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Exemption: Pre-need cemetery sales funds, care funds, and trust funds

Citation: Stat. - 815 Ill. Comp. Stat. 390/16

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815 Ill. Comp. Stat. 390/16 :
Act 390. Illinois Pre-need Cemetery Sales Act (Refs & Annos)

390/16. Trust funds; disbursements

� 16. Trust funds; disbursements.

(a) A trustee shall make no disbursements from the trust fund except as provided in this Act.

(b) A trustee shall, with respect to the investment of such trust funds, exercise the judgment and care under the circumstances then prevailing which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital.

The seller shall act as trustee of all amounts received for cemetery merchandise, services, or undeveloped spaces until those amounts have been deposited into the trust fund. The seller may continue to be the trustee of up to $500,000 that has been deposited into the trust fund, but the seller must retain an independent trustee for any amount of trust funds in excess of $500,000. A seller holding trust funds in excess of $500,000 must retain an independent trustee for its trust funds in excess of $500,000 as soon as may be practical. The Comptroller shall have the right to disqualify the trustee upon the same grounds as for refusing to grant or revoking a license hereunder. Upon notice to the Comptroller, the seller may change the trustee of the trust fund.

(c) The trustee may rely upon certifications and affidavits made to it under the provisions of this Act, and shall not be liable to any person for such reliance.

(d) A trustee shall be allowed to withdraw from the trust funds maintained pursuant to this Act, payable solely from the income earned on such trust funds, a reasonable fee for all usual and customary services for the operation of the trust fund, including, but not limited to trustee fees, investment advisor fees, allocation fees, annual audit fees and other similar fees. The maximum amount allowed to be withdrawn for these fees each year shall be the lesser of 3% of the balance of the trust calculated on an annual basis or the amount of annual income generated therefrom.

(e) The trust shall be a single-purpose trust fund. In the event of the seller's bankruptcy, insolvency or assignment for the benefit of creditors, or an adverse judgment, the trust funds shall not be available to any creditor as assets of the seller or to pay any expenses of any bankruptcy or similar proceeding, but shall be distributed to the purchasers or managed for their benefit by the trustee holding the funds. Except in an action by the Comptroller to revoke a license issued pursuant to this Act and for creation of a receivership as provided in this Act, the trust shall not be subject to judgment, execution, garnishment, attachment, or other seizure by process in bankruptcy or otherwise, nor to sale, pledge, mortgage, or other alienation, and shall not be assignable except as approved by the Comptroller. The changes made by this amendatory Act of the 91st General Assembly are intended to clarify existing law regarding the inability of licensees to pledge the trust.

(f) Because it is not known at the time of deposit or at the time that income is earned on the trust account to whom the principal and the accumulated earnings will be distributed, for purposes of determining the Illinois Income Tax due on these trust funds, the principal and any accrued earnings or losses relating to each individual account shall be held in suspense until the final determination is made as to whom the account shall be paid.
Last Amended: 2010
2010
CREDIT(S)

P.A. 84-239, � 16, eff. March 2, 1986. Amended by P.A. 85-842, � 1, eff. Sept. 24, 1987; P.A. 88-477, � 15, eff. Jan. 1, 1994; P.A. 89-615, � 20, eff. Aug. 9, 1996; P.A. 91-7, � 10, eff. June 1, 1999; P.A. 92-419, � 45, eff. Jan. 1, 2002; P.A. 96-879, � 10, eff. Feb. 2, 2010.
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