760 ILCS 3/814
2021 Illinois Compiled Statutes|Chapter 760 - TRUSTS AND FIDUCIARIES|760 ILCS 3/ - Illinois Trust Code.|Article 8 - Duties and Powers of Trustee

Sec. 814. Discretionary powers; tax savings.(a)  Notwithstanding the breadth of discretion granted to a trustee or other fiduciary in the trust instrument, including the use of such terms as "absolute", "sole", or "uncontrolled", such fiduciary shall exercise a discretionary power in good faith and in accordance with the terms and purposes of the trust instrument.(b)  Subject to subsection (e), and unless the trust instrument expressly indicates that a rule in this subsection does not apply:(1)  a person other than a settlor who is a     beneficiary and a trustee or other fiduciary of a trust that confers on that fiduciary a power to make discretionary distributions to or for that fiduciary's personal benefit may exercise the power only in accordance with an ascertainable standard; and(2)  a trustee or other fiduciary may not exercise a     power to make discretionary distributions to satisfy a legal obligation of support that such fiduciary personally owes another person.(c)  Subject to subsections (d) and (e), if a beneficiary of a trust, in an individual, trustee, or other capacity, removes a fiduciary and appoints a successor fiduciary who would be related or subordinate to that beneficiary within the meaning of Section 672(c) of the Internal Revenue Code if the beneficiary were the grantor, that successor fiduciary's discretionary powers are limited as follows:(1)  the fiduciary's discretionary power to make     distributions to or for the benefit of that beneficiary is limited to an ascertainable standard;(2)  the fiduciary's discretionary power may not be     exercised to satisfy any of that beneficiary's legal obligations for support or other purposes; and(3)  the fiduciary's discretionary power may not be     exercised to grant to that beneficiary a general power of appointment.(d)  Subsection (c) does not apply if:(1)  the appointment of the trustee or other     fiduciary by the beneficiary may be made only in conjunction with another person having a substantial interest in the property of the trust subject to the power that is adverse to the interest of the beneficiary within the meaning of Section 2041(b)(1)(C)(ii) of the Internal Revenue Code; or(2)  the appointment is in conformity with a     procedure governing appointments approved by the court before the effective date of this Code.(e)  Subsections (b) and (c) do not apply to:(1)  a person other than a settlor who is a     beneficiary and trustee or other fiduciary of a trust that confers on such fiduciary a power exercisable only in conjunction with another person having a substantial interest in the property subject to the power that is adverse to the interest of that fiduciary within the meaning of Section 2041(b)(1)(C)(ii) of the Internal Revenue Code;(2)  a power held by the settlor's spouse who is the     trustee or other fiduciary of a trust for which a marital deduction, as defined in Section 2056(b)(5) or 2523(e) of the Internal Revenue Code, was previously allowed;(3)  any trust during any period that the trust may     be revoked or amended by its settlor;(4)  a trust if contributions to the trust qualify     for the annual exclusion under Section 2503(c) of the Internal Revenue Code; or(5)  any portion of a trust over which the trustee or     other fiduciary is expressly granted in the trust instrument a presently exercisable or testamentary general power of appointment.(f)  A power whose exercise is limited or prohibited by subsections (b) and (c) may be exercised by a majority of the remaining trustees or other fiduciaries whose exercise of the power is not so limited or prohibited. If the power of all trustees or other fiduciaries is so limited or prohibited, the court may appoint a special fiduciary with authority to exercise the power.    (Source: P.A. 101-48, eff. 1-1-20.)