Annual Trust Accounting

ANNUAL TRUST ACCOUNTING

State of Illinois

Pursuant to the Illinois Trust Code, 760 ILCS 3/813.1

ARTICLE I — IDENTIFICATION AND ACCOUNTING PERIOD

Section 1.1 — Trust Identification

Section 1.2 — Accounting Period

Section 1.3 — Trustee(s)

Section 1.4 — Beneficiaries Receiving This Accounting

ARTICLE II — STATEMENT OF ASSETS AT BEGINNING OF PERIOD

Section 2.1 — Carrying Value as of [__/__/____]

Section 2.2 — Liabilities as of [__/__/____]

Section 2.3 — Net Trust Estate at Beginning of Period

ARTICLE III — RECEIPTS DURING ACCOUNTING PERIOD

Section 3.1 — Income Receipts

Section 3.2 — Principal Receipts

ARTICLE IV — DISBURSEMENTS DURING ACCOUNTING PERIOD

Section 4.1 — Income Disbursements

Section 4.2 — Principal Disbursements

Section 4.3 — Trustee Compensation

Section 4.4 — Professional and Administrative Fees

ARTICLE V — DISTRIBUTIONS TO BENEFICIARIES

ARTICLE VI — INVESTMENT TRANSACTIONS

Section 6.1 — Purchases

Section 6.2 — Sales / Dispositions

Section 6.3 — Changes in Form

ARTICLE VII — STATEMENT OF ASSETS AT END OF PERIOD

Section 7.1 — Carrying Value as of [__/__/____]

Section 7.2 — Liabilities as of [__/__/____]

Section 7.3 — Reconciliation

ARTICLE VIII — ADMINISTRATIVE DISCLOSURES

Section 8.1 — Material Changes During Period

☐ Change in trustee (specify): [________________________________]

☐ Change in trustee compensation rate or method (notice given on [__/__/____])

☐ Change in trustee contact information (notice given on [__/__/____])

☐ New qualified beneficiary identified on [__/__/____]

☐ Change in or appointment of designated representative under § 307

☐ Material litigation or claim involving the trust (specify): [________________________________]

☐ Material related-party / conflict transaction (specify): [________________________________]

☐ None.

Section 8.2 — Confidentiality Restrictions

☐ One or more trust assets are subject to confidentiality restrictions. A beneficiary requesting information about such an asset must agree to be bound by those restrictions under 760 ILCS 3/813.1(f). Affected asset(s): [________________________________].

☐ Not applicable.

ARTICLE IX — STATUTE-OF-LIMITATIONS NOTICE UNDER 760 ILCS 3/1005

Section 9.1 — Limitations Notice (Post-2020 Trusts — § 1005(a)(1))

IMPORTANT NOTICE — STATUTE OF LIMITATIONS — 760 ILCS 3/1005(a)(1).

A beneficiary may not commence a proceeding against the trustee for breach of trust for any matter disclosed in writing by this trust accounting after two (2) years from the date this accounting is furnished to you, provided this accounting (or other communication) adequately discloses the existence of a potential claim for breach of trust by providing sufficient information so that you know of the potential claim or should have inquired into its existence.

This limitation is binding on you, on each person represented by you under Article 3 of the Illinois Trust Code, and on all of your and their respective successors, representatives, heirs, and assigns.

Section 9.2 — Alternate Limitations Notice (Pre-2020 Trusts — § 1005(a)(2))

[For pre-2020 trusts only:] A current account is binding on each beneficiary receiving the account, and on the beneficiary's heirs and assigns, unless an action against the trustee is commenced within three (3) years after the date the current account is furnished. A final account is binding unless action is commenced within three (3) years after the date the final account is furnished. (760 ILCS 3/1005(a)(2).)

Section 9.3 — Residual Limitations Period (§ 1005(b))

Unless barred earlier under § 1005(a), any judicial proceeding by a beneficiary against the trustee for breach of trust must be commenced within five (5) years after the first to occur of: (i) the removal, resignation, or death of the trustee; (ii) the termination of the beneficiary's interest in the trust; or (iii) the termination of the trust.

Section 9.4 — Fraudulent Concealment (§ 1005(c))

Notwithstanding the foregoing, a beneficiary may bring any action against the trustee for fraudulent concealment within the time limit set forth in 735 ILCS 5/13-215.

Section 9.5 — Right to Object

If you object to any matter disclosed in this accounting, you should:

(a) Promptly notify the trustee in writing at the address shown in Section 1.3, identifying the specific transaction or matter, the basis for the objection, and the relief requested; and

(b) Consult with independent counsel concerning your rights and applicable deadlines under 760 ILCS 3/1005.

Failure to commence a proceeding within the applicable limitations period will bar the claim.

ARTICLE X — DESIGNATED REPRESENTATIVE RECEIPT (IF APPLICABLE)

Section 10.1 — Designated Representative

☐ Not applicable. This accounting is delivered directly to the qualified beneficiary or beneficiaries identified in Section 1.4.

☐ Applicable. Pursuant to 760 ILCS 3/307 and the trust instrument, this accounting is delivered to the following designated representative on behalf of the represented qualified beneficiary:

Section 10.2 — Acknowledgment

By accepting this accounting on behalf of the represented qualified beneficiary, the designated representative acknowledges the fiduciary duties imposed by 760 ILCS 3/307(c)–(d) and the limitations on representation set forth in § 307(b).

ARTICLE XI — WAIVER AND ELECTION OF FUTURE ACCOUNTINGS

Section 11.1 — Right to Waive

Under 760 ILCS 3/813.1(g), a qualified beneficiary may waive the right to receive future trust accountings by an instrument in writing delivered to the trustee, and may at any time withdraw a previously given waiver in writing as to future accountings.

Section 11.2 — Election (Optional)

☐ I do not waive my right to receive future accountings.

☐ I hereby waive the right to receive future annual accountings until further written notice. I understand I may revoke this waiver at any time as to future accountings.

Beneficiary / Representative Signature: ____________________________________

Print Name: [________________________________]

Date: [__/__/____]

ARTICLE XII — TRUSTEE VERIFICATION

I, the undersigned trustee, declare under penalty of perjury under the laws of the State of Illinois that:

(a) I am the duly acting trustee (or co-trustee) of the trust identified in Article I;

(b) I have prepared this Annual Trust Accounting in good faith and in accordance with 760 ILCS 3/813.1;

(c) To the best of my knowledge and belief, the receipts, disbursements, distributions, trustee compensation, professional fees, beginning and ending statements of assets and liabilities, and other matters reported in this accounting are true, correct, and complete in all material respects for the period stated; and

(d) This accounting is intended to satisfy the trustee's annual reporting obligation under 760 ILCS 3/813.1(b)(2) or (3), as applicable, and to commence the running of the limitations period under 760 ILCS 3/1005(a) with respect to the matters disclosed herein.

Trustee: ____________________________________

Print Name: [________________________________]

Date: [__/__/____]

Co-Trustee (if any): ____________________________________

Print Name: [________________________________]

Date: [__/__/____]

ARTICLE XIII — PROOF OF DELIVERY

I certify that on [__/__/____], I delivered this Annual Trust Accounting to each recipient identified in Section 1.4 by the method indicated therein. Tracking, certified mail receipts, or electronic-delivery confirmations are retained in the trust records.

Server: ____________________________________

Print Name: [________________________________]

Date: [__/__/____]

ARTICLE XIV — EXHIBITS (OPTIONAL)

The following exhibits, if any, are attached and incorporated by reference:

☐ Exhibit A — Detailed Schedule of Investments (Beginning)

☐ Exhibit B — Detailed Schedule of Investments (Ending)

☐ Exhibit C — Brokerage / Custody Statements

☐ Exhibit D — Bank Statements

☐ Exhibit E — Appraisals

☐ Exhibit F — Tax Returns (Form 1041, Schedule K-1) for the Period

☐ Exhibit G — Counsel / Accountant Engagement Letters

☐ Other: [________________________________]

Sources and References

• 760 ILCS 3/103 — Definitions ("qualified beneficiary," "trust accounting")
• 760 ILCS 3/Article 3 — Representation (§§ 301–307)
• 760 ILCS 3/307 — Designated representative
• 760 ILCS 3/813.1 — Duty to inform and account (post-2020 trusts)
• 760 ILCS 3/813.2 — Duty to inform and account (pre-2020 trusts)
• 760 ILCS 3/1005 — Limitation on action against trustee
• 760 ILCS 3/1008 — Exculpation of trustee
• 760 ILCS 3/1009 — Beneficiary's consent, release, or ratification
• 760 ILCS 3/1102 — Notice of judicial proceedings
• 760 ILCS 3/105 — Default and mandatory rules
• 735 ILCS 5/13-215 — Fraudulent concealment
• P.A. 101-48 (eff. 1-1-20); P.A. 102-279 (eff. 1-1-22); P.A. 102-558 (eff. 8-20-21)

This template must be reviewed and customized by a qualified Illinois attorney before use. The applicable statute of limitations under 760 ILCS 3/1005 depends on whether the trust became irrevocable before or after January 1, 2020. The trustee should also consider whether to seek judicial approval of the accounting under 760 ILCS 3/813.1(i) and should retain proof of delivery to support the § 813.1(h) presumption of receipt.