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Article 15 - Trust Funds

 
    (225 ILCS 411/Art. 15 heading) Article 15. Trust Funds (Article scheduled to be repealed on January 1, 2021)(Source: P.A. 96‑863, eff. 3‑1‑10.)

    (225 ILCS 411/15‑5)
    (Section scheduled to be repealed on January 1, 2021)
    Sec. 15‑5. Gifts and contributions; trust funds.
    (a) A licensed cemetery authority is hereby authorized and empowered to accept any gift, grant, contribution, payment, legacy, or pursuant to contract, any sum of money, funds, securities, or property of any kind, or the income or avails thereof, and to establish a trust fund to hold the same in perpetuity for the care of its cemetery, or for the care of any lot, grave, crypt, or niche in its cemetery, or for the special care of any lot, grave, crypt, or niche or of any family mausoleum or memorial, marker, or monument in its cemetery. Not less than the following amounts will be set aside and deposited in trust:
        (1) For interment rights, $1 per square foot of the

space sold or 15% of the sales price or imputed value, whichever is the greater, with a minimum of $25 for each individual interment right.

(2) For entombment rights, not less than 10% of the

sales price or imputed value with a minimum of $25 for each individual entombment right.

(3) For inurnment rights, not less than 10% of the

sales price or imputed value with a minimum of $15 for each individual inurnment right.

(4) For any transfer of interment rights, entombment

rights, or inurnment rights recorded in the records of the cemetery authority, a minimum of $25 for each such right transferred. This does not apply to transfers between a transferor and his or her spouse, parents, grandparents, children, grandchildren, or siblings.

(5) Upon an interment, entombment, or inurnment in a

grave, crypt, or niche in which rights of interment, entombment, or inurnment were originally acquired from a cemetery authority prior to January 1, 1948, a minimum of $25 for each such right exercised.

(6) For the special care of any lot, grave, crypt, or

niche or of a family mausoleum, memorial, marker, or monument, the full amount received.

(b) The cemetery authority shall act as trustee of all amounts received for care until they have been deposited with a corporate fiduciary as defined in Section 1‑5.05 of the Corporate Fiduciary Act. All trust deposits shall be made within 30 days after receipt.     (c) No gift, grant, legacy, payment, or other contribution shall be invalid by reason of any indefiniteness or uncertainty as to the beneficiary designated in the instrument creating the gift, grant, legacy, payment, or other contribution. If any gift, grant, legacy, payment, or other contribution consists of non‑income producing property, then the cemetery authority accepting it is authorized and empowered to sell such property and to invest the funds obtained in accordance with subsection (d) of this Section.     (d) The care funds authorized by this Section and provided for in this Article shall be held intact and, unless otherwise restricted by the terms of the gift, grant, legacy, contribution, payment, contract, or other payment, as to investments made after June 11, 1951, the trustee of the care funds of the cemetery authority, in acquiring, investing, reinvesting, exchanging, retaining, selling, and managing property for any such trust, shall act in accordance with the duties for trustees set forth in the Illinois Trusts and Trustees Act. Within the limitations of the foregoing standard, the trustee of the care funds of the cemetery authority is authorized to acquire and retain every kind of property, real, personal, or mixed, and every kind of investment, including specifically, but without limiting the generality of the foregoing, bonds, debentures and other corporate obligations, preferred or common stocks and real estate mortgages, which persons of prudence, discretion, and intelligence acquire or retain for their own account. Within the limitations of the foregoing standard, the trustee is authorized to retain property properly acquired, without limitation as to time and without regard to its suitability for original purchase. The care funds authorized by this Section may be commingled with other trust funds received by such cemetery authority for the care of its cemetery or for the care or special care of any lot, grave, crypt, niche, private mausoleum, memorial, marker, or monument in its cemetery, whether received by gift, grant, legacy, contribution, payment, contract, or other conveyance made to such cemetery authority. Such care funds may be invested with common trust funds as provided in the Common Trust Fund Act. The net income only from the investment of such care funds shall be allocated and used for the purposes specified in the transaction by which the principal was established in the proportion that each contribution bears to the entire sum invested. (Source: P.A. 96‑863, eff. 3‑1‑10.)

    (225 ILCS 411/15‑10)
    (Section scheduled to be repealed on January 1, 2021)
    Sec. 15‑10. Restrictions on loans, gifts, and investments.
    (a) No loan; investment; purchase of insurance on the life of any trustee, cemetery owner, cemetery worker, or independent contractor; purchase of any real estate; or any other transaction using care funds by any trustee, licensee, cemetery manager, or any other cemetery worker or independent contractor shall be made to or for the benefit of any person, officer, director, trustee, or party owning or having any interest in any licensee, or to any firm, corporation, trade association or partnership in which any officer, director, trustee, or party has any interest, is a member of, or serves as an officer or director. A violation of this Section shall constitute the intentional and improper withdrawal of trust funds under Section 25‑105 of this Act.
    (b) No loan or investment in any unproductive real estate or real estate outside of this State or in permanent improvements of the cemetery or any of its facilities shall be made, unless specifically authorized by the instrument whereby the principal fund was created. No commission or brokerage fee for the purchase or sale of any property shall be paid in excess of that usual and customary at the time and in the locality where such purchase or sale is made, and all such commissions and brokerage fees shall be fully reported in the next annual statement of such cemetery authority or trustee.
    (c) The prohibitions provided for in this Section apply to and include the spouse of and immediate family living with the officer, member, director, trustee, party owning any portion of such cemetery authority, or licensee under this Act.
(Source: P.A. 96‑863, eff. 3‑1‑10.)

