760 ILCS 3/802
2021 Illinois Compiled Statutes|Chapter 760 - TRUSTS AND FIDUCIARIES|760 ILCS 3/ - Illinois Trust Code.|Article 8 - Duties and Powers of Trustee

Sec. 802. Duty of loyalty.(a)  Subject to the rights of persons dealing with or assisting the trustee as provided in Section 1012, a sale, encumbrance, or other transaction involving the investment or management of trust property entered into by the trustee for the trustee's own personal account or that is otherwise affected by a conflict between the trustee's fiduciary and personal interests is voidable by a beneficiary affected by the transaction and a trustee must disgorge to the trust any profit from such transaction if voided, unless:(1)  the transaction was authorized by the trust     instrument or applicable law;(2)  the transaction was approved by the court or by     nonjudicial settlement agreement in accordance with Section 111;(3)  the beneficiary did not commence a judicial     proceeding within the time allowed by Section 1005;(4)  the beneficiary consented to the trustee's     conduct, ratified the transaction, or released the trustee in compliance with Section 1009; or(5)  the transaction involves a contract entered into     or claim acquired by the trustee before the person became or contemplated becoming trustee.(b)  A sale, encumbrance, or other transaction involving the investment or management of trust property is presumed to be affected by a conflict between personal and fiduciary interests if it is entered into by the trustee with:(1)  the trustee's spouse;(2)  the trustee's descendants, siblings, parents, or     their spouses; or(3)  a corporation or other person or enterprise in     which the trustee, or a person that owns a significant interest in the trustee, has an interest that might affect the trustee's best judgment, except as otherwise authorized by law.(c)  A transaction between a trustee and a beneficiary that does not concern trust property, that occurs during the existence of the trust and from which the trustee obtains an advantage, is voidable by the beneficiary unless the trustee establishes that the transaction was fair to the beneficiary.(d)  A transaction not concerning trust property in which the trustee engages in the trustee's individual capacity involves a conflict between personal and fiduciary interests if the transaction concerns an opportunity properly belonging to the trust.(e)  An investment by a trustee in securities of an investment company or investment trust to which the trustee, or its affiliate, provides services in a capacity other than as trustee is not presumed to be affected by a conflict between personal and fiduciary interests if the investment otherwise complies with the prudent investor rule. In addition to its compensation for acting as trustee, the trustee may be compensated by the investment company or investment trust for providing those services out of fees charged to the trust so long as the total compensation paid by the trust as trustee's fees and mutual fund or other investment fees is reasonable.(f)  In voting shares of stock or in exercising powers of control over similar interests in other forms of enterprise, the trustee shall act in the best interests of the beneficiaries.(g)  This Section does not preclude the following transactions, if fair to the beneficiaries:(1)  an agreement between a trustee and a beneficiary     relating to the appointment or compensation of the trustee;(2)  payment of reasonable compensation to the     trustee;(3)  a transaction between a trust and another trust,     decedent's estate, or guardianship of which the trustee is a fiduciary or in which a beneficiary has an interest;(4)  the entry  of an agreement for a bank or other     deposit account, safe deposit box, custodian, agency, or depository arrangement for all or any part of the trust property, including an agreement for services provided by a bank operated by or affiliated with the trustee, and the payment of reasonable compensation for those services, including compensation to the bank operated by or affiliated with the trustee, except that nothing in this paragraph shall be construed as removing any depository arrangements from the requirements of the prudent investor rule; or(5)  an advance by the trustee of money for the     protection of the trust.(h)  The court may appoint a special fiduciary to make a decision with respect to any proposed transaction that might violate this Section if entered into by the trustee.      (Source: P.A. 101-48, eff. 1-1-20.)