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Illinois Senate Bill SB3583

Illinois 2023-2024 Regular Session

Illinois Senate Bill SB3583 Compare Versions

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11 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3583 Introduced 2/9/2024, by Sen. Laura Fine SYNOPSIS AS INTRODUCED: 760 ILCS 3/103 Amends the Illinois Trust Code. Amends the definition of "charitable trust" to exclude: (i) a testamentary trust that provides for ancillary charitable gifts or distributions in addition to posthumous distributions to persons, not charitable organizations, that has become irrevocable through the death of the testator and is capable of being settled and terminated within 18 months of such death, during such period of settlement and termination; or (ii) a testamentary estate that provides for ancillary charitable gifts or bequests in addition to bequests to persons not charitable organizations. LRB103 37527 JRC 67650 b A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3583 Introduced 2/9/2024, by Sen. Laura Fine SYNOPSIS AS INTRODUCED: 760 ILCS 3/103 760 ILCS 3/103 Amends the Illinois Trust Code. Amends the definition of "charitable trust" to exclude: (i) a testamentary trust that provides for ancillary charitable gifts or distributions in addition to posthumous distributions to persons, not charitable organizations, that has become irrevocable through the death of the testator and is capable of being settled and terminated within 18 months of such death, during such period of settlement and termination; or (ii) a testamentary estate that provides for ancillary charitable gifts or bequests in addition to bequests to persons not charitable organizations. LRB103 37527 JRC 67650 b LRB103 37527 JRC 67650 b A BILL FOR
22 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3583 Introduced 2/9/2024, by Sen. Laura Fine SYNOPSIS AS INTRODUCED:
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55 Amends the Illinois Trust Code. Amends the definition of "charitable trust" to exclude: (i) a testamentary trust that provides for ancillary charitable gifts or distributions in addition to posthumous distributions to persons, not charitable organizations, that has become irrevocable through the death of the testator and is capable of being settled and terminated within 18 months of such death, during such period of settlement and termination; or (ii) a testamentary estate that provides for ancillary charitable gifts or bequests in addition to bequests to persons not charitable organizations.
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1111 1 AN ACT concerning civil law.
1212 2 Be it enacted by the People of the State of Illinois,
1313 3 represented in the General Assembly:
1414 4 Section 5. The Illinois Trust Code is amended by changing
1515 5 Section 103 as follows:
1616 6 (760 ILCS 3/103)
1717 7 Sec. 103. Definitions. In this Code:
1818 8 (1) "Action", with respect to an act of a trustee,
1919 9 includes a failure to act.
2020 10 (1.5) "Appointive property" means the property or property
2121 11 interest subject to a power of appointment.
2222 12 (2) "Ascertainable standard" means a standard relating to
2323 13 an individual's health, education, support, or maintenance
2424 14 within the meaning of Section 2041(b)(1)(A) or 2514(c)(1) of
2525 15 the Internal Revenue Code and any applicable regulations.
2626 16 (3) "Beneficiary" means a person that:
2727 17 (A) has a present or future beneficial interest in a
2828 18 trust, vested or contingent, assuming nonexercise of
2929 19 powers of appointment, excluding the right of a settlor to
3030 20 be reimbursed for tax obligations as provided in paragraph
3131 21 (3) of subsection (a) of Section 505;
3232 22 (B) in a capacity other than that of trustee, holds a
3333 23 power of appointment over trust property; or
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4040 Amends the Illinois Trust Code. Amends the definition of "charitable trust" to exclude: (i) a testamentary trust that provides for ancillary charitable gifts or distributions in addition to posthumous distributions to persons, not charitable organizations, that has become irrevocable through the death of the testator and is capable of being settled and terminated within 18 months of such death, during such period of settlement and termination; or (ii) a testamentary estate that provides for ancillary charitable gifts or bequests in addition to bequests to persons not charitable organizations.
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6868 1 (C) is an identified charitable organization that will
6969 2 or may receive distributions under the terms of the trust.
7070 3 "Beneficiary" does not include a permissible appointee of
7171 4 power of appointment, other than the holder of a presently
7272 5 exercisable general power of appointment, until the power is
7373 6 exercised in favor of such appointee.
7474 7 (4) "Charitable interest" means an interest in a trust
7575 8 that:
7676 9 (A) is held by an identified charitable organization
7777 10 and makes the organization a qualified beneficiary;
7878 11 (B) benefits only charitable organizations and, if the
7979 12 interest were held by an identified charitable
8080 13 organization, would make the organization a qualified
8181 14 beneficiary; or
8282 15 (C) is held solely for charitable purposes and, if the
8383 16 interest were held by an identified charitable
8484 17 organization, would make the organization a qualified
8585 18 beneficiary.
8686 19 (5) "Charitable organization" means:
8787 20 (A) a person, other than an individual, organized and
8888 21 operated exclusively for charitable purposes; or
8989 22 (B) a government or governmental subdivision, agency,
9090 23 or instrumentality, to the extent it holds funds
9191 24 exclusively for a charitable purpose.
9292 25 (6) "Charitable purpose" means the relief of poverty, the
9393 26 advancement of education or religion, the promotion of health,
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104104 1 municipal or other governmental purpose, or another purpose
105105 2 the achievement of which is beneficial to the community.
106106 3 (7) "Charitable trust" means a trust, or portion of a
107107 4 trust, created for a charitable purpose but excludes:
108108 5 (A) a testamentary trust that provides for ancillary
109109 6 charitable gifts or distributions in addition to
110110 7 posthumous distributions to persons, not charitable
111111 8 organizations, that has become irrevocable through the
112112 9 death of the testator and is capable of being settled and
113113 10 terminated within 18 months of such death, during such
114114 11 period of settlement and termination; or
115115 12 (B) a testamentary estate that provides for ancillary
116116 13 charitable gifts or bequests in addition to bequests to
117117 14 persons not charitable organizations.
118118 15 (8) "Community property" means all personal property,
119119 16 wherever situated, that was acquired as or became, and
120120 17 remained, community property under the laws of another
121121 18 jurisdiction, and all real property situated in another
122122 19 jurisdiction that is community property under the laws of that
123123 20 jurisdiction.
124124 21 (9) "Current beneficiary" means a beneficiary that on the
125125 22 date the beneficiary's qualification is determined is a
126126 23 distributee or permissible distributee of trust income or
127127 24 principal. The term "current beneficiary" includes the holder
128128 25 of a presently exercisable general power of appointment but
129129 26 does not include a person who is a beneficiary only because the
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140140 1 person holds any other power of appointment. In a revocable
141141 2 trust, "current beneficiary" does not include a person who may
142142 3 receive trust assets only through the exercise of a power to
143143 4 make a gift on behalf of the settlor.
144144 5 (10) "Directing party" means any investment trust advisor,
145145 6 distribution trust advisor, or trust protector.
146146 7 (11) "Donor", with reference to a power of appointment,
147147 8 means a person that creates a power of appointment.
148148 9 (12) "Environmental law" means a federal, state, or local
149149 10 law, rule, regulation, or ordinance relating to protection of
150150 11 the environment.
151151 12 (13) "General power of appointment" means a power of
152152 13 appointment exercisable in favor of a powerholder, the
153153 14 powerholder's estate, a creditor of the powerholder, or a
154154 15 creditor of the powerholder's estate.
155155 16 (14) "Guardian of the estate" means a person appointed by
156156 17 a court to administer the estate of a minor or adult
157157 18 individual.
158158 19 (15) "Guardian of the person" means a person appointed by
159159 20 a court to make decisions regarding the support, care,
160160 21 education, health, and welfare of a minor or adult individual.
161161 22 (16) "Incapacitated" or "incapacity" means the inability
162162 23 of an individual to manage property or business affairs
163163 24 because the individual is a minor, adjudicated incompetent,
164164 25 has an impairment in the ability to receive and evaluate
165165 26 information or make or communicate decisions even with the use
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176176 1 of technological assistance; or is at a location that is
177177 2 unknown and not reasonably ascertainable. Without limiting the
178178 3 ways in which incapacity may be established, an individual is
179179 4 incapacitated if:
180180 5 (i) a plenary guardian has been appointed for the
181181 6 individual under subsection (c) of Section 11a-12 of the
182182 7 Probate Act of 1975;
183183 8 (ii) a limited guardian has been appointed for the
184184 9 individual under subsection (b) of Section 11a-12 of the
185185 10 Probate Act of 1975 and the court has found that the
186186 11 individual lacks testamentary capacity; or
187187 12 (iii) the individual was examined by a licensed
188188 13 physician who determined that the individual was
189189 14 incapacitated and the physician made a signed written
190190 15 record of the physician's determination within 90 days
191191 16 after the examination and no licensed physician
192192 17 subsequently made a signed written record of the
193193 18 physician's determination that the individual was not
194194 19 incapacitated within 90 days after examining the
195195 20 individual.
196196 21 (17) "Internal Revenue Code" means the Internal Revenue
197197 22 Code of 1986 as amended from time to time and includes
198198 23 corresponding provisions of any subsequent federal tax law.
199199 24 (18) "Interested persons" means: (A) the trustee; and (B)
200200 25 all beneficiaries, or their respective representatives
201201 26 determined after giving effect to the provisions of Article 3,
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212212 1 whose consent or joinder would be required in order to achieve
213213 2 a binding settlement were the settlement to be approved by the
214214 3 court. "Interested persons" includes a trust advisor,
215215 4 investment advisor, distribution advisor, trust protector, or
216216 5 other holder, or committee of holders, of fiduciary or
217217 6 nonfiduciary powers, if the person then holds powers material
218218 7 to a particular question or dispute to be resolved or affected
219219 8 by a nonjudicial settlement in accordance with Section 111 or
220220 9 by a judicial proceeding.
