Skip to main content Skip to office menu Skip to footer
Capital IconMinnesota Legislature

HF 2976

as introduced - 91st Legislature (2019 - 2020) Posted on 02/24/2020 04:38pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

Line numbers 1.1 1.2 1.3 1.4
1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16
2.17 2.18 2.19 2.20 2.21 2.22 2.23 2.24 2.25 2.26 2.27
2.28 2.29 2.30 2.31 2.32 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20
3.21 3.22 3.23 3.24 3.25 3.26 3.27 3.28 3.29 3.30 3.31 3.32 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8
4.9

A bill for an act
relating to civil law; modifying certain transfer to minors provisions; amending
Minnesota Statutes 2018, sections 527.32; 527.33; 527.40; 527.42.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2018, section 527.32, is amended to read:


527.32 CARE OF CUSTODIAL PROPERTY.

(a) A custodian shall:

(1) take control of custodial property;

(2) register or record title to custodial property if appropriate; and

(3) collect, hold, manage, invest, and reinvest custodial property.

(b) In dealing with custodial property, a custodian shall deleted text beginobserve the standard of care that
would be observed by a prudent person dealing with property of another and is not limited
by any other statute restricting investments by fiduciaries. If a custodian has a special skill
or expertise or is named custodian on the basis of representations of a special skill or
expertise, the custodian shall use that skill or expertise
deleted text endnew text begin comply with the prudent investor
rule set forth in section 501C.0901 as if such custodial property were trust property
new text end. However,
a custodian, in the custodian's discretion and without liability to the minor or the minor's
estate, may retain any custodial property received from a transferor.

(c) A custodian may invest in or pay premiums on life insurance or endowment policies
on (i) the life of the minor only if the minor or the minor's estate is the sole beneficiary, or
(ii) the life of another person in whom the minor has an insurable interest only to the extent
that the minor, the minor's estate, or the custodian in the capacity of custodian, is the
irrevocable beneficiary.

(d) A custodian at all times shall keep custodial property separate and distinct from all
other property in a manner sufficient to identify it clearly as custodial property of the minor.
Custodial property consisting of certificated securities may be held on deposit at a stock
brokerage firm or financial institution registered in a street name or nominee name. Custodial
property consisting of an undivided interest is so identified if the minor's interest is held as
a tenant in common and is fixed. Custodial property subject to recordation is so identified
if it is recorded, and custodial property subject to registration is so identified if it is either
registered, or held in an account designated, in the name of the custodian, followed in
substance by the words: "as a custodian for ............ (name of minor) under the Minnesota
Uniform Transfers to Minors Act."

(e) A custodian shall keep records of all transactions with respect to custodial property,
including information necessary for the preparation of the minor's tax returns, and shall
make them available for inspection at reasonable intervals by a parent or legal representative
of the minor or by the minor if the minor has attained the age of 14 years.

Sec. 2.

Minnesota Statutes 2018, section 527.33, is amended to read:


527.33 POWERS OF CUSTODIAN.

(a) A custodian, acting in a custodial capacity, has all the rights, powers, and authority
over custodial property that unmarried adult owners have over their own property, but a
custodian may exercise those rights, powers, and authority in that capacity only.

(b) This section does not relieve a custodian from liability for breach of section 527.32.

new text begin (c) At any time, with or without a court order, a custodian may transfer all or part of the
custodial property to a trust, including a trust created by a custodian, that satisfies the
requirements of section 2503(c) of the Internal Revenue Code and the regulations
implementing that section. A transfer to a trust pursuant to this paragraph terminates the
custodianship to the extent of the transfer.
new text end

Sec. 3.

Minnesota Statutes 2018, section 527.40, is amended to read:


527.40 new text beginTRANSFER UPON new text endTERMINATION OF CUSTODIANSHIP.

new text begin Subdivision 1. new text end

new text begin Terminating events. new text end

The custodian shall transfer in an appropriate
manner the custodial property to the minor or to the minor's estate upon the earlier ofnew text begin the
following terminating events
new text end:

(1) the minor's attainment of 21 years of age with respect to custodial property transferred
under section 527.24 deleted text beginordeleted text endnew text begin,new text end 527.25new text begin, 527.26, or 527.27new text end;new text begin or
new text end

deleted text begin (2) the minor's attainment of age 18 with respect to custodial property transferred under
section 527.26 or 527.27; or
deleted text end

deleted text begin (3)deleted text endnew text begin (2)new text end the minor's death.

new text begin Subd. 2. new text end

new text begin Transfer. new text end

new text begin (a) Upon the date of the applicable terminating event pursuant to
subdivision 1, if (1) there is no custodian then serving or (2) no court proceeding is pending
and the custodian fails to transfer the custodial property to the minor or the minor's estate
within 90 days of that date, then the minor or the minor's personal representative may execute
an affidavit setting forth the date of the terminating event and facts that show that the
terminating event has occurred. The person in possession of the custodial property must
transfer to the minor or the minor's personal representative the custodial property when
presented with the executed affidavit and a certified copy of the minor's birth certificate or,
in the case of a deceased minor, a certified copy of the minor's death certificate.
new text end

new text begin (b) The affidavit and documentation under paragraph (a) are conclusive proof for any
party relying on the affidavit of the occurrence of the applicable terminating event pursuant
to subdivision 1 and the right of the minor or the minor's estate to receive the custodial
property outright. Any person in possession of the custodial property that transfers assets
to the minor or the minor's estate pursuant to this subdivision shall not be liable to any
person for the transfer.
new text end

Sec. 4.

Minnesota Statutes 2018, section 527.42, is amended to read:


527.42 EFFECT ON EXISTING CUSTODIANSHIPS.

deleted text begin (a) Any transfer of custodial property as now defined in sections 527.21 to 527.40 made
before January 1, 1986, is validated notwithstanding that there was no specific authority in
Minnesota Statutes 1984, sections 527.01 to 527.11 for the coverage of custodial property
of that kind or for a transfer from that source at the time the transfer was made.
deleted text end

deleted text begin (b) Sections 527.21 to 527.40 apply to all transfers made before January 1, 1986, in a
manner and form prescribed in Minnesota Statutes 1984, sections 527.01 to 527.11, except
insofar as the application impairs constitutionally vested rights or extends the duration of
custodianships in existence before January 1, 1986.
deleted text end

deleted text begin (c) Sections 527.21 and 527.40 with respect to the age of a minor for whom custodial
property is held under those sections do not apply to custodial property held in a
custodianship that terminated because of the minor's attainment of the age of 18 after May
31, 1973, and before January 1, 1986.
deleted text end

new text begin Section 527.40, subdivision 1, does not apply to custodial property transferred under
section 527.26 or 527.27 before the effective date of this section. For custodial property
transferred under section 527.26 or 527.27 before the effective date of this section, the
custodian shall transfer in an appropriate manner the custodial property to the minor or to
the minor's estate upon the earlier of the following terminating events: (1) the minor's
attainment of 18 years of age or (2) the minor's death.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end