Illinois Compiled Statutes
760 ILCS 3/ - Illinois Trust Code.
Article 12 - Trust Decanting

(760 ILCS 3/Art. 12 heading)

(760 ILCS 3/1201)
Sec. 1201. Article title. This Article may be referred to as the Trust Decanting Law.

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

(760 ILCS 3/1202)
Sec. 1202. Definitions. In this Article:
(1) (Blank).
(2) "Authorized fiduciary" means:
(3) "Court" means the court in this State having jurisdiction in matters relating to trusts.
(4) "Decanting power" or "the decanting power" means the power of an authorized fiduciary under this Article to distribute property of a first trust to one or more second trusts or to modify the terms of the first trust.
(5) "Expanded distributive discretion" means a discretionary power of distribution that is not limited to an ascertainable standard or a reasonably definite standard.
(6) "First trust" means a trust over which an authorized fiduciary may exercise the decanting power.
(7) "First-trust instrument" means the trust instrument for a first trust.
(8) "Reasonably definite standard" means a clearly measurable standard under which a holder of a power of distribution is legally accountable within the meaning of Section 674(b)(5)(A) of the Internal Revenue Code, as amended, and any applicable regulations.
(9) "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
(10) "Second trust" means:
(11) "Second-trust instrument" means the trust instrument for a second trust.

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

(760 ILCS 3/1203)
Sec. 1203. Scope.
(a) Except as otherwise provided in subsections (b) and (c), this Article applies to an express trust that is irrevocable or revocable by the settlor only with the consent of the trustee or a person holding an adverse interest.
(b) This Article does not apply to a trust held solely for charitable purposes.
(c) Subject to Section 1215, a trust instrument may restrict or prohibit exercise of the decanting power.
(d) This Article does not limit the power of a trustee, powerholder, or other person to distribute or appoint property in further trust or to modify a trust under the trust instrument, law of this State other than this Article, common law, a court order, or a nonjudicial settlement agreement.
(e) This Article does not affect the ability of a settlor to provide in a trust instrument for the distribution or appointment in further trust of the trust property or for modification of the trust instrument.

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

(760 ILCS 3/1204)
Sec. 1204. Fiduciary duty.
(a) In exercising the decanting power, an authorized fiduciary shall act in accordance with its fiduciary duties, including the duty to act in accordance with the purposes of the first trust.
(b) This Article does not create or imply a duty to exercise the decanting power or to inform beneficiaries about the applicability of this Article.
(c) Except as otherwise provided in a first-trust instrument, for purposes of this Article and Section 801, the terms of the first trust are deemed to include the decanting power.

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

(760 ILCS 3/1205)
Sec. 1205. Application; governing law. This Article applies to a trust created before, on, or after the effective date of this Code that:
(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/1206)
Sec. 1206. Reasonable reliance. A trustee or other person that reasonably relies on the validity of a distribution of part or all of the property of a trust to another trust, or a modification of a trust, under this Article, law of this State other than this Article or the law of another jurisdiction is not liable to any person for any action or failure to act as a result of the reliance.

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

(760 ILCS 3/1207)
Sec. 1207. Notice.
(a) In this Section, a notice period begins on the day notice is given under subsection (c) and ends 59 days after the day notice is given.
(b) Except as otherwise provided in this Article, an authorized fiduciary may exercise the decanting power without the consent of any person and without court approval.
(c) Except as otherwise provided in subsection (f), an authorized fiduciary shall give notice in a record of the intended exercise of the decanting power not later than 60 days before the exercise to:
(d) An authorized fiduciary is not required to give notice under subsection (c) to a qualified beneficiary who is a minor and has no representative. The authorized fiduciary is not required to give notice under subsection (c) to a person that is not known to the fiduciary or is known to the fiduciary but cannot be located by the fiduciary after reasonable diligence.
(e) A notice under subsection (c) must:
(f) The decanting power may be exercised before expiration of the notice period under subsection (a) if all persons entitled to receive notice waive the period in a signed record.
(g) The receipt of notice, waiver of the notice period, or expiration of the notice period does not affect the right of a person to file an application under Section 1209 with the court asserting that:
(h) An exercise of the decanting power is not ineffective because of the failure to give notice to one or more persons under subsection (c) if the authorized fiduciary acted with reasonable care to comply with subsection (c).
(i) If the first trust contains a charitable interest and the Attorney General objects to the proposed exercise of the decanting power in writing delivered to the authorized fiduciary before the end of the notice period, the authorized fiduciary may proceed with the proposed exercise of the decanting power only with either court approval or the later written consent of the Attorney General.

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

(760 ILCS 3/1208)
Sec. 1208. (Reserved).

