Minnesota 2025-2026 Regular Session

Minnesota Senate Bill SF571 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		1.1 A bill for an act
2	2		1.2 relating to trusts; modifying various provisions of the Uniform Trust Code, Powers
3	3		1.3 of Appointment, and the Uniform Probate Code; making technical, clarifying, and
4	4		1.4 conforming changes; amending Minnesota Statutes 2024, sections 501A.01;
5	5		1.5 501C.0301; 501C.0302; 501C.0407; 501C.0411; 501C.0414; 501C.0602;
6	6		1.6 501C.0605; 501C.0701; 501C.0808, subdivisions 1, 2, 3, 4, 5, 6, 8, by adding a
7	7		1.7 subdivision; 501C.1013, subdivision 4; 501C.1014, by adding a subdivision;
8	8		1.8 501C.1105, subdivision 1, by adding a subdivision; 502.851, subdivisions 1, 2, 3,
9	9		1.9 4, 11, 15, 16; 524.2-114; 524.2-804, subdivision 1.
10	10		1.10BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
11	11		1.11 Section 1. Minnesota Statutes 2024, section 501A.01, is amended to read:
12	12		1.12 501A.01 WHEN NONVESTED INTEREST, POWERS OF APPOINTMENT ARE
13	13		1.13INVALID; EXCEPTIONS.
14	14		1.14 (a) A nonvested property interest is invalid unless:
15	15		1.15 (1) when the interest is created, it is certain to vest or terminate no later than 21 years
16	16		1.16after the death of an individual then alive; or
17	17		1.17 (2) the interest either vests or terminates within 90 years after its creation.
18	18		1.18 (b) A general power of appointment not presently exercisable because of a condition
19	19		1.19precedent is invalid unless:
20	20		1.20 (1) when the power is created, the condition precedent is certain to be satisfied or become
21	21		1.21impossible to satisfy no later than 21 years after the death of an individual then alive; or
22	22		1.22 (2) the condition precedent either is satisfied or becomes impossible to satisfy within
23	23		1.2390 years after its creation.
24	24		1Section 1.
25		-	~~S0571-1 1st Engrossment~~~~SF571~~ REVISOR JSK
	25	+	25-02296 as introduced01/15/25 REVISOR JSK/EN
26	26		SENATE
27	27		STATE OF MINNESOTA
28	28		S.F. No. 571NINETY-FOURTH SESSION
29	29		(SENATE AUTHORS: WESTLIN)
30	30		OFFICIAL STATUSD-PGDATE
31		-	Introduction and first reading16301/23/2025
32		-	Referred to Judiciary and Public Safety
33		-	Comm report: To pass as amended01/30/2025
34		-	Second reading 2.1 (c) A nongeneral power of appointment or a general testamentary power of appointment
	31	+	Introduction and first reading01/23/2025
	32	+	Referred to Judiciary and Public Safety 2.1 (c) A nongeneral power of appointment or a general testamentary power of appointment
35	33		2.2is invalid unless:
36	34		2.3 (1) when the power is created, it is certain to be irrevocably exercised or otherwise to
37	35		2.4terminate no later than 21 years after the death of an individual then alive; or
38	36		2.5 (2) the power is irrevocably exercised or otherwise terminates within 90 years after its
39	37		2.6creation.
40	38		2.7 (d) In determining whether a nonvested property interest or a power of appointment is
41	39		2.8valid under paragraph (a), clause (1), paragraph (b), clause (1), or paragraph (c), clause (1),
42	40		2.9the possibility that a child will be born to an individual after the individual's death is
43	41		2.10disregarded.
44	42		2.11 (e) If, in measuring a period from the creation of a trust or other property arrangement,
45	43		2.12language in a governing instrument seeks to:
46	44		2.13 (1) disallow the vesting or termination of any interest trust beyond;
47	45		2.14 (2) postpone the vesting or termination of any interest or trust until; or
48	46		2.15 (3) operate in effect in any similar fashion upon,
49	47		2.16the later of the expiration of a period of time not exceeding 21 years after the death of the
50	48		2.17survivor of specified lives in being at the creation of the trust or other property arrangement,
51	49		2.18or the expiration of a period of time that exceeds or might exceed 21 years after the death
52	50		2.19of the survivor of lives in being at the creation of the trust or other property arrangement;
53	51		2.20that language is inoperative to the extent it produces a period of time that exceeds 21 years
54	52		2.21after the death of the survivor of the specified lives.
55		-	2.22 (f) For any trust created on or after August 1, 2025, this section shall apply to a nonvested
56		-	2.23property interest or power of appointment contained in a trust by substituting the term "500
57		-	2.24years" for "90 years" in each place it appears in this section, unless the terms of the trust
58		-	2.25require that all beneficial interests in the trust vest or terminate within a lesser period.
59		-	2.26 Sec. 2. Minnesota Statutes 2024, section 501C.0301, is amended to read:
60		-	2.27 501C.0301 REPRESENTATION: BASIC EFFECT.
61		-	2.28 (a) Notice to a person who may represent and bind another person under sections
62		-	2.29501C.0302 to 501C.0305 has the same effect as if notice were given directly to the other
63		-	2.30person.
	53	+	2.22 (f) For any trust created after the effective date of this section, this section shall apply
	54	+	2.23to a nonvested property interest or power of appointment contained in a trust by substituting
	55	+	2.24the term "500 years" for "90 years" in each place it appears in this section, unless the terms
	56	+	2.25of the trust require that all beneficial interests in the trust vest or terminate within a lesser
	57	+	2.26period.
	58	+	2.27 Sec. 2. Minnesota Statutes 2024, section 501C.0301, is amended to read:
	59	+	2.28 501C.0301 REPRESENTATION: BASIC EFFECT.
	60	+	2.29 (a) Notice to a person who may represent and bind another person under sections
	61	+	2.30501C.0302 to 501C.0305 has the same effect as if notice were given directly to the other
	62	+	2.31person.
64	63		2Sec. 2.
65		-	~~S0571-1 1st Engrossment~~~~SF571~~ REVISOR JSK 3.1 (b) The consent, agreement, or waiver of a person who may represent and bind another
	64	+	25-02296 as introduced01/15/25 REVISOR JSK/EN 3.1 (b) The consent, agreement, or waiver of a person who may represent and bind another
66	65		3.2person under sections 501C.0302 to 501C.0305 is binding on the person represented unless
67	66		3.3the person represented objects to the representation before the consent, agreement, or waiver
68	67		3.4would otherwise have been effective. The provisions of this paragraph shall not apply to
69	68		3.5representation under section 501C.0302.
70	69		3.6 (c) Except as otherwise provided in sections 501C.0411 and 501C.0602, a person who
71	70		3.7under sections 501C.0302 to 501C.0305 may represent a settlor who lacks capacity may
72	71		3.8receive notice and give a binding consent on the settlor's behalf.
