TRUST MANAGEMENT AND ADMINISTRATION IN LEAWOOD, KANSAS

Understanding Trust Administration and Management

Trust management (or trust administration) is simply the day-to-day work of running a trust according to its rules and the law. Whether you’re the Trustee of a Living Trust, an Irrevocable Trust, or a Special Needs Trust, the main jobs are usually the same. You’ll need to manage assets carefully, give out money to beneficiaries as the document says, keep good records, and handle tax returns. It’s all about following your “fiduciary duties”—which is just a legal way of saying you’ve got to put the trust’s interests first under Kansas law.

Trust administration usually starts when a trust becomes “irrevocable,” which often happens after the person who created it (the Settlor or Grantor) passes away. At that moment, the Trustee takes on the legal responsibility of managing everything for the people named to inherit it. This is a big deal because if things aren’t handled right, the person in charge could actually be held personally liable for mistakes. Courts in Johnson and Wyandotte Counties take these duties very seriously.

We’re here to give you the guidance you need to navigate these complex rules without the headache. Whether you’re dealing with a trust from a will or a specialized Charitable Trust, we’ll help you understand the legal language, make sure the right people get their distributions, and handle the accounting and taxes. We’ve helped thousands of families across the Kansas City area manage these details correctly so they can avoid disputes and stay out of court.

Our goal is to make sure you’re doing your job as Trustee perfectly. We’ll help you protect yourself from liability while making sure the beneficiaries get exactly what they’re supposed to. Since Gary has 27 years of experience and a J.D./M.B.A., he’s got the right mix of legal and financial know-how to make sure nothing’s missed.

Trustees have fiduciary duties, the highest standard of care recognized by law. You must act in the best interests of beneficiaries, manage assets prudently, avoid conflicts of interest, keep accurate records, provide accountings, and follow the trust document and state law precisely.

Failure to meet these duties can result in personal liability, removal as trustee, and surcharge for losses caused by mismanagement.

Trust management is complex because it sits at the intersection of estate law, tax law, investment management, accounting, and family dynamics. Even well-meaning trustees can make costly mistakes without proper guidance. Professional trust management support helps you navigate this complexity, avoid common pitfalls, and fulfill your duties while minimizing personal liability and family conflicts.

Having created 5,423 trusts over 27 years, we understand trust administration from both perspectives: designing trusts that work smoothly and guiding trustees through the administration process. This comprehensive experience means we anticipate issues before they arise and provide practical solutions that protect both trustees and beneficiaries.

How Trust Management Services Protect Trustees and Beneficiaries

Ensure Compliance with Fiduciary Duties

Trustees are held to the highest legal standard of care. Professional guidance ensures you understand and meet your duties including the duty of loyalty, duty of prudence, duty of impartiality, duty to inform and account, and duty to follow the trust terms. We help you document your decision-making and create a record that demonstrates you’re acting properly even if decisions are later questioned.

Avoid Personal Liability and Surcharge

Trustees can be held personally liable for losses caused by mismanagement, self-dealing, or failure to follow trust terms. A single mistake in trust administration can result in personal liability for thousands or hundreds of thousands of dollars. Professional management reduces your liability exposure by ensuring compliance with legal requirements and proper documentation of all actions.

Navigate Complex Tax Requirements

Trusts have unique and complex tax obligations including annual trust income tax returns (Form 1041), estate tax returns if required, generation-skipping transfer tax considerations, and special rules for distributions to beneficiaries. Trust taxation is significantly different from individual or corporate taxation. We coordinate with CPAs or handle trust tax matters to ensure compliance and tax efficiency.

Manage Family Dynamics and Beneficiary Relations

Trust administration often involves family members with competing interests, different needs, and sometimes decades of family dynamics. Professional guidance helps you navigate sensitive family situations, communicate appropriately with beneficiaries, document your decisions, and respond to beneficiary concerns in ways that minimize conflict and protect you from liability.

Interpret and Apply Trust Provisions

Trust documents are legal contracts with specific language that must be followed precisely. Many trustees struggle to understand what trust provisions mean or how to apply them to real-world situations. We help you interpret complex provisions, understand settlor intent, and apply trust terms correctly to current circumstances.

Protect Against Beneficiary Claims and Litigation

Beneficiaries sometimes sue trustees claiming mismanagement, self-dealing, or failure to distribute properly. Professional trust management creates a documented record of proper administration that defends against claims. If litigation occurs, having worked with counsel throughout administration provides strong defense against beneficiary challenges.

Coordinate Investment Management and Asset Protection

Trustees must invest trust assets prudently and diversify appropriately. This requires understanding the prudent investor rule, modern portfolio theory, and how to balance current income needs with long-term growth. We help you establish appropriate investment policies, work with investment advisors, and document that investments are prudent under the circumstances.

Facilitate Trust Termination or Modification

When a trust has served its purpose, needs to be modified for changed circumstances, or should be terminated, trustees need legal guidance to follow proper procedures. Kansas law provides several modification and termination options, but each has specific requirements. We guide you through these processes while protecting tax treatment and avoiding unintended consequences.

Errors That Create Trustee Liability

Failing to Follow the Trust Document

The trust document is the governing law for trust administration. Trustees who ignore or deviate from trust provisions, even with good intentions, breach their fiduciary duties. Common mistakes include making distributions not authorized by trust terms, ignoring mandatory distribution requirements, failing to follow investment directions, and disregarding successor trustee provisions. Read the trust document carefully and follow it precisely. When provisions are unclear, seek legal guidance rather than guessing.

Commingling Trust Assets with Personal Assets

Keeping trust assets separate from personal assets is a fundamental trustee duty. Commingling creates accounting nightmares, raises questions about self-dealing, and can result in personal liability for trust losses. Trustees must maintain separate bank accounts, never deposit personal funds in trust accounts, never pay personal expenses from trust accounts, keep meticulous records of all transactions, and title all trust property clearly in the trust name.

