Duties of Trustees to Beneficiaries

Web Admin - Wednesday, July 30, 2014

long grove wills and trusts lawyerOne common legal instrument that people use to plan their estates is a trust. A trust is a legal entity involving at least three roles: a settlor, a trustee, and a beneficiary. The idea of the trust is that each of these three roles work together. The settlor creates the rules of the trust and provides it with property, and they designate the beneficiary. The beneficiary, like the name suggests, is the person for whom the trust is managed. They derive the benefit of any income or other gains from the trust.

However, between the settlor and the beneficiary lies the trustee. The trustee manages the assets of the trust and uses them in the best interests of the beneficiary as directed by the rules of the trust that the settlor created. This means that the trustee has a variety of duties that they need to fulfill. These trustee duties can be thought of as either substantive or procedural duties. This is not an official classification, and the lines can blur, but it is at least a helpful way to catalog the duties.

Substantive Duties

Substantive duties are those that require the trustee to behave in a certain way. The central example is the duty to administer the trust by the rules the settlor laid out. The trust document will contain a variety of provisions, and it is the trustee's duty to follow them. Another example of these substantive duties is the duty of skill and care. This means that the trustee must manage the trust's assets with reasonable skill and caution. Similarly, Illinois law also imposes a “prudent investor” duty on trustees.

This means that the trustee has the duty to act as a prudent investor of the trust's assets including things like developing a diversified portfolio and actively managing investments as necessary. Trustees working with multiple beneficiaries also have a further duty: that of loyalty and impartiality. The trustee may not favor one beneficiary over the other unless the trust instrument provides some reason for it.

Procedural and Ministerial Duties

Trustees also owe beneficiaries a variety of more procedural duties, which involve the proper formalities of managing the trust. For instance, the law governing trusts in Illinois requires trustees to give annual accountings of the trust's receipts, disbursements, and an inventory of the estate. Trustees also often have duties to provide notice of certain actions such as changes in the trusteeship. This may also include a requirement that the trustee provide the beneficiaries with a copy of the trust instrument for their records.

These are just some of the many duties that trustees owe the beneficiaries of their trust. If you would like more information on the legal ramifications of managing a trust, contact an experienced Illinois estate planning attorney today. Our firm advises clients in many northwest suburban towns like Long Grove, Kenilworth, and South Barrington.

About the Author: Attorney Jay Andrew is a founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.

5 Benefits to Using an Institutional Trustee

Web Admin - Tuesday, April 08, 2014

illinois trusts and estate planning attorneyTrusts are versatile, useful legal instruments that allow the grantor (the person who sets up the trust) to set aside certain money or other assets for the use of another person (the beneficiary). However, the beneficiary does not have direct access to the assets. Instead, the trust is managed by a trustee whose job it is to control the assets and use them in the beneficiary’s best interest. This makes choosing the trustee one of the most important parts of setting up a trust.

Although most individuals can serve as a trustee, Illinois law also allows for the use of an “institutional trustee.” Institutional trustees are companies, often banks, who professionally manage the trust’s assets. These companies usually do charge a fee for the services, but the companies come with several benefits:

  • - They are skilled at managing trusts;
  • - They have the ability to handle complex paperwork and recordkeeping;
  • - They provide continuity to the management of the trust;
  • - They operate free of bias; and
  • - They are regulated to prevent fraud.

Reasons to Use an Institutional Trustee

  1. 1. Experienced Administrators: Institutional trustees have experience managing trusts. This allows them to easily navigate the legal requirements for trustees. Furthermore, many trustees are responsible for investing the trust’s assets. Banks and other institutional trustees are often professional investors who will be able to handle the task better than friends or family.

  1. 2. Strong Recordkeeping: Trusts also have fairly extensive recordkeeping requirements to prevent fraud on the part of the trustee. Institutional trustees have the infrastructure in place to make sure that important documents, like tax returns, are filed on time and do not get misplaced. Furthermore, the use of an institutional trustee prevents this complex work from being pushed onto a friend or family member.