73	72		3.9 (d) A settlor may not represent and bind a beneficiary under sections 501C.0302 to
74	73		3.10501C.0305 with respect to the termination or modification of a trust under section 501C.0411,
75	74		3.11paragraph (a).
76	75		3.12 (e) The settlor or another person, including one or more beneficiaries of the trust,
77	76		3.13designated by the terms of the trust instrument to receive information from the trustee
78	77		3.14concerning the administration of the trust and the material facts necessary to protect the
79	78		3.15beneficiaries' interests in the manner described in section 501C.0813, paragraph (b), shall
80	79		3.16be a representative of the beneficiaries with respect to the limitations period on judicial
81	80		3.17proceedings against a trustee under section 501C.1005, paragraph (a).
82	81		3.18 Sec. 3. Minnesota Statutes 2024, section 501C.0302, is amended to read:
83	82		3.19 501C.0302 REPRESENTATION BY HOLDER OF A GENERAL POWER OF
84	83		3.20APPOINTMENT.
85	84		3.21 For purposes of giving notice, waiving notice, initiating a proceeding, granting consent
86	85		3.22or approval, or objecting with regard to any proceedings under this chapter, the sole holder
87	86		3.23or all co-holders of a presently exercisable or testamentary general power of appointment,
88	87		3.24whether general or special, power of revocation, or unlimited power of withdrawal are
89	88		3.25deemed to represent and act for beneficiaries to the extent that their interests as permissible
90	89		3.26appointees, takers in default, or otherwise are subject to the power.
91	90		3.27 Sec. 4. Minnesota Statutes 2024, section 501C.0407, is amended to read:
92	91		3.28 501C.0407 EVIDENCE OF ORAL TRUST.
93	92		3.29 The formal expression of intent to create a trust can be either written or oral subject to
94	93		3.30the requirements of sections 513.04 with respect to the conveyance of interest in land except
95	94		3.31up to a one-year lease and 524.2-502 with respect to a testamentary trust. The creation of
96	95		3.32an oral trust and its terms must be established by clear and convincing evidence.
97	96		3Sec. 4.
98		-	~~S0571-1 1st Engrossment~~~~SF571~~ REVISOR JSK 4.1 Sec. 5. Minnesota Statutes 2024, section 501C.0411, is amended to read:
	97	+	25-02296 as introduced01/15/25 REVISOR JSK/EN 4.1 Sec. 5. Minnesota Statutes 2024, section 501C.0411, is amended to read:
99	98		4.2 501C.0411 MODIFICATION OR TERMINATION OF NONCHARITABLE
100	99		4.3IRREVOCABLE TRUST BY CONSENT.
101	100		4.4 (a) A noncharitable irrevocable trust may be modified or terminated upon consent of
102	101		4.5the settlor and all beneficiaries, even if the modification or termination is inconsistent with
103	102		4.6a material purpose of the trust. A settlor's power to consent to a trust's modification or
104	103		4.7termination may be exercised by an agent under a power of attorney only to the extent
105	104		4.8expressly authorized by the power of attorney or the terms of the trust, or if the trust
106	105		4.9instrument is silent with respect to consent to the trust's modification by an agent, then by
107	106		4.10a power of attorney, other than a statutory short form power of attorney executed in
108	107		4.11accordance with section 523.23, that expressly authorizes the agent to consent to a trust's
109	108		4.12modification; by the settlor's conservator with the approval of the court supervising the
110	109		4.13conservatorship if an agent is not so authorized; or by the settlor's guardian with the approval
111	110		4.14of the court supervising the guardianship if an agent is not so authorized and a conservator
112	111		4.15has not been appointed.
113	112		4.16 (b) A noncharitable irrevocable trust may be terminated upon consent of all of the
114	113		4.17beneficiaries if the court concludes that continuance of the trust is not necessary to achieve
115	114		4.18any material purpose of the trust. A noncharitable irrevocable trust may be modified upon
116	115		4.19consent of all of the beneficiaries if the court concludes that modification is not inconsistent
117	116		4.20with a material purpose of the trust.
118	117		4.21 (c) The court is not precluded from modifying or terminating a trust because the trust
119	118		4.22instrument contains spendthrift provisions.
120	119		4.23 (d) Upon termination of a trust under paragraph (a) or (b), the trustee shall distribute the
121	120		4.24trust property as agreed by the beneficiaries.
122	121		4.25 (e) If not all of the beneficiaries consent to a proposed modification or termination of
123	122		4.26the trust under paragraph (a) or (b), the modification or termination may be approved by
124	123		4.27the court if the court is satisfied that:
125	124		4.28 (1) if all of the beneficiaries had consented, the trust could have been modified or
126	125		4.29terminated under this section; and
127	126		4.30 (2) the interests of a beneficiary who does not consent will be adequately protected.
128	127		4Sec. 5.
129		-	~~S0571-1 1st Engrossment~~~~SF571~~ REVISOR JSK 5.1 Sec. 6. Minnesota Statutes 2024, section 501C.0414, is amended to read:
	128	+	25-02296 as introduced01/15/25 REVISOR JSK/EN 5.1 Sec. 6. Minnesota Statutes 2024, section 501C.0414, is amended to read:
130	129		5.2 501C.0414 MODIFICATION OR TERMINATION OF UNECONOMIC TRUST.
131	130		5.3 (a) After notice to the qualified beneficiaries, the trustee of a trust consisting of trust
132	131		5.4property having a total value less than $50,000 $150,000 may terminate the trust if the
133	132		5.5trustee concludes that the value of the trust property is insufficient to justify the cost of
134	133		5.6administration.
135	134		5.7 (b) The court may modify or terminate a trust or remove the trustee and appoint a different
136	135		5.8trustee if it determines that the value of the trust property is insufficient to justify the cost
137	136		5.9of administration.
138	137		5.10 (c) Upon termination of a trust under this section, the trustee shall distribute the trust
139	138		5.11property in a manner consistent with the purposes of the trust.
140	139		5.12 (d) This section does not apply to an easement for conservation or preservation.
141	140		5.13 Sec. 7. Minnesota Statutes 2024, section 501C.0602, is amended to read:
142	141		5.14 501C.0602 REVOCATION OR AMENDMENT OF REVOCABLE TRUST.
143	142		5.15 (a) Unless the terms of a trust expressly provide that the trust is revocable, the settlor
144	143		5.16may not revoke or amend the trust.
145	144		5.17 (b) If a revocable trust is created or funded by more than one settlor:
146	145		5.18 (1) to the extent the trust consists of community property, the trust may be revoked by
147	146		5.19either spouse acting alone but may be amended only by joint action of both spouses;
148	147		5.20 (2) to the extent the trust consists of property other than community property, each settlor
149	148		5.21may revoke or amend the trust with regard to the portion of the trust property attributable
150	149		5.22to that settlor's contribution; and
151	150		5.23 (3) upon the revocation or amendment of the trust by fewer than all of the settlors, the
152	151		5.24trustee shall promptly notify the other settlors of the revocation or amendment.