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

(760 ILCS 3/1209)
Sec. 1209. Court involvement.
(a) On application of an authorized fiduciary, a person entitled to notice under Section 1207(c), a beneficiary, or, with respect to a charitable interest, the Attorney General or any other person that has standing to enforce the charitable interest, the court may:
(b) On application of an authorized fiduciary, the court may approve:
(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/1210)
Sec. 1210. Formalities. An exercise of the decanting power must be made in a record signed by an authorized fiduciary. The signed record must, directly or by reference to the notice required by Section 1207, identify the first trust and the second trust or trusts and state the property of the first trust being distributed to each second trust and the property, if any, that remains in the first trust.

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

(760 ILCS 3/1211)
Sec. 1211. Decanting power under expanded distributive discretion.
(a) In this Section:
(b) Subject to subsection (c) and Section 1214, an authorized fiduciary that has expanded distributive discretion to distribute the principal of a first trust to one or more current beneficiaries may exercise the decanting power over the principal of the first trust.
(c) Subject to Section 1213, in an exercise of the decanting power under this Section, a second trust may not:
(d) Subject to subsection (c)(3) and Section 1214, in an exercise of the decanting power under this Section, a second trust may be a trust created or administered under the law of any jurisdiction and may:
(e) A power of appointment described in subsection (d)(1) through (4) of subsection (d) may be general or nongeneral. The class of permissible appointees in favor of which the power may be exercised may be broader than or different from the beneficiaries of the first trust.
(f) If an authorized fiduciary has expanded distributive discretion to distribute part but not all of the principal of a first trust, the fiduciary may exercise the decanting power under this Section over that part of the principal over which the authorized fiduciary has expanded distributive discretion.

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

(760 ILCS 3/1212)
Sec. 1212. Decanting power under limited distributive discretion.
(a) In this Section, "limited distributive discretion" means a discretionary power of distribution that is limited to an ascertainable standard or a reasonably definite standard.
(b) An authorized fiduciary that has limited distributive discretion over the principal of the first trust for the benefit of one or more current beneficiaries may exercise the decanting power over the principal of the first trust.
(c) Under this Section and subject to Section 1214, a second trust may be created or administered under the law of any jurisdiction. Under this Section, the second trusts, in the aggregate, must grant each beneficiary of the first trust beneficial interests that are substantially similar to the beneficial interests of the beneficiary in the first trust.
(d) A power to make a distribution under a second trust for the benefit of a beneficiary who is an individual is substantially similar to a power under the first trust to make a distribution directly to the beneficiary. A distribution is for the benefit of a beneficiary if:
(e) If an authorized fiduciary has limited distributive discretion over part but not all of the principal of a first trust, the fiduciary may exercise the decanting power under this Section over that part of the principal over which the authorized fiduciary has limited distributive discretion.

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

(760 ILCS 3/1213)
Sec. 1213. Trust for beneficiary with disability.
(a) In this Section:
(b) A special-needs fiduciary may exercise the decanting power under Section 1211 over the principal of a first trust as if the fiduciary had authority to distribute principal to a beneficiary with a disability subject to expanded distributive discretion if:
(c) In an exercise of the decanting power under this Section, the following rules apply:
(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/1214)
Sec. 1214. Protection of charitable interests.
(a) In this Section:
(b) If a first trust contains a determinable charitable interest, the Attorney General has the rights of a qualified beneficiary and may represent and bind the charitable interest.
(c) If a first trust contains a charitable interest, the second trusts in the aggregate may not:
(d) If there are 2 or more second trusts, the second trusts shall be treated as one trust for purposes of determining whether the exercise of the decanting power diminishes the charitable interest or diminishes the interest of an identified charitable organization for purposes of subsection (c).
(e) If a first trust contains a determinable charitable interest, the second trusts that include charitable interests pursuant to subsection (c) must be administered under the law of this State unless:
(f) This Article does not limit the powers and duties of the Attorney General under Illinois law.

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

(760 ILCS 3/1215)
Sec. 1215. Trust limitation on decanting.
(a) An authorized fiduciary may not exercise the decanting power to the extent the first-trust instrument expressly prohibits exercise of:
(b) Exercise of the decanting power is subject to any restriction in the first-trust instrument that expressly applies to exercise of:
(c) A general prohibition of the amendment or revocation of a first trust, a spendthrift provision, or a clause restraining the voluntary or involuntary transfer of a beneficiary's interest does not preclude exercise of the decanting power.
(d) Subject to subsections (a) and (b), an authorized fiduciary may exercise the decanting power under this Article even if the first-trust instrument permits the authorized fiduciary or another person to modify the first-trust instrument or to distribute part or all of the principal of the first trust to another trust.
(e) If a first-trust instrument contains an express prohibition described in subsection (a) or an express restriction described in subsection (b), that provision must be included in the second-trust instrument.

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

(760 ILCS 3/1216)
Sec. 1216. Change in compensation.
(a) If a first-trust instrument specifies an authorized fiduciary's compensation, the fiduciary may not exercise the decanting power to increase the fiduciary's compensation beyond the specified compensation unless:
(b) If a first-trust instrument does not specify an authorized fiduciary's compensation, the fiduciary may not exercise the decanting power to increase the fiduciary's compensation above the compensation permitted by Section 708 unless:
(c) A change in an authorized fiduciary's compensation that is incidental to other changes made by the exercise of the decanting power is not an increase in the fiduciary's compensation for purposes of subsections (a) and (b).

