2019 Illinois Compiled Statutes
Chapter 760 - TRUSTS AND FIDUCIARIES
760 ILCS 3/ - Illinois Trust Code.
Article 13 - Uniform Powers of Appointment Law
(760 ILCS 3/Art. 13 heading)
(760 ILCS 3/1301)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1301. Article title. This Article may be referred to as the Uniform Powers of Appointment Law.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1302)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1302. Definitions. In this Article:
(1) "Appointee" means a person to which a powerholder makes an appointment of appointive property.
(2) "Appointive property" means the property or property interest subject to a power of appointment.
(3) "Blanket-exercise clause" means a clause in an instrument that exercises a power of appointment and is not a specific-exercise clause. The term includes a clause that:
(A) expressly uses the words "any power" in
exercising any power of appointment the powerholder has;
(B) expressly uses the words "any property" in
appointing any property over which the powerholder has a power of appointment; or
(C) disposes of all property subject to disposition
by the powerholder.
(4) "Exclusionary power of appointment" means a power of appointment exercisable in favor of any one or more of the permissible appointees to the exclusion of the other permissible appointees.
(5) "Gift-in-default clause" means a clause identifying a taker in default of appointment.
(6) "Impermissible appointee" means a person that is not a permissible appointee.
(7) "Instrument" means a writing.
(8) "Permissible appointee" means a person in whose favor a powerholder may exercise a power of appointment.
(9) "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
(10) "Specific-exercise clause" means a clause in an instrument that specifically refers to and exercises a particular power of appointment.
(11) "Taker in default of appointment" means a person that takes part or all of the appointive property to the extent the powerholder does not effectively exercise the power of appointment.
(12) "Terms of the instrument" means the manifestation of the intent of the maker of the instrument regarding the instrument's provisions as expressed in the instrument or as may be established by other evidence that would be admissible in a legal proceeding.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1303)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1303. Governing law. Unless the terms of the instrument creating a power of appointment manifest a contrary intent:
(1) the creation, revocation, or amendment of the
power is governed by the law of the donor's domicile at the relevant time; and
(2) the exercise, release, or disclaimer of the
power, or the revocation or amendment of the exercise, release, or disclaimer of the power, is governed by the law of the powerholder's domicile at the relevant time.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1304)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1304. Creation of power of appointment.
(a) A power of appointment is created only if:
(1) the instrument creating the power:
(A) is valid under applicable law; and
(B) except as otherwise provided in subsection
(b), transfers the appointive property; and
(2) the terms of the instrument creating the power
manifest the donor's intent to create, in a powerholder, a power of appointment over the appointive property exercisable in favor of a permissible appointee.
(b) Subdivision (a)(1)(B) does not apply to the creation of a power of appointment by the exercise of a power of appointment.
(c) A power of appointment may not be created in a deceased individual.
(d) Subject to an applicable rule against perpetuities, a power of appointment may be created in an unborn or unascertained powerholder.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1305)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1305. Nontransferability. A powerholder may not transfer a power of appointment. If the powerholder dies without exercising or releasing the power, the power lapses.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1306)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1306. Presumption of unlimited authority. Subject to Section 1308, and unless the terms of the instrument creating a power of appointment manifest a contrary intent, the power is:
(1) presently exercisable;
(2) exclusionary; and
(3) except as otherwise provided in Section 1307,
general.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1307)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1307. Exception to presumption of unlimited authority. Unless the terms of the instrument creating a power of appointment manifest a contrary intent, the power is nongeneral if:
(1) the power is exercisable only at the
powerholder's death; and
(2) the permissible appointees of the power are a
defined and limited class that does not include the powerholder's estate, the powerholder's creditors, or the creditors of the powerholder's estate.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1308)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1308. Rules of classification.
(a) In this Section, "adverse party" means a person with a substantial beneficial interest in property that would be affected adversely by a powerholder's exercise or nonexercise of a power of appointment in favor of the powerholder, the powerholder's estate, a creditor of the powerholder, or a creditor of the powerholder's estate.
(b) If a powerholder may exercise a power of appointment only with the consent or joinder of an adverse party, the power is nongeneral.