    (225 ILCS 411/15‑15)
    (Section scheduled to be repealed on January 1, 2021)
    Sec. 15‑15. Care funds; deposits; investments.
    (a) Whenever a cemetery authority accepts care funds, either in connection with the sale or giving away at an imputed value of an interment right, entombment right, or inurnment right, or in pursuance of a contract, or whenever, as a condition precedent to the purchase or acceptance of an interment right, entombment right, or inurnment right, such cemetery authority shall establish a care fund or deposit the funds in an already existing care fund.
    (b) The cemetery authority shall execute and deliver to the person from whom it received the care funds an instrument in writing that shall specifically state: (i) the nature and extent of the care to be furnished and (ii) that such care shall be furnished only in so far as net income derived from the amount deposited in trust will permit (the income from the amount so deposited, less necessary expenditures of administering the trust, shall be deemed the net income).
    (c) The setting‑aside and deposit of care funds shall be made by such cemetery authority no later than 30 days after the close of the month in which the cemetery authority gave away for an imputed value or received the final payment on the purchase price of interment rights, entombment rights, or inurnment rights, or received the final payment for the general or special care of a lot, grave, crypt, or niche or of a family mausoleum, memorial, marker, or monument, and such amounts shall be held by the trustee of the care funds of such cemetery authority in trust and in perpetuity for the specific purposes stated in the written instrument described in subsection (b). For all care funds received by a cemetery authority, except for care funds received by a cemetery authority pursuant to a specific gift, grant, contribution, payment, legacy, or contract that are subject to investment restrictions more restrictive than the investment provisions set forth in this Act, and except for care funds otherwise subject to a trust agreement executed by a person or persons responsible for transferring the specific gift, grant, contribution, payment, or legacy to the cemetery authority that contains investment restrictions more restrictive than the investment provisions set forth in this Act, the cemetery authority may, without the necessity of having to obtain prior approval from any court in this State, designate a new trustee in accordance with this Act and invest the care funds in accordance with this Section, notwithstanding any contrary limitation contained in the trust agreement.
    (d) Any cemetery authority engaged in selling or giving away at an imputed value interment rights, entombment rights, or inurnment rights, in conjunction with the selling or giving away at an imputed value any other merchandise or services not covered by this Act, shall be prohibited from increasing the sales price or imputed value of those items not requiring a care fund deposit under this Act with the purpose of allocating a lesser sales price or imputed value to items that require a care fund deposit.
    (e) If any sale that requires a deposit to a cemetery authority's care fund is made by a cemetery authority on an installment basis, and the installment contract is factored, discounted, or sold to a third party, then the cemetery authority shall deposit the amount due to the care fund within 30 days after the close of the month in which the installment contract was factored, discounted, or sold. If, subsequent to such deposit, the purchaser defaults on the contract such that no care fund deposit on that contract would have been required, then the cemetery authority may apply the amount deposited as a credit against future required deposits.
    (f) The trust authorized by this Section shall be a single purpose trust fund. In the event of the cemetery authority'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 cemetery authority or to pay any expenses of any bankruptcy or similar proceeding, but shall be retained intact to provide for the future maintenance of the cemetery. Except in an action by the Department 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 Department.
(Source: P.A. 96‑863, eff. 3‑1‑10.)

    (225 ILCS 411/15‑25)
    (Section scheduled to be repealed on January 1, 2021)
    Sec. 15‑25. Funds purpose and exemptions. The trust funds authorized by this Article, and the income therefrom, and any funds received under a contract to furnish care of a burial space for a definite number of years, shall be held for the general benefit of the lot owners and are exempt from taxation. The trust funds authorized by the provisions of this Article, and the income therefrom, are exempt from the operation of all laws of mortmain and the laws against perpetuities and accumulations.
(Source: P.A. 96‑863, eff. 3‑1‑10.)

    (225 ILCS 411/15‑40)
    (Section scheduled to be repealed on January 1, 2021)
    Sec. 15‑40. Trust examinations and audits.
    (a) The Department shall examine at least annually every licensee who holds $250,000 or more in its care funds. For that purpose, the Department shall have free access to the office and places of business and to such records of all licensees and of all trustees of the care funds of all licensees as shall relate to the acceptance, use, and investment of care funds. The Department may require the attendance of and examine under oath all persons whose testimony may be required relative to such business. In such cases the Department, or any qualified representative of the Department whom the Department may designate, may administer oaths to all such persons called as witnesses, and the Department, or any such qualified representative of the Department, may conduct such examinations. The cost of an initial examination shall be determined by rule.
    (b) The Department may order additional audits or examinations as it may deem necessary or advisable to ensure the safety and stability of the trust funds and to ensure compliance with this Act. These additional audits or examinations shall only be made after good cause is established by the Department in the written order. The grounds for ordering these additional audits or examinations may include, but shall not be limited to:
        (1) material and unverified changes or fluctuations

in trust balances;

(2) the licensee changing trustees more than twice in

any 12‑month period;

(3) any withdrawals or attempted withdrawals from the

trusts in violation of this Act; or

(4) failure to maintain or produce documentation

required by this Act.

(Source: P.A. 96‑863, eff. 3‑1‑10.)