Poor Communication with Beneficiaries

Kansas law requires trustees to keep beneficiaries reasonably informed. Failing to communicate creates beneficiary distrust and often leads to litigation. Common mistakes include failing to notify beneficiaries of their beneficial interest, refusing to provide accountings when requested, ignoring beneficiary questions or concerns, making distribution decisions without explanation, and being defensive or dismissive of beneficiary inquiries. Transparent communication prevents most beneficiary disputes.

Improper Investment Management

Trustees must invest trust assets prudently according to the prudent investor rule. Common investment mistakes include failing to diversify assets appropriately, investing too conservatively or aggressively, keeping assets in non-productive investments, self-dealing by using trust assets for personal benefit, and failing to consider both income and growth needs. Even well-meaning investment decisions can breach fiduciary duties if not properly considered and documented.

Inadequate Record Keeping

Trustees must maintain complete, accurate records of all trust transactions. Poor record keeping makes it impossible to prove you’ve acted properly if challenged. Trustees should keep detailed records of all receipts and disbursements, investment transactions and rationale, distribution decisions and supporting documentation, communications with beneficiaries, and professional advice received. Digital record-keeping systems help maintain organized records.

Self-Dealing or Conflicts of Interest

Trustees owe undivided loyalty to beneficiaries. Self-dealing, even unintentional, is a serious breach of fiduciary duty. Common self-dealing mistakes include purchasing trust assets for yourself or family, selling personal assets to the trust, borrowing from trust funds, using trust assets for personal benefit, and employing yourself or family members without proper authorization and fair compensation. Avoid all transactions that benefit you personally, even if they seem fair.

Failing to Obtain Professional Guidance

Many trustees try to handle complex trust administration alone, often because they want to save on fees or believe they can figure it out themselves. This is penny-wise and pound-foolish. The cost of professional guidance is minimal compared to potential liability for mistakes. Trustees should seek legal counsel for unclear provisions, complex decisions, beneficiary disputes, tax planning, and investment policy development. Professional fees are typically paid from trust assets as administrative expenses.

Missing Tax Filing Deadlines

Trusts have strict tax filing deadlines that trustees must meet. Missing deadlines results in penalties and interest that trustees may be personally liable for. Critical deadlines include Form 1041 due April 15 for calendar year trusts, estate tax returns due 9 months after death, K-1s to beneficiaries by Form 1041 filing deadline, and quarterly estimated tax payments if required. Calendar your deadlines and engage professionals well in advance.

Trust Management Questions Answered

Q: What is trust management and what does it involve?

Trust management (also called trust administration) is the process of managing trust assets, making distributions to beneficiaries, handling tax filings, and fulfilling all legal duties according to the trust document’s terms after the trust becomes active.

For revocable living trusts, management begins when the grantor becomes incapacitated or dies. For irrevocable trusts, management begins immediately upon creation. Key responsibilities include asset management (investing trust assets prudently, maintaining property, collecting income), record keeping (tracking all transactions, maintaining detailed financial records, preparing accountings), tax compliance (filing trust tax returns Form 1041, paying taxes from trust assets, issuing K-1s to beneficiaries), distributions (making payments to beneficiaries according to trust terms, exercising discretion when granted), communication (keeping beneficiaries informed, responding to inquiries, providing periodic accountings), and legal compliance (following Kansas trust laws, meeting fiduciary duties, avoiding conflicts of interest).

Over 27 years, we’ve administered trusts throughout Johnson County and Wyandotte County, helping trustees navigate complex responsibilities while protecting beneficiaries’ interests. Trust management requires attention to detail, understanding of tax implications, and strict adherence to fiduciary standards.

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Q: Do I need a lawyer for trust administration or can I do it myself?

Kansas law doesn’t require attorney representation for trust administration, but most trustees benefit from legal guidance to understand fiduciary duties, avoid personal liability, and ensure proper tax compliance.

Simple trusts with cooperative beneficiaries, straightforward assets, and clear trust terms may be manageable without ongoing counsel, though initial legal review is still wise. However, you should obtain legal counsel when dealing with trust complexity (multiple beneficiaries with different interests, business holdings, real estate in multiple states, or complicated distribution provisions), beneficiary disputes (disagreements about distributions, challenges to trustee decisions, or threatened litigation), unclear trust terms (ambiguous language, conflicting provisions, or questions about grantor intent), tax complications (estate tax returns required, generation-skipping transfer tax issues, or complex income tax situations), conflicts of interest (you’re both trustee and beneficiary, transactions between trust and trustee, or competing interests among beneficiaries), or trust modifications (considering amendment, termination, or court approval for actions outside trustee authority).

Trustees can be held personally liable for breaches of fiduciary duty, improper distributions, tax filing failures, or self-dealing. The cost of proper legal guidance is minimal compared to potential liability for mistakes that can reach tens or hundreds of thousands of dollars.

Q: What are the costs of trust administration?

Trust administration costs depend on the trust’s complexity, asset types, number of beneficiaries, tax filing requirements, and duration of administration.

Simple trusts with straightforward assets and cooperative beneficiaries typically cost less than complex trusts involving business interests, real estate requiring active management, or beneficiary disputes requiring mediation or litigation. Tax filing requirements also affect costs—trusts requiring Form 1041 income tax returns, Form 706 estate tax returns, or generation-skipping transfer tax filings need additional professional time. Trusts lasting years or decades require more ongoing attention than short-term distribution trusts that close quickly after the grantor’s death.

