58a-505. Creditor's claim against settlor.
58a-505
58a-505. Creditor's claim against settlor.(a)Except as provided by K.S.A. 33-101 et seq. and 33-201 etseq., and amendments thereto, whether or not the terms of a trust containa spendthrift provision, the following rules apply:
(1) During the lifetime of the settlor, the property of a revocable trust issubject to claims of the settlor's creditors.
(2) With respect to an irrevocable trust, a creditor or assignee of thesettlor may reach the maximum amount that can be distributed to or for thesettlor's benefit. If a trust has more than one settlor, the amount thecreditor or assignee of a particular settlor may reach may not exceed thesettlor's interest in the portion of the trust attributable to thatsettlor's contribution.
(3) After the death of a settlor, and subject to the settlor's right todirect the source from which liabilities will be paid, the property of a trustthat was revocable at the settlor's death is subject to claims of the settlor'screditors, costs of administration of the settlor's estate, the expenses of thesettlor'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 andchildren to the extent the settlor's probate estate is inadequate to satisfythose 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 ofwithdrawal is treated in the same manner as the settlor of a revocable trust tothe extent of the property subject to the power;
(2) upon the lapse, release, or waiver of the power, the holder is treated asthe settlor of the trust only to the extent the value of the property affectedby the lapse, release, or waiver exceeds the greater of the amount specified insection 2041(b)(2) or 2514(e) of the federal internal revenue code of 1986, asin effect on December 31, 2002; or section 2503(b) of the federal internalrevenue 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 spouseof a person occurring upon the death of such person.
History: L. 2002, ch. 133, § 42;L. 2004, ch. 158, § 8; July 1.