language to be deleted (2) new language
relating to property held in trust; clarifying status of certain distributions; changing certain relationship and inheritance provisions; changing certain estate taxation provisions; providing for emergency and temporary conservators;
amending Minnesota Statutes 2008, sections 289A.10, subdivision 1; 291.03, by adding a subdivision; 501B.64, subdivision 3; 524.1-201; 524.2-114; Minnesota Statutes 2009 Supplement, sections 291.005, subdivision 1; 524.5-409; proposing coding for new law in Minnesota Statutes, chapter 524.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
In the case of a decedent who has an interest in property with a situs in Minnesota, the personal representative must submit a Minnesota estate tax return to the commissioner, on a form prescribed by the commissioner, if:
(1) a federal estate tax return is required to be filed; or
(2) the federal gross estate exceeds $700,000 for estates of decedents dying after December 31, 2001, and before January 1, 2004; $850,000 for estates of decedents dying after December 31, 2003, and before January 1, 2005; $950,000 for estates of decedents dying after December 31, 2004, and before January 1, 2006; and $1,000,000 for estates of decedents dying after December 31, 2005.
The return must contain a computation of the Minnesota estate tax due. The return must be signed by the personal representative.
Unless the context otherwise clearly requires, the following terms used in this chapter shall have the following meanings:
(1) "Commissioner" means the commissioner of revenue or any person to whom the commissioner has delegated functions under this chapter.
(2) "Federal gross estate" means the gross estate of a decedent as valued and otherwise determined for federal estate tax purposes by federal taxing authorities pursuant to the provisions of the Internal Revenue Code.
(3) "Internal Revenue Code" means the United States Internal Revenue Code of 1986, as amended through March 31, 2009.
(4) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as defined by section 2011(b)(3) of the Internal Revenue Code, increased by the amount of deduction for state death taxes allowed under section 2058 of the Internal Revenue Code.
(5) "Minnesota gross estate" means the federal gross estate of a decedent after (a) excluding therefrom any property included therein which has its situs outside Minnesota, and (b) including therein any property omitted from the federal gross estate which is includable therein, has its situs in Minnesota, and was not disclosed to federal taxing authorities.
(6) "Nonresident decedent" means an individual whose domicile at the time of death was not in Minnesota.
(7) "Personal representative" means the executor, administrator or other person appointed by the court to administer and dispose of the property of the decedent. If there is no executor, administrator or other person appointed, qualified, and acting within this state, then any person in actual or constructive possession of any property having a situs in this state which is included in the federal gross estate of the decedent shall be deemed to be a personal representative to the extent of the property and the Minnesota estate tax due with respect to the property.
(8) "Resident decedent" means an individual whose domicile at the time of death was in Minnesota.
(9) "Situs of property" means, with respect to real property, the state or country in which it is located; with respect to tangible personal property, the state or country in which it was normally kept or located at the time of the decedent's death; and with respect to intangible personal property, the state or country in which the decedent was domiciled at death.
Distributions made from ordinary income by a regulated investment company or by a trust qualifying and electing to be taxed under federal law as a real estate investment trust are income. All other distributions made by the company or trust, including distributions from capital gains, depreciation, or depletion, whether in the form of cash or an option to take new stock or cash or an option to purchase additional shares, are principal.
Subject to additional definitions contained in the subsequent articles which are applicable to specific articles or parts, and unless the context otherwise requires, in chapters 524 and 525:
(2) "Application" means a written request to the registrar for an order of informal probate or appointment under article III, part 3.
"Beneficiary," as it relates to trust beneficiaries, includes a person who has any present or future interest, vested or contingent, and also includes the owner of an interest by assignment or other transfer and as it relates to a charitable trust, includes any person entitled to enforce the trust.
"Child" includes any individual entitled to take as a child under law by intestate succession from the parent whose relationship is involved and excludes any person who is only a stepchild, a foster child, a grandchild or any more remote descendant.
"Claims" includes liabilities of the decedent whether arising in contract or otherwise and liabilities of the estate which arise after the death of the decedent including funeral expenses and expenses of administration. The term does not include taxes, demands or disputes regarding title of a decedent to specific assets alleged to be included in the estate, tort claims, foreclosure of mechanic's liens, or to actions pursuant to section 573.02.
