Minnesota
The probate and trust law section of the Minnesota State Bar Association (MSBA), in cooperation with the Uniform Law Commission (ULC), prepared and introduced a Minnesota-specific version of the Uniform Trust Code during the 2015 legislative session. The bill was passed by both houses of the Minnesota Legislature and was signed by Gov. Mark Dayton. The new law goes into effect Jan. 1, 2016, and, with a few exceptions, will apply to all trusts governed by Minnesota law, whenever created.
From a substantive standpoint, the new Trust Code brings Minnesota trust law into the 21st century and in line with national trends that have developed during the 25 years since Minnesota’s trust law was last overhauled. Trustees and beneficiaries alike will benefit from greater flexibility through new or enhanced procedures like decanting, non-judicial settlement agreements, modification of trusts to correct mistakes and achieve tax objectives, the ability to create directed trusts (discussed in more detail later), and the option to create “silent” trusts (which do not need to be disclosed to the beneficiaries of the trust), to name the most significant.
The new Trust Code also recognizes the growing use of revocable trusts as “substitutes for wills” and codifies rules of construction that are consistent with that development. For example, it clarifies the mental capacity required to make a revocable trust (same as a will), the ability to use a written list to dispose of tangible personal property in a revocable trust (parallel to the rule already in place for wills), and the time limit for contesting the validity of a revocable trust (now in line with the rule for contesting wills). The Trust Code also preserves Minnesota’s unique in rem jurisdiction for trust proceedings and its historically strong spendthrift law.