Providing that certain resultant trusts are not subject to claims of the settlor's creditors.

Session of 2026
HOUSE BILL No. 2722
By Committee on Judiciary
Requested by Joe Molina on behalf of the Kansas Bar Association
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AN ACT concerning the Kansas uniform trust code; relating to spendthrift
and discretionary trusts; providing that certain resultant trusts are not
subject to claims of the settlor's creditors; amending K.S.A. 58a-505
and repealing the existing section.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 58a-505 is hereby amended to read as follows: 58a-
505. (a) Except as provided by in subsection (c), K.S.A. 33-101 et seq. and
33-201 et seq., and amendments thereto, whether or not the terms of a trust
contain a spendthrift provision, the following rules apply:
(1) During the lifetime of the settlor, the property of a revocable trust
is subject to claims of the settlor's creditors.
(2) With respect to an irrevocable trust, a creditor or assignee of the
settlor may reach the maximum amount that can be distributed to or for the
settlor's benefit. If a trust has more than one settlor, the amount the creditor
or assignee of a particular settlor may reach may not exceed the settlor's
interest in the portion of the trust attributable to that settlor's contribution.
(3) After the death of a settlor, and subject to the settlor's right to
direct the source from which liabilities will be paid, the property of a trust
that was revocable at the settlor's death is subject to claims of the settlor's
creditors, costs of administration of the settlor's estate, the expenses of the
settlor's funeral and disposal of remains, the homestead, homestead
allowance, the elective share rights of the surviving spouse pursuant to
K.S.A. 59-6a209, and amendments thereto, and statutory allowance to a
surviving spouse and children to the extent the settlor's probate estate is
inadequate to satisfy those claims, costs, expenses, and allowances.
(b) For purposes of this section:
(1) During the period the power may be exercised, the holder of a
power of withdrawal is treated in the same manner as the settlor of a
revocable trust to the extent of the property subject to the power;
(2) upon the lapse, release, or waiver of the power, the holder is
treated as the settlor of the trust only to the extent the value of the property
affected by the lapse, release, or waiver exceeds the greater of the amount
specified in section 2041(b)(2) or 2514(e) of the federal internal revenue
code of 1986, as in effect on December 31, 2002 ;, or section 2503(b) of
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HB 2722 2
the federal internal revenue code of 1986, as in effect on December 31,
2002; and
(3) this subsection shall not apply to the lapse of powers held by the
spouse of a person occurring upon the death of such person.
(c) This section shall not apply to:
(1) An irrevocable trust that was a reversionary trust created under
the terms of section 2523(e) of the federal internal revenue code of 1986,
as in effect on July 1, 2026, for which an election under section 2523(f) of
the federal internal revenue code of 1986, as in effect on July 1, 2026, was
made in which the settlor of the initial trust is a beneficiary of the
resultant trust; or
(2) a resultant trust that was funded by the exercise of a power of
appointment reposed in the spouse of the settlor in an irrevocable trust
created for the benefit of the settlor's spouse that was entirely funded by
completed gifts of the settlor to the initial trust and with respect to which
the settlor of the initial trust was a beneficiary of the resultant trust, the
surviving spouse exercising such power of appointment in that event being
deemed the settlor of the resultant trust.
Sec. 2. K.S.A. 58a-505 is hereby repealed.
Sec. 3. This act shall take effect and be in force from and after its
publication in the statute book.
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