(7) "Court" means the court or branch having jurisdiction in matters relating to the affairs of decedents. This court in this state is known as the district court.
(8) "Conservator" means a person who is appointed by a court to manage the estate of a protected person.
(9) "Descendant" of an individual means all of the individual's descendants of all generations, with the relationship of parent and child at each generation being determined by the definition of child and parent contained in this section.
(10) "Devise," when used as a noun, means a testamentary disposition of real or personal property and when used as a verb, means to dispose of real or personal property by will.
(11) "Devisee" means any person designated in a will to receive a devise. In the case of a devise to an existing trust or trustee, or to a trustee on trust described by will, the trust or trustee is the devisee and the beneficiaries are not devisees.
(13) "Distributee" means any person who has received or who will receive property of a decedent from the decedent's personal representative other than as a creditor or purchaser. A testamentary trustee is a distributee with respect to property which the trustee has received from a personal representative only to the extent of distributed assets or their increment remaining in the trustee's hands. A beneficiary of a testamentary trust to whom the trustee has distributed property received from a personal representative is a distributee of the personal representative. For purposes of this provision, "testamentary trustee" includes a trustee to whom assets are transferred by will, to the extent of the devised assets.
"Estate" includes all of the property of the decedent, trust, or other person whose affairs are subject to this chapter as originally constituted and as it exists from time to time during administration.
(16) "Fiduciary" includes personal representative, guardian, conservator and trustee.
(17) "Foreign personal representative" means a personal representative of another jurisdiction.
(18) "Formal proceedings" means those conducted before a judge with notice to interested persons.
"Guardian" means a person who has qualified as a guardian of a minor or incapacitated person pursuant to testamentary or court appointment, but excludes one who is merely a guardian ad litem.
(21) "Heirs" means those persons, including the surviving spouse, who are entitled under the statutes of intestate succession to the property of a decedent.
(22) "Incapacitated person" is as described in section 524.5-102, subdivision 6, other than a minor.
"Informal proceedings" means those conducted by the judge, the registrar, or the person or persons designated by the judge for probate of a will or appointment of a personal representative in accordance with sections 524.3-301 to 524.3-311.
"Interested person" includes heirs, devisees, children, spouses, creditors, beneficiaries and any others having a property right in or claim against the estate of a decedent, ward or protected person which may be affected by the proceeding. It also includes persons having priority for appointment as personal representative, and other fiduciaries representing interested persons. The meaning as it relates to particular persons may vary from time to time and must be determined according to the particular purposes of, and matter involved in, any proceeding.
(27) "Lease" includes an oil, gas, or other mineral lease.
(28) "Letters" includes letters testamentary, letters of guardianship, letters of administration, and letters of conservatorship.
(30) "Mortgage" means any conveyance, agreement or arrangement in which property is used as security.
(31) "Nonresident decedent" means a decedent who was domiciled in another jurisdiction at the time of death.
(32) "Organization" includes a corporation, government or governmental subdivision or agency, business trust, estate, trust, partnership or association, two or more persons having a joint or common interest, or any other legal entity.
(35) "Person" means an individual, a corporation, an organization, or other legal entity.
(36) "Personal representative" includes executor, administrator, successor personal representative, special administrator, and persons who perform substantially the same function under the law governing their status. "General personal representative" excludes special administrator.
(37) "Petition" means a written request to the court for an order after notice.
(38) "Proceeding" includes action at law and suit in equity.
(39) "Property" includes both real and personal property or any interest therein and means anything that may be the subject of ownership.
(40) "Protected person" is as described in section 524.5-102, subdivision 14.
(42) "Registrar" refers to the judge of the court or the person designated by the court to perform the functions of registrar as provided in section 524.1-307.
"Security" includes any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in an oil, gas or mining title or lease or in payments out of production under such a title or lease, collateral trust certificate, transferable share, voting trust certificate or, in general, any interest or instrument commonly known as a security, or any certificate of interest or participation, any temporary or interim certificate, receipt or certificate of deposit for, or any warrant or right to subscribe to or purchase, any of the foregoing.
