Kansas committee hears HB 2590 to create Kansas Community Property Trust Act and amend trust code

The Committee on Financial Institutions and Pensions on opening day heard testimony on HB 2590, a bill that would create a Kansas Community Property Trust Act and amend the Kansas Uniform Trust Code to add designated representatives and expand the enforceability of governing trust instruments.

Jason Thompson, adviser in the Revisor’s office, told the committee the bill’s first sections define and authorize community property trusts, require an express declaration and a qualified trustee, and limit provisions that would adversely affect a child’s right to support. Thompson also explained provisions allowing governing instruments to expand, restrict or eliminate certain general rules that otherwise apply to fiduciaries and trust administration.

Kelly Vanzwal, testifying for the Kansas Bankers Association, said the bill’s provisions are optional and must be affirmatively chosen by the drafter or settlor. "None of this is gonna accidentally slip into someone's trust unless they've consciously made that choice," she said, adding the KBA’s trust division supports the proposal.

Will Bergman of Midwest Trust Company outlined economic and tax rationales proponents cite, including a potential double step-up in basis in some circumstances and opportunities to attract trust administration business to Kansas. Bergman characterized recent state activity as a factor that tripled assets under trust administration in Kansas over the past five years and said the measure is intended to give families and advisers more estate-planning options.

Committee members questioned fiscal impacts, interstate competition and safeguards for minors and beneficiaries. On fiscal effects, proponents and staff said they expected little or no direct cost to state agencies and suggested the change could ultimately increase assessment and privilege-tax revenue through expanded trust business. On minor beneficiaries, proponents said existing rules for qualified beneficiaries and guardianship would remain in force and the designated representative provisions would operate within those frameworks.

The committee closed the public hearing after noting one written-only proponent, attorney Charles Andres of Olathe, and no opponents were present. The chair said the committee intends to continue work on HB 2590 at a future meeting.