We provide transparent fee structures based on your specific situation rather than one-size-fits-all pricing. During our initial meeting, we review the trust document, discuss administration requirements, and provide a clear estimate of anticipated costs. Throughout Johnson County and Wyandotte County, we focus on efficient administration that fulfills fiduciary duties while minimizing unnecessary expenses.

Q: What is a revocable living trust and why do I need one?

A revocable living trust is a legal document that holds title to your assets during your lifetime, allows you to maintain complete control as trustee, and directs distribution to beneficiaries after your death without going through probate.

Unlike a will (which only takes effect at death and must go through probate), a revocable living trust becomes effective immediately when you create and fund it. You serve as trustee during your lifetime, managing assets normally, and name a successor trustee to take over if you become incapacitated or die. The trust remains “revocable” because you can modify, amend, or terminate it anytime during your lifetime.

Key benefits include avoiding probate (saving 8 to 12 months and $5,000 to $10,000+ in costs), maintaining complete privacy (probate becomes public record while trusts remain private), providing incapacity management (successor trustee manages assets if you’re unable), and controlling distribution timing (can delay inheritances for minor children or beneficiaries with special circumstances). Over 27 years, we’ve created 5,423 trusts throughout Johnson County and Wyandotte County, helping families avoid probate and protect assets. However, revocable living trusts don’t reduce estate taxes or protect assets from your creditors during your lifetime—they’re primarily probate avoidance and incapacity planning tools.

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Q: What are your office hours and response times for trustee questions?

Our office is open Monday through Friday, 8:00 AM to 5:30 PM, and we return calls within 60 minutes. Trustees often have time-sensitive questions about distributions, investments, or beneficiary issues that require quick guidance. We prioritize trustee support because delays can create liability exposure. Most trust-related matters requiring immediate attention are addressed within 4 weeks on average, though ongoing trust administration support is continuous and responsive to trustee needs as they arise. Our Leawood office at 4901 W 136th St Suite 240 offers 45 free parking spaces including 6 ADA-compliant spaces with ground-level access for trustee consultations.

Q: What is your track record with trust creation and administration?

Over 27 years since 1998, Gary Eastman has created 5,423 trusts for Kansas families. This extensive trust drafting experience means we understand what works in real-world administration, what causes problems for trustees, and how to design trusts that achieve their purposes without unnecessary complexity. Gary’s dual credentials, a J.D. (law degree) and M.B.A. in Finance from the University of Kansas, provide both the legal expertise and financial understanding essential for sophisticated trust management. Trustees must make investment decisions, understand tax implications, interpret financial statements, and comply with fiduciary standards, all of which require this unique combination of skills.

We’ve served 5,407 estate planning clients overall, drafted 1,257 wills, and administered 143 probate estates, giving us comprehensive understanding of how trusts interact with overall estate plans. We return calls within 60 minutes during business hours and address most trust-related matters requiring immediate attention within 4 weeks on average.

Q: What documents are included in trust-based estate planning?

Comprehensive trust-based estate planning includes five core documents: a revocable living trust, pour-over will, durable financial power of attorney, healthcare power of attorney, and healthcare directive (living will).

The revocable living trust holds and manages your assets, directs distributions to beneficiaries, and avoids probate. The pour-over will acts as a safety net, transferring any assets not in the trust at death into the trust (though these assets still go through probate). Financial power of attorney names someone to handle financial decisions if you’re incapacitated, while healthcare power of attorney designates someone for medical decisions. The healthcare directive specifies your wishes for end-of-life care and medical treatment.

These documents work together as an integrated system—the trust manages assets, powers of attorney handle incapacity, and the pour-over will catches anything missed. Over 27 years creating 5,423 trusts throughout Johnson County and Wyandotte County, we’ve found clients need all five documents for complete protection. Missing any single document creates gaps that can force court proceedings, delay distributions, or leave family members without authority to act during incapacity.

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Q: How long does it take to create a trust?

Trust creation typically takes 4 to 8 weeks from initial meeting to final signing, depending on the trust’s complexity and how quickly you provide required information.

The process involves an initial consultation where we discuss your assets, family situation, and goals, followed by document drafting that incorporates your specific wishes and Kansas law requirements. You review the draft trust, provide feedback on any changes needed, and schedule a signing meeting once everything is finalized. Simple trusts with straightforward assets and beneficiaries move faster, while complex situations involving business interests, real estate in multiple states, blended families, or special needs planning require additional time to address properly.

After signing, the critical next step is funding the trust—transferring asset titles from your individual name into the trust name. Real estate requires new deeds, financial accounts need beneficiary changes or retitling, and business interests may need operating agreement amendments. Throughout Johnson County and Wyandotte County, we guide clients through both document creation and trust funding to ensure the trust actually works as intended. An unfunded trust provides no probate avoidance benefits.

Q: Do I need a trust if I have a small estate?

Trust planning can benefit estates of any size, but the decision depends on your assets, goals, and whether probate avoidance justifies the upfront cost.

Kansas probate typically costs $5,000 to $10,000+ and takes 8 to 12 months regardless of estate size, so even a $300,000 estate benefits from avoiding these expenses and delays. Additionally, trusts provide incapacity planning (your successor trustee manages assets if you become unable) and privacy (probate becomes public record while trusts remain private). However, trusts cost more to create than simple wills ($2,000 to $5,000 for trust packages vs. $500 to $1,500 for wills), so you’re paying upfront to save later.

Consider a trust if you own real estate (which always requires probate without a trust), have minor children needing asset management, want to avoid probate delays for beneficiaries, value privacy, or need incapacity planning. A will may be sufficient if your estate consists mainly of retirement accounts and life insurance with named beneficiaries (these pass outside probate), you’re comfortable with probate costs and timelines, or your estate is very simple. Throughout Johnson County and Wyandotte County, we help clients weigh the cost-benefit of trust planning based on their specific assets and circumstances.

