Full Text of SB0365 95th General Assembly
SB0365eng 95TH GENERAL ASSEMBLY
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| AN ACT concerning civil law.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Principal and Income Act is amended by | 5 |
| changing Section 14 as follows:
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| (760 ILCS 15/14) (from Ch. 30, par. 514)
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| Sec. 14. Charges against income and principal.
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| (a) The following charges shall be made against income:
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| (1) ordinary expenses, other than compensation as | 10 |
| provided in paragraph
(6) of this subsection (a), incurred | 11 |
| by the trustee in connection with the
administration or | 12 |
| protection of the trust property, including regularly
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| recurring taxes assessed against any portion of the | 14 |
| principal, water rates,
premiums on insurance taken upon | 15 |
| the interests of the income beneficiary,
remainderman, or | 16 |
| trustee, interest paid by the trustee (except interest
on | 17 |
| taxes as provided in paragraphs (7) and (8) of this
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| subsection and paragraphs
(5), (6), and (7) of subsection | 19 |
| (c)), ordinary repairs and maintenance;
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| (2) (blank);
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| (3) one-half of court costs, attorney's fees and other | 22 |
| expenses and fees
on any judicial accounting, unless the | 23 |
| court directs otherwise;
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| (4) court costs, attorney's fees and other expenses and | 2 |
| fees on other
judicial proceedings if the matter primarily | 3 |
| concerns the income interest,
unless the court directs | 4 |
| otherwise;
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| (5) special compensation and expenses of or incurred by | 6 |
| the trustee in
connection with income;
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| (6) one-half of the regular compensation of the | 8 |
| trustee, attorney,
investment counsel, custodian or | 9 |
| accountant, subject to paragraph (1) of
subsection (d)
(c) ;
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| (7) any tax, including interest and penalties thereon, | 11 |
| levied upon
receipts defined as income under this Act or | 12 |
| the trust instrument and
payable by the trustee;
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| (8) one-half of the interest on all estate, | 14 |
| inheritance, and
generation-skipping transfer taxes | 15 |
| apportioned to the trust and one-half of the
interest on | 16 |
| any penalties on those taxes.
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| (a-5) A reasonable allowance for depreciation on property | 18 |
| that is subject to
depreciation under generally accepted | 19 |
| accounting principles may be charged by
the trustee, but no | 20 |
| allowance shall be made for depreciation of that portion of
any | 21 |
| real property used by a beneficiary as a residence. Such an | 22 |
| allowance
shall be charged only against the income from the | 23 |
| property subject to
depreciation and shall not accrue from year | 24 |
| to year.
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| (b) If charges against income are of an unusual amount, the | 26 |
| trustee may
by means of reserves or other reasonable means |
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| charge them over a
reasonable period of time and withhold from | 2 |
| distribution sufficient sums to
regularize distributions.
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| (c) The following charges shall be made against principal:
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| (1) one-half of the regular compensation of the | 5 |
| trustee, attorney,
investment counsel, custodian or | 6 |
| accountant , subject to subsection (d)
shall be paid out of | 7 |
| principal,
provided that, if in the judgment of the | 8 |
| trustee, the charging of a part or
all of that portion of | 9 |
| such compensation to principal is impracticable
because of | 10 |
| the lack of sufficient principal cash and readily | 11 |
| marketable
intangible personal property, or inadvisable | 12 |
| because of the nature of the
assets, that part or all of | 13 |
| such compensation shall be paid out of income.