(44) "Settlement," in reference to a decedent's estate, includes the full process of administration, distribution and closing.
(46) "State" includes any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession subject to the legislative authority of the United States.
(47) "Successor personal representative" means a personal representative, other than a special administrator, who is appointed to succeed a previously appointed personal representative.
(48) "Successors" means those persons, other than creditors, who are entitled to property of a decedent under the decedent's will, this chapter or chapter 525. "Successors" also means a funeral director or county government that provides the funeral and burial of the decedent, or a state or county agency with a claim authorized under section 256B.15.
(51) "Testacy proceeding" means a proceeding to establish a will or determine intestacy.
"Trust" includes any express trust, private or charitable, with additions thereto, wherever and however created. It also includes a trust created or determined by judgment or decree under which the trust is to be administered in the manner of an express trust. "Trust" excludes other constructive trusts, and it excludes resulting trusts, conservatorships, personal representatives, trust accounts as defined in chapter 528, custodial arrangements pursuant to sections 149A.97, 318.01 to 318.06, 527.21 to 527.44, business trusts providing for certificates to be issued to beneficiaries, common trust funds, voting trusts, security arrangements, liquidation trusts, and trusts for the primary purpose of paying debts, dividends, interest, salaries, wages, profits, pensions, or employee benefits of any kind, and any arrangement under which a person is nominee or escrowee for another.
(54) "Trustee" includes an original, additional, or successor trustee, whether or not appointed or confirmed by court.
(55) "Ward" is as described in section 524.5-102, subdivision 17.
(56) "Will" includes codicil and any testamentary instrument which merely appoints an executor or revokes or revises another will.
If, for purposes of intestate succession, a relationship of parent and child must be established to determine succession by, through, or from a person:
(1) An adopted child is the child of an adopting parent and not of the birth parents except that adoption of a child by the spouse of a birth parent has no effect on the relationship between the child and that birth parent. If a parent dies and a child is subsequently adopted by a stepparent who is the spouse of a surviving parent, any rights of inheritance of the child or the child's descendant from or through the deceased parent of the child which exist at the time of the death of that parent shall not be affected by the adoption.
(2) In cases not covered by clause (1), a person is the child of the person's parents regardless of the marital status of the parents and the parent and child relationship may be established under the Parentage Act, sections 257.51 to 257.74.
(a) The court may appoint a limited or unlimited conservator for a respondent only if it finds that:
(1) by clear and convincing evidence, the individual is unable to manage property and business affairs because of an impairment in the ability to receive and evaluate information or make decisions, even with the use of appropriate technological assistance, or because the individual is missing, detained, or unable to return to the United States;
(2) by a preponderance of evidence, the individual has property that will be wasted or dissipated unless management is provided or money is needed for the support, care, education, health, and welfare of the individual or of individuals who are entitled to the individual's support and that protection is necessary or desirable to obtain or provide money; and
(3) the respondent's identified needs cannot be met by less restrictive means, including use of appropriate technological assistance.
(b) Alternatively, the court, with appropriate findings, may enter any other appropriate order, or dismiss the proceeding.
(c) The court, whenever feasible, shall grant to a conservator only those powers necessitated by the protected person's limitations and demonstrated needs and make appointive and other orders that will encourage the development of the protected person's maximum self-reliance and independence.
(d) Within 14 days after an appointment, the conservator shall send or deliver to the protected person, if the protected person has attained 14 years of age and is not missing, detained, or unable to return to the United States, and counsel if represented at the hearing, a copy of the order of appointment accompanied by a notice which advises the protected person of the right to appeal the conservatorship appointment in the time and manner provided by the Rules of Appellate Procedure.
(e) Each year, within 30 days after the anniversary date of an appointment, a conservator shall send or deliver to the protected person and to interested persons of record with the court a notice of the right to request termination or modification of the conservatorship or for any order that is in the best interests of the protected person or for other appropriate relief.
(f) The appointment of a conservator or the entry of another protective order is not a determination of incapacity of the protected person.
Presented to the governor May 11, 2010
Signed by the governor May 13, 2010, 9:58 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes