Illinois Trustees Need to Know About Certifications of Trust
An update to the Illinois Trusts and Trustees Act back in 2015 it more efficient for the trustee of an Illinois trust to deal with third parties and trust property. Illinois SB1877 wrote into the Act (760 ILCS 5) a new section expressly authorizing the trustee to use a “Certification of Trust” in order to deal with trust affairs. Previously, when a trustee wished to act in his or her capacity as trustee, he often found that third parties, like financial institutions, would require a copy of the trust agreement before taking any action. That sometimes led to issues of confidentiality for trust settlors that did not wish for the comprehensive terms of their trusts to be disclosed as well as undue burden for trustees who may have needed to deal with dozens of separate institutions with dozens of different policies dealing with required trustee disclosures.
New Requirements for Illinois Certification of Trust
With the signing of the new amendment into law a trustee is now authorized by statute to simply present a third party with a document containing specific information, namely:
► A statement that the trust exists and has not been revoked, modified or amended in any way that would make the certification incorrect;
► The date the trust was executed;
► The identity of the settlor (the trust creator);
► The identity and address of the current trustee;
► The trustee’s powers;
► Whether the trust is revocable or irrevocable
► Whether the trust may be amended, and if so, the identity of the person holding the power to amend it;
► The authority of co-trustees to sign;
► The trust’s taxpayer ID number; and
► The manner in which trust property should be titled.
While the list may seem fairly exhaustive and comprehensive, it is a vast improvement over the old system in which third parties often required a copy of entire trust agreements which sometimes could be dozens of pages long.
Potential Liability for Non-compliant Third Parties
What’s more encouraging is that a third party presented with an accurate and complete certification of trust generally does not have any valid reason for requesting the entire trust agreement. Any third parties that nonetheless require disclosure may be liable for damages if a court determines that the request was not made in good faith.
From an estate planning perspective, this development is great news for those individuals using revocable living trusts (and other trust mechanisms) as part of their estate plan. It greatly reduces the complexity and confusion that can often come with acting as a trustee over one’s assets.
A sample Certification of Trust can be found here.
Michael F. Brennan is an attorney at the Virtual Attorney™ a virtual law office helping clients in Illinois, Wisconsin, and Minnesota with estate planning and small business legal needs. He can be reached at michael.brennan@mfblegal.com with questions or comments, or check out his website at www.thevirtualattorney.com .
The information contained herein is intended for informational purposes only and is not legal advice, nor is it intended to create an attorney-client relationship. For specific legal advice regarding a specific legal issue please contact me or another attorney for assistance.
