The Illinois legislature has passed and the governor has signed into law two bills creating new sections of the Trusts & Trustees Act, 760 ILCS 5/16.3, “Directed Trusts” and 5/16.4, “Distribution of Trust Principal in Further Trust.” These sections will help bring the Illinois Trusts & Trustees Act into the 21st Century and in line with laws in modern and progressive states that have lured trust and legal business and related investments away from Illinois.
These sections add flexibility to Illinois estate planning and administration of trusts, which is particularly important because Illinois law allows qualified perpetual trusts that can last for generations. Both sections apply to trusts currently in existence and those established in the future. Both sections are effective as of January 1, 2013. The full article by Mary D. Cascino, Lyman W. Welch and Susan T. Bart — "Trust & Trustees Act Modernized: Decanting and Directed Trusts," from the November 2012 issue of the Illinois Bar Journal — reviews these two sections and their most important provisions.