153	152		5.25 (c) The settlor may revoke or amend a revocable trust:
154	153		5.26 (1) by substantial compliance with a method provided in the terms of the trust; or
155	154		5.27 (2) if the terms of the trust do not provide a method or the method provided in the terms
156	155		5.28is not expressly made exclusive, by:
157	156		5.29 (i) if the trust is created pursuant to a writing, by another writing manifesting clear and
158	157		5.30convincing evidence of the settlor's intent to revoke or amend the trust; or
159	158		5Sec. 7.
160		-	~~S0571-1 1st Engrossment~~~~SF571~~ REVISOR JSK 6.1 (ii) if the trust is an oral trust, by any other method manifesting clear and convincing
	159	+	25-02296 as introduced01/15/25 REVISOR JSK/EN 6.1 (ii) if the trust is an oral trust, by any other method manifesting clear and convincing
161	160		6.2evidence of the settlor's intent.
162	161		6.3 (d) Upon revocation of a revocable trust, the trustee shall deliver the trust property as
163	162		6.4the settlor directs.
164	163		6.5 (e) A settlor's powers with respect to revocation, amendment, or distribution of trust
165	164		6.6property may be exercised by an agent under a power of attorney only to the extent expressly
166	165		6.7authorized by the terms of the trust, or the power if the trust instrument is silent with respect
167	166		6.8to revocation, amendment, or distribution of trust property by an agent, then by a power of
168	167		6.9attorney, other than a statutory short form power of attorney executed in accordance with
169	168		6.10section 523.23, that expressly authorizes the agent to exercise the settlor's powers with
170	169		6.11respect to revocation, amendment, or distribution of property.
171	170		6.12 (f) A conservator of the settlor may exercise a settlor's powers with respect to revocation,
172	171		6.13amendment, or distribution of trust property only with the approval of the court supervising
173	172		6.14the conservatorship.
174	173		6.15 (g) A trustee who does not know that a trust has been revoked or amended is not liable
175	174		6.16to the settlor or settlor's successors in interest for distributions made and other actions taken
176	175		6.17on the assumption that the trust had not been amended or revoked.
177	176		6.18 Sec. 8. Minnesota Statutes 2024, section 501C.0605, is amended to read:
178	177		6.19 501C.0605 LIMITATION ON ACTION CONTESTING VALIDITY OF
179	178		6.20REVOCABLE TRUST; DISTRIBUTION OF TRUST PROPERTY.
180	179		6.21 (a) A person may commence a judicial proceeding to contest the validity of a trust that
181	180		6.22was revocable immediately prior to the settlor's death within the earlier of:
182	181		6.23 (1) three years after the settlor's death; or
183	182		6.24 (2) 120 days after the trustee sent the person a copy of the trust instrument and a notice
184	183		6.25informing the person of the settlor's death, of the trust's existence, of the trustee's name and
185	184		6.26address, and of the time allowed for commencing a proceeding.
186	185		6.27 (b) Upon the death of the settlor of a trust that was revocable at the settlor's death, the
187	186		6.28trustee may proceed to distribute the trust property in accordance with the terms of the trust.
188	187		6.29The trustee is not subject to liability for doing so unless:
189	188		6.30 (1) the trustee knows of a pending judicial proceeding contesting the validity of the trust;
190	189		6.31or
191	190		6Sec. 8.
192		-	~~S0571-1 1st Engrossment~~~~SF571~~ REVISOR JSK 7.1 (2) a potential contestant has notified the trustee of a possible judicial proceeding to
	191	+	25-02296 as introduced01/15/25 REVISOR JSK/EN 7.1 (2) a potential contestant has notified the trustee of a possible judicial proceeding to
193	192		7.2contest the trust and a judicial proceeding is commenced within 60 days after the contestant
194	193		7.3sent the notification.
195	194		7.4 (c) A beneficiary of a trust that is determined to have been invalid, in whole or in part,
196	195		7.5is liable to return any distribution received, to the extent the invalidity applies to the
197	196		7.6distribution.
198	197		7.7 Sec. 9. Minnesota Statutes 2024, section 501C.0701, is amended to read:
199	198		7.8 501C.0701 ACCEPTING OR DECLINING TRUSTEESHIP.
200	199		7.9 (a) Except as otherwise provided in paragraph (c), a person designated as trustee accepts
201	200		7.10the trusteeship:
202	201		7.11 (1) by substantially complying with a method of acceptance provided in the terms of
203	202		7.12the trust; or
204	203		7.13 (2) if the terms of the trust do not provide a method, or the method provided in the terms
205	204		7.14is not expressly made exclusive, by accepting delivery of the trust property, exercising
206	205		7.15powers or performing duties as trustee, or otherwise indicating acceptance of the trusteeship.
207	206		7.16 (b) A person designated as trustee who has not yet accepted the trusteeship may reject
208	207		7.17the trusteeship. A designated trustee who does not accept the trusteeship within a reasonable
209	208		7.18time after knowing of the designation, but not more than 120 days, is deemed to have rejected
210	209		7.19the trusteeship.
211	210		7.20 (c) A person designated as trustee, without accepting the trusteeship, may:
212	211		7.21 (1) act to preserve the trust property if, within a reasonable time after acting, the person
213	212		7.22sends a rejection of the trusteeship to the settlor or, if the settlor is dead or lacks capacity,
214	213		7.23to a qualified beneficiary; and
215	214		7.24 (2) inspect or investigate trust property to determine potential liability or for any other
216	215		7.25purpose.
217	216		7.26 Sec. 10. Minnesota Statutes 2024, section 501C.0808, subdivision 1, is amended to read:
218	217		7.27 Subdivision 1.Definitions.(a) The definitions in this section apply to this section.
219	218		7.28 (b) "Directing party" means any one or more persons acting as investment trust advisor,
220	219		7.29distribution trust advisor, or trust protector as provided in this section.
221	220		7Sec. 10.
222		-	~~S0571-1 1st Engrossment~~~~SF571~~ REVISOR JSK 8.1 (c) "Distribution trust advisor" means one or more persons given authority by the
	221	+	25-02296 as introduced01/15/25 REVISOR JSK/EN 8.1 (c) "Distribution trust advisor" means one or more persons given authority by the
223	222		8.2governing instrument to direct, consent to, veto, or otherwise exercise all or any portion of
224	223		8.3the distribution powers and discretions of the trust, including but not limited to authority to
225	224		8.4make discretionary distributions of income or principal exercise the powers specified in
226	225		8.5subdivision 3.
