SF 571

2nd Engrossment - 94th Legislature (2025 - 2026) Posted on 05/08/2025 10:09am

A bill for an act
relating to trusts; modifying various provisions of the Uniform Trust Code, Powers
of Appointment, and the Uniform Probate Code; making technical, clarifying, and
conforming changes; amending Minnesota Statutes 2024, sections 501A.01;
501C.0301; 501C.0302; 501C.0407; 501C.0411; 501C.0414; 501C.0602;
501C.0605; 501C.0701; 501C.0808, subdivisions 1, 2, 3, 4, 5, 6, 8, by adding a
subdivision; 501C.1013, subdivision 4; 501C.1014, by adding a subdivision;
501C.1105, subdivision 1, by adding a subdivision; 502.851, subdivisions 1, 2, 3,
4, 11, 15, 16; 524.2-114; 524.2-804, subdivision 1.

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

Section 1.

Minnesota Statutes 2024, section 501A.01, is amended to read:

501A.01 WHEN NONVESTED INTEREST, POWERS OF APPOINTMENT ARE
INVALID; EXCEPTIONS.

(a) A nonvested property interest is invalid unless:

(1) when the interest is created, it is certain to vest or terminate no later than 21 years
after the death of an individual then alive; or

(2) the interest either vests or terminates within 90 years after its creation.

(b) A general power of appointment not presently exercisable because of a condition
precedent is invalid unless:

(1) when the power is created, the condition precedent is certain to be satisfied or become
impossible to satisfy no later than 21 years after the death of an individual then alive; or

(2) the condition precedent either is satisfied or becomes impossible to satisfy within
90 years after its creation.

(c) A nongeneral power of appointment or a general testamentary power of appointment
is invalid unless:

(1) when the power is created, it is certain to be irrevocably exercised or otherwise to
terminate no later than 21 years after the death of an individual then alive; or

(2) the power is irrevocably exercised or otherwise terminates within 90 years after its
creation.

(d) In determining whether a nonvested property interest or a power of appointment is
valid under paragraph (a), clause (1), paragraph (b), clause (1), or paragraph (c), clause (1),
the possibility that a child will be born to an individual after the individual's death is
disregarded.

(e) If, in measuring a period from the creation of a trust or other property arrangement,
language in a governing instrument seeks to:

(1) disallow the vesting or termination of any interest trust beyond;

(2) postpone the vesting or termination of any interest or trust until; or

(3) operate in effect in any similar fashion upon,

the later of the expiration of a period of time not exceeding 21 years after the death of the
survivor of specified lives in being at the creation of the trust or other property arrangement,
or the expiration of a period of time that exceeds or might exceed 21 years after the death
of the survivor of lives in being at the creation of the trust or other property arrangement;

that language is inoperative to the extent it produces a period of time that exceeds 21 years
after the death of the survivor of the specified lives.

new text begin (f) For any trust created on or after August 1, 2025, this section shall apply to a nonvested
property interest or power of appointment contained in a trust by substituting the term "500
years" for "90 years" in each place it appears in this section, unless the terms of the trust
require that all beneficial interests in the trust vest or terminate within a lesser period.
new text end

Sec. 2.

Minnesota Statutes 2024, section 501C.0301, is amended to read:

501C.0301 REPRESENTATION: BASIC EFFECT.

(a) Notice to a person who may represent and bind another person under sections
501C.0302 to 501C.0305 has the same effect as if notice were given directly to the other
person.

(b) The consent new text begin , agreement, or waiver new text end of a person who may represent and bind another
person under sections 501C.0302 to 501C.0305 is binding on the person represented unless
the person represented objects to the representation before the consent new text begin , agreement, or waiver new text end
would otherwise have been effective. The provisions of this paragraph shall not apply to
representation under section 501C.0302.

(c) Except as otherwise provided in sections 501C.0411 and 501C.0602, a person who
under sections 501C.0302 to 501C.0305 may represent a settlor who lacks capacity may
receive notice and give a binding consent on the settlor's behalf.

(d) A settlor may not represent and bind a beneficiary under sections 501C.0302 to
501C.0305 with respect to the termination or modification of a trust under section 501C.0411,
paragraph (a).

(e) The settlor or another person, including one or more beneficiaries of the trust,
designated by the terms of the trust instrument to receive information from the trustee
concerning the administration of the trust and the material facts necessary to protect the
beneficiaries' interests in the manner described in section 501C.0813, paragraph (b), shall
be a representative of the beneficiaries with respect to the limitations period on judicial
proceedings against a trustee under section 501C.1005, paragraph (a).

Sec. 3.

Minnesota Statutes 2024, section 501C.0302, is amended to read:

501C.0302 REPRESENTATION BY HOLDER OF A deleted text begin GENERAL deleted text end POWER new text begin OF
APPOINTMENT new text end .

For purposes of giving notice, waiving notice, initiating a proceeding, granting consent
or approval, or objecting with regard to any proceedings under this chapter, the sole holder
or all co-holders of a presently exercisable or testamentary deleted text begin general deleted text end power of appointment,
new text begin whether general or special, new text end power of revocation, or unlimited power of withdrawal are
deemed to represent and act for beneficiaries to the extent that their interests as permissible
appointees, takers in default, or otherwise are subject to the power.

Sec. 4.

Minnesota Statutes 2024, section 501C.0407, is amended to read:

501C.0407 EVIDENCE OF ORAL TRUST.

The formal expression of intent to create a trust can be either written or oral subject to
the requirements of sections 513.04 new text begin with respect to the conveyance of interest in land except
up to a one-year lease new text end and 524.2-502 new text begin with respect to a testamentary trust new text end . The creation of
an oral trust and its terms must be established by clear and convincing evidence.

Sec. 5.

Minnesota Statutes 2024, section 501C.0411, is amended to read:

501C.0411 MODIFICATION OR TERMINATION OF NONCHARITABLE
IRREVOCABLE TRUST BY CONSENT.