The decision | 14 |
| of the trustee to pay a larger portion or all of such
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| compensation out of income shall be conclusive, and the | 16 |
| income of the trust
shall not be entitled to reimbursement | 17 |
| from principal at any subsequent
time or times ;
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| (2) special compensation and expenses of or incurred by | 19 |
| the trustee in
connection with principal, trustee's | 20 |
| compensation computed on principal
as an acceptance, | 21 |
| distribution or termination fee, and, unless the court
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| directs otherwise, court costs, attorney's fees and other | 23 |
| expenses and fees
in judicial proceedings primarily | 24 |
| concerning matters of principal or in
any action to | 25 |
| construe the trust or protect it or the property or assure
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| the title to any trust property;
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| (3) charges not provided for in subsection (a), | 2 |
| including the cost of
investing and reinvesting principal, | 3 |
| the payments on principal of an
indebtedness (including a | 4 |
| mortgage amortized by periodic payments of
principal), and | 5 |
| expenses for preparation of property for rental or sale;
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| (4) extraordinary repairs or expenses incurred in | 7 |
| making a capital
improvement to principal, including | 8 |
| special assessments;
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| (4.5) costs and disbursements related to environmental | 10 |
| matters,
including reclamation, assessing environmental | 11 |
| conditions, remedying and
removing environmental | 12 |
| contamination, monitoring remedial activities and the
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| release of substances, preventing future releases of | 14 |
| substances, collecting
amounts from persons liable or | 15 |
| potentially liable for the costs of those
activities, | 16 |
| penalties imposed under environmental laws or regulations | 17 |
| and other
payments made to comply with those laws or | 18 |
| regulations, statutory or common law
claims by third | 19 |
| parties, and defending claims based on environmental | 20 |
| matters;
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| (5) any tax, including interest and penalties thereon, | 22 |
| levied upon profit,
gain, or other receipts allocated to | 23 |
| principal notwithstanding denomination
of the tax as an | 24 |
| income tax by the taxing authority;
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| (6) any tax, including interest and penalties thereon, | 26 |
| levied upon
amounts not actually received by the trustee |
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| before the date the tax is
payable, including extensions, | 2 |
| notwithstanding the denomination of the tax
as an income | 3 |
| tax by the taxing authority, except that if, in the | 4 |
| judgment of
the trustee, the charging against principal of | 5 |
| part or all of the tax is
impracticable because of a lack | 6 |
| of sufficient principal cash and readily
marketable | 7 |
| intangible personal property or inadvisable because of the
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| nature of the assets that part or all of the tax shall be | 9 |
| charged against
income. The decision of the trustee to | 10 |
| charge part or all of the tax
against income shall be | 11 |
| conclusive, and the income of the trust shall not
be | 12 |
| entitled to reimbursement from principal at any subsequent | 13 |
| time or
times. If any part or all of the amount on which | 14 |
| tax was previously paid
and charged against principal is | 15 |
| later received by the trustee and if the
receipt is | 16 |
| otherwise credited to income, then when the amount is | 17 |
| received
the portion of the tax previously paid and charged | 18 |
| against principal
attributable to the amount so received | 19 |
| shall be deducted from the amount
and credited to | 20 |
| principal;
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| (7) all estate, inheritance, and
generation-skipping
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| transfer taxes and any penalties on the taxes apportioned | 23 |
| to the trust and
one-half of the interest on those taxes | 24 |
| and penalties;
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| (8) a net loss in any fiscal or calendar year from the | 26 |
| operation of a
business or an agricultural or farming |
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| operation, to be repaid from income
as available in the | 2 |
| succeeding year or years;
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| (9) monies paid for the purchase of options.
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| (d) If, in the judgment of the trustee, the charging of all | 5 |
| or part of the compensation provided for in item (6) of | 6 |
| subsection (a) is impractical because of the lack of sufficient | 7 |
| income cash or in item (1) of subsection (c) is impractical | 8 |
| because of the lack of sufficient principal cash and readily | 9 |
| marketable intangible personal property, or inadvisable | 10 |
| because of the nature of the assets, such part or all of such | 11 |
| compensation shall be paid out of income or principal as the | 12 |
| trustee determines. The decision of the trustee to pay a larger | 13 |
| portion or all of such compensation out of income or principal | 14 |
| shall be conclusive, and neither the income nor principal of | 15 |
| the trust shall be entitled to reimbursement at any subsequent | 16 |
| time or times. The provisions of this subsection (d) shall not | 17 |
| apply to the extent that they would cause a trust otherwise | 18 |
| qualifying for a federal or State tax benefit or other benefit | 19 |
| not to so qualify for that benefit. This subsection (d) is | 20 |
| available to trusts in existence on the effective date of this | 21 |
| amendatory Act of the 95th General Assembly or created after | 22 |
| that date.
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| (Source: P.A. 91-923, eff. 7-7-00.)
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