2023 Illinois Compiled Statutes › Chapter 760 - TRUSTS AND FIDUCIARIES › 760 ILCS 3/ - Illinois Trust Code. › Article 10 - Liability of Trustees and Rights of Persons Dealing With Trustee

(760 ILCS 3/Art. 10 heading)
Article 10.  Liability of Trustees and Rights of Persons Dealing with Trustee.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1001)
Sec. 1001. Remedies for breach of trust.
(a)  A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust.
(b)  To remedy a breach of trust that has occurred or may occur, the court may:
(1)  compel the trustee to perform the trustee's     duties;
(2)  enjoin the trustee from committing a breach of     trust;
(3)  compel the trustee to redress a breach of trust     by paying money, restoring property, or other means;
(4)  order a trustee to account;
(5)  appoint a special fiduciary to take possession     of the trust property and administer the trust;
(6)  suspend the trustee;
(7)  remove the trustee as provided in Section 706;
(8)  reduce or deny compensation to the trustee; or
(9)  subject to Section 1012, void an act of the     trustee, impose a lien or a constructive trust on trust property, or trace trust property wrongfully disposed of and recover the property or its proceeds.
(c)  Nothing in this Section limits the equitable powers of the court to order other appropriate relief.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1002)
Sec. 1002. Damages for breach of trust.
(a)  A trustee who commits a breach of trust is liable to the beneficiaries affected for the greater of:
(1)  the amount required to restore the value of the     trust property and trust distributions to what they would have been had the breach not occurred; or
(2)  the value of any benefit received by the trustee     by reason of the breach.
(b)  Except as otherwise provided in this subsection, if more than one trustee is liable to the beneficiaries for a breach of trust, a trustee is entitled to contribution from the other trustee or trustees liable for the breach. A trustee is not entitled to contribution if the trustee was substantially more at fault than another trustee or if the trustee committed the breach of trust in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries. A trustee who received a benefit from the breach of trust is not entitled to contribution from another trustee to the extent of the benefit received.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1003)
Sec. 1003. No damages in absence of breach. Except as provided in Section 802, absent a breach of trust, a trustee is not liable to a beneficiary for a loss or depreciation in the value of trust property or for any benefit received by the trustee by reason of the administration of the trust.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1004)
Sec. 1004. Attorney's fees and costs. In a judicial proceeding involving the administration of a trust, the court, as equity may require, may award costs and expenses, including reasonable attorney's fees, to any party, to be paid by another party or from the trust that is the subject of the controversy.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1005)
Sec. 1005. Limitation on action against trustee.
(a)  A beneficiary may not commence a proceeding against a trustee for breach of trust for any matter disclosed in writing by a trust accounting, or otherwise as provided in Sections 813.1, 813.2, and 1102, after the date on which the disclosure becomes binding upon the beneficiary as provided below:
(1)  With respect to a trust that becomes irrevocable     after the effective date of this Code and to trustees accepting appointment after the effective date of this Code, a matter disclosed in writing by a trust accounting or otherwise pursuant to Section 813.1 and Section 1102 is binding on each person who receives the information and each person represented as provided in Article 3 by a person who receives the information, and all of the person's respective successors, representatives, heirs, and assigns, unless an action against the trustee is instituted within 2 years after the date the information is furnished.  A trust accounting or other communication adequately discloses the existence of a potential claim for breach of trust if it provides sufficient information so that the person entitled to receive the information knows of the potential claim or should have inquired into its existence.
