Illinois Compiled Statutes
760 ILCS 3/ - Illinois Trust Code.
Article 11 - Total Return Trusts

(760 ILCS 3/Art. 11 heading)

(760 ILCS 3/1101)
Sec. 1101. Total return trust defined; trustee duty to inform.
(a) In this Article, "total return trust" means a trust converted in accordance with this Article that the trustee shall manage and invest seeking a total return without regard to whether the return is from income or appreciation of principal.
(b) Notwithstanding any other provision of this Article, a trustee has no duty to inform beneficiaries about the availability of this Article and has no duty to review the trust to determine whether any action should be taken under this Article unless requested to do so in writing by a qualified beneficiary.

(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/1102)
Sec. 1102. Conversion by trustee. A trustee may convert a trust to a total return trust as described in this Article if all of the following apply:
(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/1103)
Sec. 1103. Conversion by agreement. Conversion to a total return trust may be made by agreement between a trustee and all qualified beneficiaries. The agreement may include any actions a court could properly order under Section 1104; however, any distribution percentage determined by the agreement may not be less than 3% nor greater than 5%.

(Source: P.A. 101-48, eff. 1-1-20; 102-279, eff. 1-1-22.)

(760 ILCS 3/1104)
Sec. 1104. Conversion or reconversion by court.
(a) The trustee may for any reason elect to petition the court to order conversion to a total return trust, including without limitation the reason that conversion under Section 1102 is unavailable because a beneficiary timely objects to the conversion to a total return trust.
(b) A beneficiary may request the trustee to convert to a total return trust or adjust the distribution percentage. If the trustee declines or fails to act within 6 months after receiving a written request to do so, the beneficiary may petition the court to order the conversion or adjustment.
(c) The trustee may petition the court prospectively to reconvert from a total return trust or adjust the distribution percentage if the trustee determines that the reconversion or adjustment will enable the trustee to better carry out the purposes of the trust. A beneficiary may request the trustee to petition the court prospectively to reconvert from a total return trust or adjust the distribution percentage. If the trustee declines or fails to act within 6 months after receiving a written request to do so, the beneficiary may petition the court to order the reconversion or adjustment.
(d) In a judicial proceeding under this Section, the trustee may, but need not, present the trustee's opinions and reasons (1) for supporting or opposing conversion to (or reconversion from or adjustment of the distribution percentage of) a total return trust, including whether the trustee believes conversion (or reconversion or adjustment of the distribution percentage) would enable the trustee to better carry out the purposes of the trust, and (2) about any other matters relevant to the proposed conversion (or reconversion or adjustment of the distribution percentage). A trustee's actions in accordance with this Section shall not be deemed improper or inconsistent with the trustee's duty of impartiality unless the court finds from all the evidence that the trustee acted in bad faith.
(e) The court shall order conversion to (or reconversion prospectively from or adjustment of the distribution percentage of) a total return trust if the court determines that the conversion (or reconversion or adjustment of the distribution percentage) will enable the trustee to better carry out the purposes of the trust and the conversion (or reconversion or adjustment of the distribution percentage) is in the best interests of the beneficiaries.
(f) The court may order any of the following actions in a proceeding brought by a trustee or a beneficiary under this Section:
(g) Nothing in this Section limits the equitable powers of the court to grant other relief.