(a) A noncharitable irrevocable trust may be modified or terminated upon consent of
the settlor and all beneficiaries, even if the modification or termination is inconsistent with
a material purpose of the trust. A settlor's power to consent to a trust's modification or
termination may be exercised by an agent under a power of attorney only to the extent
expressly authorized by deleted text begin the power of attorney or deleted text end the terms of the trust new text begin , or if the trust
instrument is silent with respect to consent to the trust's modification by an agent, then by
a power of attorney, other than a statutory short form power of attorney executed in
accordance with section 523.23, that expressly authorizes the agent to consent to a trust's
modification new text end ; by the settlor's conservator with the approval of the court supervising the
conservatorship if an agent is not so authorized; or by the settlor's guardian with the approval
of the court supervising the guardianship if an agent is not so authorized and a conservator
has not been appointed.

(b) A noncharitable irrevocable trust may be terminated upon consent of all of the
beneficiaries if the court concludes that continuance of the trust is not necessary to achieve
any material purpose of the trust. A noncharitable irrevocable trust may be modified upon
consent of all of the beneficiaries if the court concludes that modification is not inconsistent
with a material purpose of the trust.

(c) The court is not precluded from modifying or terminating a trust because the trust
instrument contains spendthrift provisions.

(d) Upon termination of a trust under paragraph (a) or (b), the trustee shall distribute the
trust property as agreed by the beneficiaries.

(e) If not all of the beneficiaries consent to a proposed modification or termination of
the trust under paragraph (a) or (b), the modification or termination may be approved by
the court if the court is satisfied that:

(1) if all of the beneficiaries had consented, the trust could have been modified or
terminated under this section; and

(2) the interests of a beneficiary who does not consent will be adequately protected.

Sec. 6.

Minnesota Statutes 2024, section 501C.0414, is amended to read:

501C.0414 MODIFICATION OR TERMINATION OF UNECONOMIC TRUST.

(a) After notice to the qualified beneficiaries, the trustee of a trust consisting of trust
property having a total value less than deleted text begin $50,000 deleted text end new text begin $150,000 new text end may terminate the trust if the
trustee concludes that the value of the trust property is insufficient to justify the cost of
administration.

(b) The court may modify or terminate a trust or remove the trustee and appoint a different
trustee if it determines that the value of the trust property is insufficient to justify the cost
of administration.

(c) Upon termination of a trust under this section, the trustee shall distribute the trust
property in a manner consistent with the purposes of the trust.

(d) This section does not apply to an easement for conservation or preservation.

Sec. 7.

Minnesota Statutes 2024, section 501C.0602, is amended to read:

501C.0602 REVOCATION OR AMENDMENT OF REVOCABLE TRUST.

(a) Unless the terms of a trust expressly provide that the trust is revocable, the settlor
may not revoke or amend the trust.

(b) If a revocable trust is created or funded by more than one settlor:

(1) to the extent the trust consists of community property, the trust may be revoked by
either spouse acting alone but may be amended only by joint action of both spouses;

(2) to the extent the trust consists of property other than community property, each settlor
may revoke or amend the trust with regard to the portion of the trust property attributable
to that settlor's contribution; and

(3) upon the revocation or amendment of the trust by fewer than all of the settlors, the
trustee shall promptly notify the other settlors of the revocation or amendment.

(c) The settlor may revoke or amend a revocable trust:

(1) by substantial compliance with a method provided in the terms of the trust; or

(2) if the terms of the trust do not provide a method or the method provided in the terms
is not expressly made exclusive, by:

(i) if the trust is created pursuant to a writing, by another writing manifesting clear and
convincing evidence of the settlor's intent to revoke or amend the trust; or

(ii) if the trust is an oral trust, by any other method manifesting clear and convincing
evidence of the settlor's intent.

(d) Upon revocation of a revocable trust, the trustee shall deliver the trust property as
the settlor directs.

(e) A settlor's powers with respect to revocation, amendment, or distribution of trust
property may be exercised by an agent under a power of attorney only to the extent expressly
authorized by the terms of the trust new text begin , new text end or deleted text begin the power deleted text end new text begin if the trust instrument is silent with respect
to revocation, amendment, or distribution of trust property by an agent, then by a power of
attorney, other than a statutory short form power of attorney executed in accordance with
section 523.23, that expressly authorizes the agent to exercise the settlor's powers with
respect to revocation, amendment, or distribution of property new text end .

(f) A conservator of the settlor may exercise a settlor's powers with respect to revocation,
amendment, or distribution of trust property only with the approval of the court supervising
the conservatorship.

(g) A trustee who does not know that a trust has been revoked or amended is not liable
to the settlor or settlor's successors in interest for distributions made and other actions taken
on the assumption that the trust had not been amended or revoked.

Sec. 8.

Minnesota Statutes 2024, section 501C.0605, is amended to read:

501C.0605 LIMITATION ON ACTION CONTESTING VALIDITY OF
REVOCABLE TRUST; DISTRIBUTION OF TRUST PROPERTY.

(a) A person may commence a judicial proceeding to contest the validity of a trust that
was revocable immediately prior to the settlor's death within the earlier of:

(1) three years after the settlor's death; or

(2) 120 days after the trustee sent the person a copy of the trust instrument and a notice
informing the person new text begin of the settlor's death, new text end of the trust's existence, of the trustee's name and
address, and of the time allowed for commencing a proceeding.

(b) Upon the death of the settlor of a trust that was revocable at the settlor's death, the
trustee may proceed to distribute the trust property in accordance with the terms of the trust.
The trustee is not subject to liability for doing so unless:

(1) the trustee knows of a pending judicial proceeding contesting the validity of the trust;
or

(2) a potential contestant has notified the trustee of a possible judicial proceeding to
contest the trust and a judicial proceeding is commenced within 60 days after the contestant
sent the notification.

(c) A beneficiary of a trust that is determined to have been invalid, in whole or in part,
is liable to return any distribution received, to the extent the invalidity applies to the
distribution.

Sec. 9.