Q: What happens to my trust if I move from Leawood to a different state?

Your Kansas-created revocable living trust remains valid if you move to another state—trusts are recognized nationwide under state trust laws and common law principles.

However, you should review the trust with an attorney in your new state to ensure it complies with local laws and takes advantage of any beneficial state-specific provisions. Some states have different rules about homestead exemptions, creditor protections, or trust administration procedures that may affect how your trust operates. Additionally, if you acquire real estate in your new state, you should retitle that property into the trust to avoid probate in multiple states.

Moving also triggers practical updates: change your address with financial institutions holding trust assets, update successor trustee contact information in trust records, review whether your named trustees can still serve effectively from a different state, and consider whether state income tax or estate tax laws in your new state affect planning. Throughout Johnson County and Wyandotte County, we’ve helped clients relocating to other states coordinate with local attorneys to ensure seamless transitions. We can provide referrals to qualified estate planning attorneys in most states and facilitate the review process.

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Q: How do I fund my trust after creating it?

Funding your trust means transferring asset titles from your individual name into the trust’s name—without proper funding, your trust provides no probate avoidance benefits.

Real estate requires executing and recording new deeds transferring property to the trust (e.g., “John Smith, Trustee of the John Smith Revocable Trust dated January 15, 2025”). Bank and brokerage accounts need retitling or beneficiary designation changes depending on the institution’s procedures. Vehicles can be retitled through the Kansas Department of Revenue, though many people skip this for regularly replaced vehicles. Business interests may require amending operating agreements or transferring membership certificates depending on the entity structure.

Some assets should NOT go in the trust: retirement accounts (IRAs, 401(k)s, 403(b)s) should name the trust as contingent beneficiary only, not owner, to preserve tax-deferred status; HSAs and FSAs have similar restrictions; and vehicles held for business use may be better titled to an LLC. Life insurance can name the trust as beneficiary or remain with individual beneficiaries depending on your distribution goals. Throughout Johnson County and Wyandotte County, we provide specific funding instructions for each asset type and can prepare deeds, assist with financial institution forms, and verify funding is complete. An unfunded trust is just an expensive document that won’t avoid probate.

Q: Can charitable giving be incorporated into trust planning?

Yes, charitable giving can be integrated into trusts through outright bequests, charitable remainder trusts, charitable lead trusts, or naming charitable organizations as trust beneficiaries.

Simple charitable bequests in your revocable living trust direct specific amounts or percentages to charities at your death, reducing your taxable estate dollar-for-dollar. Charitable remainder trusts (CRTs) provide income to you or beneficiaries for a term of years or life, with the remainder going to charity—offering immediate income tax deductions, avoiding capital gains tax on contributed appreciated assets, and removing assets from your taxable estate. Charitable lead trusts (CLTs) work in reverse: charity receives income for a term of years, then assets pass to your heirs with reduced gift or estate tax.

Additional charitable strategies include naming charities as contingent trust beneficiaries (if primary beneficiaries predecease you), creating donor-advised funds within your trust structure, or establishing private foundations for ongoing family philanthropy. We coordinate with your CPA and financial advisors to structure charitable giving that maximizes income tax deductions, estate tax reductions, and charitable impact.

Q: What are the benefits of a living trust over a will?

Living trusts provide four primary advantages over wills: avoiding probate, enabling incapacity planning, maintaining privacy, and controlling distribution timing.

Trusts avoid probate entirely—assets transfer directly to beneficiaries within weeks rather than the 8 to 12 months probate requires, saving $5,000 to $10,000+ in court costs and attorney fees. Wills only take effect at death and must go through probate court, which becomes public record showing all your assets, debts, and beneficiaries. Trusts remain completely private with no public filings. For incapacity planning, trusts allow your successor trustee to manage assets immediately if you become unable to do so, while wills provide no incapacity protection (requiring costly conservatorship proceedings to access your assets).

Additional trust benefits include controlling when beneficiaries receive inheritances (delaying distributions for minor children or beneficiaries with substance abuse or financial management issues), protecting inheritances from beneficiaries’ divorces or creditors through continued trust ownership, and managing assets across multiple states without ancillary probate. However, trusts cost more upfront to create ($2,000 to $5,000 vs. $500 to $1,500 for wills) and require the extra step of funding by transferring assets into the trust. Throughout Johnson County and Wyandotte County, we typically recommend trusts for clients who own real estate, have minor children, value privacy, or want to avoid probate delays.

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Q: How do trusts address complex family situations?

Trusts provide flexible tools for addressing blended families, special needs beneficiaries, unequal inheritances, beneficiaries with substance abuse or financial mismanagement issues, and family conflicts.

For blended families, trusts can balance competing interests between current spouses and children from previous marriages through QTIP (Qualified Terminable Interest Property) trusts that provide lifetime income to the surviving spouse while preserving principal for children, or separate trusts for each set of children funded at the first spouse’s death. Special needs trusts preserve beneficiaries’ eligibility for SSI, Medicaid, and other government benefits while providing supplemental support for quality-of-life expenses not covered by benefits.

For beneficiaries with substance abuse, creditor problems, or poor financial judgment, trusts can make distributions at trustee discretion rather than outright, continue holding assets in trust protection rather than distributing immediately, or impose conditions like sobriety testing or financial counseling before distributions. Unequal inheritances between children can be explained in the trust document to reduce disputes, or equalized through life insurance proceeds to children receiving less. Throughout Johnson County and Wyandotte County, we structure trusts that address real family complexities while minimizing potential conflicts.

Q: What is the difference between revocable and irrevocable trusts?

Revocable trusts can be modified, amended, or terminated anytime during your lifetime, while irrevocable trusts generally cannot be changed once created. This fundamental difference affects control, taxation, and asset protection.