(c) If the permissible appointees of a power of appointment are not defined and limited, the power is exclusionary.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1309)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1309. Power to revoke or amend. A donor may revoke or amend a power of appointment only to the extent that:
(1) the instrument creating the power is revocable
by the donor; or
(2) the donor reserves a power of revocation or
amendment in the instrument creating the power of appointment.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1310)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1310. Requisites for exercise of power of appointment. A power of appointment is exercised only:
(1) if the instrument exercising the power is valid
under applicable law;
(2) if the terms of the instrument exercising the
power:
(A) manifest the powerholder's intent to
exercise the power; and
(B) subject to Section 1313, satisfy the
requirements of exercise, if any, imposed by the donor; and
(3) to the extent the appointment is a permissible
exercise of the power.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1311)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1311. Intent to exercise: determining intent from residuary clause.
(a) In this Section:
(1) "Residuary clause" does not include a residuary
clause containing a blanket-exercise clause or a specific-exercise clause.
(2) "Will" includes a codicil and a testamentary
instrument that revises another will.
(b) A residuary clause in a powerholder's will, or a comparable clause in the powerholder's revocable trust, manifests the powerholder's intent to exercise a power of appointment only if:
(1) the terms of the instrument containing the
residuary clause do not manifest a contrary intent;
(2) the power is a general power exercisable in
favor of the powerholder's estate;
(3) there is no gift-in-default clause or it is
ineffective; and
(4) the powerholder did not release the power.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1312)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1312. Intent to exercise: after-acquired power. Unless the terms of the instrument exercising a power of appointment manifest a contrary intent:
(1) except as otherwise provided in paragraph (2), a
blanket-exercise clause extends to a power acquired by the powerholder after executing the instrument containing the clause; and
(2) if the powerholder is also the donor of the
power, the clause does not extend to the power unless there is no gift-in-default clause or it is ineffective.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1313)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1313. Substantial compliance with donor-imposed formal requirement. A powerholder's substantial compliance with a formal requirement of an appointment imposed by the donor, including a requirement that the instrument exercising the power of appointment make reference or specific reference to the power, is sufficient if:
(1) the powerholder knows of and intends to exercise
the power; and
(2) the powerholder's manner of attempted exercise
of the power does not impair a material purpose of the donor in imposing the requirement.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1314)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1314. Permissible appointment.
(a) A powerholder of a general power of appointment that permits appointment to the powerholder or the powerholder's estate may make any appointment, including an appointment in trust or creating a new power of appointment, that the powerholder could make in disposing of the powerholder's own property.
(b) A powerholder of a general power of appointment that permits appointment only to the creditors of the powerholder or of the powerholder's estate is restricted to appointing to those creditors.
(c) Unless the terms of the instrument creating a power of appointment manifest a contrary intent, the powerholder of a nongeneral power may:
(1) make an appointment in any form, with any
conditions and limitations, including an appointment in trust to any trustee, in favor of a permissible appointee;
(2) create a general or nongeneral power in a
permissible appointee that may be exercisable in favor of persons other than permissible appointees of the original nongeneral power; or
(3) create a nongeneral power in any person to
appoint to one or more of the permissible appointees of the original nongeneral power.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1315)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1315. Appointment to deceased appointee. Subject to Section 4-11 of the Probate Act of 1975, an appointment to a deceased appointee is ineffective.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1316)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1316. Impermissible appointment.
(a) Except as otherwise provided in Section 1315, an exercise of a power of appointment in favor of an impermissible appointee is ineffective.