Minnesota Statutes 2024, section 501C.0701, is amended to read:

501C.0701 ACCEPTING OR DECLINING TRUSTEESHIP.

(a) Except as otherwise provided in paragraph (c), a person designated as trustee accepts
the trusteeship:

(1) by substantially complying with a method of acceptance provided in the terms of
the trust; or

(2) if the terms of the trust do not provide a method, or the method provided in the terms
is not expressly made exclusive, by accepting delivery of the trust property, exercising
powers or performing duties as trustee, or otherwise indicating acceptance of the trusteeship.

(b) A person designated as trustee who has not yet accepted the trusteeship may reject
the trusteeship. A designated trustee who does not accept the trusteeship within a reasonable
time after knowing of the designation new text begin , but not more than 120 days, new text end is deemed to have rejected
the trusteeship.

(c) A person designated as trustee, without accepting the trusteeship, may:

(1) act to preserve the trust property if, within a reasonable time after acting, the person
sends a rejection of the trusteeship to the settlor or, if the settlor is dead or lacks capacity,
to a qualified beneficiary; and

(2) inspect or investigate trust property to determine potential liability or for any other
purpose.

Sec. 10.

Minnesota Statutes 2024, section 501C.0808, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) The definitions in this section apply to this section.

(b) "Directing party" means deleted text begin any deleted text end new text begin one or more persons acting as new text end investment trust advisor,
distribution trust advisor, or trust protector as provided in this section.

(c) "Distribution trust advisor" means one or more persons given authority by the
governing instrument to deleted text begin direct, consent to, veto, or otherwise exercise all or any portion of
the distribution powers and discretions of the trust, including but not limited to authority to
make discretionary distributions of income or principal deleted text end new text begin exercise the powers specified in
subdivision 3 new text end .

(d) "Excluded fiduciary" means deleted text begin any fiduciary deleted text end new text begin one or more fiduciaries new text end that by the
governing instrument deleted text begin is deleted text end new text begin are new text end directed to act in accordance with the exercise of specified
powers by a directing party, in which case such specified powers shall be deemed granted
not to the fiduciary but to the directing party and such fiduciary shall be deemed excluded
from exercising such specified powers. If a governing instrument provides that a fiduciary
as to one or more specified matters is to act, omit action, or make decisions only with the
consent of a directing party, then such fiduciary is an excluded fiduciary with respect to
such matters. A person may be an excluded fiduciary even if such person participated in
the exercise of (1) a power described in section 501C.0111 relating to nonjudicial settlement
agreements, (2) a power described in section 502.851 relating to decanting, (3) a permitted
trustee amendment, or (4) a similar power that invokes the provisions of this section with
respect to any new or existing trust.

(e) "Fiduciary" means deleted text begin any person deleted text end new text begin one or more persons new text end expressly given one or more
fiduciary duties by the governing instrument new text begin or by this section new text end , including but not limited to
a trustee.

(f) "Governing instrument" means the instrument stating the terms of a trust, including
but not limited to any court order, or nonjudicial settlement agreement establishing,
construing, or modifying the terms of the trust in accordance with section 501C.0111 or
502.851, or other applicable law.

(g) "Investment trust advisor" means deleted text begin any deleted text end one or more persons given authority by the
governing instrument to deleted text begin direct, consent to, or veto the exercise of all or any portion of the
investment powers of the trust deleted text end new text begin exercise the powers specified in subdivision 2 new text end .

(h) "Power" means authority to take or withhold an action or decision, including but not
limited to an expressly specified power, the implied power necessary to exercise a specified
power, and authority inherent in a general grant of discretion.

(i) "Trust protector" means one or more persons given one or more of the powers specified
in subdivision 4 deleted text begin , whether or not designated with the title of trust protector by the governing
instrument deleted text end .

Sec. 11.

Minnesota Statutes 2024, section 501C.0808, subdivision 2, is amended to read:

Subd. 2.

Powers of investment trust advisor.

An investment trust advisor may be
designated in the governing instrument of a trust. The powers of an investment trust advisor
may be exercised or not exercised in the sole and absolute discretion of the investment trust
advisor, and are binding on all other persons, including but not limited to each beneficiary,
fiduciary, excluded fiduciary, and any other party having an interest in the trust. The
governing instrument may use the title "investment trust advisor" or any similar name or
description demonstrating the intent to provide for the office and function of an investment
trust advisor. new text begin The governing instrument may provide that the investment trust advisor has
the authority to direct, consent to, or veto the exercise of all or any portion of the investment
powers of the trustee. new text end Unless the terms of the governing instrument provide otherwise, the
investment trust advisor has the authority to:

(1) direct the trustee with respect to the retention, purchase, transfer, assignment, sale,
or encumbrance of trust property and the investment and reinvestment of principal and
income of the trust;

(2) direct the trustee with respect to all management, control, and voting powers related
directly or indirectly to trust assets, including but not limited to voting proxies for securities
held in trust;

(3) select deleted text begin and determine reasonable compensation of deleted text end new text begin any new text end one or more advisors, managers,
consultants, or counselors, deleted text begin including deleted text end new text begin which may be new text end the trustee, and deleted text begin to deleted text end delegate to them any
of the powers of the investment trust advisor in accordance with section 501C.0807 new text begin and
determine their reasonable compensation for investment services new text end ; and

(4) determine the frequency and methodology for valuing any asset for which there is
no readily available market value.

Sec. 12.

Minnesota Statutes 2024, section 501C.0808, subdivision 3, is amended to read:

Subd. 3.

Powers of distribution trust advisor.