(2)  With respect to a trust that became irrevocable     before the effective date of this Code or a trustee that accepted appointment before the effective date of this Code, a current account is binding on each beneficiary receiving the account and on the beneficiary's heirs and assigns unless an action against the trustee is instituted by the beneficiary or the beneficiary's heirs and assigns within 3 years after the date the current account is furnished, and a final accounting is binding on each beneficiary receiving the final accounting and all persons claiming by or through the beneficiary, unless an action against the trustee is instituted by the beneficiary or person claiming by or through him or her within 3 years after the date the final account is furnished. If the account is provided to the representative of the estate of the beneficiary or to a spouse, parent, adult child, or guardian of the person of the beneficiary, the account is binding on the beneficiary unless an action is instituted against the trustee by the representative of the estate of the beneficiary or by the spouse, parent, adult child, or guardian of the person to whom the account is furnished within 3 years after the date it is furnished.
(3)  Notwithstanding paragraphs (1) and (2), with     respect to trust estates that terminated and were distributed 10 years or less before January 1, 1988, the final account furnished to the beneficiaries entitled to distribution of the trust estate is binding on the beneficiaries receiving the final account, and all persons claiming by or through them, unless an action against the trustee is instituted by the beneficiary or person claiming by or through him or her within 5 years after January 1, 1988 or within 10 years after the date the final account was furnished, whichever is longer.
(4)  Notwithstanding paragraphs (1), (2) and (3),     with respect to trust estates that terminated and were distributed more than 10 years before January 1, 1988, the final account furnished to the beneficiaries entitled to distribution of the trust estate is binding on the beneficiaries receiving the final account, and all persons claiming by or through them, unless an action against the trustee is instituted by the beneficiary or person claiming by or through him or her within 2 years after January 1, 1988.
(b)  Unless barred earlier under subsection (a), a judicial proceeding by a beneficiary against a trustee for breach of trust must be commenced within 5 years after the first to occur of:
(1)  the removal, resignation, or death of the     trustee;
(2)  the termination of the beneficiary's interest in     the trust; or
(3)  the termination of the trust.
(c)  Notwithstanding any other provision of this Section, a beneficiary may bring any action against the trustee for fraudulent concealment within the time limit set forth in Section 13-215 of the Code of Civil Procedure.
(Source: P.A. 101-48, eff. 1-1-20; 102-558, eff. 8-20-21.)
(760 ILCS 3/1006)
Sec. 1006. Reliance on trust instrument. A trustee who acts in reasonable reliance on the express language of the trust instrument is not liable to a beneficiary for a breach of trust to the extent the breach resulted from the reliance.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1007)
Sec. 1007. Event affecting administration or distribution. If the happening of an event, including, but not limited to, marriage, divorce, performance of educational requirements, or death, affects the administration or distribution of a trust, a trustee who has exercised reasonable care to ascertain the happening of the event is not liable for a loss resulting from the trustee's lack of knowledge.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1008)
Sec. 1008. Exculpation of trustee.
(a)  A term of a trust relieving a trustee of liability for breach of trust is unenforceable to the extent that it:
(1)  relieves the trustee of liability for breach of     trust committed in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries; or
(2)  was inserted as the result of an abuse by the     trustee of a fiduciary or confidential relationship to the settlor.
(b)  An exculpatory term drafted or caused to be drafted by the trustee is invalid as an abuse of a fiduciary or confidential relationship unless the trustee proves that the exculpatory term is fair under the circumstances and that its existence and contents were adequately communicated to the settlor.  These conditions are satisfied if the settlor was represented by independent counsel.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1009)
Sec. 1009. Beneficiary's consent, release, or ratification.
(a)  A trustee is not liable to a beneficiary, or to anyone claiming by or through the beneficiary, for breach of trust if the beneficiary consented to the conduct constituting the breach, released the trustee from liability for the breach, or ratified the transaction constituting the breach, unless:
(1)  the consent, release, or ratification of the     beneficiary was induced by improper conduct of the trustee; or
(2)  at the time of the consent, release, or     ratification, the beneficiary did not know of the beneficiary's rights or of the material facts relating to the breach.
