It has been mentioned here on Epilawg a few times already that Minnesota adopted a new trust statute. The specifics of the Minnesota Trust Code can be found in Minn. Ch. 501C (“MN Trust Code”) and has come to fruition by the countless hours and effort of a committee of local trusts and estates attorneys. The new statute will be effective as of January 1, 2016 but, under Minn. Stat. §501C.1304, will not only apply to trusts created after such date but also to any preexisting trusts.
In the spring, Julian Zebot wrote a series of posts that focused on the changes in the law that will impact Minnesota trust litigation. His posts can be found at:
- What You Need to Know About Minnesota’s Uniform Trust Code Part I: Dual-Track Jurisdiction;
- Part II: Trust Administration Involving Co-Trustees; and
- Part III: The Trustee’s Duty to Inform and Silent Trusts
Over the next few weeks, I will highlight some of the substantial changes in the new MN Trust Code that may be more helpful to the drafters of trust agreements.
For starters, the MN Trust Code now contains some definitions of terms that apply to the statutes under Minn. Ch. 501C. These will be helpful to practitioners, as they will no longer need to look elsewhere to define certain terms in trust agreements. See Minn. Stat. §501C.0103.
Additionally, Minn. Stat. §501C.0601 now requires that a settlor have the same capacity as he or she needs to execute a will in order to create, amend or revoke a revocable living trust. Under Minn. Stat. §524.2-501, a person who is of sound mind has the capacity to make a will. The committee decided to adopt this standard for capacity given that so often a revocable trust is being used as a will substitute.
The MN Trust Code requires that a revocable trust expressly grant the authority to be amended or revoked under Minn. Stat. §501C.0602, otherwise, the trust will be deemed irrevocable. The method by which a trust may be amended depends on how the trust was created. For example, if the trust was created under a written agreement, the trust may be amended “…by another writing manifesting clear and convincing evidence of the settlor’s intent to revoke or amend the trust.” See Minn. Stat. §501C.0602(c)(2)(i). Conversely, a trust that is created orally may be amended “…by any other method manifesting clear and convincing evidence of the settlor’s intent.” See Minn. Stat. §501C.0602(c)(2)(ii).
Lastly, an attorney-in-fact may exercise the power to amend or revoke a trust under their authority of a power of attorney as long as either the trust agreement, or the power of attorney, expressly grants the attorney-in-fact to have such authority. See Minn. Stat. §501C.0602(e).
In the next part of the series, I will outline the default and mandatory rules within the MN Trust Code. Contact an attorney for more information on, or with any questions about, the new trust law.