A distribution trust advisor may be
designated in the governing instrument of a trust. The powers of a distribution trust advisor
may be exercised or not exercised in the sole and absolute discretion of the distribution trust
advisor, and are binding on all other persons, including but not limited to each beneficiary,
fiduciary, excluded fiduciary, and any other party having an interest in the trust. The
governing instrument may use the title "distribution trust advisor" or any similar name or
description demonstrating the intent to provide for the office and function of a distribution
trust advisor. new text begin The governing instrument may provide that the distribution trust advisor has
the authority to direct, consent to, veto, or otherwise exercise all or any portion of the
distribution powers and discretions of the trustee. new text end Unless the terms of the governing
instrument provide otherwise, the distribution trust advisor has authority to new text begin :
new text end

new text begin (1) new text end direct the trustee with regard to all decisions relating directly or indirectly to
discretionary distributions new text begin of income or principal new text end to or for one or more beneficiaries deleted text begin . deleted text end new text begin ; and
new text end

new text begin (2) direct the trustee to terminate the trust, including determination of how the trustee
shall distribute the trust property to be consistent with the purposes of the trust.
new text end

Sec. 13.

Minnesota Statutes 2024, section 501C.0808, subdivision 4, is amended to read:

Subd. 4.

Powers of trust protector.

A trust protector may be designated in the governing
instrument of a trust. The powers of a trust protector may be exercised or not exercised in
the sole and absolute discretion of the trust protector, and are binding on all other persons,
including but not limited to each beneficiary, investment trust advisor, distribution trust
advisor, fiduciary, excluded fiduciary, and any other party having an interest in the trust.
The governing instrument may use the title "trust protector" or any similar name or
description demonstrating the intent to provide for the office and function of a trust protector.
The powers granted to a trust protector by the governing instrument may include but are
not limited to authority to do any one or more of the following:

(1) modify or amend the governing instrument to achieve favorable tax status or respond
to changes in the Internal Revenue Code, federal laws, state law, or the rulings and regulations
under such laws;

(2) increase, decrease, or modify the interests of any beneficiary or beneficiaries of the
trust;

(3) modify the terms of any power of appointment granted by the trust; provided,
however, such modification or amendment may not grant a beneficial interest to any
individual, class of individuals, or other parties not specifically provided for under the trust
instrument;

(4) remove, appoint, or remove and appoint, a trustee, investment trust advisor,
distribution trust advisor, another directing party, investment committee member, or
distribution committee member, including designation of a plan of succession for future
holders of any such office;

deleted text begin (5) terminate the trust, including determination of how the trustee shall distribute the
trust property to be consistent with the purposes of the trust;
deleted text end

deleted text begin (6) deleted text end new text begin (5) new text end change the situs of the trust, the governing law of the trust, or both;

deleted text begin (7) deleted text end new text begin (6) new text end appoint one or more successor trust protectors, including designation of a plan
of succession for future trust protectors;

deleted text begin (8) deleted text end new text begin (7) new text end interpret terms of the trust instrument at the request of the trustee;

deleted text begin (9) deleted text end new text begin (8) new text end advise the trustee on matters concerning a beneficiary;

deleted text begin (10) deleted text end new text begin (9) new text end amend or modify the governing instrument to take advantage of laws governing
restraints on alienation, distribution of trust property, or to improve the administration of
the trust; new text begin or
new text end

deleted text begin (11) veto or direct trust distributions; or
deleted text end

deleted text begin (12) deleted text end new text begin (10) new text end provide direction regarding notification of qualified beneficiaries.

If a charity is a current beneficiary or a presumptive remainder beneficiary of the trust,
a trust protector must give notice to the attorney general's charitable trust division at least
60 days before taking any of the actions authorized under clause (2), (3), (4), new text begin or new text end (5) deleted text begin , or (6) deleted text end .
The attorney general's charitable trust division may, however, waive this notice requirement.

Sec. 14.

Minnesota Statutes 2024, section 501C.0808, subdivision 5, is amended to read:

Subd. 5.

Duty and liability of directing party.

new text begin (a) new text end A directing party new text begin who is a distribution
trust advisor or an investment trust advisor new text end is a fiduciary of the trust subject to the same
duties and standards applicable to a trustee of a trust as provided by applicable law deleted text begin unless
the governing instrument provides otherwise, but the governing instrument may not, however,
relieve or exonerate a directing party from the duty to act or withhold acting as the directing
party in good faith reasonably believes is in the best interests of the trust. deleted text end new text begin , including but not
limited to the limitation period for actions against a trustee, the effect of providing a report
or account, and the defenses available to a trustee in an action for breach of trust against
the trustee. The terms of the governing instrument may vary the duty or liability of an
investment trust advisor or a distribution trust advisor, but only to the same extent the terms
of the trust could vary the duty or liability of a trustee in a like position and under similar
circumstances.
new text end

new text begin (b) A trust protector is not a fiduciary of the trust unless the governing instrument provides
otherwise, provided that a trust protector shall be a fiduciary subject to paragraph (a) if the
governing instrument grants the trust protector any of the powers of an investment trust
advisor under subdivision 2 or a distribution trust advisor under subdivision 3, but only to
the extent of the power or powers granted.
new text end

Sec. 15.

Minnesota Statutes 2024, section 501C.0808, subdivision 6, is amended to read:

Subd. 6.

Duty and liability of excluded fiduciary.

(a) The excluded fiduciary shall act
in accordance with the governing instrument and new text begin shall take reasonable steps to new text end comply with
the directing party's exercise of the powers granted to the directing party by the governing
instrument. Unless otherwise provided in the governing instrument, an excluded fiduciary
has no duty to monitor, review, inquire, investigate, recommend, evaluate, or warn with
respect to a directing party's exercise of or failure to exercise any power granted to the
directing party by the governing instrument, including but not limited to, any power related
to the acquisition, disposition, retention, management, or valuation of any asset or investment.
Except as otherwise provided in this section or the governing instrument, an excluded
fiduciary is not liable, either individually or as a fiduciary, for any action, inaction, consent,
or failure to consent by a directing party, including but not limited to, any of the following:

(1) if a governing instrument provides that an excluded fiduciary is to follow the direction
of a directing party, and the excluded fiduciary acts in accordance with the direction, then
except in cases of willful misconduct on the part of the excluded fiduciary in complying
with the direction of the directing party, the excluded fiduciary is not liable for any loss
resulting directly or indirectly from following the direction, including but not limited to,
compliance regarding the valuation of assets for which there is no readily available market
value;

(2) if a governing instrument provides that an excluded fiduciary is to act or omit to act
only with the consent of a directing party, then except in cases of willful misconduct on the
part of the excluded fiduciary, the excluded fiduciary is not liable for any loss resulting
directly or indirectly from any act taken or omitted as a result of the directing party's failure
to provide consent after having been requested to do so by the excluded fiduciary; or

(3) if a governing instrument provides that, or if for any other reason, an excluded
fiduciary is required to assume the role or responsibilities of a directing party, or if the
excluded fiduciary appoints a directing party or successor to a directing party, then except
in cases of willful misconduct on the part of the excluded fiduciary, the excluded fiduciary
is not liable for any loss resulting directly or indirectly from its actions in carrying out the
roles and responsibilities of the directing party.