227	226		8.6 (d) "Excluded fiduciary" means any fiduciary one or more fiduciaries that by the
228	227		8.7governing instrument is are directed to act in accordance with the exercise of specified
229	228		8.8powers by a directing party, in which case such specified powers shall be deemed granted
230	229		8.9not to the fiduciary but to the directing party and such fiduciary shall be deemed excluded
231	230		8.10from exercising such specified powers. If a governing instrument provides that a fiduciary
232	231		8.11as to one or more specified matters is to act, omit action, or make decisions only with the
233	232		8.12consent of a directing party, then such fiduciary is an excluded fiduciary with respect to
234	233		8.13such matters. A person may be an excluded fiduciary even if such person participated in
235	234		8.14the exercise of (1) a power described in section 501C.0111 relating to nonjudicial settlement
236	235		8.15agreements, (2) a power described in section 502.851 relating to decanting, (3) a permitted
237	236		8.16trustee amendment, or (4) a similar power that invokes the provisions of this section with
238	237		8.17respect to any new or existing trust.
239	238		8.18 (e) "Fiduciary" means any person one or more persons expressly given one or more
240	239		8.19fiduciary duties by the governing instrument or by this section, including but not limited to
241	240		8.20a trustee.
242	241		8.21 (f) "Governing instrument" means the instrument stating the terms of a trust, including
243	242		8.22but not limited to any court order, or nonjudicial settlement agreement establishing,
244	243		8.23construing, or modifying the terms of the trust in accordance with section 501C.0111 or
245	244		8.24502.851, or other applicable law.
246	245		8.25 (g) "Investment trust advisor" means any one or more persons given authority by the
247	246		8.26governing instrument to direct, consent to, or veto the exercise of all or any portion of the
248	247		8.27investment powers of the trust exercise the powers specified in subdivision 2.
249	248		8.28 (h) "Power" means authority to take or withhold an action or decision, including but not
250	249		8.29limited to an expressly specified power, the implied power necessary to exercise a specified
251	250		8.30power, and authority inherent in a general grant of discretion.
252	251		8.31 (i) "Trust protector" means one or more persons given one or more of the powers specified
253	252		8.32in subdivision 4, whether or not designated with the title of trust protector by the governing
254	253		8.33instrument.
255	254		8Sec. 10.
256		-	~~S0571-1 1st Engrossment~~~~SF571~~ REVISOR JSK 9.1 Sec. 11. Minnesota Statutes 2024, section 501C.0808, subdivision 2, is amended to read:
	255	+	25-02296 as introduced01/15/25 REVISOR JSK/EN 9.1 Sec. 11. Minnesota Statutes 2024, section 501C.0808, subdivision 2, is amended to read:
257	256		9.2 Subd. 2.Powers of investment trust advisor.An investment trust advisor may be
258	257		9.3designated in the governing instrument of a trust. The powers of an investment trust advisor
259	258		9.4may be exercised or not exercised in the sole and absolute discretion of the investment trust
260	259		9.5advisor, and are binding on all other persons, including but not limited to each beneficiary,
261	260		9.6fiduciary, excluded fiduciary, and any other party having an interest in the trust. The
262	261		9.7governing instrument may use the title "investment trust advisor" or any similar name or
263	262		9.8description demonstrating the intent to provide for the office and function of an investment
264	263		9.9trust advisor. The governing instrument may provide that the investment trust advisor has
265	264		9.10the authority to direct, consent to, or veto the exercise of all or any portion of the investment
266	265		9.11powers of the trustee. Unless the terms of the governing instrument provide otherwise, the
267	266		9.12investment trust advisor has the authority to:
268	267		9.13 (1) direct the trustee with respect to the retention, purchase, transfer, assignment, sale,
269	268		9.14or encumbrance of trust property and the investment and reinvestment of principal and
270	269		9.15income of the trust;
271	270		9.16 (2) direct the trustee with respect to all management, control, and voting powers related
272	271		9.17directly or indirectly to trust assets, including but not limited to voting proxies for securities
273	272		9.18held in trust;
274	273		9.19 (3) select and determine reasonable compensation of any one or more advisors, managers,
275	274		9.20consultants, or counselors, including which may be the trustee, and to delegate to them any
276	275		9.21of the powers of the investment trust advisor in accordance with section 501C.0807 and
277	276		9.22determine their reasonable compensation for investment services; and
278	277		9.23 (4) determine the frequency and methodology for valuing any asset for which there is
279	278		9.24no readily available market value.
280	279		9.25 Sec. 12. Minnesota Statutes 2024, section 501C.0808, subdivision 3, is amended to read:
281	280		9.26 Subd. 3.Powers of distribution trust advisor.A distribution trust advisor may be
282	281		9.27designated in the governing instrument of a trust. The powers of a distribution trust advisor
283	282		9.28may be exercised or not exercised in the sole and absolute discretion of the distribution trust
284	283		9.29advisor, and are binding on all other persons, including but not limited to each beneficiary,
285	284		9.30fiduciary, excluded fiduciary, and any other party having an interest in the trust. The
286	285		9.31governing instrument may use the title "distribution trust advisor" or any similar name or
287	286		9.32description demonstrating the intent to provide for the office and function of a distribution
288	287		9.33trust advisor. The governing instrument may provide that the distribution trust advisor has
289	288		9Sec. 12.
290		-	~~S0571-1 1st Engrossment~~~~SF571~~ REVISOR JSK 10.1the authority to direct, consent to, veto, or otherwise exercise all or any portion of the
	289	+	25-02296 as introduced01/15/25 REVISOR JSK/EN 10.1the authority to direct, consent to, veto, or otherwise exercise all or any portion of the
291	290		10.2distribution powers and discretions of the trustee. Unless the terms of the governing
292	291		10.3instrument provide otherwise, the distribution trust advisor has authority to:
293	292		10.4 (1) direct the trustee with regard to all decisions relating directly or indirectly to
294	293		10.5discretionary distributions of income or principal to or for one or more beneficiaries.; and
295	294		10.6 (2) direct the trustee to terminate the trust, including determination of how the trustee
296	295		10.7shall distribute the trust property to be consistent with the purposes of the trust.
297	296		10.8 Sec. 13. Minnesota Statutes 2024, section 501C.0808, subdivision 4, is amended to read:
298	297		10.9 Subd. 4.Powers of trust protector.A trust protector may be designated in the governing
299	298		10.10instrument of a trust. The powers of a trust protector may be exercised or not exercised in
300	299		10.11the sole and absolute discretion of the trust protector, and are binding on all other persons,
301	300		10.12including but not limited to each beneficiary, investment trust advisor, distribution trust
302	301		10.13advisor, fiduciary, excluded fiduciary, and any other party having an interest in the trust.
303	302		10.14The governing instrument may use the title "trust protector" or any similar name or
304	303		10.15description demonstrating the intent to provide for the office and function of a trust protector.