With revocable trusts, you retain complete control as trustee, can change beneficiaries or distribution terms whenever you want, can dissolve the trust and take assets back, and pay all income taxes on trust earnings (it’s tax-neutral during your lifetime). However, assets remain in your taxable estate for estate tax purposes, offer no creditor protection during your lifetime, and provide no Medicaid eligibility benefits. Revocable trusts primarily avoid probate and provide incapacity management while maintaining full control.

Irrevocable trusts require giving up control—you cannot serve as trustee (must use independent trustee), cannot change beneficiaries or terms, and cannot take assets back. In exchange, you get significant benefits: assets are removed from your taxable estate (reducing estate tax for estates exceeding $13.61 million), creditor protection (assets generally can’t be reached by your creditors), potential income tax advantages (income may be taxed to beneficiaries at lower rates), and Medicaid planning benefits (assets removed from your countable resources after five-year lookback). Throughout Johnson County and Wyandotte County, we recommend revocable trusts for most clients seeking probate avoidance and control, while irrevocable trusts serve high-net-worth estate tax planning, asset protection, or Medicaid planning needs.

Q: What should I do if I already have a trust but haven’t reviewed it recently?

Schedule a trust review immediately. Trusts should be reviewed at least every 3 to 5 years or after significant life events, tax law changes, or asset changes.

Life events triggering review include marriage or divorce, birth or adoption of children or grandchildren, death of named trustees or beneficiaries, substantial changes in asset values or types (buying/selling real estate, starting/selling a business), retirement, or moving to a different state. Tax law changes requiring review include the scheduled 2026 estate tax exemption sunset (dropping from $13.61 million to approximately $7 million), changes to retirement account distribution rules like the SECURE Act, and state tax law modifications if you’ve relocated.

A comprehensive trust review examines whether named trustees and successor trustees are still appropriate and able to serve, beneficiaries’ circumstances have changed (marriages, divorces, financial difficulties, special needs), all assets are properly funded into the trust (unfunded assets still go through probate), distribution provisions still reflect your wishes, and trust terms comply with current law. Common problems we find in outdated trusts include deceased or incapacitated trustees still named, assets never transferred into the trust, provisions no longer tax-efficient under current law, and beneficiary designations conflicting with trust terms. Throughout Johnson County and Wyandotte County, we review trusts regardless of where they were originally created, identifying issues and recommending updates.

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Q: How do I plan for trustee succession?

Trustee succession planning involves naming multiple successors in order of priority, considering each person’s abilities and willingness to serve, and addressing what happens if all named trustees are unable or unwilling to serve.

Most trusts name a primary trustee (often yourself for revocable trusts), first successor trustee (often your spouse), second successor trustee (often adult children or siblings), and may include a corporate trustee (bank or trust company) as final successor. Each successor should possess financial responsibility, organizational skills, impartiality among beneficiaries, and understanding of fiduciary duties. Consider whether family members live nearby (managing local real estate or business interests from another state is challenging), have time and willingness to handle detailed record-keeping and tax filings, can remain neutral in family conflicts, and possess investment knowledge for managing trust assets prudently.

Alternative succession approaches include naming co-trustees (two people serving together, requiring agreement on decisions), appointing a trust protector (someone with authority to remove and replace trustees if problems arise), or using corporate trustees from the start for complex estates or family conflicts. Address trustee compensation in the trust document—family members often serve without fees while professional trustees charge 0.5% to 1.5% of assets annually. If all named successors are unable to serve, Kansas law allows courts to appoint trustees, but it’s better to name sufficient successors to avoid court involvement. Throughout Johnson County and Wyandotte County, we help clients select trustees and successors who will faithfully execute their wishes while managing family dynamics effectively.

Q: What happens to my trust if I become incapacitated?

Your successor trustee takes over managing the trust according to the authority granted in the trust document, paying your living expenses, healthcare costs, and managing investments without any court involvement.

For revocable living trusts where you serve as initial trustee, incapacity triggers the succession—your named successor trustee steps in immediately (or after one or two physicians certify your incapacity, depending on how the trust document defines incapacity). The successor trustee can access trust accounts, sell trust property if needed for your care, make investment decisions, pay bills and taxes, and distribute funds for your benefit according to trust terms. This avoids conservatorship proceedings, which cost $5,000 to $15,000+ and require ongoing court supervision, annual accountings, and court approval for major decisions.

Compare this to having only a will (which provides no incapacity protection) or relying solely on powers of attorney (which some institutions resist honoring, especially if they’re older or appear to conflict with the institution’s policies). Trust succession is automatic and legally binding—financial institutions must recognize your successor trustee’s authority. The trust continues operating seamlessly: your successor pays your living expenses and medical bills, maintains your home and property, manages investments, files trust tax returns, and provides for your dependents if applicable. Throughout Johnson County and Wyandotte County, we structure trusts with clear incapacity triggers and successor trustee powers, ensuring your affairs are managed properly if you become unable to do so yourself.

Q: Can I change my beneficiaries after creating a Leawood revocable trust?

Yes, revocable trusts allow you to change beneficiaries, distribution amounts, trustees, or any other terms anytime during your lifetime—that’s why they’re called “revocable.”

You can amend specific provisions through a formal amendment document (signed and notarized, referencing the original trust and describing changes), or completely restate the entire trust with new terms while keeping the same trust name and date (avoiding the need to retitle assets). Common reasons for changes include marriages, divorces, births or adoptions, deaths of beneficiaries, estrangements or reconciliations, changes in beneficiaries’ financial circumstances or needs, and wanting to add or remove charitable beneficiaries. However, once you die or become incapacitated (if the trust document specifies), the trust typically becomes irrevocable and cannot be changed.

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Q: How do Eastman Law Firm trusts comply with Kansas law?

