- Illinois Trust and Payable on Death Accounts Act Now Law
- December 15, 2010 | Author: Timothy J. Leake
- Law Firm: Hinshaw & Culbertson LLP - Rockford Office
Under the Illinois Trust and Payable on Death Accounts Act (Act), trust accounts and payable on death (POD) accounts may be paid to the named beneficiaries upon the death of the account owner. Until July 21, 2010, only natural persons could be proper recipients of proceeds under such accounts. After July 21, 2010, such accounts may be distributed to any living person, or to a trust, corporation, charitable organization, or any other entity that maintains a lawful existence under state or federal authority under which it was organized.
Further, financial institutions that maintain trust accounts or payable on death accounts are not required to distribute the account proceeds until it is provided with: (1) evidence of the death of the account owner; (2) identification from each beneficiary, including business records showing evidence of the lawful existence of any party authorized to collect the funds that is not a natural person; and (3) written direction from each beneficiary to close the account and distribute the proceeds. If the financial institution, in its discretion, cannot identify or determine the lawful existence of one or more of the beneficiaries authorized to collect on the account, or if conflicting claims to the account are made by the beneficiaries or other interested parties, the financial institution may refuse to distribute the proceeds without liability to any party until a court determines the proper ownership of the proceeds.
With the enactment of the Act, the holders of trust accounts and POD accounts — the number of which accounts is on the rise — should contact an estate planning professional to discuss the possible use of such accounts, and the coordination of beneficiaries of these and other estate assets.