(b) An exercise of a power of appointment in favor of a permissible appointee is ineffective to the extent the appointment is a fraud on the power.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1317)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1317. Selective allocation doctrine. If a powerholder exercises a power of appointment in a disposition that also disposes of property the powerholder owns, the owned property and the appointive property must be allocated in the permissible manner that best carries out the powerholder's intent.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1318)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1318. Capture doctrine: disposition of ineffectively appointed property under general power. To the extent a powerholder of a general power of appointment, other than a power to revoke, amend, or withdraw property from a trust, makes an ineffective appointment:
(1) the gift-in-default clause controls the
disposition of the ineffectively appointed property; or
(2) if there is no gift-in-default clause or to the
extent the clause is ineffective, the ineffectively appointed property:
(A) passes to:
(i) the powerholder if the powerholder is a
permissible appointee and living; or
(ii) if the powerholder is an impermissible
appointee or not living, the powerholder's estate if the estate is a permissible appointee; or
(B) if there is no taker under subparagraph (A),
passes under a reversionary interest to the donor or the donor's transferee or successor in interest.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1319)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1319. Disposition of unappointed property under released or unexercised general power. To the extent a powerholder releases or fails to exercise a general power of appointment other than a power to revoke, amend, or withdraw property from a trust:
(1) the gift-in-default clause controls the
disposition of the unappointed property; or
(2) if there is no gift-in-default clause or to the
extent the clause is ineffective:
(A) except as otherwise provided in subparagraph
(B), the unappointed property passes to:
(i) the powerholder if the powerholder is a
permissible appointee and living; or
(ii) if the powerholder is an impermissible
appointee or not living, the powerholder's estate if the estate is a permissible appointee; or
(B) to the extent the powerholder released the
power, or if there is no taker under subparagraph (A), the unappointed property passes under a reversionary interest to the donor or the donor's transferee or successor in interest.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1320)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1320. Disposition of unappointed property under released or unexercised nongeneral power. To the extent a powerholder releases, ineffectively exercises, or fails to exercise a nongeneral power of appointment:
(1) the gift-in-default clause controls the
disposition of the unappointed property; or
(2) if there is no gift-in-default clause or to the
extent the clause is ineffective, the unappointed property:
(A) passes to the permissible appointees if:
(i) the permissible appointees are defined
and limited; and
(ii) the terms of the instrument creating
the power do not manifest a contrary intent; or
(B) if there is no taker under subparagraph (A),
passes under a reversionary interest to the donor or the donor's transferee or successor in interest.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1321)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1321. Disposition of unappointed property if partial appointment to taker in default. Unless the terms of the instrument creating or exercising a power of appointment manifest a contrary intent, if the powerholder makes a valid partial appointment to a taker in default of appointment, the taker in default of appointment may share fully in unappointed property.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1322)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1322. Appointment to taker in default. If a powerholder of a general power makes an appointment to a taker in default of appointment and the appointee would have taken the property under a gift-in-default clause had the property not been appointed, the power of appointment is deemed not to have been exercised, and the appointee takes under the gift-in-default clause.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1323)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1323. Powerholder's authority to revoke or amend exercise. A powerholder may revoke or amend an exercise of a power of appointment only to the extent that:
(1) the powerholder reserves a power of revocation
or amendment in the instrument exercising the power of appointment and, if the power is nongeneral, the terms of the instrument creating the power of appointment do not prohibit the reservation; or
(2) the terms of the instrument creating the power
of appointment provide that the exercise is revocable or amendable.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1324)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1324. Disposition of trust property subject to power. In disposing of trust property subject to a power of appointment exercisable by an instrument other than a will, a trustee acting in good faith shall have no liability to any appointee or taker in default of appointment for relying upon an instrument believed to be genuine purporting to exercise a power of appointment or for assuming that there is no instrument exercising the power of appointment in the absence of actual knowledge thereof within 3 months of the last date on which the power of appointment may be exercised.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1325)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1325. Disclaimer. As provided by Section 2-7 of the Probate Act of 1975:
(1) A powerholder may disclaim all or part of a
power of appointment.
(2) A permissible appointee, appointee, or taker in
default of appointment may disclaim all or part of an interest in appointive property.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1326)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1326. Authority to release. A powerholder may release a power of appointment, in whole or in part, except to the extent the terms of the instrument creating the power prevent the release.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1327)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1327. Method of release. A powerholder of a releasable power of appointment may release the power in whole or in part:
(1) by substantial compliance with a method provided
in the terms of the instrument creating the power; or
(2) if the terms of the instrument creating the
power do not provide a method or the method provided in the terms of the instrument is not expressly made exclusive, by an instrument manifesting the powerholder's intent by clear and convincing evidence.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1328)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1328. Revocation or amendment of release. A powerholder may revoke or amend a release of a power of appointment only to the extent that:
(1) the instrument of release is revocable by the
powerholder; or
(2) the powerholder reserves a power of revocation
or amendment in the instrument of release.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1329)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1329. Power to contract: presently exercisable power of appointment. A powerholder of a presently exercisable power of appointment may contract:
(1) not to exercise the power; or
(2) to exercise the power if the contract when made
does not confer a benefit on an impermissible appointee.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1330)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1330. Power to contract: power of appointment not presently exercisable. A powerholder of a power of appointment that is not presently exercisable may contract to exercise or not to exercise the power only if the powerholder:
(1) is also the donor of the power; and
(2) has reserved the power in a revocable trust.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1331)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1331. Remedy for breach of contract to appoint or not to appoint. The remedy for a powerholder's breach of a contract to appoint or not to appoint is limited to damages payable out of the appointive property or, if appropriate, specific performance of the contract.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1332)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1332. Creditor claim: general power created by powerholder.