Kansas trusts must comply with the Kansas Uniform Trust Code (K.S.A. 58a-101 et seq.), which governs trust creation, administration, and termination. For valid trust creation, Kansas requires a settlor with capacity to create the trust, a definite beneficiary (or charitable purpose), a trustee with duties to perform, and the same person not being sole trustee and sole beneficiary. The trust document must clearly identify the trust property, state the settlor’s intent to create a trust, and specify beneficiaries and distribution terms. Revocable living trusts in Kansas don’t require witnesses or notarization for validity (though notarization helps with real estate transfers), but must be in writing and signed by the settlor. Kansas law also governs trustee duties (duty of loyalty, duty to administer prudently, duty to keep beneficiaries informed), creditor protections, trust modifications and terminations, and spendthrift provision enforcement. Throughout Johnson County and Wyandotte County, we draft trusts complying with Kansas statutory requirements, incorporating provisions that protect beneficiaries while giving trustees appropriate flexibility to adapt to changing circumstances.

Q: What should I consider when choosing a trustee for my Leawood Trust?

Choose a trustee based on trustworthiness, financial competence, availability, impartiality among beneficiaries, and understanding of fiduciary duties. Trustee responsibilities include managing and investing trust assets prudently, making distributions according to trust terms, filing trust income tax returns (Form 1041), maintaining detailed records of all transactions, communicating regularly with beneficiaries, and acting in beneficiaries’ best interests (not the trustee’s own interests). The trustee must understand they have a fiduciary duty—the highest legal standard of care—and can be held personally liable for mismanagement, self-dealing, or failure to follow trust terms.

Consider three main options: individual trustees (family members or friends who know you personally but may lack financial expertise or face family conflicts), professional trustees (attorneys, CPAs, or financial advisors who have expertise but charge hourly fees), or corporate trustees (banks or trust companies offering institutional stability, investment management, and no personal conflicts, but charging 0.5% to 1.5% of assets annually). For simple trusts with cooperative beneficiaries and straightforward assets, individual trustees often work well. For complex trusts, high-value estates, beneficiary conflicts, or business interests requiring professional management, corporate or professional trustees may be better. Throughout Johnson County and Wyandotte County, we help clients evaluate trustee options, name appropriate successors, and structure trustee powers that balance control with flexibility.

Q: Does The Eastman Law Firm handle out-of-state property for Leawood residents?

Yes, we help clients owning property in multiple states coordinate trust planning to avoid ancillary probate in each state where real estate is located. Real estate outside Kansas titled in your individual name must go through ancillary probate in that state, but transferring the property into your revocable living trust avoids probate in all states. For example, a Kansas resident owning a home in Kansas, a vacation condo in Colorado, and rental property in Florida would face probate proceedings in all three states (costing $3,000 to $8,000+ per state and taking 6 to 12 months each) if properties are individually owned. However, if all three properties are titled in the trust’s name, no probate is required in any state—the trust administers all properties together after your death regardless of location.

To transfer out-of-state real estate into your trust, you execute a new deed in the property’s state transferring ownership from your individual name to your trust name (e.g., “John Smith” to “John Smith, Trustee of the John Smith Revocable Trust dated January 15, 2025”). We coordinate with attorneys licensed in the property’s state to prepare proper deeds, ensure compliance with local recording requirements, verify title insurance implications, and confirm the transfer doesn’t trigger property tax reassessments or documentary stamp taxes. Throughout Johnson County and Wyandotte County, we help clients owning multi-state property structure trusts that avoid ancillary probate while addressing state-specific legal requirements.

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Q: Should life insurance be in a trust?

Life insurance should be in an irrevocable life insurance trust (ILIT) if your estate exceeds or will exceed the federal estate tax exemption ($13.61 million in 2024), because life insurance death benefits owned by you are included in your taxable estate.

For example, if you own a $2 million life insurance policy and die with a $12 million estate, your total taxable estate is $14 million, exceeding the exemption by $390,000 and triggering $156,000 in estate tax at 40%. However, if an ILIT owns the policy, the $2 million death benefit passes to beneficiaries outside your taxable estate, avoiding the $156,000 tax while still providing the insurance proceeds to your family.

ILITs work by transferring policy ownership to the trust (which becomes irrevocable), naming the trust as policy beneficiary, and having the trust distribute proceeds to beneficiaries according to trust terms after your death. You can gift money to the ILIT annually to pay premiums using your annual exclusion ($18,000 per beneficiary in 2024). However, there’s a trade-off: you give up ownership and control of the policy permanently. For estates under the exemption threshold, keeping life insurance outside a trust is usually simpler—beneficiaries receive proceeds directly, avoiding probate, without the complexity and cost of ILIT administration. Throughout Johnson County and Wyandotte County, we help clients determine whether ILITs make sense based on estate size, insurance amounts, and long-term estate tax projections.

Q: Are life insurance proceeds taxable?

Life insurance death benefits are generally income tax-free to beneficiaries, but may be subject to estate tax if the policy is owned by the deceased or if the deceased had “incidents of ownership” in the policy.

For income tax purposes, beneficiaries receive death benefits without paying federal or Kansas income tax regardless of policy size, a $5 million policy pays $5 million tax-free. However, for estate tax purposes, if you own the policy at death, the full death benefit is included in your taxable estate. For estates exceeding $13.61 million (2024), this triggers 40% estate tax on amounts over the exemption.

Ways to avoid estate taxation on life insurance include transferring ownership to an irrevocable life insurance trust (ILIT) at least three years before death (policies transferred within three years of death are still included in the estate under IRS rules), transferring ownership directly to beneficiaries (though this creates gift tax issues and loss of control), or having someone else own and pay for the policy from inception. Interest earned on death benefits (if the insurance company holds proceeds and pays interest) is taxable income to beneficiaries. Policy cash value growth during your lifetime is tax-deferred, and loans against cash value are generally tax-free. Throughout Johnson County and Wyandotte County, we coordinate life insurance planning with estate tax strategies to maximize tax efficiency while maintaining appropriate control and flexibility.