  1. 3. Management Continuity: The corporate nature of institutional trustees also allows for continuity in the trust’s management. Trusts can last for decades and decades. An individual trustee may not be physically or mentally capable of managing a trust for its entire duration. Conversely, institutional trustees have the ability to smoothly transfer trust administration from one employee to the next, allowing for steady management of the assets.

  1. 4. Unbiased Distribution: Additionally, institutional trustees can eliminate the possibility of bias that might exist with trustees who are friends or family. The company would not have any prior history with particular beneficiaries that might interfere with the fair and evenhanded use of the trust’s assets.

  1. 5. Fraud Protection: Finally, institutional trustees have fraud prevention mechanisms in place. Although everyone would like to think that their friends or family members are above reproach, cases of theft on the part of the trustee do happen. Many institutional trustees are subject to government regulation and auditing requirements that can reduce the risk of fraud on their parts.

If you are interested in setting up a trust, consult with an Illinois estate planning lawyer to tailor one to your specific situation. Our attorneys lend their experience to clients across the northwest suburban area, including in Long Grove, Riverwoods, and Kenilworth.

About the Author: Attorney Jay Andrew is a founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.

Five Advantages of Living Trusts Over Wills

Web Admin - Friday, January 03, 2014

By Jay Andrew
JAA@DGAALAW.COM / (847) 934-6000

When preparing for the disposition of their property after they pass on, many people often find themselves questioning what wills and living trusts are and which document would better suit their needs. Wills, governed by the Probate Act of 1975, are legal documents that a person prepares prior to their death, which specifies how the rest of the family should distribute their property and handle the other affairs. Living trusts, which are controlled by the Trusts and Trustees Act, are legal devices that allow a person of the creator’s choosing, the trustee, to handle the disposition of their property. While everyone’s situation comes with unique considerations, living trusts may provide various advantages over wills. Five of the most important advantages include:

1. Living trusts can help your family avoid dealing with long, draw-out probate proceedings. Courts use probate proceedings to tie up a person’s loose ends, distribute their property, and generally enact their will. If you use a living trust, rather than moving through the court system, the trustee can distribute the property in accordance with the trust. This means that your family will not need to bring themselves to the courthouse and deal with the fees and hassle that come along with probate proceedings.

2. Living trusts also provide more privacy than wills do. While both wills and living trusts remain private throughout your life, the probate court will look at the will after you pass on, even if there are no formal probate proceedings. That means that the will becomes a matter of public record. On the other hand, your relatives will not need to file the trust with the court, so it can stay between them.

3. Living trusts also stand a better chance of surviving a legal challenge after your death, making it more likely that your final plans will be enacted to your specifications. The extra strength from a living trust comes from your ability to keep an active eye on it during your life. Because you would stay involved with the trust’s management during your life, relatives would find it harder to prove that you were not of sound mind when making the plan.

4. Living trusts make leaving property to minor children simpler too. Because minors cannot own most property, the trustee whom you choose can manage it for them, whereas a court appointee would likely handle the management if you chose to pass the property on with a will.

5. Living trusts have further benefits in the event that you become incapacitated while alive. Ordinarily, such circumstances would require relatives to petition the court for control of your affairs, and then the court would appoint a person to manage them. With a living trust, you can appoint a successor trustee to take over management in the event that you become incapacitated.

Decisions about testamentary dispositions can be complicated and involve multiple areas of law. If you are in the process of making such decisions, contact a Palatine estate planning lawyer today. We serve many areas in the northwest suburbs including Arlington Heights, Crystal Lake and Barrington.