221221 10 (19) "Interests of the beneficiaries" means the beneficial
222222 11 interests provided in the trust instrument.
223223 12 (20) "Jurisdiction", with respect to a geographic area,
224224 13 includes a State or country.
225225 14 (21) "Legal capacity" means that the person is not
226226 15 incapacitated.
227227 16 (22) "Nongeneral power of appointment" means a power of
228228 17 appointment that is not a general power of appointment.
229229 18 (22.5) "Permissible appointee" means a person in whose
230230 19 favor a powerholder may exercise a power of appointment.
231231 20 (23) "Person" means an individual, estate, trust, business
232232 21 or nonprofit entity, public corporation, government or
233233 22 governmental subdivision, agency, or instrumentality, or other
234234 23 legal entity.
235235 24 (24) "Power of appointment" means a power that enables a
236236 25 powerholder acting in a nonfiduciary capacity to designate a
237237 26 recipient of an ownership interest in or another power of
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248248 1 appointment over the appointive property. The term "power of
249249 2 appointment" does not include a power of attorney.
250250 3 (25) "Power of withdrawal" means a presently exercisable
251251 4 general power of appointment other than a power:
252252 5 (A) exercisable by the powerholder as trustee that is
253253 6 limited by an ascertainable standard; or
254254 7 (B) exercisable by another person only upon consent of
255255 8 the trustee or a person holding an adverse interest.
256256 9 (26) "Powerholder" means a person in which a donor creates
257257 10 a power of appointment.
258258 11 (27) "Presently exercisable power of appointment" means a
259259 12 power of appointment exercisable by the powerholder at the
260260 13 relevant time. The term "presently exercisable power of
261261 14 appointment":
262262 15 (A) includes a power of appointment exercisable only
263263 16 after the occurrence of a specified event, the
264264 17 satisfaction of an ascertainable standard, or the passage
265265 18 of a specified time only after:
266266 19 (i) the occurrence of the specified event;
267267 20 (ii) the satisfaction of the ascertainable
268268 21 standard; or
269269 22 (iii) the passage of the specified time; and
270270 23 (B) does not include a power exercisable only at the
271271 24 powerholder's death.
272272 25 (28) "Presumptive remainder beneficiary" means a
273273 26 beneficiary of a trust, as of the date of determination and
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284284 1 assuming nonexercise of all powers of appointment, who either:
285285 2 (A) would be a distributee or permissible distributee of trust
286286 3 income or principal if the trust terminated on that date; or
287287 4 (B) would be a distributee or permissible distributee of trust
288288 5 income or principal if the interests of all distributees
289289 6 currently eligible to receive income or principal from the
290290 7 trust terminated on that date without causing the trust to
291291 8 terminate.
292292 9 (29) "Property" means anything that may be the subject of
293293 10 ownership, whether real or personal, legal or equitable, or
294294 11 any interest therein.
295295 12 (30) "Qualified beneficiary" means each current
296296 13 beneficiary and presumptive remainder beneficiary.
297297 14 (31) "Revocable", as applied to a trust, means revocable
298298 15 by the settlor without the consent of the trustee or a person
299299 16 holding an adverse interest. A revocable trust is deemed
300300 17 revocable during the settlor's lifetime.
301301 18 (32) "Settlor", except as otherwise provided in Sections
302302 19 113 and 1225, means a person, including a testator, who
303303 20 creates, or contributes property to, a trust. If more than one
304304 21 person creates or contributes property to a trust, each person
305305 22 is a settlor of the portion of the trust property attributable
306306 23 to that person's contribution except to the extent another
307307 24 person has the power to revoke or withdraw that portion.
308308 25 (33) "Sign" means, with present intent to authenticate or
309309 26 adopt a record:
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320320 1 (A) to execute or adopt a tangible symbol; or
321321 2 (B) to attach to or logically associate with the
322322 3 record an electronic symbol, sound, or process.
323323 4 (34) "Spendthrift provision" means a term of a trust that
324324 5 restrains both voluntary and involuntary transfer of a
325325 6 beneficiary's interest.
326326 7 (35) "State" means a State of the United States, the
327327 8 District of Columbia, Puerto Rico, the United States Virgin
328328 9 Islands, or any territory or insular possession subject to the
329329 10 jurisdiction of the United States. The term "state" includes
330330 11 an Indian tribe or band recognized by federal law or formally
331331 12 acknowledged by a state.
332332 13 (36) "Terms of the trust" means:
333333 14 (A) except as otherwise provided in paragraph (B), the
334334 15 manifestation of the settlor's intent regarding a trust's
335335 16 provisions as:
336336 17 (i) expressed in the trust instrument; or
337337 18 (ii) established by other evidence that would be
338338 19 admissible in a judicial proceeding; or
339339 20 (B) the trust's provisions as established, determined,
340340 21 or modified by:
341341 22 (i) a trustee or other person in accordance with
342342 23 applicable law;
343343 24 (ii) a court order; or
344344 25 (iii) a nonjudicial settlement agreement under
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