IRREVOCABLE TRUST AGREEMENT

(Illinois)

[// GUIDANCE: This template is drafted to comply with the Illinois Trust Code, 760 Ill. Comp. Stat. 3/1-101 et seq., and incorporates the user-specified metadata. All bracketed items must be completed or revised by counsel prior to execution.]

TABLE OF CONTENTS

I. Document Header
II. Definitions
III. Operative Provisions
IV. Representations & Warranties
V. Covenants & Restrictions
VI. Default & Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution Block

I. DOCUMENT HEADER

1.1 Title and Parties

This Irrevocable Trust Agreement (the “Agreement”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and among:

(a) [GRANTOR FULL LEGAL NAME], an individual residing at [ADDRESS] (“Grantor”); and
(b) [TRUSTEE FULL LEGAL NAME], whose principal place of business/residence is [ADDRESS] (“Trustee”).

[// GUIDANCE: Where multiple Grantors or Co-Trustees exist, duplicate and adjust signature blocks accordingly.]

1.2 Recitals

A. Grantor desires to create an irrevocable trust (the “Trust”) to hold, manage, and distribute the Trust Estate for the benefit of the Beneficiaries identified herein, in accordance with the Illinois Trust Code, 760 Ill. Comp. Stat. 3/1-101 et seq.
B. Trustee is willing to accept the appointment and hold the Trust Estate subject to the terms and conditions set forth below.
C. Grantor intends that the Trust be treated for federal and state tax purposes as a [GRANTOR/NON-GRANTOR] trust.

NOW, THEREFORE, in consideration of the mutual covenants and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

II. DEFINITIONS

The following terms, when capitalized, shall have the meanings set forth below. Any term not defined herein shall have the meaning assigned by applicable Illinois law.

“Accounting Period” – Each twelve-month period ending [MONTH / DAY] unless the Trustee selects a different fiscal year for the Trust.

“Beneficiary(ies)” – The persons or entities listed on Schedule A, together with any successors, appointees, or their estates, as applicable.

“Code” – The Internal Revenue Code of 1986, as amended.

“Discretionary Distribution” – A distribution made in the Trustee’s sole and absolute discretion under Section III.3.

“Qualified Beneficiary” – As defined in 760 Ill. Comp. Stat. 3/103(18), or any successor provision.

“Trust Estate” – All property transferred to the Trust under Section III.1 and all additions, substitutions, accretions, and reinvestments thereof.

III. OPERATIVE PROVISIONS

3.1 Transfer of Property

Grantor hereby irrevocably assigns, conveys, and delivers to Trustee the property described on Schedule B (the “Initial Trust Property”), receipt of which Trustee acknowledges, to hold in trust under the terms of this Agreement (together with all future additions, the “Trust Estate”).

3.2 Irrevocability

(a) This Trust is irrevocable. Except as expressly provided in Section VII.4 (Decanting & Statutory Modification) and as otherwise permitted under 760 Ill. Comp. Stat. 3/411–417, Grantor shall have no power, whether alone or in conjunction with any other person, to alter, amend, revoke, or terminate the Trust or any of its provisions.
(b) Any attempted revocation or modification by Grantor contrary to this section shall be void ab initio.

3.3 Distributions

(a) Mandatory Distributions. Trustee shall distribute to or for the benefit of the Beneficiaries the amounts, if any, specified in Schedule C.
(b) Discretionary Distributions. Subject to Section V.2 (Spendthrift), Trustee may make Discretionary Distributions for the health, education, maintenance, or support (“HEMS standard”) of a Beneficiary at such times and in such amounts as Trustee, in Trustee’s sole discretion, deems advisable.
(c) Distribution Guidelines. In exercising discretion, Trustee may consider other financial resources of the Beneficiary, tax implications, and any written direction from the Trust Protector, if appointed.

3.4 Trustee Powers

Subject to statutory duties, Trustee shall have all powers granted by 760 Ill. Comp. Stat. 3/815, including but not limited to:
1. Investing and reinvesting the Trust Estate;
2. Retaining any asset, including non-diversified holdings;
3. Borrowing money and encumbering Trust assets;
4. Allocating receipts and expenses between income and principal;
5. Employing professional advisors and delegating authority consistent with 760 Ill. Comp. Stat. 3/807.

3.5 Accounting & Reports

Within 90 days after the close of each Accounting Period, Trustee shall furnish each Qualified Beneficiary a written report meeting the requirements of 760 Ill. Comp. Stat. 3/813, unless such Beneficiary waives the right in writing.