Recent Posts


agent pregnant women trucking accidents Palatine probate lawyer Arlington Heights TBI attorney Des Plaines civil attorney blended families Arlington Heights employment law attorneys Schaumburg estate planning lawyer subcontractor DUI penalities drug crime Inverness injury lawyer caregiver hit and run accident DUI attorney Schaumburg employment attorney modern family estate planning Illinois medical malpractice lawyers traumatic brain injury Illinois boating accident lawyer rest breaks insurance adjusters healthcare claims Kenilworth estate planning attorneys new real estate form Palatine insurance lawyer blood alcohol content Barrington attorney Illinois personal injury attorney Illinois employment laws manufacturing Schaumburg Schaumburg criminal attorney Inverness civil lawyer Schaumburg medical malpractice lawyer Barrington real estate lawyer Colin Gilbert eluding a police officer wrongful termination Inverness DUI lawyer job lawyers wrongful termination, employment law, whistleblower protections, Illinois employment laws, discrimination in the workplace probate claims process Buffalo Grove traffic attorney Buffalo Grove insurance claim dispute lawyers DUI defense paid sick leave Inverness real estate lawyer Illinois employment lawyer Illinois small business Arlington Heights tax lawyer homestead rights Barrington workers compensation attorney whistleblower protections estate planning trusts motorcycle accident lawyer workers compensation Palatine business attorney controlled substance Home Sale Contingencies construction accidents drug crimes Deer Park workers compensation lawyer Crystal Lake estate planning lawyer Arlington Heights wills and trusts lawyer Arlington Heights injury attorney Illinois traffic ticket lawyer Illinois jet ski accident lawyer personal injury law firm workers compensation benefits Rolling Meadows personal injury lawyers Des Plaines real estate lawyer Des Plaines claims law firm commercial real estate social media after death revenge porn Barrington injury attorney Deer Park real estate law firm Detainer Actions medical malpractice, missed diagnosis, delayed diagnosis, medical mistake, Deer Creek medical malpractice lawyers digital assets deadly crashes Illinois medical malpractice claim insurance claim dispute attorney Crystal Lake medical malpractice law firm Rolling Meadows litigation lawyer personal injury personal injury attorney Illinois employment attorneys Illinois collections attorney clemency Chicago employment lawyer Rolling Meadows insurance lawyer Long Grove estate planning attorney Illinois employee rights attorney. overtime pay Palatine personal injury lawyer Crystal Lake tax lawyer Illinois employment law vacation home fines real estate contract natural gas explosion Rolling Meadows business lawyer Schaumburg personal injury attorney Riverwoods estate planning lawyer pedestrian injuries, pedestrian fatality Illinois probate lawyer Do Not Resuscitate Arlington Heights real estate lawyer Rolling Meadows DUI lawyer Arlington Heights employment attorney comp time civil litigation Inverness corporate attorney Illinois insurance attorney Barrington Illinois estate planning lawyer Illinois will lawyer Mount Prospect wills and trusts lawyers liens Chicago car accident lawyer medical malpractice compensation federal regulations for LLCs probate claims Long Grove estate planning attorneys Inverness accident lawyer Deer Park personal injury lawyer pet bites insurance claim denial Barrington drug crime attorney privacy laws head on collisions meal breaks DGAA Barrington personal injury lawyer boating accidents Chicago lawyer mass shooting Illinois Sales Representative Act Crystal lake insurance dispute attorney Rolling Meadows insurance attorney employment law, Illinois employment laws ACA traumatic brain injuries power of attorney food poisoning overtime violations Illinois insurance claim dispute lawyers college kids Illinois workers compensation attorney Chicago estate planning lawyer Illinois elder law attorney Illinois living will Rolling Meadows employment law attorneys Crystal Lake insurance lawyer Des Plaines personal injury lawyer Illinois estate planning attorney Schaumburg construction accident lawyer Des Plaines real estate attorney medical research employee rights workplace sexual harassment speeding trustee Rolling Meadows accident lawyer Illinois trucking safety Des Plaines insurance attorney Arlington Heights Traffic Lawyer Illinois employment law attorneys comparative negligence foreclosure pizza emoji Buffalo Grove law firm DUI estate planning Crystal Lake employment lawyer Illinois medical malpractice case Palatine corporate attorney forming a corporation in Illinois Exclusions