IRREVOCABLE TRUST AGREEMENT
(Kansas – Governed by the Kansas Uniform Trust Code)
[// GUIDANCE: This template is drafted for irrevocable, non-testamentary trusts settled under Kansas law. It is suitable for both grantor and non-grantor tax treatment, depending on completion. All bracketed items MUST be completed or deleted before execution.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Operative Provisions
- Representations & Warranties
- Covenants & Restrictions
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
IRREVOCABLE TRUST AGREEMENT
This Irrevocable Trust Agreement (the “Agreement”) is entered into as of [Effective Date] (the “Effective Date”) by and between [Settlor Full Legal Name] (“Settlor”), and [Trustee Full Legal Name], whose address is [Trustee Address] (“Trustee”).
Recitals
A. Settlor desires to create an irrevocable trust under the laws of the State of Kansas for the benefit of the persons identified herein.
B. Trustee is willing to accept the trusteeship and to hold, manage, and distribute the Trust Estate pursuant to the terms of this Agreement.
C. Settlor has, contemporaneously with the execution of this Agreement, delivered to Trustee the property described on Schedule A (the “Initial Trust Property”), and the parties desire that such property, together with any additions, substitutions, and accumulations, constitute an irrevocable trust governed by this Agreement (the “Trust”).
NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Settlor and Trustee agree as follows.
2. DEFINITIONS
For ease of reference, capitalized terms have the meanings set forth below. Terms appear alphabetically and are applicable throughout this Agreement unless the context clearly requires otherwise.
“Accounting Period” – Each calendar year ending December 31, unless Trustee elects another fiscal year.
“Beneficiary” – Each person or entity identified in Schedule B and any additional person or entity who becomes entitled to distributions hereunder.
“Code” – The Internal Revenue Code of 1986, as amended.
“KS UTC” – The Kansas Uniform Trust Code, Kan. Stat. Ann. § 58a-101 et seq. (2023).
“Qualified Trustee” – A trustee who meets the requirements of the KS UTC and applicable federal tax regulations.
“Trust Assets” or “Trust Estate” – The Initial Trust Property and all income, proceeds, and increments, real or personal, tangible or intangible, held by Trustee pursuant to this Agreement.
[// GUIDANCE: Add or delete definitions to reflect the final drafting.]
3. OPERATIVE PROVISIONS
3.1 Establishment and Funding
(a) Settlor hereby unconditionally transfers, assigns, and delivers the Initial Trust Property to Trustee.
(b) Trustee shall hold the same as a separate, irrevocable trust to be administered and distributed exclusively in accordance with this Agreement.
(c) Additional property may be added to the Trust by Settlor, any Beneficiary, or any third party with Trustee’s consent, provided such additions are accepted in writing by Trustee.
3.2 Irrevocability
(a) This Trust is irrevocable and may not be altered, amended, modified, or revoked by Settlor in whole or in part.
(b) Notwithstanding subsection (a), the Trust may be modified or terminated only to the limited extent permitted under the KS UTC (e.g., by unanimous consent of all qualified beneficiaries and Trustee or by court order under Kan. Stat. Ann. § 58a-410 through § 58a-416).
(c) Settlor expressly waives any reversionary, withdrawal, or amendment power except as expressly provided herein.
3.3 Trust Purpose
The Trust is established for the primary purpose of providing for the health, education, maintenance, and support (“HEMS”) of the Beneficiaries, preserving family wealth, and achieving lawful tax and estate-planning objectives.
3.4 Beneficial Interests and Distributions
(a) Distribution Standards: Trustee shall distribute or apply so much of the net income and principal to or for the HEMS of the Beneficiaries as Trustee, in Trustee’s sole and absolute discretion, deems advisable, considering each Beneficiary’s other resources.
(b) Accumulation: Any net income not distributed shall be added to principal annually.
(c) Remainder: Upon the death of the last surviving income Beneficiary, Trustee shall distribute the remaining Trust Estate per the dispositive provisions set forth in Schedule B.
(d) Spendthrift Protection: To the maximum extent allowed by Kansas law, the interest of any Beneficiary is not subject to voluntary or involuntary transfer, assignment, or encumbrance prior to actual receipt.
3.5 Tax Provisions
(a) Grantor Trust Option: Settlor may elect grantor trust status under Code §§ 671-679 by completing Schedule C.
(b) Tax Liability: Unless grantor trust status is elected, Trustee shall pay any income taxes attributable to Trust income from Trust Assets, and such taxes shall be a proper charge to income or principal as Trustee determines.
(c) Gift & Estate Tax Disclaimer: Settlor acknowledges and agrees that transfers to the Trust may constitute completed gifts for federal gift tax purposes and may be includible in Settlor’s gross estate only to the extent provided under the Code; Settlor is advised to consult independent tax counsel.
