Ending a trust under Illinois law

When an Illinois trust ends

760 ILCS 3/410 provides that a trust terminates to the extent it is revoked or expires under its terms, no purpose remains to be achieved, or its purposes have become unlawful, contrary to public policy or impossible to achieve. After notice to the qualified beneficiaries, the trustee of a trust whose property is worth less than $100,000 may terminate it if the costs of continuing it will substantially impair its purpose, distributing to the current beneficiaries after at least 30 days' notice to them (760 ILCS 3/414). Consent and court modification are in 760 ILCS 3/411 and 760 ILCS 3/412.

Distribution, the reserve and the written approval

On termination, the trustee proceeds expeditiously to make the distribution (760 ILCS 3/817). The trustee may require a written approval of the trust accounting and, at the trustee's election, a refunding agreement, and may withhold a reasonable amount or require a reasonable reserve for debts, expenses and taxes pending them or a judicial settlement of accounts; an approved accounting binds the approving beneficiary.

The final accounting, the search and the record

A trust accounting goes, on termination, to all beneficiaries entitled to a distribution of the residue (760 ILCS 3/813.1(b)(4)). Before the termination the trustee conducts a reasonable search for trust property remitted to a state unclaimed-property administrator, and afterward keeps a copy of the governing instrument for at least 7 years (760 ILCS 3/810(e), (f)). A matter adequately disclosed in the accounting binds unless an action is brought within 2 years, and otherwise within 5 years after the trust's termination or the other events 760 ILCS 3/1005(b) lists.

The statutes, verbatim

• Modification or termination of trust; proceedings for approval or disapproval

  760 ILCS 3/410 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Modification or termination of uneconomic trust

  760 ILCS 3/414 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Recordkeeping and identification of trust property

  760 ILCS 3/810 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Distribution upon termination

  760 ILCS 3/817 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

Common questions

Frequently asked questions

How does an Illinois trust end?

By revocation or expiration under its terms, when no purpose remains, or when its purposes become unlawful or impossible (760 ILCS 3/410); by consent or the court (760 ILCS 3/411, 760 ILCS 3/412); or, for a trust worth less than $100,000, by the trustee after notice (760 ILCS 3/414).

Can an Illinois trustee ask the beneficiaries to approve the final accounting?

Yes. On termination the trustee may require a written approval of the trust accounting and, at the trustee's election, a refunding agreement, and may hold a reasonable reserve pending them (760 ILCS 3/817).

Does an Illinois trustee file a final account in court?

Not by default: an Illinois trust is not subject to continuing judicial supervision unless the court orders it (760 ILCS 3/201), though the trustee may ask the court to approve a final accounting (760 ILCS 3/813.1(i)). The final accounting goes to the residue's takers (760 ILCS 3/813.1(b)(4)).

General information about Illinois law, not legal advice.