Illinois § 16

§ 16.

Trust funds; disbursements. (a) A trustee shall make no disbursements from the trust fund except as provided in this Act. (b) A trustee has a duty to invest and manage the trust assets pursuant to the Illinois Prudent Investor Law under Article 9 of the Illinois Trust Code. Whenever the seller changes trustees pursuant to this Act, the trustee must provide written notice of the change in trustees to the Comptroller no less than 28 days prior to the effective date of such a change in trustee. The trustee has an ongoing duty to provide the Comptroller with a current and true copy of the trust agreement under which the trust funds are held pursuant to this Act. (c) The trustee may rely upon certifications and affidavits made to it under the provisions of this Act, and shall not be liable to any person for such reliance. (d) A trustee shall be allowed to withdraw from the trust funds maintained pursuant to this Act a reasonable fee pursuant to the Illinois Trust Code. (e) The trust shall be a single-purpose trust fund. In the event of the seller's bankruptcy, insolvency or assignment for the benefit of creditors, or an adverse judgment, the trust funds shall not be available to any creditor as assets of the seller or to pay any expenses of any bankruptcy or similar proceeding, but shall be distributed to the purchasers or managed for their benefit by the trustee holding the funds. Except in an action by the Comptroller to revoke a license issued pursuant to this Act and for creation of a receivership as provided in this Act, the trust shall not be subject to judgment, execution, garnishment, attachment, or other seizure by process in bankruptcy or otherwise, nor to sale, pledge, mortgage, or other alienation, and shall not be assignable except as approved by the Comptroller. The changes made by this amendatory Act of the 91st General Assembly are intended to clarify existing law regarding the inability of licensees to pledge the trust. (f) Because it is not known at the time of deposit or at the time that income is earned on the trust account to whom the principal and the accumulated earnings will be distributed, for purposes of determining the Illinois Income Tax due on these trust funds, the principal and any accrued earnings or losses relating to each individual account shall be held in suspense until the final determination is made as to whom the account shall be paid. (g) A trustee shall at least annually furnish to each purchaser a statement identifying: (1) the receipts, disbursements, and inventory of the trust, including an explanation of any fees or expenses charged by the trustee under paragraph (d) of this Section or otherwise, (2) an explanation of the purchaser's right to a refund, if any, under this Act, and (3) the primary regulator of the trust as a corporate fiduciary under state or federal law. (h) If the trustee has reason to believe that the contact information for a purchaser is no longer valid, then the trustee shall promptly notify the seller. If the trustee has reason to believe that the purchaser is deceased, then the trustee shall promptly notify the seller. A trustee shall remit as provided in Section 18.5 of this Act any pre-need trust funds, including both the principal and any accrued earnings or losses, relating to an individual account that is presumed abandoned under Section 18.5. (Source: P.A. 101-48, eff. 1-1-20; 101-552, eff. 1-1-20; 102-558, eff. 8-20-21.)