Q: Will an inheritance affect government benefits?

Yes, inheritances can disqualify beneficiaries from means-tested government benefits like Supplemental Security Income (SSI), Medicaid, and subsidized housing if assets are received directly in the beneficiary’s name.

SSI recipients can have no more than $2,000 in countable assets ($3,000 for couples), and Medicaid eligibility in Kansas requires assets below specific thresholds depending on the program. An inheritance of even a few thousand dollars received directly disqualifies the beneficiary until assets are spent down below eligibility limits, potentially interrupting critical benefits for months or years.

The solution is leaving inheritances to special needs beneficiaries through a special needs trust (also called a supplemental needs trust), which holds assets for the beneficiary’s benefit without disqualifying them from government benefits. The trust can pay for quality-of-life expenses not covered by government programs—vacations, entertainment, additional therapies, electronics, vehicle—while SSI and Medicaid continue covering basic living expenses and healthcare. Special needs trusts must include specific provisions complying with federal and Kansas rules, name an appropriate trustee who understands government benefit programs, and carefully limit distributions that could be considered “income” or “in-kind support and maintenance” reducing SSI payments. Throughout Johnson County and Wyandotte County, we create special needs trusts protecting beneficiaries’ inheritances while preserving essential government benefits.

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Q: What are my duties as trustee?

As trustee, you have several fiduciary duties: duty of loyalty (act solely in beneficiaries’ best interests), duty of prudence (manage trust assets carefully and reasonably), duty of impartiality (treat beneficiaries fairly according to trust terms), duty to inform and account (keep beneficiaries reasonably informed and provide accountings), duty to follow trust terms (administer according to the trust document and law), and duty to segregate assets (keep trust property separate from personal property). These are the highest legal duties recognized, and violations can result in personal liability. Throughout Johnson County and Wyandotte County, we help trustees understand and fulfill these duties to avoid personal liability while properly serving beneficiaries.

Q: Can I be paid for serving as trustee?

Yes, trustees are entitled to reasonable compensation for their services unless the trust document specifically says otherwise. Kansas law allows “reasonable compensation” which typically means a percentage of trust assets (often 1% to 2% annually) plus reimbursement of reasonable expenses. If you’re a family member trustee, you can choose to serve without compensation, but you’re entitled to payment. Corporate and professional trustees typically charge published fee schedules. Throughout Johnson County and Wyandotte County, we advise trustees on appropriate compensation structures that comply with trust terms and Kansas law.

Q: How often must I provide accountings to beneficiaries?

Kansas law requires trustees to keep qualified beneficiaries reasonably informed about trust administration. This generally includes providing an accounting annually showing all receipts, disbursements, assets, and liabilities.

Some trusts require more frequent accountings. Beneficiaries can also request accountings at reasonable intervals. Formal court accountings are typically only required when terminating a trust or if disputes arise. Throughout Johnson County and Wyandotte County, we help trustees prepare proper accountings that satisfy legal requirements while maintaining beneficiary trust.

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Q: Can I invest trust assets however I want?

No, trustees must follow the “prudent investor rule” under Kansas law. This means diversifying investments reasonably, considering both income and growth needs, balancing risk and return appropriately, and considering the purposes and terms of the trust. You can’t put all trust assets in a single risky investment or keep everything in cash earning no return. If the trust document provides specific investment directions, you must follow them unless they’re now imprudent due to changed circumstances. Throughout Johnson County and Wyandotte County, we advise trustees on investment strategies that satisfy the prudent investor rule while achieving trust objectives.

Q: What if beneficiaries disagree with my decisions?

First, ensure you’re acting within your authority under the trust document. Document your decision-making process and rationale. Communicate clearly with beneficiaries about why you’re making specific decisions.

If beneficiaries still disagree, consider whether you need to seek court instruction, especially if the trust language is unclear. Remember that as trustee, you have discretion in many areas. You don’t need beneficiary approval for proper trust administration, but you should be able to defend your decisions as reasonable and in accordance with your fiduciary duties. Throughout Johnson County and Wyandotte County, we help trustees navigate beneficiary disputes while protecting their authority and fulfilling fiduciary obligations.

Q: Can I hire professionals and pay them from trust assets?

Yes, trustees can and should hire professionals (attorneys, CPAs, financial advisors, appraisers) when needed. Professional fees are legitimate trust expenses payable from trust assets.

However, fees must be reasonable, and you should ensure you’re getting value for the fees paid. Hiring professionals doesn’t relieve you of fiduciary responsibility, but it helps you fulfill your duties properly and provides documentation that you sought expert guidance. Throughout Johnson County and Wyandotte County, we assist trustees with complex administration issues, providing guidance that helps protect against personal liability.

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Q: What if the trust document is unclear or outdated?

When trust provisions are ambiguous or seem outdated for current circumstances, trustees have several options: seek legal counsel (interpret provisions based on settlor intent and Kansas law), petition the court (request judicial instruction on proper interpretation), non-judicial modification (if all beneficiaries agree to changes), or trust decanting (move assets to a new trust with updated terms). Never simply ignore unclear provisions or assume what the settlor meant without proper analysis. Throughout Johnson County and Wyandotte County, we help trustees interpret ambiguous trust language and determine the best path forward when provisions need updating.

Q: Can a trust be modified or terminated?

Yes, Kansas law provides several ways to modify or terminate trusts: purpose achieved or impossible (if the trust purpose has been accomplished or become impossible to fulfill), unanimous consent (if all beneficiaries and the settlor, if living, agree), judicial modification (for changed circumstances not anticipated by settlor), decanting (transferring assets to a new trust with modified terms), or merger (combining with another trust if it serves beneficiary interests).