(b) Any excluded fiduciary is also relieved from any obligation to review or evaluate
any direction from a distribution trust advisor or to perform investment or suitability reviews,
inquiries, or investigations or to make recommendations or evaluations with respect to
investments to the extent the directing party, custodial account owner, or authorized designee
of a custodial account owner had authority to direct the acquisition, disposition, or retention
of any such investment. If the excluded fiduciary offers such communication to the directing
party or any investment person selected by the investment trust advisor, the action may not
be deemed to constitute an undertaking by the excluded fiduciary to monitor or otherwise
participate in actions within the scope of the advisor's authority or to constitute any duty to
do so.

(c) An excluded fiduciary is also relieved of any duty to communicate with, warn, or
apprise any beneficiary or third party concerning instances in which the excluded fiduciary
would or may have exercised the excluded fiduciary's own discretion in a manner different
from the manner directed by the directing party.

(d) Absent a contrary provision in the governing instrument, the actions of the excluded
fiduciary, including any communications with the directing party or others, or carrying out,
recording, or reporting actions taken at the directing party's direction pertaining to matters
within the scope of authority of the directing party, shall be deemed to be administrative
actions taken by the excluded fiduciary solely to allow the excluded fiduciary to perform
those duties assigned to the excluded fiduciary under the governing instrument. An
administrative action described under this paragraph may not be deemed to constitute an
undertaking by the excluded fiduciary to monitor, participate, or otherwise take any fiduciary
responsibility for actions within the scope of authority of the directing party.

new text begin (e) Any person acting in the role of excluded fiduciary or directing party is an interested
person who may petition the district court and invoke its jurisdiction as provided in sections
501C.0201 to 501C.0208 for those matters specified in section 501C.0202, and the provisions
of section 501C.0202 shall be construed and applied so that the references in that section
to a "trustee" include the excluded fiduciary or directing party, as applicable.
new text end

Sec. 16.

Minnesota Statutes 2024, section 501C.0808, subdivision 8, is amended to read:

Subd. 8.

Duty to inform excluded fiduciary new text begin and directing parties new text end .

new text begin (a) new text end Each directing
party shall keep the excluded fiduciary and any other directing party reasonably informed
regarding the administration of the trust with respect to any specific duty or function being
performed by the directing party to the extent that the duty or function would normally be
performed by the excluded fiduciary or to the extent that providing such information to the
excluded fiduciary or other directing party is reasonably necessary for the excluded fiduciary
or other directing party to perform its duties. The directing party shall provide such
information as reasonably requested by the excluded fiduciary or other directing party.
Neither the performance nor the failure to perform of a directing party's duty to inform as
provided in this subdivision affects the limitation on the liability of the excluded fiduciary
as provided in this section.

new text begin (b) Each excluded fiduciary shall keep the directing party or parties reasonably informed
regarding the administration of the trust with respect to any specific duty or function
performed by the excluded fiduciary to the extent that providing such information to the
directing party or parties is reasonably necessary for the directing party to perform its duties.
The excluded fiduciary shall provide such information as reasonably requested by a directing
party. Neither the performance of nor the failure to perform an excluded fiduciary's duty to
inform as provided in this subdivision affects the liability of the directing party as provided
in this section.
new text end

Sec. 17.

Minnesota Statutes 2024, section 501C.0808, is amended by adding a subdivision
to read:

new text begin Subd. 9a. new text end

new text begin Office of directing party. new text end

new text begin Unless the terms of a governing instrument provide
otherwise, the rules applicable to a trustee apply to a directing party regarding the following
matters:
new text end

new text begin (1) acceptance under section 501C.0701;
new text end

new text begin (2) giving of bond to secure performance under section 501C.0702;
new text end

new text begin (3) when more than one person is acting in the role of a directing party, the provisions
applicable to cotrustees under section 501C.0703;
new text end

new text begin (4) reasonable compensation under section 501C.0708;
new text end

new text begin (5) resignation under section 501C.0705;
new text end

new text begin (6) removal under section 501C.0706; and
new text end

new text begin (7) vacancy and appointment of successor under section 501C.0704.
new text end

Sec. 18.

Minnesota Statutes 2024, section 501C.1013, subdivision 4, is amended to read:

Subd. 4.

Effect.

When a certificate of trust is recorded in a county where real property
is situated, or in the case of personal property, when it is presented to a third party, the
certificate of trust serves to document the existence of the trust, the identity of the trustees,
the powers of the trustees and any limitations on those powers, and other matters the
certificate of trust sets out, as though the full trust instrument had been recorded or presented.
Until amended or revoked under subdivision 5, or until the full trust instrument is recorded
or presented, a certificate of trust is prima facie proof as to matters contained in it and any
party may rely upon the continued effectiveness of the certificate new text begin , and the subsequent
revocation or amendment of a certificate of trust shall not affect transactions entered into
in reliance on a prior certificate of trust new text end .

Sec. 19.

Minnesota Statutes 2024, section 501C.1014, is amended by adding a subdivision
to read:

new text begin Subd. 5. new text end

new text begin Affidavit of trustee. new text end

new text begin An affidavit of a trustee or of trustees of an inter vivos
trust or a testamentary trust in support of a personal property transaction may be substantially
in the form of the affidavit provided in subdivision 1 or 2, as long as the affidavit sets forth
a description of the personal property and includes paragraphs 2, 3(a) and (b), changing the
property reference to the personal property described, 4, 5, 6, and 7 of the form of the
affidavit provided in subdivision 1 or 2.
new text end

Sec. 20.