3.6 Trustee Powers
Trustee shall have all powers granted to trustees under the KS UTC and applicable law, including but not limited to those enumerated on Schedule D. In exercising any discretionary power, Trustee shall act in good faith and in accordance with the purposes of the Trust.
3.7 Accounting & Information Rights
(a) Annual Accounting: Within 90 days after the close of each Accounting Period, Trustee shall provide each qualified Beneficiary an account of Trust administration compliant with Kan. Stat. Ann. § 58a-813.
(b) Request for Information: A Beneficiary may request additional information reasonably related to Trust administration, and Trustee shall comply within a reasonable time, subject to any limitations permitted by law.
4. REPRESENTATIONS & WARRANTIES
4.1 Settlor
(a) Authority: Settlor has the legal capacity and full authority to create and fund the Trust.
(b) No Fraudulent Transfer: The transfer of the Initial Trust Property does not constitute a fraudulent conveyance or violate the Uniform Voidable Transactions Act (or any similar law).
(c) Tax and Legal Advice: Settlor has obtained independent tax and legal advice or knowingly waived the right to do so.
4.2 Trustee
(a) Qualification: Trustee is qualified to serve and is not disqualified under any applicable law or court order.
(b) Fiduciary Duty: Trustee understands and accepts the fiduciary duties imposed by the KS UTC and this Agreement.
(c) No Conflict: Trustee’s acceptance of this office does not conflict with any legal, contractual, or fiduciary obligation of Trustee.
[// GUIDANCE: Reps & warranties survive execution; see survival clause in Section 9.]
5. COVENANTS & RESTRICTIONS
5.1 Affirmative Covenants of Trustee
(a) Compliance: Administer the Trust in accordance with Kansas law and this Agreement.
(b) Prudent Investor Rule: Invest Trust Assets prudently consistent with Kan. Stat. Ann. § 58a-804 and sound fiduciary principles.
(c) Records: Keep accurate and complete books and records.
(d) Tax Filings: Timely file all required federal, state, and local tax returns.
5.2 Negative Covenants of Trustee
(a) No Commingling: Trustee shall not commingle Trust Assets with Trustee’s personal assets.
(b) Self-Dealing: Except as otherwise expressly provided, Trustee shall not engage in self-dealing or transactions prohibited by the KS UTC.
(c) No Delegation of Discretion: Trustee may not delegate discretionary distribution decisions except in strict compliance with Kan. Stat. Ann. § 58a-807.
5.3 Settlor Covenants
Settlor shall execute all instruments and do all acts reasonably requested by Trustee to vest title to assets in Trustee and to carry out the purposes of this Trust.
6. DEFAULT & REMEDIES
6.1 Events of Default
The following constitute an “Event of Default”:
(a) Trustee’s willful misconduct, gross negligence, or material breach of fiduciary duty;
(b) Trustee’s insolvency or conviction of a crime involving dishonesty;
(c) Failure to provide required accountings within 60 days after written notice;
(d) Any other circumstance justifying removal under Kan. Stat. Ann. § 58a-706.
6.2 Notice & Cure
Beneficiary may deliver written notice specifying the default. Trustee shall have 30 days to cure, unless the default is incapable of cure or immediate action is required to protect the Trust.
6.3 Remedies
(a) Removal: Upon an uncured Event of Default, a majority in interest of the qualified beneficiaries may remove Trustee and appoint a successor pursuant to Section 9.6.
(b) Surcharge: Trustee shall be liable only to the extent of Trust Assets for any loss resulting from breach, except in cases of willful misconduct or bad faith, in which case personal liability applies.
(c) Injunctive Relief: Any court of competent jurisdiction may issue injunctive relief to enforce this Agreement and protect Trust Assets.
6.4 Attorneys’ Fees
In any proceeding arising under this Agreement, the prevailing party shall be entitled to recover reasonable attorneys’ fees and costs from the non-prevailing party, which may be charged against that party’s beneficial interest or against Trust Assets consistent with Section 7.1.
7. RISK ALLOCATION
7.1 Trustee Indemnification
(a) General: Trustee and its affiliates, officers, and employees (collectively, the “Indemnified Parties”) shall be indemnified and held harmless from the Trust Assets against all claims, liabilities, and expenses (including reasonable attorneys’ fees) arising from the administration of the Trust, except such as result from Trustee’s willful misconduct or gross negligence.
(b) Priority: Indemnification payments shall have priority over distributions to Beneficiaries.
7.2 Limitation of Liability
Except for willful misconduct or gross negligence, liability of Trustee to all parties, in the aggregate, shall not exceed the value of the Trust Assets at the time the claim arises.
