Sometimes it may be a legitimate question about the manner in which trust is given. Terms of trust can not provide guidance on how to proceed for a given situation. Under these circumstances, trustees or beneficiaries in the past might have had to seek a court order to allow them to continue.
The new section was recently added by the Illinois Trusts and trustees that allows for “virtual representation contracts” to be made by the administration of trust without the need for court action. These are agreements between the trustee of the trust and the main beneficiaries of confidence that can bind to other beneficiaries who would receive distribution in the second row of the primary beneficiary died before the assets were to be distributed. The interests of all beneficiaries of the trust must be substantially identical.
The main benefit of this Convention is that it allows a trustee, beneficiaries and remaindermen to implement the agreements without going to court and without having to appoint guardians ad Lite for beneficiaries. These agreements can be used to settle the ambiguity or clarify certain provisions in the trust document. They can also be used to make decisions about the powers or duties of trustee and many other issues that may arise in connection with the administration of the trust. These agreements contribute Accord and solidarity between beneficiaries without having to obtain a court order that approval may be costly in terms of both time and money.
For the contract to be valid, all the main beneficiaries will be adult and not disqualified, that is, they must be legally competent to make decisions. It should also be emphasized that the trustee shall be party to the Convention, not just beneficiaries.
There are some restrictions on the use of virtual representation agreements. While matters of administration confidence can be resolved by agreement, the virtual representation agreement can not be used to change the terms of the trust.
Virtual representation agreements can serve to solve various issues concerning the administration of the trust. Interested individuals should consult a lawyer to find out more about how virtual representation agreements may benefit them.
This article is intended to present general information for educational purposes, is not legal advice and should not be relied on in connection with a particular matter. The reader is advised to immediately hold his own separate legal counsel with respect to any specific legal issues. Rights to bring a claim runs through time by the applicable statute of limitations.