Minnesota Statutes 2024, section 501C.1105, subdivision 1, is amended to read:

Subdivision 1.

Expenses.

Unless a will new text begin or trust instrument new text end provides otherwise and subject
to subdivision 2, all expenses incurred in connection with the settlement of a decedent's
estate, including debts, funeral expenses, estate taxes, interest and penalties concerning
taxes, family allowances, fees of attorneys and personal representatives, and court costs
must be charged against the principal of the estate.

Sec. 21.

Minnesota Statutes 2024, section 501C.1105, is amended by adding a subdivision
to read:

new text begin Subd. 4. new text end

new text begin Decedent's estate. new text end

new text begin For purposes of this section, the "decedent's estate" includes
the estate of the decedent and any trust that was revocable by the decedent at the time of
the decedent's death.
new text end

Sec. 22.

Minnesota Statutes 2024, section 502.851, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) The definitions in this subdivision apply to this section.

(b) "Appointed trust" means an irrevocable trust which receives principal from an invaded
trust under subdivision 3 or 4, including another trust created by the settlor of the invaded
trust, under the terms of the invaded trust or any other trust instrument, or by the trustees,
in that capacity, of the invaded trust. For purposes of creating another trust, any requirement
that a trust instrument be signed by the settlor shall be deemed satisfied by the signature of
the trustee of the appointed trust. new text begin In the discretion of the authorized trustee, the appointed
trust may be the same trust as the invaded trust with modified terms which does not require
the trustee of the appointed trust to refer to the trust by a different name or obtain a separate
tax identification number when applicable.
new text end

(c) "Authorized trustee" means, as to an invaded trust, any trustee or trustees with
authority to pay trust principal to or for one or more current beneficiaries other than a trustee
who is the settlor, or a beneficiary to whom income or principal must be paid currently or
in the future, or who is or will become eligible to receive a distribution of income or principal
in the discretion of the trustee, other than by the exercise of a power of appointment held
in a nonfiduciary capacity.

(d) "Current beneficiary" or "beneficiaries" means the person or persons, or as to a class,
any person or persons who are or will become members of that class, to whom the trustees
may distribute principal at the time of the exercise of the power, provided that the interest
of a beneficiary to whom income, but not principal, may be distributed at the discretion of
the trustee of the invaded trust, may be continued in the appointed trust.

(e) "Invade" means the power to pay directly to the beneficiary of a trust or make
application for the benefit of the beneficiary.

(f) "Invaded trust" means any existing irrevocable inter vivos or testamentary trust whose
principal is appointed under subdivision 3 or 4.

(g) "Person or persons interested in the invaded trust" means all qualified beneficiaries
as defined in section 501C.0103, paragraph (m).

(h) "Principal" includes the income of the trust at the time of the exercise of the power
that is not currently required to be distributed, including accrued and accumulated income.

(i) "Unlimited discretion" means the unlimited power to distribute principal. A power
to distribute principal that includes words such as best interests, welfare, comfort, or
happiness shall not be considered a limitation of the power to distribute principal.

Sec. 23.

Minnesota Statutes 2024, section 502.851, subdivision 2, is amended to read:

Subd. 2.

deleted text begin Power of appointment; effect when more or less extensive than authorized deleted text end new text begin
Savings provision new text end .

deleted text begin An exercise of a power of appointment is not void if the exercise is:
deleted text end

deleted text begin (1) more extensive than was authorized but is valid to the extent authorized by the
instrument creating its power; or
deleted text end

deleted text begin (2) less extensive than authorized by the instrument creating the power, unless the donor
has manifested a contrary intention.
deleted text end

new text begin (a) If exercise of the power to invade trust principal under subdivision 3 or 4 would be
effective under this section except that the appointed trust instrument in part does not comply
with this section, the exercise of the power is effective and the following rules apply with
respect to the principal of the appointed trust attributable to the exercise of the power:
new text end

new text begin (1) a provision in the appointed trust instrument that is not permitted under this section
is void to the extent necessary to comply with this section; and
new text end

new text begin (2) a provision required by this section to be in the appointed trust instrument that is not
contained in the trust instrument is deemed to be included in the trust instrument to the
extent necessary to comply with this section.
new text end

new text begin (b) If a trustee or other fiduciary of an appointed trust determines that paragraph (a)
applies to a prior exercise of the power to invade trust principal under subdivision 3 or 4,
the fiduciary shall take corrective action consistent with the fiduciary's duties.
new text end

Sec. 24.

Minnesota Statutes 2024, section 502.851, subdivision 3, is amended to read:

Subd. 3.

Authorized trustee with unlimited discretion.

(a) An authorized trustee with
unlimited discretion to invade trust principal may appoint part or all of the principal to a
trustee of an appointed trust for, and only for the benefit of, one, more than one, or all of
the current beneficiaries of the invaded trust, to the exclusion of any one or more of the
current beneficiaries. The successor and remainder beneficiaries of the appointed trust deleted text begin may
be none, deleted text end new text begin must be new text end one, more than one, or all of the successor and remainder beneficiaries of
the invaded trust new text begin , and may be to the exclusion of any one, more than one, or all of such
successor and remainder beneficiaries new text end .

(b) An authorized trustee exercising the power under paragraph (a) may grant a
discretionary power of appointment in the appointed trust to one or more of the current
beneficiaries of the invaded trust, provided that the beneficiary granted a power to appoint
may receive principal outright under the terms of the invaded trust.

(c) If the authorized trustee grants a power of appointment, the class of permissible
appointees in favor of whom the beneficiary may exercise the power of appointment granted
in the appointed trust may be broader or otherwise different from the current, successor,
and remainder beneficiaries of the invaded trust.