insurance agents Thanksgiving ObamaCare car crash injuries estate planning, death tax, succession plans, business estate plans, Barrington estate planning lawyers insurance claim delay independent contractor Illinois personal injury lawyers Illinois real estate ken apicella Buffalo Grove personal injury lawyer underage DUI Deer Park employment law attorney employee misclassification first degree murder civil rights violation Illinois estate planning real estate attorney Illinois corporate lawyer Illinois DUI attorney employment law, meal breaks, rest breaks, hotel employees, Des Plaines employment law attorneys traffic crimes distracted driving accidents Deer Park accident attorney Long Grove real estate attorney life insurance claims Schaumburg wrongful death attorney motorcycle accident GM ignition switches fiduciary rule Crystal Lake criminal defense attorney reckless homicide bad faith insurance claims Chicago insurance law firm Illinois motorcycle accident lawyer taxes insurance claim dispute Crystal Lake traffic attorney Crystal Lake personal injury lawyer Illinois pet lawyer Barrington estate planning lawyer Des Plaines DUI attorney unauthorized overtime Barrington employment law firm unfunded trust Joliet general practice lawyers Crystal Lake will lawyer real estate lawyer Illinois LLC creation Illinois estate planning law firm Illinois business lawyer severance agreements medication errors murder Illinois construction accident attorney criminal record Rolling Meadows drug defense attorney bicycle dooring accidents Illinois trusts attorney rollover car crashes Barrington criminal lawyer Barrington boating accident attorney LLCs life insurance policy dealing with problem employees expungement Des Plaines injury law firm field sobriety test consent to a search living wills Illinois lawyer filing a medical malpractice claim Rolling Meadows Traffic Lawyer Palatine criminal defense lawyer Des Plaines motorcycle accident attorney bike accident Arlington Heights wills and trusts attorneys Arlington Heights wills and trusts attorney Crystal Lake traffic lawyer employment attorney crossover accidents Buffalo Grove real estate attorney products liability employment contract, employment law, employment at-will, Deer Park employment law attorneys, contract, gift tax exemption, estate planning, estate planning strategies, Illinois estate planning, South Barrington estate planning attorneys work unions living trust elder law Chicago attorney Barrington medical malpractice lawyers Schaumburg drug defense lawyer criminal law Chicago will attorney Palatine injury attorney sole proprietorship Schaumburg personal injury lawyers Retaliatory Discharge Schaumburg injury lawyer Schaumburg elder law lawyer construction accidents, personal injury, wrongful death, Arlington Heights personal injury attorneys, workers' compensation Illinois traffic accident lawyer Arlington Heights car crash attorneys FMLA insurance denial appeals traffic accidents Des Plaines personal injury attorney Des Plaines Traffic Lawyer Crystal Lake pedestrian accident lawyer commercial leases Chicago employment attorney medical malpractice caretaker rights preventable medical errors Illinois insurance disputes Rolling Meadows personal injury lawyer Chicago corporate attorney Des Plaines criminal attorney swimming pools license reinstatement Illinois business law atorneys IRELA attorney fees hiring employees Crystal Lake car accident attorney Inverness elder law lawyer Schaumburg traffic lawyer cell phone license revocation wills deed transfer insurance negligence operating agreements fatal car accidents real estate closing Palatine civil litigation lawyer back injuries Palatine real estate lawyer drug possession personal injury lawyer Illinois traffic attorney civil litigation attorney IRA benefits Palatine civil attorney Illinois injury lawyer rollover accidents Arlington Heights traffic attorney Palatine employment law lawyer probate lawyer wage theft Illinois law pet law foreclosed rental property Fourth of July tax attorney Buffalo Grove employment lawyer trust payments owner responsibility denied insurance claims criminal Illinois wrongful termination lawyer premises liability Palatine employment lawyer traffic tickets Illinois rollover accident lawyers anesthesia errors living trust benefits Inverness estate planning lawyer digital assets, digital fiduciary, estate planning, digital content, Long Grove estate planning lawyers Palatine construction attorney Barrington personal injury attorney Rolling Meadows tax attorney Crystal Lake business law attorneys Crystal Lake personal injury attorney dog bites Illinois insurance claim dispute lawyer Palatine estate planning lawyer home inspection lawyer Arlington Heights lawyer Attorney Ken Apicella driving Illinois workplace discrimination attorney Barrington estate planning attorney boating DUI product liability probate Illinois red light cameras Crystal Lake car accident lawyer criminal defense Mount Prospect real estate lawyer FSLA problem employees Illinois car accident attorney Palatine trusts lawyer Des Plaines pet law attorney Des Plaines drug crimes lawyer Crystal Lake law firm vacation home Des Plaines drug lawyer Illinois Smoke Detector Act unpaid assessment jet ski accidents Rolling Meadows traffic attorney privacy loss of consortium Barrington employment attorney Arlington Heights personal injury lawyer Illinois speeding lawyer corporate law capital gains tax Des Plaines medical malpractice attorney real estate zoning coronavirus Illinois workplace lawyer Illinois Human Rights Act Rolling Meadows personal injury attorney employee discrimination Inverness insurance attorney auto accidents denied insurance claim Schaumburg estate attorney Rolling Meadows marijuana attorney pedestrian accident license suspension Rolling Meadows medical malpractice lawyers Palatine elder law attorney Illinois employment law firm underinsured motorist surgical mistakes Illinois personal injury lawyer Buffalo Grove injury lawyer breach of contract texting while driving School Visitation Rights Act liability claims irrevocable trust advance healthcare directive Rolling Meadows estate planning attorney Inverness traffic law firm fiduciary rule delay bicycle accidents Chicago estate planning financial advisors personal injury accidents Des Plaines tax law firm Palatine punch death Arlington Heights car accident lawyer residential real estate trusts life insurance cell phone tower data Illinois insurance claim attorney estate attorney Kenilworth estate planning lawyer PTSD mortgage digital media accounts, estate planning, Arlington Heights estate planning attorney, TBI cell phone accidents elder abuse Barrington civil litigation attorney employment law car accident disability benefits unpaid overtime Illinois attorney insurance claim denials llinois Real Estate Lawyers Association business litigation Arlington Heights medical malpractice lawyer slip and fall Schaumburg estate planning attorney Arlington Heights accident attorney living trust vs will medical marijuana insurance disputes, Illinois insurance disputes, Illinois insurance dispute attorneys, denied insurance claims, Arlington Heights insurance dispute attorneys BAIID murder defense Palatine law firm Illinois traffic laws small business Deer Park traffic lawyer wrongful death personal injury claims Rolling Meadows insurance dispute lawyers wills and trusts Buffalo Grove car accident lawyer insurance claim hands free device Illinois wills and trusts attorneys Crystal Lake employment attorney low-ball insurance settlement Inverness personal injury attorney condo Illinois pedestrian accident attorney traffic violations Crystal Lake civil litigation lawyer Des Plaines collections attorney Buffalo Grove personal injury attorney Illinois insurance claims lawyers Whistleblower Claims appealing an insurance claim brain injury insurance denials insurance disputes personal injury claim liability Fair Labor Standards Act construction contracts condo association boating under the influence Barrington litigation attorney car accident lawyer Rolling Meadows Attorney real estate attorneys IRS underfunded trust federal crimes loopholes nursing home negligence Illinois Probate Act of 1975 probate process Illinois tax attorney Palatine Attorney traffic violations defense CAM car collision golf accidents Crystal Lake injury attorney Chicago insurance claim attorneys Employment Discrimination Law Home Remodeling Repair Act senior citizens Buffalo Grove criminal defense lawyer Class A misdemeanor spinal cord injury traffic offenses Deer Park DUI lawyer internet pain and suffering medical malpractice claims Buffalo Grove medical malpractice lawyers BUI special needs trust Policy Cancellation traffic laws Illinois Wage Payment and Collection Act IRA trust transfer Palatine drug lawyer Illinois driving without license Arlington Heights pedestrian accidents Illinois bicycle safety employment contract DMV DNR Family Medical Leave Act personal injury, auto accident injuries, delayed injuries, serious injuries, Des Plaines personal injury attorneys no contest clauses Illinois real estate lawyer Kenilworth estate planning attorney digital information Schaumburg civil litigation attorney murder charges trucking accident lawyers Illinois Mount Prospect elder law attorney Chicago traffic lawyer Long Grove real estate lawyer estate tax Palatine traffic accidents Illinois criminal defense attorney denial of life insurance dynasty trusts Rolling Meadows criminal lawyer Crystal Lake bike accident lawyer Arlington Heights wills and trusts lawyers drug crimes lawyer South Barrington real estate attorney Buffalo Grove corporate attorney healthcare insurance claims sexual images Deer Park traffic accident attorney health insurance dispute guardianship attorney landlord tenant law Deer Park motorcycle accident lawyer Schaumburg criminal law attorney Rolling Meadows employment law attorney life insurance lawyer truck collisions Crystal Lake accident attorney minimum wage Barrington criminal defense lawyer landlord Chicago biking tips Arlington Heights insurance attorney Des Plaines accident attorney Schaumburg insurance lawyers Rolling Meadows corporate lawyer workers comp Rolling Meadows traffic law firm Palatine employment attorney texting and driving Legal Info Palatine workers compensation lawyer in terrorem provision Crystal Lake medical malpractice lawyer Schaumburg corporate attorney marijuana Schaumburg Attorney car accident lawyers Illinois home inspection Des Plaines personal injury lawyers digital evidence Crystal Lake pet attorney Arlington Heights personal injury attorney Arlington Heights Attorney Rolling Meadows insurance dispute lawyers, insurance dispute Federal Food Drug and Cosmetic Act income distribution deducation Buffalo Grove traffic lawyers drunk driving statistics Illinois civil litigation lawyer car accidents employees uninsured motorist Illinois defective products attorney estate planning lawyer Illinois workers compensation lawyer Long Grove wills and trusts attorneys Arlington Heights estate planning attorney breathalyzer test Illinois medical malpractice attorney defective products Illinois traffic attorneys institutional trustee POA insurance agent negligence investment property Palatine traffic lawyer natural gas estate planning attorney Barrington Traffic Lawyer jet ski drunk driving Rolling Meadows real estate attorney gift taxes Inverness probate lawyer Transfer on Death Instrument Schaumburg car accident attorney insurance dispute real estate traffic deaths trauma after an accident Jay Andrew compensatory time license drugs Illinois wills and trusts Schaumburg personal injury lawyer Rolling Meadows Rolling Meadows criminal attorney holiday statistics Barrington business law firm Colin H. Gilbert Deer Park medical malpractice attorney Palatine corporate law attorneys distracted driving accident victims Long Grove estate planning Barrington employment law attorney trench injuries icy parking lots Mt Prospect Attorney Arlington Heights trucking lawyer probate fees South Barrington real estate lawyer rent to own real estate contracts Illinois personal injury Rolling Meadows employment attorney suspended license Schaumburg probate attorney accidental death benefits pedestrian accidents pedestrian-automobile accident Des Plaines Food and Drug Administration's Food Safety Modernization Act Liquor Control Act installment contracts Deer Park criminal attorney defective products lawyer insurance dispute, insurance dispute lawyers, insurance claim denial, insurance claim delays, Rolling Meadows insurance dispute attorneys preventing accidents Affordable Care Act estate planning for college students creditors Landlord Tenant Ordinance Chicago trucking accident attorney Super Mario changes to mortgage law Crystal Lake medical malpractice attorneys Illinois Trust Code involuntary manslaughter car crashes insurance attorney marijuana crimes attorney Arlington Heights criminal lawyer Inverness real estate attorney BAC spinal cord injuries car crash Chicago will attorney, social media platforms, Illinois estate planning lawyer, contracts child safety Illinois job attorney Buffalo Grove probate lawyer Illinois mortgages Illinois registered agent Illinois insurance lawyer fault based insurance real estate leasing estate planning, digital assets, Revised Uniform Fiduciary Access to Digital Assets Act, Illinois digital assets, Illinois estate planning, Rolling Meadows boating crash lawyer Schaumburg employment law attorneys Illinois Transfer on Death Instrument insurance dispute attorney Rolling Meadows probate lawyer automated cars Illinois employment law attorney Schaumburg real estate lawyer power of attorney for healthcare Illinois insurance dispute lawyers commercial leasing employment lawyer right to work Rolling Meadows car accident lawyers slip and fall accidents estate plan Self-Directed IRA Accounts pay when paid contract dram shop law Crystal Lake employment law attorney Illinois Workers’ Compensation Commission sexual harassment rumble strips startup company Forcible Entry