By Hampton & Hampton LLP | Estate Planning Attorneys Serving Chicago and the Surrounding Suburbs
Taking on the role of trustee in Illinois often means stepping into a position you didn’t plan for. You might need to coordinate the sale of a small rental property, handle a loved one’s bank accounts, or sort through family heirlooms before they’re passed down. These responsibilities can be as personal as they are procedural — and knowing where to start makes all the difference.
At Hampton & Hampton LLP we help trustees throughout Chicago and surrounding communities to make the process clear and manageable. Whether it’s updating property records with the Cook County Recorder of Deeds, addressing tax obligations through the Illinois Department of Revenue, or meeting requirements under the Illinois Trust Code – 760 ILCS 3, we help you move from uncertainty to confident action.
What Is a Trustee Under Illinois Law?
A trustee is the individual or institution responsible for managing trust assets according to the trust agreement and for the benefit of the beneficiaries. This is a fiduciary duty, meaning you must act:
- Loyally
- Responsibly
- In good faith
- In compliance with Illinois trust statutes
Under the Illinois Trust Code – 760 ILCS 3/801, trustees must administer the trust in good faith, in line with its terms, and in the beneficiaries’ best interests. Failing to meet these obligations can lead to personal legal liability, including court-ordered removal, restitution, and surcharge judgments.
First Steps for a Newly Appointed Trustee in Illinois
If you’ve just learned you are a trustee, act quickly to establish control and ensure compliance.
1. Review the Trust Document Thoroughly
Identify:
- All named beneficiaries
- Your authority and responsibilities
- Whether the trust is revocable or irrevocable
- Instructions for distributions
- Administrative powers such as selling property or investing assets
Learn how our Wills and trusts services can align to simplify this review process.
2. Locate and Secure All Trust Assets
Trust assets may include:
- Real estate
- Bank and brokerage accounts
- Life insurance proceeds
- Personal property
- Business interests
Illinois-Specific Tip:
- Assets meant for the trust but not yet titled in its name (e.g., payable-on-death designations or pour-over wills) must be transferred using proper documentation.
- File a change of ownership with the county assessor for any Illinois real estate to ensure tax records reflect the trust as owner and avoid transfer delays.
3. Notify Beneficiaries and Interested Parties
Under 760 ILCS 3/813, trustees must provide certain information to qualified beneficiaries, including your name and address, typically within 90 days of accepting the role or learning of the trust’s existence. Meeting this deadline helps prevent disputes and ensures compliance.
4. Determine Whether the Trust Needs an EIN
Not all trusts require a separate tax ID. In Illinois, an EIN is generally required if:
- The trust becomes irrevocable after the grantor’s death and remains active
- You are sole trustee and sole beneficiary but plan to keep assets in trust temporarily or long-term
If assets are distributed immediately and the trust is terminated, an EIN may not be needed.
5. Keep Detailed Records and Provide Accountings
Illinois trustees must maintain records of deposits, distributions, expenses, and communications with beneficiaries. Annual or periodic accountings are often required and serve as protection against claims of mismanagement.
Special Case: Trustee and Sole Beneficiary
If you are both trustee and sole beneficiary—common when an only child inherits a parent’s trust—Illinois law still requires you to:
- Review the trust document to confirm your role
- Retitle or distribute assets into your personal name
- Pay outstanding expenses, debts, and taxes
- Document every transaction
- Formally terminate the trust once all obligations are met
What Most Trustees Miss — and How We Close the Gaps
Many first-time trustees in Illinois make avoidable mistakes, such as:
- Not re-titling real estate before sale or transfer
- Overlooking final tax obligations before making distributions
- Failing to secure digital accounts linked to trust assets
- Missing statutory notice or accounting requirements
We help trustees anticipate and avoid these issues before they become expensive legal problems.
When to Call an Attorney for Trust Administration
Professional guidance is strongly advised if:
- Beneficiaries dispute your decisions
- The trust owns a business or out-of-state real estate
- The trust document is unclear or outdated
- Tax filings are required
- You’re unsure about deadlines or your legal authority
- You discover assets in another state — multi-state trust administration can trigger separate tax filings, ancillary probate, and compliance with that state’s property laws.
FAQs – Illinois Trust Administration
Q: How long does trust administration take in Illinois?
A: It depends on the trust’s complexity and clarity. Simple trusts can close within months; others may stay active for years.
Q: Do I need to file taxes for the trust?
A: If the trust earns income or stays open after the grantor’s death, you likely need to file a trust tax return. An EIN is typically required in these situations.
Q: Can I be paid for serving as trustee in Illinois?
A: Yes. Trustees are generally entitled to “reasonable compensation” unless the trust document states otherwise. Learn more about our Estate Planning Attorney – Chicago services for trustee guidance.
Serving Chicago and the Collar Counties: Cook, DuPage, Lake, Will, Kane, and McHenry Counties
Call: 470-567-1529
Schedule Your Consultation: hamptonandhamptonlaw.com