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This is a first in a series of posts discussing different aspects on the new statute, Minnesota’s Uniform Trust Code (UTC), which becomes effective January 1, 2016. While this series will be useful information for all Epilawg readers, it is geared towards those readers that are attorneys, fiduciaries and their clients.

At long last, Minnesota has a new trust statute—the somewhat confusingly titled Section 501C of the Minnesota Statutes—which is also commonly referred to as Minnesota’s Uniform Trust Code (UTC). While the statute originated as an exercise in defensive drafting intended to stave off whole-sale adoption of the Uniform Trust Code (from which the new statute is partially derived), more than four and a half years later, the new statute’s drafters and proponents are excited about its enactment and what it will mean for Minnesota estate planners, clients, and fiduciaries when it takes effect on January 1, 2016.

The new statute codifies, in substantial part, existing Minnesota trust law, but it does make some important substantive and procedural changes that attorneys and clients alike should be aware of. This series does not seek to explore all of those changes (or additions) to the law—which one can reasonably expect will be fodder for many articles and blog posts over the next year—but rather focuses on several changes that will either have a direct effect on Minnesota trust litigation or otherwise implicate common litigation or risk management-related issues.

countdownfromseven - DG iStockDual Track Jurisdiction

One of the most noteworthy changes in the new statute is the addition of an in personam jurisdiction option. Prior to the UTC’s passage, Minnesota had been one of the few states that used in rem jurisdiction exclusively in trust litigation proceedings. Under the new statute, parties to a trust proceeding will be given a choice between proceeding in rem or proceeding in personam. Their choice may depend on the nature of the trust and the interests of the parties.

In Rem Jurisdiction

In rem jurisdiction is binding on any current or future claim to the property, which allows for peace of mind upon entry of a final order. Minnesota law, however, requires that in rem proceedings be commenced by publication, which may deter parties who put a premium on personal privacy. Despite this drawback, in rem jurisdiction will likely remain the preferred option for trusts with multiple beneficiaries because it still provides the cleanest and most certain way to comprehensively avoid future disputes or claims. In addition, it remains under the new statute the only option for a party who wishes to submit the trust to the court’s continuing supervision.

In Personam Jurisdiction

While not so comprehensively binding, in personam jurisdiction—think back to the first year of law school, International Shoe, and the analysis of a defendant’s “minimum contacts” with a particular jurisdiction—does away with the need for publication. Individual service of process removes the need for public notice. Unlike an in rem proceeding, however, an in personam proceeding will not bind an interested party who was not given a chance to appear or be represented. This may be of particular concern with respect to a trust with a large number of beneficiaries or with unascertained or undetermined beneficiaries, as it may be difficult to identify and serve process on every interested party to the proceeding.

Virtual Representation

While in personam jurisdiction’s reach may not be as complete as in rem jurisdiction, it is broadened under the new statute by the simultaneous adoption of an expanded version of virtual representation, which allows an agent to stand in for a principal, a fiduciary for a beneficiary, and a parent for a child. In certain circumstances, an unrepresented party will even be bound if his or her interest is substantially identical to a party who participated in the proceeding. Notwithstanding the broadening effect of these virtual representation provisions, in personam jurisdiction will still likely be better suited to, and more commonly used with, trusts that value privacy, have fewer beneficiaries, and no need for continuing judicial supervision.

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Designation of Standby or Temporary Custodian for your Child

Dock - iStockSo, you and your spouse are finally ready to take that vacation to Mexico – without the kids. The flights are booked, your bags are nearly packed and thoughts of warm weather and a beach are in the forefront of your mind . . . as well as who will take care of the kiddos while you are away. Who will handle the kids’ schedules? Feed them? Watch over them? Take them to the doctor if they get sick? Who will have the authority to act on your behalf?

Standby or Temporary Custodian

Thankfully, in Minnesota, a parent can designate an adult to serve as a standby or temporary custodian to care for the parent’s minor child for a period of time designated in a written designation. Parents can also name an alternate custodian, should the primary custodian be unavailable or unwilling to act.

In general, the standby custodian is a person(s) authorized to act for up to 60 days regarding the care and custody of your children and whose authority becomes effective upon some triggering event (like a vacation) listed in the designation.

A temporary custodian, on the other hand, is a person(s) designated to assume the duties of legal and physical custodian for a specified time up to 24 months.

Typical situations in which a designation of standby or temporary custodian is used include when parents go on an extended trip without the children, as highlighted above, or when a single parent is hospitalized for an extended period of time and the other parent is unable to care for the child.

The Designation

Specifically, the designation must identify the person making the designation (the “designator” – the parent(s)); the children; the other parent, if any; the standby or temporary custodian; and the triggering event(s) upon which the designation becomes effective. The designation must include the signed consent of the standby or temporary custodian and the signed consent of the other parent, or a statement as to why the other parent’s consent is not required. The designation must be signed by the designator in the presence of two witnesses who are 18 years of age or older and who are not named in the designation.

Commencement

The standby or temporary custodian may act as custodian upon the occurrence of the triggering event listed in the designation. The commencement of the standby or temporary custodian’s authority to act does not itself divest the designator of any parental rights, but confers on the standby or temporary custodian concurrent or shared custody of the child. Keep in mind that a custodian is required by law to assure frequent and continuing contact with the parent and child and shall assure the involvement of the parents, to the greatest extent possible, in decision making on behalf of the child.