(b)  If the beneficiary's consent, release, or ratification involves a self-dealing transaction, the consent, release, or ratification is binding only if the transaction was fair and reasonable.  The condition that a self-dealing transaction must be fair and reasonable is satisfied if the beneficiary was represented by independent counsel.  No consideration is required for the consent, release, or ratification to be valid.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1010)
Sec. 1010. Limitation on personal liability of trustee.
(a)  Except as otherwise provided in the contract, a trustee is not personally liable on a contract properly entered into in the trustee's fiduciary capacity in the course of administering the trust if the trustee in the contract disclosed the fiduciary capacity.
(b)  A trustee is personally liable for torts committed in the course of administering a trust, or for obligations arising from ownership or control of trust property, including liability for violation of environmental law, only if the trustee is personally at fault.
(c)  A claim based on a contract entered into by a trustee in the trustee's fiduciary capacity, on an obligation arising from ownership or control of trust property, or on a tort committed in the course of administering a trust, may be asserted in a judicial proceeding against the trustee in the trustee's fiduciary capacity, whether or not the trustee is personally liable for the claim.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1011)
Sec. 1011. Interest as general partner.
(a)  Except as otherwise provided in subsection (c) or unless personal liability is imposed in the contract, a trustee who holds an interest as a general partner in a general or limited partnership is not personally liable on a contract entered into by the partnership after the trust's acquisition of the interest if the fiduciary capacity was disclosed in the contract or in a statement previously filed pursuant to the Uniform Partnership Act (1997) or Uniform Limited Partnership Act (2001) or any other similar state law.
(b)  Except as otherwise provided in subsection (c), a trustee who holds an interest as a general partner is not personally liable for torts committed by the partnership or for obligations arising from ownership or control of the interest unless the trustee is personally at fault.
(c)  The immunity provided by this Section does not apply if an interest in the partnership is held by the trustee in a capacity other than that of trustee or is held by the trustee's spouse or one or more of the trustee's descendants, siblings, or parents, or the spouse of any of them.
(d)  If the trustee of a revocable trust holds an interest as a general partner, the settlor is personally liable for contracts and other obligations of the partnership as if the settlor were a general partner.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1012)
Sec. 1012. Protection of person dealing with trustee.
(a)  A person other than a beneficiary or a beneficiary's representative under Article 3 acting in a representative capacity who in good faith assists a trustee, or who in good faith and for value deals with a trustee, without knowledge that the trustee is exceeding or improperly exercising the trustee's powers is protected from liability as if the trustee properly exercised the power.
(b)  A person other than a beneficiary or a beneficiary's representative under Article 3 acting in a representative capacity who in good faith deals with a trustee is not required to inquire into the extent of the trustee's powers or the propriety of their exercise.
(c)  A person, including a beneficiary, who in good faith delivers assets to a trustee need not ensure their proper application.
(d)  A person other than a beneficiary who in good faith assists a former trustee, or who in good faith and for value deals with a former trustee, without knowledge that the trusteeship has terminated is protected from liability as if the former trustee were still a trustee.
(e)  Comparable protective provisions of other laws relating to commercial transactions or transfer of securities by fiduciaries prevail over the protection provided by this Section.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1013)
Sec. 1013. Certification of trust.
(a)  Instead of furnishing a copy of the trust instrument to a person other than a beneficiary, the trustee may furnish to the person a certification of trust containing the following information:
(1)  a statement that the trust exists and the date     the trust instrument was executed;
(2)  the identity of the settlor;
(3)  the identity and address of the currently acting     trustee;
(4)  the powers of the trustee;
(5)  the revocability or irrevocability of the trust,     whether the trust is amendable or unamendable, and the identity of any person holding a power to revoke the trust;
(6)  the authority of co-trustees to sign or     otherwise authenticate and whether all or less than all are required in order to exercise powers of the trustee;
(7)  the trust's taxpayer identification number; and
(8)  the manner of taking title to trust property.
(b)  A certification of trust must be signed or otherwise authenticated by one or more of the trustees.  A third party may require that the certification of trust be acknowledged.