305	304		10.16The powers granted to a trust protector by the governing instrument may include but are
306	305		10.17not limited to authority to do any one or more of the following:
307	306		10.18 (1) modify or amend the governing instrument to achieve favorable tax status or respond
308	307		10.19to changes in the Internal Revenue Code, federal laws, state law, or the rulings and regulations
309	308		10.20under such laws;
310	309		10.21 (2) increase, decrease, or modify the interests of any beneficiary or beneficiaries of the
311	310		10.22trust;
312	311		10.23 (3) modify the terms of any power of appointment granted by the trust; provided,
313	312		10.24however, such modification or amendment may not grant a beneficial interest to any
314	313		10.25individual, class of individuals, or other parties not specifically provided for under the trust
315	314		10.26instrument;
316	315		10.27 (4) remove, appoint, or remove and appoint, a trustee, investment trust advisor,
317	316		10.28distribution trust advisor, another directing party, investment committee member, or
318	317		10.29distribution committee member, including designation of a plan of succession for future
319	318		10.30holders of any such office;
320	319		10.31 (5) terminate the trust, including determination of how the trustee shall distribute the
321	320		10.32trust property to be consistent with the purposes of the trust;
322	321		10Sec. 13.
323		-	~~S0571-1 1st Engrossment~~~~SF571~~ REVISOR JSK 11.1 (6) (5) change the situs of the trust, the governing law of the trust, or both;
	322	+	25-02296 as introduced01/15/25 REVISOR JSK/EN 11.1 (6) (5) change the situs of the trust, the governing law of the trust, or both;
324	323		11.2 (7) (6) appoint one or more successor trust protectors, including designation of a plan
325	324		11.3of succession for future trust protectors;
326	325		11.4 (8) (7) interpret terms of the trust instrument at the request of the trustee;
327	326		11.5 (9) (8) advise the trustee on matters concerning a beneficiary;
328	327		11.6 (10) (9) amend or modify the governing instrument to take advantage of laws governing
329	328		11.7restraints on alienation, distribution of trust property, or to improve the administration of
330	329		11.8the trust; or
331	330		11.9 (11) veto or direct trust distributions; or
332	331		11.10 (12) (10) provide direction regarding notification of qualified beneficiaries.
333	332		11.11 If a charity is a current beneficiary or a presumptive remainder beneficiary of the trust,
334	333		11.12a trust protector must give notice to the attorney general's charitable trust division at least
335	334		11.1360 days before taking any of the actions authorized under clause (2), (3), (4), or (5), or (6).
336	335		11.14The attorney general's charitable trust division may, however, waive this notice requirement.
337	336		11.15Sec. 14. Minnesota Statutes 2024, section 501C.0808, subdivision 5, is amended to read:
338	337		11.16 Subd. 5.Duty and liability of directing party.(a) A directing party who is a distribution
339	338		11.17trust advisor or an investment trust advisor is a fiduciary of the trust subject to the same
340	339		11.18duties and standards applicable to a trustee of a trust as provided by applicable law unless
341	340		11.19the governing instrument provides otherwise, but the governing instrument may not, however,
342	341		11.20relieve or exonerate a directing party from the duty to act or withhold acting as the directing
343	342		11.21party in good faith reasonably believes is in the best interests of the trust., including but not
344	343		11.22limited to the limitation period for actions against a trustee, the effect of providing a report
345	344		11.23or account, and the defenses available to a trustee in an action for breach of trust against
346	345		11.24the trustee. The terms of the governing instrument may vary the duty or liability of an
347	346		11.25investment trust advisor or a distribution trust advisor, but only to the same extent the terms
348	347		11.26of the trust could vary the duty or liability of a trustee in a like position and under similar
349	348		11.27circumstances.
350	349		11.28 (b) A trust protector is not a fiduciary of the trust unless the governing instrument provides
351		-	11.29otherwise, provided that a trust protector shall be a fiduciary subject to ~~paragraph~~ (a) if the
	350	+	11.29otherwise, provided that a trust protector shall be a fiduciary subject to subsection (a) if the
352	351		11.30governing instrument grants the trust protector any of the powers of an investment trust
353	352		11.31advisor under subdivision 2 or a distribution trust advisor under subdivision 3, but only to
354	353		11.32the extent of the power or powers granted.
355	354		11Sec. 14.
356		-	~~S0571-1 1st Engrossment~~~~SF571~~ REVISOR JSK 12.1 Sec. 15. Minnesota Statutes 2024, section 501C.0808, subdivision 6, is amended to read:
	355	+	25-02296 as introduced01/15/25 REVISOR JSK/EN 12.1 Sec. 15. Minnesota Statutes 2024, section 501C.0808, subdivision 6, is amended to read:
357	356		12.2 Subd. 6.Duty and liability of excluded fiduciary.(a) The excluded fiduciary shall act
358	357		12.3in accordance with the governing instrument and shall take reasonable steps to comply with
359	358		12.4the directing party's exercise of the powers granted to the directing party by the governing
360	359		12.5instrument. Unless otherwise provided in the governing instrument, an excluded fiduciary
361	360		12.6has no duty to monitor, review, inquire, investigate, recommend, evaluate, or warn with
362	361		12.7respect to a directing party's exercise of or failure to exercise any power granted to the
363	362		12.8directing party by the governing instrument, including but not limited to, any power related
364	363		12.9to the acquisition, disposition, retention, management, or valuation of any asset or investment.
365	364		12.10Except as otherwise provided in this section or the governing instrument, an excluded
366	365		12.11fiduciary is not liable, either individually or as a fiduciary, for any action, inaction, consent,
367	366		12.12or failure to consent by a directing party, including but not limited to, any of the following:
368	367		12.13 (1) if a governing instrument provides that an excluded fiduciary is to follow the direction
369	368		12.14of a directing party, and the excluded fiduciary acts in accordance with the direction, then
370	369		12.15except in cases of willful misconduct on the part of the excluded fiduciary in complying
371	370		12.16with the direction of the directing party, the excluded fiduciary is not liable for any loss
372	371		12.17resulting directly or indirectly from following the direction, including but not limited to,
373	372		12.18compliance regarding the valuation of assets for which there is no readily available market
374	373		12.19value;
375	374		12.20 (2) if a governing instrument provides that an excluded fiduciary is to act or omit to act
376	375		12.21only with the consent of a directing party, then except in cases of willful misconduct on the
377	376		12.22part of the excluded fiduciary, the excluded fiduciary is not liable for any loss resulting
378	377		12.23directly or indirectly from any act taken or omitted as a result of the directing party's failure
379	378		12.24to provide consent after having been requested to do so by the excluded fiduciary; or
380	379		12.25 (3) if a governing instrument provides that, or if for any other reason, an excluded
381	380		12.26fiduciary is required to assume the role or responsibilities of a directing party, or if the
382	381		12.27excluded fiduciary appoints a directing party or successor to a directing party, then except
383	382		12.28in cases of willful misconduct on the part of the excluded fiduciary, the excluded fiduciary
384	383		12.29is not liable for any loss resulting directly or indirectly from its actions in carrying out the
385	384		12.30roles and responsibilities of the directing party.