(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/1105)
Sec. 1105. Post conversion. While a trust is a total return trust, all of the following apply to the trust:
(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/1106)
Sec. 1106. Administration.
(a) As used in this Section, "excluded asset" means an asset for which there is no readily available market value and that the trustee determines in accordance with subsection (d) shall be excluded from the net fair market value of the trust's assets for purposes of determining the distribution amount under paragraph (2) of Section 1105.
(b) The trustee, in the trustee's discretion, may determine any of the following matters in administering a total return trust as the trustee from time to time determines necessary or helpful for the proper functioning of the trust:
(c) The trustee shall distribute any net income received from excluded assets as provided in the trust instrument.
(d) Unless the trustee determines there are compelling reasons to the contrary considering all relevant factors including the best interests of the beneficiaries, the trustee shall treat each asset for which there is no readily available market value as an excluded asset. Examples of assets for which there is a readily available market value include: cash and cash equivalents; stocks, bonds, and other securities and instruments for which there is an established market on a stock exchange, in an over-the-counter market, or otherwise; and any other property that can reasonably be expected to be sold within one week of the decision to sell without extraordinary efforts by the seller. Examples of assets for which there is no readily available market value include: stocks, bonds, and other securities and instruments for which there is no established market on a stock exchange, in an over-the-counter market, or otherwise; real property; tangible personal property; and artwork and other collectibles.
(e) If tangible personal property or real property is possessed or occupied by a beneficiary, the trustee shall not limit or restrict any right of the beneficiary to use the property in accordance with the trust instrument regardless of whether the trustee treats the property as an excluded asset.

(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/1107)
Sec. 1107. Allocations.
(a) Expenses, taxes, and other charges that would be deducted from income if the trust were not a total return trust shall not be deducted from the distribution amount.
(b) Unless otherwise provided by the trust instrument, the trustee shall fund the distribution amount each year from the following sources for that year in the order listed:
(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/1108)
Sec. 1108. Restrictions. Conversion to a total return trust does not affect any provision in the trust instrument:
(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/1109)
Sec. 1109. Tax limitations.
(a) If a particular trustee is a beneficiary of the trust and conversion or failure to convert would enhance or diminish the beneficial interest of the trustee, or if possession or exercise of the conversion power by a particular trustee would alone cause any individual to be treated as owner of a part of the trust for income tax purposes or cause a part of the trust to be included in the gross estate of any individual for estate tax purposes, then the particular trustee may not participate as a trustee in the exercise of the conversion power except that the particular trustee may petition the court under subsection (a) of Section 1104 to order conversion in accordance with this Article.
(b) If the particular trustee has one or more co-trustees to whom subsection (a) does not apply, the co-trustee or co-trustees may convert the trust to a total return trust in accordance with this Article.

(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/1110)
Sec. 1110. Releases. A trustee may irrevocably release the power granted by this Article if the trustee reasonably believes the release is in the best interests of the trust and its beneficiaries. The release may be personal to the releasing trustee or may apply generally to some or all subsequent trustees, and the release may be for any specified period, including a period measured by the life of an individual.

(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/1111)
Sec. 1111. Remedies. A trustee who reasonably and in good faith takes any action under this Article is not liable to any interested person. If a trustee reasonably and in good faith takes any action under this Article and an interested person opposes the action, the person's exclusive remedy is to obtain an order of the court directing the trustee to convert the trust to a total return trust, to reconvert from a total return trust, to change the distribution percentage, or to order any administrative procedures the court determines necessary or helpful for the proper functioning of the trust. An action by a trustee under this Article is presumed taken or omitted reasonably and in good faith unless it is determined by the court to have been an abuse of discretion.

(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/1112)
Sec. 1112. Application. This Article is available to trusts in existence on or after August 22, 2002. This Article shall be construed as pertaining to the administration of a trust and shall be available to any trust that is administered in Illinois or that is governed by Illinois law with respect to the meaning and effect of its terms unless one of the following apply:
(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/1113)
Sec. 1113. Application to express trusts.
(a) In this Section:
(b) A unitrust changes the definition of income by substituting the unitrust amount for net trust accounting income as the method of determining current return and shall be given effect notwithstanding any contrary provision of the Principal and Income Act. By way of example and not limitation, a unitrust amount determined by a percentage of not less than 3% nor greater than 5% is conclusively presumed a reasonable current return that fairly apportions the total return of a unitrust.
(c) Subsection (b) of Section 1107 applies to a unitrust except to the extent its trust instrument expressly provides otherwise.
(d) This Section does not apply to a charitable remainder unitrust as defined by Section 664(d) of the Internal Revenue Code.

(Source: P.A. 101-48, eff. 1-1-20.)