(d) If the beneficiary or beneficiaries of the invaded trust are described by a class, the
beneficiary or beneficiaries of the appointed trust may include present or future members
of the class.

Sec. 25.

Minnesota Statutes 2024, section 502.851, subdivision 4, is amended to read:

Subd. 4.

Authorized trustee without unlimited discretion.

(a) An authorized trustee
with the power to invade trust principal but without unlimited discretion may appoint part
or all of the principal of the trust to a trustee of an appointed trust, provided that the current
beneficiaries of the appointed trust shall be the same as the current beneficiaries of the
invaded trust and the successor and remainder beneficiaries shall be the same as the successor
and remainder beneficiaries of the invaded trust.

(b) If the authorized trustee exercises the power under this subdivision, the appointed
trust shall include the same language authorizing the trustee to distribute the income or
invade the principal of the appointed trust as in the invaded trust.

(c) If the authorized trustee exercises the power under this subdivision to extend the
term of the appointed trust beyond the term of the invaded trust, for any period after the
invaded trust would have otherwise terminated under the provisions of the invaded trust,
the appointed trust, in addition to the language required to be included in the appointed trust
pursuant to paragraph (b), may also include language providing the trustee with unlimited
discretion to invade the principal of the appointed trust during this extended term.

(d) If the beneficiary or beneficiaries of the invaded trust are described by a class, the
beneficiary or beneficiaries of the appointed trust shall include present deleted text begin or deleted text end new text begin and new text end future members
of the class.

(e) If the authorized trustee exercises the power under this subdivision and if the invaded
trust grants a power of appointment to a beneficiary of the trust, the appointed trust shall
grant the power of appointment in the appointed trust and the class of permissible appointees
shall be the same as in the invaded trust.

Sec. 26.

Minnesota Statutes 2024, section 502.851, subdivision 11, is amended to read:

Subd. 11.

Requirements for exercise of power to appoint; notice.

(a) The exercise of
the power to appoint to an appointed trust under subdivision 3 or 4 must be evidenced by
an instrument in writing, signed deleted text begin , deleted text end new text begin and new text end dated deleted text begin , and acknowledged deleted text end by the authorized trustee.
The exercise of the power shall be effective 60 days after the date of delivery of notice as
specified in paragraph (c), unless each person entitled to notice agrees in writing to an earlier
effective date or waives in writing the right to object to the exercise of the power.

(b) An authorized trustee may exercise the power authorized by subdivision 3 or 4
without the consent of the settlor or the persons interested in the invaded trust and without
court approval, provided that the authorized trustee may seek court approval for the exercise
with notice to all persons interested in the invaded trust.

(c) A copy of the instrument exercising the power, a copy of the appointed trust, and a
copy of the invaded trust shall be delivered to:

(1) any person having the right, pursuant to the terms of the invaded trust, to remove or
replace the authorized trustee exercising the power under subdivision 3 or 4; deleted text begin and
deleted text end

(2) all persons interested in the invaded trust deleted text begin . deleted text end new text begin ; and
new text end

new text begin (3) any person who would be considered the owner of all or any portion of the appointed
trust under sections 671 to 679 of the Internal Revenue Code.
new text end

(d) Notice of an exercise of the power must be given in the same manner as provided in
section 501C.0109 new text begin and is subject to the provisions of section 501C.0301 new text end .

(e) The instrument exercising the power shall state whether the appointment is of all the
assets comprising the principal of the invaded trust or only a part of the assets comprising
the principal of the invaded trust and, if a part, the approximate percentage of the value of
the principal of the invaded trust that is subject to the appointment.

(f) A person entitled to notice may object to the authorized trustee's exercise of the power
under this section by serving a written notice of objection upon the authorized trustee prior
to the effective date of the exercise of the power. The failure to object shall not constitute
a consent.

(g) If the authorized trustee does not receive a written objection to the proposed exercise
from a person entitled to notice within the applicable period, the authorized trustee is not
liable to any person who received the required notice for the exercise of the power.

(h) If the authorized trustee receives a written objection within the applicable period,
either the authorized trustee or any person entitled to notice may petition the court to have
the proposed exercise of a power performed as proposed, performed with modifications, or
denied. In a proceeding, a person objecting to the proposed exercise has the burden of proof
as to whether the authorized trustee's proposed exercise should not be performed. A person
who has not objected is not estopped from opposing the proposed exercise in the proceeding.
If the authorized trustee decides not to implement the proposed exercise, the trustee shall
notify all persons entitled to notice of the decision not to exercise the power and the reasons
for the decision, and the authorized trustee's decision not to implement the proposed exercise
does not itself give rise to liability to any person interested in the invaded trust. A person
entitled to notice may petition the court to have the exercise of a power performed and has
the burden of proof as to whether it should be performed.

(i) A copy of the instrument exercising the power and a copy of each of the invaded trust
and the appointed trust shall be filed with records of the appointed trust and the invaded
trust.

Sec. 27.

Minnesota Statutes 2024, section 502.851, subdivision 15, is amended to read:

Subd. 15.

Prohibitions.

new text begin (a) new text end An authorized trustee may not exercise a power authorized
by subdivision 3 or 4 to effect any of the following:

(1) to reduce, limit, or modify any beneficiary's current right to a mandatory distribution
of income or principal, a mandatory annuity or unitrust interest, a current right to withdraw
a percentage of the value of the trust, or a current right to withdraw a specified dollar amount;
provided, however, and subject to the other limitations in this section, an authorized trustee
may exercise a power authorized by subdivision 3 or 4 to appoint to an appointed trust that
is a supplemental needs trust that conforms to the provisions of section 501C.1205;

(2) notwithstanding section 501C.1008, paragraph (b), to decrease or indemnify against
a trustee's liability or exonerate a trustee from liability for failure to exercise reasonable
care, diligence, and prudence new text begin , except that the appointed trust may divide and reallocate
fiduciary powers among fiduciaries, including one or more trustees, distribution trust
advisors, investment trust advisors, trust protectors, or other persons, and relieve a fiduciary
from liability for an act or failure to act of another fiduciary as permitted under section
501C.0808 new text end ;