386	385		12.31 (b) Any excluded fiduciary is also relieved from any obligation to review or evaluate
387	386		12.32any direction from a distribution trust advisor or to perform investment or suitability reviews,
388	387		12.33inquiries, or investigations or to make recommendations or evaluations with respect to
389	388		12.34investments to the extent the directing party, custodial account owner, or authorized designee
390	389		12Sec. 15.
391		-	~~S0571-1 1st Engrossment~~~~SF571~~ REVISOR JSK 13.1of a custodial account owner had authority to direct the acquisition, disposition, or retention
	390	+	25-02296 as introduced01/15/25 REVISOR JSK/EN 13.1of a custodial account owner had authority to direct the acquisition, disposition, or retention
392	391		13.2of any such investment. If the excluded fiduciary offers such communication to the directing
393	392		13.3party or any investment person selected by the investment trust advisor, the action may not
394	393		13.4be deemed to constitute an undertaking by the excluded fiduciary to monitor or otherwise
395	394		13.5participate in actions within the scope of the advisor's authority or to constitute any duty to
396	395		13.6do so.
397	396		13.7 (c) An excluded fiduciary is also relieved of any duty to communicate with, warn, or
398	397		13.8apprise any beneficiary or third party concerning instances in which the excluded fiduciary
399	398		13.9would or may have exercised the excluded fiduciary's own discretion in a manner different
400	399		13.10from the manner directed by the directing party.
401	400		13.11 (d) Absent a contrary provision in the governing instrument, the actions of the excluded
402	401		13.12fiduciary, including any communications with the directing party or others, or carrying out,
403	402		13.13recording, or reporting actions taken at the directing party's direction pertaining to matters
404	403		13.14within the scope of authority of the directing party, shall be deemed to be administrative
405	404		13.15actions taken by the excluded fiduciary solely to allow the excluded fiduciary to perform
406	405		13.16those duties assigned to the excluded fiduciary under the governing instrument. An
407	406		13.17administrative action described under this paragraph may not be deemed to constitute an
408	407		13.18undertaking by the excluded fiduciary to monitor, participate, or otherwise take any fiduciary
409	408		13.19responsibility for actions within the scope of authority of the directing party.
410	409		13.20 (e) Any person acting in the role of excluded fiduciary or directing party is an interested
411	410		13.21person who may petition the district court and invoke its jurisdiction as provided in sections
412	411		13.22501C.0201 to 501C.0208 for those matters specified in section 501C.0202, and the provisions
413	412		13.23of section 501C.0202 shall be construed and applied so that the references in that section
414	413		13.24to a "trustee" include the excluded fiduciary or directing party, as applicable.
415	414		13.25Sec. 16. Minnesota Statutes 2024, section 501C.0808, subdivision 8, is amended to read:
416	415		13.26 Subd. 8.Duty to inform excluded fiduciary and directing parties.(a) Each directing
417	416		13.27party shall keep the excluded fiduciary and any other directing party reasonably informed
418	417		13.28regarding the administration of the trust with respect to any specific duty or function being
419	418		13.29performed by the directing party to the extent that the duty or function would normally be
420	419		13.30performed by the excluded fiduciary or to the extent that providing such information to the
421	420		13.31excluded fiduciary or other directing party is reasonably necessary for the excluded fiduciary
422	421		13.32or other directing party to perform its duties. The directing party shall provide such
423	422		13.33information as reasonably requested by the excluded fiduciary or other directing party.
424	423		13.34Neither the performance nor the failure to perform of a directing party's duty to inform as
425	424		13Sec. 16.
426		-	~~S0571-1 1st Engrossment~~~~SF571~~ REVISOR JSK 14.1provided in this subdivision affects the limitation on the liability of the excluded fiduciary
	425	+	25-02296 as introduced01/15/25 REVISOR JSK/EN 14.1provided in this subdivision affects the limitation on the liability of the excluded fiduciary
427	426		14.2as provided in this section.
428	427		14.3 (b) Each excluded fiduciary shall keep the directing party or parties reasonably informed
429	428		14.4regarding the administration of the trust with respect to any specific duty or function
430	429		14.5performed by the excluded fiduciary to the extent that providing such information to the
431	430		14.6directing party or parties is reasonably necessary for the directing party to perform its duties.
432	431		14.7The excluded fiduciary shall provide such information as reasonably requested by a directing
433	432		14.8party. Neither the performance of nor the failure to perform an excluded fiduciary's duty to
434	433		14.9inform as provided in this subdivision affects the liability of the directing party as provided
435	434		14.10in this section.
436	435		14.11Sec. 17. Minnesota Statutes 2024, section 501C.0808, is amended by adding a subdivision
437	436		14.12to read:
438	437		14.13 Subd. 9a.Office of directing party.Unless the terms of a governing instrument provide
439	438		14.14otherwise, the rules applicable to a trustee apply to a directing party regarding the following
440	439		14.15matters:
441	440		14.16 (1) acceptance under section 501C.0701;
442	441		14.17 (2) giving of bond to secure performance under section 501C.0702;
443	442		14.18 (3) when more than one person is acting in the role of a directing party, the provisions
444	443		14.19applicable to cotrustees under section 501C.0703;
445	444		14.20 (4) reasonable compensation under section 501C.0708;
446	445		14.21 (5) resignation under section 501C.0705;
447	446		14.22 (6) removal under section 501C.0706; and
448	447		14.23 (7) vacancy and appointment of successor under section 501C.0704.
449	448		14.24Sec. 18. Minnesota Statutes 2024, section 501C.1013, subdivision 4, is amended to read:
450	449		14.25 Subd. 4.Effect.When a certificate of trust is recorded in a county where real property
451	450		14.26is situated, or in the case of personal property, when it is presented to a third party, the
452	451		14.27certificate of trust serves to document the existence of the trust, the identity of the trustees,
453	452		14.28the powers of the trustees and any limitations on those powers, and other matters the
454	453		14.29certificate of trust sets out, as though the full trust instrument had been recorded or presented.
455	454		14.30Until amended or revoked under subdivision 5, or until the full trust instrument is recorded
456	455		14.31or presented, a certificate of trust is prima facie proof as to matters contained in it and any
457	456		14Sec. 18.
458		-	~~S0571-1 1st Engrossment~~~~SF571~~ REVISOR JSK 15.1party may rely upon the continued effectiveness of the certificate, and the subsequent
	457	+	25-02296 as introduced01/15/25 REVISOR JSK/EN 15.1party may rely upon the continued effectiveness of the certificate, and the subsequent
459	458		15.2revocation or amendment of a certificate of trust shall not affect transactions entered into
460	459		15.3in reliance on a prior certificate of trust.