3.6 Tax Matters

(a) EIN. Trustee shall obtain and maintain a federal employer identification number for the Trust unless the Trust is treated as wholly owned by the Grantor for tax purposes.
(b) Returns. Trustee shall prepare and file all tax returns required by federal, state, and local law and may engage accountants at Trust expense.
(c) Tax Elections. Trustee may make any tax election deemed advisable, including but not limited to a Code § 645 election for qualified revocable trusts, if applicable.

3.7 Addition or Removal of Trustees

[// GUIDANCE: Insert bespoke succession mechanics as desired.]
(a) Resignation. Trustee may resign upon 30 days’ written notice to the Qualified Beneficiaries and any Co-Trustee.
(b) Removal. A majority of the Qualified Beneficiaries, acting jointly, may remove Trustee with or without cause by written notice.
(c) Successor Trustee. Upon resignation, removal, incapacity, or death of Trustee, [SUCCESSOR TRUSTEE NAME] shall serve. If no successor is willing or able, a successor shall be appointed by the Probate Division of the Circuit Court of [COUNTY], Illinois (“Probate Court”).

IV. REPRESENTATIONS & WARRANTIES

4.1 Grantor
(a) Authority. Grantor has full legal capacity and authority to enter into this Agreement and to transfer the Initial Trust Property free of liens or encumbrances.
(b) Title. Grantor warrants clear title to all property conveyed herein.
(c) Tax Disclosure. Grantor acknowledges that (i) no legal or tax advice has been provided by Trustee, and (ii) Grantor has consulted independent counsel regarding the tax consequences of establishing this Trust.

4.2 Trustee
(a) Authority. Trustee represents that Trustee is legally competent to serve and is not disqualified under any applicable statute.
(b) Fiduciary Duty. Trustee shall discharge fiduciary duties in accordance with the Illinois Trust Code and the terms herein.
(c) Reliance. Trustee may rely on any document reasonably believed genuine without liability for verification.

[// GUIDANCE: Survival language may be added if representations are intended to survive replacement of Trustee.]

V. COVENANTS & RESTRICTIONS

5.1 Grantor Covenants
Grantor covenants not to (a) revoke or amend the Trust, (b) direct or control Trustee’s investment decisions except as expressly provided herein, or (c) exercise any retained power in a manner that would cause inclusion of the Trust Estate in Grantor’s estate contrary to Grantor’s stated tax intentions.

5.2 Spendthrift Provision
Pursuant to 760 Ill. Comp. Stat. 3/502, the interest of any Beneficiary shall not be subject to voluntary or involuntary transfer, assignment, or anticipation, and shall be free from the claims of creditors until received by the Beneficiary.

5.3 Reporting & Notice
Beneficiaries shall promptly provide Trustee with current contact information and any tax identification data reasonably requested.

VI. DEFAULT & REMEDIES

6.1 Events of Default
For purposes of this Agreement, each of the following constitutes a “Default”:
(a) Trustee’s material breach of fiduciary duty;
(b) Trustee’s failure to render required reports under Section 3.5 within 30 days after written demand;
(c) Trustee’s insolvency or conviction of a felony involving dishonesty.

6.2 Notice & Cure
Before any removal or legal action for Default, Qualified Beneficiaries shall provide Trustee written notice specifying the Default and a 30-day period to cure, unless the Probate Court waives the cure period for good cause.

6.3 Remedies
Upon an uncured Default, Qualified Beneficiaries may:
1. Petition the Probate Court for removal and surcharge;
2. Seek specific performance or injunctive relief under Section VIII.4;
3. Compel an accounting or restitution.

6.4 Attorneys’ Fees
Trustee and any Beneficiary prevailing in an action to enforce this Agreement shall be entitled to reasonable attorneys’ fees and costs, payable from the Trust Estate except as the Probate Court directs otherwise.

VII. RISK ALLOCATION

7.1 Trustee Indemnification
(a) Scope. To the fullest extent permitted by 760 Ill. Comp. Stat. 3/1009, Trustee shall be indemnified and held harmless out of the Trust Estate against any liability, claim, or expense (including reasonable attorneys’ fees) incurred by reason of any act or omission within the scope of Trustee’s authority, except for liability arising from Trustee’s willful misconduct or gross negligence.
(b) Advancement. Trustee may, in Trustee’s discretion, advance expenses subject to later adjustment if indemnification is ultimately determined improper.

7.2 Limitation of Liability
Trustee’s liability to the Beneficiaries shall be limited to the value of the Trust Estate; Trustee shall have no personal liability except in cases of willful misconduct or gross negligence.