(3) to alter or eliminate a provision granting another person the right to remove or replace
the authorized trustee exercising the power under subdivision 3 or 4, unless notice has been
provided to the persons under subdivision 11, paragraph (c), or approval is granted by a
court having jurisdiction over the trust;

(4) to make a binding and conclusive fixation of the value of any asset for purposes of
distribution, allocation, or otherwise;

(5) to extend the term of the appointed trust beyond any permissible period of the rule
against perpetuities of the invaded trust, and any exercise of the power which extends the
term of the appointed trust beyond the permissible period of the rule against perpetuities of
the invaded trust shall void the entire exercise of the power; or

(6) to jeopardize:

(i) the deduction or exclusion originally claimed with respect to any contribution to the
invaded trust that qualified for the annual exclusion under section 2503(b) of the Internal
Revenue Code; the marital deduction under section 2056(a) or 2523(a) of the Internal
Revenue Code; or the charitable deduction under section 170(a), 642(c), 2055(a), or 2522(a)
of the Internal Revenue Code;

(ii) the qualification of a transfer as a direct skip under section 2642(c) of the Internal
Revenue Code; deleted text begin or
deleted text end

new text begin (iii) the qualification as a foreign grantor trust under section 672(f)(2)(A) of the Internal
Revenue Code; or
new text end

deleted text begin (iii) deleted text end new text begin (iv) new text end any other specific tax benefit for which a contribution originally qualified for
income, gift, estate, or generation-skipping transfer purposes under the Internal Revenue
Code.

new text begin (b) If the property of the invaded trust includes shares of stock in an S corporation, as
defined in section 1361 of the Internal Revenue Code, and the invaded trust is, or but for
the exercise of power to invade the trust principal under this section would be, a permitted
shareholder under any provision of section 1361 of the Internal Revenue Code, the authorized
trustee may exercise the power with respect to part or all of the S corporation stock only if
any appointed trust receiving the stock is a permitted shareholder under section 1361(c)(2)
of the Internal Revenue Code. If the property of the invaded trust includes shares of stock
in an S corporation and the invaded trust is, or but for the exercise of power to invade the
trust principal under this section would be, a qualified subchapter S trust within the meaning
of section 1361(d) of the Internal Revenue Code, the appointed trust instrument must not
include or omit a term that prevents the appointed trust from qualifying as a qualified
subchapter S trust.
new text end

Sec. 28.

Minnesota Statutes 2024, section 502.851, subdivision 16, is amended to read:

Subd. 16.

Compensation; commissions.

For the purposes of this section deleted text begin : (1) deleted text end new text begin , new text end unless a
court otherwise directs, an authorized trustee may not exercise a power authorized by
subdivision 3 or 4 to change the provisions regarding the determination of the compensation
of any trustee. The commissions or other compensation payable to the trustees of the invaded
trust may continue to be paid to the trustees of the appointed trust during the term of the
appointed trust and shall be determined in the same manner as in the invaded trust.

deleted text begin (2) No trustee shall receive any paying commission or other compensation for appointing
of property from the invaded trust to an appointed trust pursuant to subdivision 3 or 4.
deleted text end

Sec. 29.

Minnesota Statutes 2024, section 524.2-114, is amended to read:

524.2-114 PARENT BARRED FROM INHERITING IN CERTAIN
CIRCUMSTANCES.

(a) A parent is barred from inheriting from or through a child of the parent if:

(1) the parent's parental rights were terminated and the parent-child relationship was not
judicially reestablished; deleted text begin or
deleted text end

(2) the child died before reaching 18 years of age and there is clear and convincing
evidence that immediately before the child's death the parental rights of the parent could
have been terminated under law of this state other than this chapter on the basis of
nonsupport, abandonment, abuse, neglect, or other actions or inactions of the parent toward
the child deleted text begin . deleted text end new text begin ; or
new text end

new text begin (3) the child died after reaching 18 years of age and there is clear and convincing evidence
that:
new text end

new text begin (i) during the years of the child's minority, the parental rights of the parent could have
been terminated under laws of this state other than this chapter on the basis of nonsupport,
abandonment, abuse, neglect, or other actions or inactions of the parent toward the child;
and
new text end

new text begin (ii) in the year preceding the child's death, the parent and child were estranged. For
purposes of this subdivision, "estranged" means having a relationship characterized by
enmity, hostility, or indifference.
new text end

(b) For the purpose of intestate succession from or through the deceased child, a parent
who is barred from inheriting under this section is treated as if the parent predeceased the
child.

new text begin (c) This section does not apply to the probate of federal trust land under United States
Code, title 25, sections 2205 to 2209, as amended, in a federal, state, or Tribal probate
matter. Federal trust land has the meaning given under United States Code, title 24, section
2201(4)(i).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment and
applies to actions commenced on or after that date.
new text end

Sec. 30.

Minnesota Statutes 2024, section 524.2-804, subdivision 1, is amended to read:

Subdivision 1.

Revocation upon dissolution.

Except as provided by the express terms
of a governing instrument, other than a trust instrument under section 501C.1207, executed
prior to the dissolution or annulment of an individual's marriage, a court order, a contract
relating to the division of the marital property made between individuals before or after
their marriage, dissolution, or annulment, or a plan document governing a qualified or
nonqualified retirement plan, the dissolution or annulment of a marriage revokes any
revocable:

(1) disposition, beneficiary designation, or appointment of property made new text begin in a governing
instrument new text end by an individual to the individual's former spouse deleted text begin in a governing instrument deleted text end new text begin or
any members of the former spouse's family who are not also members of the individual's
family new text end ;

(2) provision in a governing instrument conferring a general or nongeneral power of
appointment on an individual's former spouse; and

(3) nomination in a governing instrument, nominating an individual's former spouse new text begin or
any members of the former spouse's family who are not also members of the individual's
family new text end to serve in any fiduciary or representative capacity, including a personal representative,
executor, trustee, conservator, agent, or guardian.