts of the State of Illinois.
-2- LRB9004020NTsb
1 (4) The investment agent shall be subject to the
2 same standards that are applicable to the trustee.
3 (5) The investment agent shall be liable to the
4 beneficiaries of the trust and to the designated trustee
5 to the same extent as if the investment agent were a
6 designated trustee in relation to the exercise or
7 nonexercise of the investment function.
8 (6) (Blank). The trustee shall send written notice
9 of its intention to begin delegating investment functions
10 under this Section to the beneficiaries eligible to
11 receive income from the trust on the date of initial
12 delegation at least 30 days before the delegation. This
13 notice shall thereafter, until or unless the
14 beneficiaries eligible to receive income from the trust
15 at the time are notified to the contrary, authorize the
16 trustee to delegate investment functions pursuant to this
17 Section.
18 (c) If all requirements of subsection (b) are satisfied,
19 the trustee shall not otherwise be responsible for the
20 investment decisions or actions of the investment agent to
21 which the investment functions are delegated.
22 (d) On and after July 1, 1992, this Section applies to
23 all existing and future trusts, but only as to actions or
24 inactions occurring after that date.
25 (Source: P.A. 87-715; 87-895.)