Each method has specific legal requirements that must be followed. Throughout Johnson County and Wyandotte County, we help trustees and beneficiaries navigate trust modifications and terminations under Kansas law.

Q: What is decanting and when is it used?

Decanting is transferring assets from an existing trust to a new trust with modified terms. It’s useful when you need to update administrative provisions, change trustee succession, add asset protection features, correct drafting errors, or modernize outdated trust language. Kansas allows decanting under certain conditions. It’s a powerful tool but must be done carefully to avoid tax consequences and ensure the new trust serves beneficiary interests. Throughout Johnson County and Wyandotte County, we assist with trust decanting when trustees need to update irrevocable trusts that can’t be modified through other means.

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Q: How do I resign as trustee?

Trustees can resign following procedures in the trust document or Kansas law. Generally, you must give written notice to qualified beneficiaries and any co-trustees, ensure a successor trustee is appointed or petition the court to appoint one, provide a final accounting to beneficiaries, and formally transfer trust assets to the successor trustee.

You cannot simply walk away; proper resignation procedures protect you from future liability. Throughout Johnson County and Wyandotte County, we guide trustees through proper resignation procedures that protect against continued liability while ensuring smooth transition to successor trustees.

Q: What happens if I breach my fiduciary duties?

Breach of fiduciary duty can result in serious consequences: personal liability for losses caused by the breach, removal as trustee, surcharge requiring you to restore lost value plus interest, payment of beneficiaries’ attorney fees, and potential criminal charges for intentional misconduct like embezzlement.

This is why professional guidance is essential—the cost of mistakes far exceeds the cost of proper administration. Throughout Johnson County and Wyandotte County, we help trustees avoid breaches through proper guidance on fiduciary duties, administration procedures, and compliance with Kansas trust law.

Kansas-Specific Trust Administration Rules

Kansas Trust Code

Kansas enacted the Uniform Trust Code in 2002, providing comprehensive rules for trust creation, administration, and termination. The Kansas Trust Code governs trustee duties, beneficiary rights, trust modification, judicial proceedings, and creditor claims. Understanding Kansas trust law is essential for proper administration.

Trustee Duties Under Kansas Law

Kansas law codifies specific fiduciary duties: Duty of loyalty (avoid conflicts of interest), duty of prudence (invest and manage as prudent investor), duty of impartiality (act impartially toward beneficiaries), duty to inform and account (keep beneficiaries informed), duty to follow trust terms (administer according to trust document), and duty to incur only reasonable costs (minimize administrative costs).

These duties can’t be waived, though trust documents can expand or modify some duties.

Beneficiary Rights in Kansas

Kansas law provides beneficiaries with specific rights: Right to receive information about the trust, right to annual accountings from trustee, right to enforce trust terms and hold trustee accountable, right to petition court for instruction or removal of trustee, and right to notice of trust proceedings.

Qualified beneficiaries (those with current or future interests) have more extensive rights than remote beneficiaries.

Kansas Trust Modification and Termination

Kansas provides several mechanisms for trust modification: Modification by settlor (if trust is revocable or settlor reserved modification power), modification by consent (if all beneficiaries and settlor agree), judicial modification (for changed circumstances or to further trust purposes), and non-judicial modification (for certain administrative changes).

Termination is allowed when trust purpose is fulfilled or becomes impossible, or when uneconomical to continue a trust with small value.

Decanting in Kansas

Kansas law allows trustees to decant assets from one trust to another in many circumstances. This provides flexibility to update trusts without judicial proceedings. Kansas decanting law includes significant protections ensuring decanting serves beneficiary interests and doesn’t undermine settlor intent.

Proper decanting requires careful legal analysis to avoid tax consequences.

Trust Protectors in Kansas

Kansas law recognizes trust protectors – individuals or entities given specific powers over trust administration separate from trustee powers. Trust protectors can remove and appoint trustees, modify trust terms within limits, direct or veto investment decisions, or exercise other powers granted by the trust document.

This provides additional flexibility and oversight in trust administration.

Virtual Representation in Kansas

Kansas allows virtual representation where one beneficiary can represent and bind other beneficiaries with similar interests in trust proceedings. This simplifies trust proceedings by avoiding the need to involve every potential beneficiary. Virtual representation is particularly useful for trusts with many beneficiaries or contingent interests.

Trust Income Tax in Kansas

Kansas follows federal rules for trust income taxation with some modifications. Trusts are subject to Kansas income tax on Kansas-source income. However, Kansas provides exemptions for certain trust income including Social Security benefits and some retirement income. Trusts are taxed at higher rates than individuals, making tax planning important.

Creditor Claims Against Trusts

Kansas law protects trust beneficiaries from creditors to varying degrees depending on trust type. Spendthrift trusts protect beneficiary interests from most creditors. Discretionary trusts provide even stronger protection since beneficiaries have no enforceable right to distributions. However, certain creditors (child support, alimony, government claims) can reach trust assets despite spendthrift provisions.

Trustee Liability and Indemnification

Kansas law provides that trustees are personally liable for trust obligations unless the trust contract limits liability. However, trustees are entitled to indemnification from trust assets for liabilities incurred in proper administration. This means trustees who act properly can’t be held personally liable even if trust obligations exceed trust assets. Proper administration and documentation protect trustees from personal exposure.

Let’s Get Together And Discuss Your Options

Our Leawood office at 4901 W 136th St Suite 240 is centrally located to serve trustees throughout Johnson County and the Kansas City metro area. With 45 free parking spaces including 6 ADA-compliant spaces and ground-level access, we provide convenient, accessible service for trustee consultations, beneficiary meetings, and ongoing trust management support.

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