7.3 Insurance
Trustee may, at Trust expense, purchase and maintain fiduciary liability insurance in such amounts as Trustee deems appropriate.
7.4 Force Majeure
Trustee shall not be liable for any delay or failure to perform caused by governmental action, pandemic, war, natural disaster, or other circumstance beyond Trustee’s reasonable control, provided Trustee acts to mitigate the effects as soon as practicable.
8. DISPUTE RESOLUTION
8.1 Governing Law
This Agreement and the rights and obligations of the parties shall be governed by, and construed in accordance with, the substantive laws of the State of Kansas, without regard to its conflict-of-laws rules.
8.2 Forum Selection
All judicial proceedings relating to this Trust shall be brought exclusively in the probate division of the [County] District Court, Kansas (the “Probate Court”). The parties consent to the jurisdiction of such court.
8.3 Optional Arbitration
[OPTIONAL – check ONE box before execution]
☐ All disputes shall first be mediated and, if unresolved, submitted to binding arbitration administered by [Arbitration Organization] in accordance with its rules then in effect.
☐ Arbitration not elected.
[// GUIDANCE: Kansas law generally allows arbitration of trust disputes if expressly provided; ensure all beneficiaries, including minors via virtual representation, are bound.]
8.4 Jury Waiver
The parties acknowledge that probate matters in Kansas are generally tried to the court; accordingly, any right to a jury trial is waived to the fullest extent permitted by law.
8.5 Injunctive Relief
Nothing in this Section shall limit any party’s right to seek provisional or injunctive relief from the Probate Court as necessary to preserve Trust Assets or enforce fiduciary duties.
9. GENERAL PROVISIONS
9.1 Amendments
This Agreement may be amended only (i) as permitted under Section 3.2(b), and (ii) by a written instrument executed by Settlor (if living), Trustee, and all qualified beneficiaries, or by court order.
9.2 Waiver
No waiver of any provision shall be effective unless in writing and signed by the party against whom the waiver is asserted. A waiver on one occasion shall not constitute a waiver on any subsequent occasion.
9.3 Assignment
No party may assign, delegate, or otherwise transfer its rights or obligations under this Agreement except as expressly permitted herein or by law.
9.4 Successors & Assigns
This Agreement shall bind and inure to the benefit of the parties hereto and their respective successors, assigns, heirs, and personal representatives.
9.5 Severability
If any provision is held invalid or unenforceable, the remaining provisions shall nevertheless be given full force and effect, and the invalid provision shall be reformed to the minimum extent necessary to achieve its intended purpose.
9.6 Successor Trustee
(a) Appointment: Upon a vacancy, the successor named in Schedule E shall serve. If no successor is available, a majority of the qualified beneficiaries may appoint a successor, subject to court approval if required.
(b) Vesting of Title: All Trust Assets shall vest in any successor without the need for additional conveyance.
(c) Transition: The outgoing Trustee shall deliver all Trust property and records to the successor within 30 days.
9.7 Integration
This Agreement, including all Schedules, constitutes the entire agreement of the parties and supersedes all prior understandings with respect to the subject matter hereof.
9.8 Counterparts; Electronic Signatures
This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together constitute one document. Signatures delivered by facsimile, email (PDF), or other electronic means shall be effective.
9.9 Survival
The representations, warranties, indemnities, and other provisions intended by their nature to survive termination of the Trust shall so survive.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, Settlor and Trustee have executed this Irrevocable Trust Agreement as of the Effective Date.
SETTLOR
[Settlor Name]
Date: ____
TRUSTEE
[Trustee Name], Trustee
Date: ____
[OPTIONAL – CO-TRUSTEE]
[Co-Trustee Name], Co-Trustee
Date: ____
NOTARIZATION
State of Kansas )
County of ______ ) ss.
On this ___ day of ____, 20__, before me, the undersigned Notary Public, personally appeared [Settlor Name] and [Trustee Name], known to me (or satisfactorily proven) to be the persons whose names are subscribed to this instrument, and acknowledged that they executed the same for the purposes therein contained.
Notary Public
My Commission Expires: _______
[// GUIDANCE: Review Kansas notarization requirements (K.S.A. 53-501 et seq.) and add witness lines if the Trust will hold real property in jurisdictions requiring witnessed conveyances.]
SCHEDULES (Attach at execution)
• Schedule A – Initial Trust Property
• Schedule B – Beneficiaries & Dispositive Provisions
• Schedule C – Grantor Trust Election & Tax Certificates
• Schedule D – Trustee Powers (Expanded List)
• Schedule E – Successor Trustees & Contact Information
[// GUIDANCE: The above Agreement is ready for attorney review. Verify county-specific probate court identifiers, beneficiary status (qualified vs. contingent), and confirm that all tax elections align with the client’s objectives before funding.]