(a) In this Section, "power of appointment created by the powerholder" includes a power of appointment created in a transfer by another person to the extent the powerholder contributed value to the transfer.
(b) Appointive property subject to a general power of appointment created by the powerholder is subject to a claim of a creditor of the powerholder or of the powerholder's estate to the extent provided in the Uniform Fraudulent Transfer Act.
(c) Subject to subsection (b), appointive property subject to a general power of appointment created by the powerholder is not subject to a claim of a creditor of the powerholder or the powerholder's estate to the extent the powerholder irrevocably appointed the property in favor of a person other than the powerholder or the powerholder's estate.
(d) Subject to subsections (b) and (c), and notwithstanding the presence of a spendthrift provision or whether the claim arose before or after the creation of the power of appointment, appointive property subject to a general power of appointment created by the powerholder is subject to a claim of a creditor of:
(1) the powerholder, to the same extent as if the
powerholder owned the appointive property, if the power is presently exercisable; and
(2) the powerholder's estate, to the extent the
estate is insufficient to satisfy the claim and subject to the right of a decedent to direct the source from which liabilities are paid, if the power is exercisable at the powerholder's death.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1333)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1333. Creditor claim: general power not created by powerholder.
(a) Except as otherwise provided in subsection (b), appointive property subject to a general power of appointment created by a person other than the powerholder is subject to a claim of a creditor of:
(1) the powerholder, to the extent the powerholder's
property is insufficient, if the power is presently exercisable; and
(2) the powerholder's estate if the power is
exercised at the powerholder's death, to the extent the estate is insufficient, subject to the right of the deceased powerholder to direct the source from which liabilities are paid.
(b) Subject to subsection (c) of Section 1335, a power of appointment created by a person other than the powerholder that is subject to an ascertainable standard relating to an individual's health, education, support, or maintenance within the meaning of Section 2041(b)(1)(A) of the Internal Revenue Code or Section 2514(c)(1) of the Internal Revenue Code, as amended, is treated for purposes of this Article as a nongeneral power.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1334)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1334. Power to withdraw.
(a) For purposes of Sections 1333 through 1336, and except as otherwise provided in subsection (b), a power to withdraw property from a trust is treated, during the time the power may be exercised, as a presently exercisable general power of appointment to the extent of the property subject to the power to withdraw.
(b) A power to withdraw property from a trust ceases to be treated as a presently exercisable general power of appointment upon its lapse, release, or waiver.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1335)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1335. Creditor claim: nongeneral power.
(a) Except as otherwise provided in subsections (b) and (c), appointive property subject to a nongeneral power of appointment is exempt from a claim of a creditor of the powerholder or the powerholder's estate.
(b) Appointive property subject to a nongeneral power of appointment is subject to a claim of a creditor of the powerholder or the powerholder's estate to the extent that the powerholder owned the property and, reserving the nongeneral power, transferred the property in violation of the Uniform Fraudulent Transfer Act.
(c) If the initial gift in default of appointment is to the powerholder or the powerholder's estate, a nongeneral power of appointment is treated for purposes of this Section as a general power.
(Source: P.A. 101-48, eff. 1-1-20.)
(760 ILCS 3/1336)
(This Section may contain text from a Public Act with a delayed effective date)
Sec. 1336. Application to existing relationships.
(a) Except as otherwise provided in this Article, on and after the effective date of this Code:
(1) this Article applies to a power of appointment
created before, on, or after its effective date;
(2) this Article applies to a judicial proceeding
concerning a power of appointment commenced on or after its effective date;
(3) this Article applies to a judicial proceeding
concerning a power of appointment commenced before its effective date unless the court finds that application of a particular provision of this Article would substantially interfere with the effective conduct of the judicial proceeding or prejudice a right of a party, in which case the particular provision of this Article does not apply and the superseded law applies;
(4) a rule of construction or presumption provided
in this Article applies to an instrument executed before the effective date of the Article unless there is a clear indication of a contrary intent in the terms of the instrument; and
(5) an act done before the effective date of this
Code is not affected by this Article.
(b) If a right is acquired, extinguished, or barred on the expiration of a prescribed period that commenced under law of this State other than this Article before the effective date of this Code, the law continues to apply to the right.
(c) No trustee is liable to any person in whose favor a power of appointment may have been exercised for any distribution of property made to persons entitled to take in default of the effective exercise of the power of appointment to the extent that the distribution shall have been completed before the effective date of this Code.
(Source: P.A. 101-48, eff. 1-1-20.)