(c)  A certification of trust must state that the trust has not been revoked, modified, or amended in any manner that would cause the representations contained in the certification of trust to be incorrect.
(d)  A certification of trust need not contain the dispositive terms of a trust.
(e)  A recipient of a certification of trust may require the trustee to furnish copies of those excerpts from the original trust instrument and later amendments that designate the trustee and confer upon the trustee the power to act in the pending transaction.
(f)  A person who acts in reliance upon a certification of trust without actual knowledge that the representations contained therein are incorrect is not liable to any person for so acting and may assume without inquiry the existence of the facts contained in the certification. Knowledge of the trust instrument may not be inferred solely from the fact that a copy of all or part of the trust instrument is held by the person relying upon the certification.
(g)  A person who in good faith enters into a transaction in reliance upon a certification of trust may enforce the transaction against the trust property as if the representations contained in the certification were correct.
(h)  A person making a demand for the trust instrument in addition to a certification of trust or excerpts is liable for damages if the court determines that the person did not act in good faith in demanding the trust instrument.  A person required to examine a complete copy of the trust instrument for purposes of complying with applicable federal, state, or local law, a person acting in a fiduciary capacity with respect to a trust, and the Attorney General's Charitable Trust Bureau are deemed to be acting in good faith when demanding a copy of the trust instrument.  This Section does not modify or limit any obligation a trustee may have to furnish a copy of a trust instrument to the Attorney General under the Charitable Trust Act or the Solicitation for Charity Act.
(i)  This Section does not limit the right of a person to obtain a copy of the trust instrument in a judicial proceeding concerning the trust.
(j)  A certification of trust may be substantially as follows, but nothing in this subsection invalidates or bars the use of a certification of trust in any other or different form:
CERTIFICATION OF TRUST
Name of trust:................................................
Date trust instrument was executed:..........................
Tax Identification Number of trust (SSN or EIN):.............
Name(s) of settlor(s) of trust:.............................
Name(s) of currently acting trustee(s):......................
Address(es) of currently acting trustee(s):..................
.... This trust states that .... of .... co-trustee(s) are required to exercise the powers of the trustee.
.... The co-trustees authorized to sign or otherwise authenticate on behalf of the trust are:.
.... There are no co-trustees authorized to sign or otherwise authenticate on behalf of the trust.
Name(s) of successor trustee(s):..............................
The trustee(s) has (have) the power to (state, synopsize, or describe relevant powers):.
Title to the trust property shall be taken as follows (for example, "John Doe and Jane Doe, co-trustees of the Doe Family Living Trust, dated January 4, 1999"):.
.... This is an irrevocable trust.
.... This is a revocable trust. Name(s) of person(s) holding power to revoke the trust:.
.... This is an unamendable trust.
.... This trust is amendable. Name(s) of person(s) holding power to amend the trust:.
I (we) certify that the above-named trust is in full force and has not been revoked, modified, or amended in any manner that would cause the representations in this Certification of Trust to be incorrect.
IN WITNESS THEREOF, each of the undersigned, being a trustee of the above-named trust with the authority to execute this Certification of Trust, does hereby execute it this ..... day of .........., .......
Trustee Signature: .............
Printed Name: ..................
Trustee Signature: .............
Printed Name: ..................
[OPTIONAL:
State of .................)
County of ................)
This instrument was signed and acknowledged before me on .........., ...... (date)  by  (name/s of
person/s):.
(Signature of Notary Public):
............................
(SEAL)]
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1014)
Sec. 1014. Reliance on Secretary of Financial and Professional Regulation. No trustee or other person is liable under this Code for any act done or omitted in good faith in conformity with any rule, interpretation, or opinion issued by the Secretary of Financial and Professional Regulation, notwithstanding that after the act or omission has occurred, the rule, opinion, or interpretation upon which reliance is placed is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.
(Source: P.A. 101-48, eff. 1-1-20.)