Duty to inform and account; trusts irrevocable and trustees accepting appointment after effective date of Code.
(a)This Section applies to all trusts created under a trust instrument that became irrevocable after the effective date of this Code and, subject to Section 603, to all revocable trusts except with respect to a trustee of a revocable trust who accepted such trustee's trusteeship before the effective date of this Code. This Section is prospective only and does not apply to any trust created under a trust instrument that became irrevocable before the effective date of this Code. Subject to Section 105, this Section supplants any common law duty of a trustee to inform and account to trust beneficiaries.
(b)General principles.
(1)The trustee shall notify each qualified beneficiary
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Duty to inform and account; trusts irrevocable and trustees accepting appointment after effective date of Code. (a) This Section applies to all trusts created under a trust instrument that became irrevocable after the effective date of this Code and, subject to Section 603, to all revocable trusts except with respect to a trustee of a revocable trust who accepted such trustee's trusteeship before the effective date of this Code. This Section is prospective only and does not apply to any trust created under a trust instrument that became irrevocable before the effective date of this Code. Subject to Section 105, this Section supplants any common law duty of a trustee to inform and account to trust beneficiaries. (b) General principles. (1) The trustee shall notify each qualified beneficiary: (A) of the trust's existence; (B) of the beneficiary's right to request a complete copy of the trust instrument or, if the trust instrument so provides, only the portion of the trust instrument that set forth the terms of the trust in which the qualified beneficiary has an interest as a qualified beneficiary, as applicable; and (C) whether the beneficiary has a right to receive or request trust accountings. The notice required by this paragraph (1) must be given: (i) within 90 days of the trust becoming irrevocable or if no trustee is then acting within 90 days of the trustee's acceptance of the trusteeship; (ii) within 90 days of the trustee acquiring knowledge that a qualified beneficiary has a representative under Article 3 who did not previously receive notice; (iii) within 90 days of the trustee acquiring knowledge that a qualified beneficiary who previously had a representative under Article 3 no longer has a representative under Article 3; and (iv) within 90 days of the trustee acquiring knowledge that there is a new qualified beneficiary. (2) A trustee shall send at least annually a trust accounting to all current beneficiaries. (3) A trustee shall send at least annually a trust accounting to all presumptive remainder beneficiaries. (4) Upon termination of a trust, a trustee shall send a trust accounting to all beneficiaries entitled to receive a distribution of the residue of the trust. (5) Notwithstanding any other provision, a trustee in its discretion may provide notice, information, trust accountings, reports, or a complete copy of the trust instrument to any beneficiary of the trust regardless of whether the communication is otherwise required to be provided. (6) Upon the reasonable request of a qualified beneficiary, the trustee shall promptly furnish to the qualified beneficiary a complete copy of the trust instrument. (7) Notwithstanding any other provision, a trustee is deemed to have fully and completely discharged the trustee's duties under this Section to inform and account to all beneficiaries, at common law or otherwise, if the trustee provides the notice required under paragraph (1) to each qualified beneficiary and if the trustee provides at least annually and on termination of the trust a trust accounting required by paragraph (2), (3), or (4) to each beneficiary entitled to a trust accounting. (8) For each asset or class of assets described in a trust accounting for which there is no readily available market value, the trustee, in the trustee's discretion, may determine whether to estimate the value or use a nominal carrying value for such an asset, how to estimate the value of such an asset, and whether and how often to engage a professional appraiser to value such an asset. (c) Upon a vacancy in a trusteeship, unless a co-trustee remains in office, the trust accounting required by subsection (b) must be sent to the beneficiaries entitled to the accounting by the former trustee. A personal representative, guardian of the estate, or guardian of the person may send the trust accounting to the beneficiaries entitled to the accounting on behalf of a deceased or incapacitated trustee. (d) Other required notices. (1) A trustee shall: (A) within 90 days after accepting a trusteeship, notify each qualified beneficiary of the acceptance and of the trustee's name, address, and telephone number, except that the notice requirement of this subdivision (A) does not apply with respect to a succession of a corporate trustee by merger or consolidation with another corporate fiduciary or by transfer between holding company affiliates if there is no change in the contact information for the trustee, in which case the successor trustee has discretion to determine what timing and manner of notice is appropriate; (B) notify each qualified beneficiary in advance of any change in the rate of or the method of determining the trustee's compensation; and (C) notify each qualified beneficiary of the trustee's resignation. (2) In the event of the incapacity, death, disqualification, or removal of any trustee, a trustee who continues acting as trustee following such an event shall notify each qualified beneficiary of the incapacity, death, disqualification, or removal of any other trustee within 90 days after the event. (3) A trustee shall notify each qualified beneficiary of any change in the address, telephone number, or other contact information for the trustee no later than 90 days after the change goes into effect. (e) Each request for information under this Section must be with respect to a single trust that is sufficiently identified to enable the trustee to locate the trust's records. A trustee may charge a reasonable fee for providing information under this Section to: (1) a beneficiary who is not a qualified beneficiary; (2) a qualified beneficiary for providing information that was previously provided to the qualified beneficiary or a representative under Article 3 for the qualified beneficiary; or (3) a representative under Article 3 for a qualified beneficiary for information that was previously provided to the qualified beneficiary or a representative under Article 3 for the qualified beneficiary. (f) If a trustee is bound by any confidentiality restrictions regarding a trust asset, then, before receiving the information, a beneficiary eligible under this Section to receive any information about that asset must agree to be bound by the same confidentiality restrictions. The trustee has no duty or obligation to disclose to any beneficiary any information that is otherwise prohibited to be disclosed by applicable law. (g) A qualified beneficiary may waive the right to receive information otherwise required to be furnished under this Section, such as a trust accounting, by an instrument in writing delivered to the trustee. A qualified beneficiary may at any time, by an instrument in writing delivered to the trustee, withdraw a waiver previously given with respect to future trust accountings. (h) Receipt of information, notices, or a trust accounting by a beneficiary is presumed if the trustee has procedures in place requiring the mailing or delivery of information, notices, or trust accountings to the beneficiary. This presumption applies to the mailing or delivery of information, notices, or trust accountings by electronic means or the provision of access to an account by electronic means for so long as the beneficiary has agreed to receive electronic delivery or access. (i) A trustee may request approval of the trustee's current or final trust accounting in a judicial proceeding at the trustee's election, with all reasonable and necessary costs of the proceeding payable by the trust and allocated between income and principal in accordance with the Principal and Income Act. (j) Notwithstanding any other provision, this Section is not intended to and does not impose on any trustee a duty to inform any beneficiary in advance of transactions relating to the trust property.