461	460		15.4 Sec. 19. Minnesota Statutes 2024, section 501C.1014, is amended by adding a subdivision
462	461		15.5to read:
463	462		15.6 Subd. 5.Affidavit of trustee.An affidavit of a trustee or of trustees of an inter vivos
464	463		15.7trust or a testamentary trust in support of a personal property transaction may be substantially
465	464		15.8in the form of the affidavit provided in subdivision 1 or 2, as long as the affidavit sets forth
466	465		15.9a description of the personal property and includes paragraphs 2, 3(a) and (b), changing the
467	466		15.10property reference to the personal property described, 4, 5, 6, and 7 of the form of the
468	467		15.11affidavit provided in subdivision 1 or 2.
469	468		15.12Sec. 20. Minnesota Statutes 2024, section 501C.1105, subdivision 1, is amended to read:
470	469		15.13 Subdivision 1.Expenses.Unless a will or trust instrument provides otherwise and subject
471	470		15.14to subdivision 2, all expenses incurred in connection with the settlement of a decedent's
472	471		15.15estate, including debts, funeral expenses, estate taxes, interest and penalties concerning
473	472		15.16taxes, family allowances, fees of attorneys and personal representatives, and court costs
474	473		15.17must be charged against the principal of the estate.
475	474		15.18Sec. 21. Minnesota Statutes 2024, section 501C.1105, is amended by adding a subdivision
476	475		15.19to read:
477	476		15.20 Subd. 4.Decedent's estate.For purposes of this section, the "decedent's estate" includes
478	477		15.21the estate of the decedent and any trust that was revocable by the decedent at the time of
479	478		15.22the decedent's death.
480	479		15.23Sec. 22. Minnesota Statutes 2024, section 502.851, subdivision 1, is amended to read:
481	480		15.24 Subdivision 1.Definitions.(a) The definitions in this subdivision apply to this section.
482	481		15.25 (b) "Appointed trust" means an irrevocable trust which receives principal from an invaded
483	482		15.26trust under subdivision 3 or 4, including another trust created by the settlor of the invaded
484	483		15.27trust, under the terms of the invaded trust or any other trust instrument, or by the trustees,
485	484		15.28in that capacity, of the invaded trust. For purposes of creating another trust, any requirement
486	485		15.29that a trust instrument be signed by the settlor shall be deemed satisfied by the signature of
487	486		15.30the trustee of the appointed trust. In the discretion of the authorized trustee, the appointed
488	487		15.31trust may be the same trust as the invaded trust with modified terms which does not require
489	488		15Sec. 22.
490		-	~~S0571-1 1st Engrossment~~~~SF571~~ REVISOR JSK 16.1the trustee of the appointed trust to refer to the trust by a different name or obtain a separate
	489	+	25-02296 as introduced01/15/25 REVISOR JSK/EN 16.1the trustee of the appointed trust to refer to the trust by a different name or obtain a separate
491	490		16.2tax identification number when applicable.
492	491		16.3 (c) "Authorized trustee" means, as to an invaded trust, any trustee or trustees with
493	492		16.4authority to pay trust principal to or for one or more current beneficiaries other than a trustee
494	493		16.5who is the settlor, or a beneficiary to whom income or principal must be paid currently or
495	494		16.6in the future, or who is or will become eligible to receive a distribution of income or principal
496	495		16.7in the discretion of the trustee, other than by the exercise of a power of appointment held
497	496		16.8in a nonfiduciary capacity.
498	497		16.9 (d) "Current beneficiary" or "beneficiaries" means the person or persons, or as to a class,
499	498		16.10any person or persons who are or will become members of that class, to whom the trustees
500	499		16.11may distribute principal at the time of the exercise of the power, provided that the interest
501	500		16.12of a beneficiary to whom income, but not principal, may be distributed at the discretion of
502	501		16.13the trustee of the invaded trust, may be continued in the appointed trust.
503	502		16.14 (e) "Invade" means the power to pay directly to the beneficiary of a trust or make
504	503		16.15application for the benefit of the beneficiary.
505	504		16.16 (f) "Invaded trust" means any existing irrevocable inter vivos or testamentary trust whose
506	505		16.17principal is appointed under subdivision 3 or 4.
507	506		16.18 (g) "Person or persons interested in the invaded trust" means all qualified beneficiaries
508	507		16.19as defined in section 501C.0103, paragraph (m).
509	508		16.20 (h) "Principal" includes the income of the trust at the time of the exercise of the power
510	509		16.21that is not currently required to be distributed, including accrued and accumulated income.
511	510		16.22 (i) "Unlimited discretion" means the unlimited power to distribute principal. A power
512	511		16.23to distribute principal that includes words such as best interests, welfare, comfort, or
513	512		16.24happiness shall not be considered a limitation of the power to distribute principal.
514	513		16.25Sec. 23. Minnesota Statutes 2024, section 502.851, subdivision 2, is amended to read:
515	514		16.26 Subd. 2.Power of appointment; effect when more or less extensive than authorized
516	515		16.27Savings provision.An exercise of a power of appointment is not void if the exercise is:
517	516		16.28 (1) more extensive than was authorized but is valid to the extent authorized by the
518	517		16.29instrument creating its power; or
519	518		16.30 (2) less extensive than authorized by the instrument creating the power, unless the donor
520	519		16.31has manifested a contrary intention.
521	520		16Sec. 23.
522		-	~~S0571-1 1st Engrossment~~~~SF571~~ REVISOR JSK 17.1 (a) If exercise of the power to invade trust principal under subdivision 3 or 4 would be
	521	+	25-02296 as introduced01/15/25 REVISOR JSK/EN 17.1 (a) If exercise of the power to invade trust principal under subdivision 3 or 4 would be
523	522		17.2effective under this section except that the appointed trust instrument in part does not comply
524	523		17.3with this section, the exercise of the power is effective and the following rules apply with
525	524		17.4respect to the principal of the appointed trust attributable to the exercise of the power:
526	525		17.5 (1) a provision in the appointed trust instrument that is not permitted under this section
527	526		17.6is void to the extent necessary to comply with this section; and
528	527		17.7 (2) a provision required by this section to be in the appointed trust instrument that is not
529	528		17.8contained in the trust instrument is deemed to be included in the trust instrument to the
530	529		17.9extent necessary to comply with this section.
531		-	17.10 (b) If a trustee or other fiduciary of an appointed trust determines that ~~paragraph~~ (a)
	530	+	17.10 (b) If a trustee or other fiduciary of an appointed trust determines that subsection (a)
532	531		17.11applies to a prior exercise of the power to invade trust principal under subdivision 3 or 4,
533	532		17.12the fiduciary shall take corrective action consistent with the fiduciary's duties.