If the standby custodian’s authority to act commences due to the death of the designator, that authority is limited to the legal and physical custody of the child until such time as the standby custodian is formally appointed as guardian. This process is described here.

For reference, if a parent has appointed a testamentary guardian of children by Will and there is a conflict between the designation in the Will and a duly executed standby custodian designation, the document latest in date of execution prevails.

Court Involvement

If necessary, the designator may file a petition for approval of a designation with the court at any time. If a petition has not been filed with the court when the triggering event occurs, the standby custodian has temporary legal authority to act as custodian without the direction of the court for a period of 60 days. The standby custodian must file a petition for approval within that 60-day period in order to retain authority to act as custodian, if more time is needed.

If you are in need of a designation, be sure to contact an attorney in your area.

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Part I picCollecting Final Wages from Your Employer

Most of us don’t work for free. If your employer hasn’t paid you all of the wages you’ve earned, then that’s exactly what you’d be doing. What follows is a quick guide on what to do if your employer owes you wages. The rules for wages due to an employee upon separation from their employment in Minnesota are located in Minnesota Statute §§ 181.13 and 181.14.

If You’ve Been Terminated

If you’ve been terminated by your employer, then Minnesota Statute § 181.13 requires that your employer pay you your final wages within 24 hours of your termination. If your employer doesn’t pay you within those 24 hours, the employer will be in default and will be liable to the employee for his/her regular rate of pay for up to fifteen days.

If You’ve Voluntarily Left Your Employment

If you’ve voluntarily left your employment, then Minnesota Statute § 181.14 requires that your employer pay you your final wages by your next pay day following the date you left your employment. The date of payment is not permitted to be longer than 20 days after your last day.

How to Collect Your Final Wages

First, you need to inform your former employer than you are still owed wages in writing. You do not need to know the exact amount of wages that you are owed, but you do need to make a demand in writing. The Department of Labor & Industry (“DLI”) suggests you send the letter to your employer via certified mail to ensure that they received notice of your claim. Form letters are available on the DLI website here.

If your employer does not meet the standards explained in Minnesota Statutes §§ 181.13 and 181.14, you have two options. One is that you can file a wage claim with the Labor Standards unit at the Minnesota Department of Labor & Industry. The statute of limitations for making a wage claim with DLI is two years. DLI suggests you include the following information when you contact DLI about your wage claim:

  1. your name, address and telephone number;
  2. your former employer’s name, address, telephone number and manager or owner’s name;
  3. your last day of work;
  4. the date you demanded your final wages;
  5. the amount you are due in final wages (if unknown provide as accurate an estimate as possible);
  6. the dates you worked for your former employer yet were not paid; and
  7. whether you were terminated from your job or you quit your job.

Second, you are also permitted to bring a lawsuit against your former employer for those wages. Note that if the wages you are owed are less than $10,000, you would need to file your complaint in small claims court. If the wages are more than $10,000, you would file in state district court.

If you’ve been let go from your job or have found a new job but are still owed wages by your former employer, contact a lawyer a right away to help you get the wages you already earned. Otherwise, you’re just working for free.

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Painless Probate: Closing Informally

by Kassandra Heinrich March 19, 2015 Guest Articles

I really don’t know how probate got such a bad reputation, but in my experience it isn’t that bad. As other contributors to Epilawg have noted (see for example: Estate Planning Myth #6: I Must […]

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Postnuptial Agreements

by Jayne Sykora March 12, 2015 Estate Planning 101

We’ve written before about prenuptial agreements (“prenups”), which are agreements entered into by a couple before marriage that most often outline the ownership and division of property should a marriage end either by divorce or […]

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Dissolving a Business Entity: Why & How

by Jayne Sykora March 9, 2015 Business

Oftentimes, on the cusp of starting a new business, a business owner(s) is excited, slightly anxious, and cautiously optimistic about the future. In this haze of excitement, what often is not discussed, considered or even […]

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Unintended Consequences of Disinheriting Children

by Jennifer Santini March 5, 2015 Estate Planning 101

One thing I learned quickly after becoming an estate planning attorney is that there are often times when my clients’ wishes are not the same as what I would do in their particular situation. For […]

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Selling Real Estate Out of a Conservatorship

by Jayne Sykora February 23, 2015 Incapacity Planning

Last fall, I covered the basics on conservatorships (see: Conservatorship Basics Part 1 and Part 2). As a review, a conservatorship is needed when an adult individual is impaired to the extent of lacking sufficient […]

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Minnesota and the UTC

by Maggie Green February 19, 2015 Estate Planning 101

The 2015 Minnesota Legislature may adopt the Uniform Trust Code.  The proposed legislation would provide new rules regarding the administration of trusts, codify some common laws and clarify procedures available to those involved with the administration of trusts. […]

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In the News: Facebook’s Legacy Contact

by Jennifer Santini February 16, 2015 Estate Planning 101

Last week, Facebook announced that users of the social media website could designate a “legacy contact,” who would be able to control and manage the user’s Facebook page once the user passed away. The legacy […]

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Timeshare Exit Strategies

by Jayne Sykora February 5, 2015 Real Estate

Over the last few years, I have had a few clients who own timeshares. A timeshare is typically a resort of units in which multiple parties hold rights to use the property and each owner […]

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