7.3 Insurance
Trustee may purchase, at Trust expense, fiduciary liability insurance naming Trustee as insured and the Trust as additional insured.

7.4 Decanting & Statutory Modification
(a) Decanting. Trustee may exercise the power to appoint the Trust Estate to a new trust under 760 Ill. Comp. Stat. 3/1201–1212, provided the new trust complies with the irrevocability intent of Section 3.2.
(b) Judicial Modification. Nothing herein shall preclude modification by court order under 760 Ill. Comp. Stat. 3/411–417.

7.5 Force Majeure
Trustee shall not be liable for delays or failures caused by acts of God, natural disasters, governmental restrictions, or other events beyond Trustee’s reasonable control; provided that Trustee exercises reasonable diligence to mitigate the effects thereof.

VIII. DISPUTE RESOLUTION

8.1 Governing Law
This Agreement and all disputes arising hereunder shall be governed by and construed in accordance with the internal laws of the State of Illinois, without regard to conflicts of law principles.

8.2 Forum Selection
Exclusive venue for any judicial proceeding relating to the Trust shall be the Probate Division of the Circuit Court of [COUNTY], Illinois.

8.3 Arbitration (Optional)
[OPTIONAL – STRIKE IF NOT DESIRED]
Any internal trust dispute not involving removal of Trustee may, at the election of the Trustee or a majority of Qualified Beneficiaries, be submitted to binding arbitration administered by [ARBITRATION ADMINISTRATOR] under its Trust and Estates Rules. Judgment on the award may be entered in any court of competent jurisdiction.

8.4 Injunctive Relief
Notwithstanding Section 8.3, any party may seek temporary, preliminary, or permanent injunctive relief from the Probate Court to protect the Trust Estate or enforce fiduciary duties, without prejudice to later arbitration or litigation on the merits.

8.5 Jury Waiver
[// GUIDANCE: Illinois probate matters are generally non-jury; however, to preserve statutory rights the clause below is advisory only.]
The parties acknowledge that actions in the Probate Court are tried without a jury. Nothing herein shall be construed as a waiver of any statutory right to a jury trial where such right may not be waived.

IX. GENERAL PROVISIONS

9.1 Amendment & Waiver
Except as provided in Sections 3.2 and 7.4, this Trust may not be amended. No waiver of any provision shall be effective unless in writing and signed by the waiving party; no waiver shall constitute a continuing waiver.

9.2 Assignment
No party may assign rights or delegate duties hereunder except as expressly permitted by this Agreement or applicable law.

9.3 Successors & Assigns
The terms of this Agreement shall bind and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, and permitted assigns.

9.4 Severability
If any provision is held invalid or unenforceable, such provision shall be reformed to the minimum extent necessary to reflect the parties’ intent, and the remaining provisions shall remain in full force and effect.

9.5 Integration
This Agreement constitutes the entire understanding of the parties relating to the subject matter hereof and supersedes all prior agreements, written or oral.

9.6 Counterparts; Electronic Signatures
This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which together constitute one instrument. Electronic signatures and notarizations compliant with 5 ILCS 175/-101 et seq. shall be deemed original.

9.7 Headings
Headings are for convenience only and shall not affect interpretation.

X. EXECUTION BLOCK

IN WITNESS WHEREOF, the parties have executed this Irrevocable Trust Agreement as of the Effective Date.

Grantor:

[GRANTOR NAME]

Trustee:

[TRUSTEE NAME], Trustee

[OPTIONAL TRUST PROTECTOR SIGNATURE BLOCK]

STATE OF ILLINOIS )

COUNTY OF [COUNTY] )

Subscribed and sworn before me on ______, 20__, by [GRANTOR NAME] and [TRUSTEE NAME].

Notary Public
My Commission Expires: ______

SCHEDULE A – BENEFICIARIES

1. [NAME, Address, Relationship, SSN/Tax ID (last four digits)]
2. […]

SCHEDULE B – INITIAL TRUST PROPERTY

SCHEDULE C – MANDATORY DISTRIBUTIONS

[Example: “Upon Grantor’s death, Trustee shall distribute $____ per year to each living child of Grantor until age 25.”]

[// GUIDANCE: Attach additional schedules for specific dispositive provisions, life insurance policies, or special assets as necessary.]

[// GUIDANCE: Prior to execution, confirm compliance with (i) Illinois Notary Public Act formalities; (ii) any ancillary state tax filings; and (iii) federal gift tax reporting (IRS Form 709) if applicable.]