HB5023 104TH GENERAL ASSEMBLY

LRB104 19374 JRC 32822 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB5023

Introduced 2/10/2026, by Rep. Daniel Didech

SYNOPSIS AS INTRODUCED:

760 ILCS 3/822 new

Amends the Article in the Illinois Trust Code governing the duties and powers of trustees to provide a procedure for settlement of accounts. Provides that a trustee may obtain a settlement of its accounts if a trust terminates under the terms of the trust, a trust terminates early, a trustee resigns or is removed, or a trustee seeks discharge of an interim accounting period if the interest of one or more beneficiaries has terminated and the trust is continuing. Provides that a trustee who elects to use the new provisions must provide notice and a statement of information to the qualified beneficiaries of the trust and the successor trustee, if applicable, within a reasonable time after termination of the trust under its terms, the resignation or removal of the trustee, or the end of the period for which the trustee is seeking discharge. Provides that, if, after receiving the notice and trust information, a qualified beneficiary or any other party that received the notice and trust information objects to a disclosed act or omission, the qualified beneficiary must provide written notice of the objection to the trustee not later than 60 days after the notice was sent by the trustee. Provides that, if no written objection is provided in the 60-day time period, the information provided is considered approved by the recipient. Requires the trustee, in the case of a trust terminating under the terms of the trust or the trustee's resignation or removal, within a reasonable period of time following the expiration of the 60-day time period, to distribute the assets as provided in the trust or to the successor trustee. Provides that, if a qualified beneficiary gives the trustee a written objection within the applicable 60-day time period, the trustee or the qualified beneficiary may (i) submit the written objection to the court for resolution and charge the expense of commencing a proceeding to the trust or (ii) resolve the objection by a nonjudicial settlement agreement or other written agreement. Makes other changes.

A BILL FOR

AN ACT concerning civil law.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Trust Code is amended by adding Section 822 as follows:

(760 ILCS 3/822 new)

Sec. 822. Settlement of accounts.

(a) A trustee may obtain a settlement of its accounts under subsection (b) if:

(1) a trust terminates under the terms of the trust;

(2) a trust terminates early under Section 414;

(3) a trustee resigns or is removed; or

(4) a trustee seeks discharge of an interim accounting period when the interest of one or more beneficiaries has terminated and the trust is continuing.

(b)(1) A trustee who elects to proceed under this Section shall provide all of the following to the qualified beneficiaries of the trust and the successor trustee, if applicable, within a reasonable time after termination of the trust under its terms, the resignation or removal of the trustee, or the end of the period for which the trustee is seeking discharge:

(A) a statement showing the market value, as set forth on the most recent accounting as determined under Section 813.1 or 813.2 of the new assets to be distributed from a terminating trust or to a successor trustee;

(B) a trust accounting for the prior 5 years showing all receipts and disbursements and inventory value of the net assets;

(C) an estimate for any items reasonably anticipated to be received or disbursed;

(D) the amount of any fees, including trustee fees, remaining to be paid;

(E) notice that the trust is terminating, or that the trustee has resigned or been removed, the time period for which the trustee seeks discharge of its accounts, and a statement providing that claims against a trustee under Sections 604 and 1005, if applicable, are barred if no objections are received within the time period described in subsection (c);

(F) the name and mailing address of the trustee;

(G) the name and telephone number of a person who may be contacted for additional information; and

(H) a statement that the trustee is unaware of any undisclosed information that could give rise to a claim by an interested party.

(2) The trustee may also provide the statement and notice described in this subsection to any other person who the trustee reasonably believes may have an interest in the trust.

(3) The statement and notice described in this subsection shall be provided to the qualified beneficiaries and any interested party from whom the trustee is seeking a release via first class mail and certified mail, return receipt requested.

(c)(1) If, after receiving the notice and trust information described in subsection (b), a qualified beneficiary or any other party that received the notice and trust information objects to a disclosed act or omission, the qualified beneficiary shall provide written notice of the objection to the trustee no later than 60 days after the notice was sent by the trustee. If no written objection is provided in the 60-day time period, the information provided under subsection (b) is considered approved by the recipient. The trustee, in the case of a trust terminating under the terms of the trust or the trustee's resignation or removal, within a reasonable period of time following the expiration of the 60-day time period, shall distribute the assets as provided in the trust or to the successor trustee. If a qualified beneficiary gives the trustee a written objection within the applicable 60-day time period, the trustee or the qualified beneficiary may:

(A) submit the written objection to the court for resolution and charge the expense of commencing a proceeding to the trust; or

(B) resolve the objection by a nonjudicial settlement agreement or other written agreement.

(2) Any agreement entered into under paragraph (1) may include a release, an indemnity clause, or both, on the part of the beneficiary against the trustee relating to the trust. If the parties agree to a nonjudicial settlement agreement or other written agreement, any related expenses shall be charged to the trust. Upon a resolution of an objection under this subsection, within a reasonable period of time, the trustee shall distribute the remaining trust assets as provided in the trust or to the successor trustee.

(3) A trustee who elects to terminate a trust under this Section and sends the notice and statement to the qualified beneficiaries within a reasonable time following notification of an event that terminates a trust is considered to have expeditiously made distribution to the qualified beneficiaries in which distribution of trust assets occurs following within a reasonable time following the expiration of the 60-day time period in paragraph (1).

(d) The trustee may rely upon the written statement of a person receiving notice that the person does not object.

(e) When a trustee distributes assets of a terminating trust or to the successor trustee after complying with this Article and having received no objections, each person who received notice and either consented or failed to object under this Section is barred from:

(1) bringing a claim against the trustee or challenging the validity of the trust to the same extent and with the same preclusive effect as if the court had entered a final order approving the trustee's final account; or

(2) bringing a claim against the trustee for the period of the interim accounts to the same extent and with the same preclusive effect as if the court had entered a final order approving the trustee's interim accounts.

(f) The court, as determined under Section 202, has exclusive jurisdiction over matters under this Section.

(g) Sections 3301 through 304 apply to this Section.

(h) Nothing in this Section precludes a trustee from proceeding under Section 7201 to have the trustee's accounts reviewed and settled by the court.