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

(760 ILCS 3/1217)
Sec. 1217. Relief from liability and indemnification.
(a) Except as otherwise provided in this Section, a second-trust instrument may not relieve an authorized fiduciary from liability for breach of trust to a greater extent than the first-trust instrument.
(b) A second-trust instrument may provide for indemnification of an authorized fiduciary of the first trust or another person acting in a fiduciary capacity under the first trust for any liability or claim that would have been payable from the first trust if the decanting power had not been exercised.
(c) A second-trust instrument may not reduce fiduciary liability in the aggregate.
(d) Subject to subsection (c), a second-trust instrument may divide and reallocate fiduciary powers among fiduciaries, including one or more trustees, distribution advisors, investment advisors, trust protectors, or other persons, and relieve a fiduciary from liability for an act or failure to act of another fiduciary as permitted by law of this State other than this Article.

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

(760 ILCS 3/1218)
Sec. 1218. Removal or replacement of authorized fiduciary. An authorized fiduciary may not exercise the decanting power to modify a provision in the first-trust instrument granting another person power to remove or replace the fiduciary unless:
(Source: P.A. 101-48, eff. 1-1-20.)

(760 ILCS 3/1219)
Sec. 1219. Tax-related limitations.
(a) In this Section:
(b) An exercise of the decanting power is subject to the following limitations:
(Source: P.A. 101-48, eff. 1-1-20; 102-558, eff. 8-20-21.)

(760 ILCS 3/1220)
Sec. 1220. Duration of second trust.
(a) Subject to subsection (b), a second trust may have a duration that is the same as or different from the duration of the first trust.
(b) To the extent that property of a second trust is attributable to property of the first trust, the second trust is subject to any rules governing maximum perpetuity, accumulation, or suspension of the power of alienation applicable to property of the first trust.

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

(760 ILCS 3/1221)
Sec. 1221. Need to distribute not required. An authorized fiduciary may exercise the decanting power whether or not under the first trust's discretionary distribution standard the fiduciary would have made or could have been compelled to make a discretionary distribution of principal at the time of the exercise.

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

(760 ILCS 3/1222)
Sec. 1222. Savings provision.
(a) If exercise of the decanting power would be effective under this Article except that the second-trust instrument in part does not comply with this Article, the exercise of the power is effective and the following rules apply to the principal of the first trust subject to the exercise of the power:
(b) If a trustee or other fiduciary of a second trust discovers that subsection (a) applies to a prior exercise of the decanting power, the fiduciary shall take such appropriate corrective action as is consistent with the fiduciary's duties.

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

(760 ILCS 3/1223)
Sec. 1223. Trust for care of animal.
(a) In this Section:
(b) The decanting power may be exercised over an animal trust that has a protector to the extent the trust could be decanted under this Article as if each animal that benefits from the trust were an individual, if the protector consents in a signed record to the exercise of the decanting power.
(c) A protector for an animal has the rights under this Article of a qualified beneficiary.
(d) Notwithstanding any other provision of this Article, if a first trust is an animal trust, in an exercise of the decanting power, the second trust must provide that trust property may be applied only to its intended purpose for the period the first trust benefited the animal.

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

(760 ILCS 3/1224)
Sec. 1224. (Reserved).

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

(760 ILCS 3/1225)
Sec. 1225. Settlor.
(a) For purposes of the laws of this State other than this Article and subject to subsection (b), a settlor of a first trust is deemed to be the settlor of the second trust with respect to the portion of the principal of the first trust subject to the exercise of the decanting power.
(b) In determining settlor intent with respect to a second trust, the intent of a settlor of the first trust, the intent of a settlor of the second trust, and the intent of the authorized fiduciary may be considered.

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

(760 ILCS 3/1226)
Sec. 1226. Later-discovered property.
(a) Except as otherwise provided in subsection (c), if exercise of the decanting power was intended to distribute all the principal of the first trust to one or more second trusts, later-discovered property otherwise belonging to the first trust and property paid to or acquired by the first trust after the exercise of the power is part of the trust estate of the second trust.
(b) Except as otherwise provided in subsection (c), if exercise of the decanting power was intended to distribute less than all the principal of the first trust to one or more second trusts, later-discovered property belonging to the first trust or property paid to or acquired by the first trust after exercise of the decanting power remains part of the trust estate of the first trust.
(c) An authorized fiduciary may provide in an exercise of the decanting power or by the terms of a second trust for disposition of later-discovered property belonging to the first trust or property paid to or acquired by the first trust after exercise of the decanting power.

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

(760 ILCS 3/1227)
Sec. 1227. Obligations. A debt, liability, or other obligation enforceable against property of a first trust is enforceable to the same extent against that property when held by the second trust after exercise of the decanting power.

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