Illinois Trust Accounting Explained | What is a Trust Accounting?

In this article, we will explain Illinois trust accountings.  We address the following:

• What is a trust accounting?
• Who is entitled to a trust accounting in Illinois?
• What information must be included in a trust accounting in Illinois?
  

What is a Trust Accounting?

A trust accounting is a document created by the trustee to inform the settlor (if living) or beneficiaries of what assets are or have been in the trust.  It includes a ledger of income and disbursements. 

The treatment of a trust is not unlike that of an estate or will.  To learn more about estate planning as a whole, see our article entitled What is an Estate Accounting? | What Information Should an Estate Accounting Contain in Illinois Probate?

When is a Trustee Required to Provide a Trust Accounting in Illinois?

A trust accounting must be made and properly reported to involved parties a minimum of once per year, with the exception of beneficiaries who have chosen to waive that right . 

Who is Entitled to a Trust Accounting in Illinois?

If the trust is revocable, the trustee only needs to make a yearly accounting to the settlor (person who opened the account).  If the trust is irrevocable or the settlor has passed away, the trustee needs to provide a yearly accounting to all of the beneficiaries, including current, contingent and remainder beneficiaries.

In addition, other “interested parties” who are not named as beneficiaries of the trust may have the right to an accounting of the trust.  The court considers an “interested party” to be anyone with a financial, property or fiduciary interest in the settlor’s trust estate.  The people entitled to a trust accounting will most likely be included in the will as well, as the trust itself is part of the settlor’s estate.

Check out our article about who is entitled to an estate accounting for more information.

What Information Must be Included in a Trust Accounting in Illinois?

Here are a list of things that a trust accounting must include:

• An inventory of the trust assets on the day of the decedent’s death;
• A detailed explanation of all of the income received by the trust, including where the income came from and a description of the nature of the income; and
• A detailed explanation of all of the expenditures and disbursements from the trust, including where each disbursement was paid and a description as to the purpose of the disbursement.

If any of the aforementioned information is missing from the trust accounting, beneficiaries of the account have the right to demand a more detailed accounting.

For more information, check out our article entitled What is a Trust? | Illinois Trusts Explained.