534	533		17.13Sec. 24. Minnesota Statutes 2024, section 502.851, subdivision 3, is amended to read:
535	534		17.14 Subd. 3.Authorized trustee with unlimited discretion.(a) An authorized trustee with
536	535		17.15unlimited discretion to invade trust principal may appoint part or all of the principal to a
537	536		17.16trustee of an appointed trust for, and only for the benefit of, one, more than one, or all of
538	537		17.17the current beneficiaries of the invaded trust, to the exclusion of any one or more of the
539	538		17.18current beneficiaries. The successor and remainder beneficiaries of the appointed trust may
540	539		17.19be none, must be one, more than one, or all of the successor and remainder beneficiaries of
541	540		17.20the invaded trust, and may be to the exclusion of any one, more than one, or all of such
542	541		17.21successor and remainder beneficiaries.
543	542		17.22 (b) An authorized trustee exercising the power under paragraph (a) may grant a
544	543		17.23discretionary power of appointment in the appointed trust to one or more of the current
545	544		17.24beneficiaries of the invaded trust, provided that the beneficiary granted a power to appoint
546	545		17.25may receive principal outright under the terms of the invaded trust.
547	546		17.26 (c) If the authorized trustee grants a power of appointment, the class of permissible
548	547		17.27appointees in favor of whom the beneficiary may exercise the power of appointment granted
549	548		17.28in the appointed trust may be broader or otherwise different from the current, successor,
550	549		17.29and remainder beneficiaries of the invaded trust.
551	550		17.30 (d) If the beneficiary or beneficiaries of the invaded trust are described by a class, the
552	551		17.31beneficiary or beneficiaries of the appointed trust may include present or future members
553	552		17.32of the class.
554	553		17Sec. 24.
555		-	~~S0571-1 1st Engrossment~~~~SF571~~ REVISOR JSK 18.1 Sec. 25. Minnesota Statutes 2024, section 502.851, subdivision 4, is amended to read:
	554	+	25-02296 as introduced01/15/25 REVISOR JSK/EN 18.1 Sec. 25. Minnesota Statutes 2024, section 502.851, subdivision 4, is amended to read:
556	555		18.2 Subd. 4.Authorized trustee without unlimited discretion.(a) An authorized trustee
557	556		18.3with the power to invade trust principal but without unlimited discretion may appoint part
558	557		18.4or all of the principal of the trust to a trustee of an appointed trust, provided that the current
559	558		18.5beneficiaries of the appointed trust shall be the same as the current beneficiaries of the
560	559		18.6invaded trust and the successor and remainder beneficiaries shall be the same as the successor
561	560		18.7and remainder beneficiaries of the invaded trust.
562	561		18.8 (b) If the authorized trustee exercises the power under this subdivision, the appointed
563	562		18.9trust shall include the same language authorizing the trustee to distribute the income or
564	563		18.10invade the principal of the appointed trust as in the invaded trust.
565	564		18.11 (c) If the authorized trustee exercises the power under this subdivision to extend the
566	565		18.12term of the appointed trust beyond the term of the invaded trust, for any period after the
567	566		18.13invaded trust would have otherwise terminated under the provisions of the invaded trust,
568	567		18.14the appointed trust, in addition to the language required to be included in the appointed trust
569	568		18.15pursuant to paragraph (b), may also include language providing the trustee with unlimited
570	569		18.16discretion to invade the principal of the appointed trust during this extended term.
571	570		18.17 (d) If the beneficiary or beneficiaries of the invaded trust are described by a class, the
572	571		18.18beneficiary or beneficiaries of the appointed trust shall include present or and future members
573	572		18.19of the class.
574	573		18.20 (e) If the authorized trustee exercises the power under this subdivision and if the invaded
575	574		18.21trust grants a power of appointment to a beneficiary of the trust, the appointed trust shall
576	575		18.22grant the power of appointment in the appointed trust and the class of permissible appointees
577	576		18.23shall be the same as in the invaded trust.
578	577		18.24Sec. 26. Minnesota Statutes 2024, section 502.851, subdivision 11, is amended to read:
579	578		18.25 Subd. 11.Requirements for exercise of power to appoint; notice.(a) The exercise of
580	579		18.26the power to appoint to an appointed trust under subdivision 3 or 4 must be evidenced by
581	580		18.27an instrument in writing, signed, and dated, and acknowledged by the authorized trustee.
582	581		18.28The exercise of the power shall be effective 60 days after the date of delivery of notice as
583	582		18.29specified in paragraph (c), unless each person entitled to notice agrees in writing to an earlier
584	583		18.30effective date or waives in writing the right to object to the exercise of the power.
585	584		18.31 (b) An authorized trustee may exercise the power authorized by subdivision 3 or 4
586	585		18.32without the consent of the settlor or the persons interested in the invaded trust and without
587	586		18Sec. 26.
588		-	~~S0571-1 1st Engrossment~~~~SF571~~ REVISOR JSK 19.1court approval, provided that the authorized trustee may seek court approval for the exercise
	587	+	25-02296 as introduced01/15/25 REVISOR JSK/EN 19.1court approval, provided that the authorized trustee may seek court approval for the exercise
589	588		19.2with notice to all persons interested in the invaded trust.
590	589		19.3 (c) A copy of the instrument exercising the power, a copy of the appointed trust, and a
591	590		19.4copy of the invaded trust shall be delivered to:
592	591		19.5 (1) any person having the right, pursuant to the terms of the invaded trust, to remove or
593	592		19.6replace the authorized trustee exercising the power under subdivision 3 or 4; and
594	593		19.7 (2) all persons interested in the invaded trust.; and
595	594		19.8 (3) any person who would be considered the owner of all or any portion of the appointed
596	595		19.9trust under sections 671 to 679 of the Internal Revenue Code.
597	596		19.10 (d) Notice of an exercise of the power must be given in the same manner as provided in
598	597		19.11section 501C.0109 and is subject to the provisions of section 501C.0301.
599	598		19.12 (e) The instrument exercising the power shall state whether the appointment is of all the
600	599		19.13assets comprising the principal of the invaded trust or only a part of the assets comprising
601	600		19.14the principal of the invaded trust and, if a part, the approximate percentage of the value of
602	601		19.15the principal of the invaded trust that is subject to the appointment.
603	602		19.16 (f) A person entitled to notice may object to the authorized trustee's exercise of the power
604	603		19.17under this section by serving a written notice of objection upon the authorized trustee prior
605	604		19.18to the effective date of the exercise of the power. The failure to object shall not constitute
606	605		19.19a consent.
607	606		19.20 (g) If the authorized trustee does not receive a written objection to the proposed exercise
608	607		19.21from a person entitled to notice within the applicable period, the authorized trustee is not
609	608		19.22liable to any person who received the required notice for the exercise of the power.
610	609		19.23 (h) If the authorized trustee receives a written objection within the applicable period,
611	610		19.24either the authorized trustee or any person entitled to notice may petition the court to have
612	611		19.25the proposed exercise of a power performed as proposed, performed with modifications, or
613	612		19.26denied. In a proceeding, a person objecting to the proposed exercise has the burden of proof
614	613		19.27as to whether the authorized trustee's proposed exercise should not be performed. A person
615	614		19.28who has not objected is not estopped from opposing the proposed exercise in the proceeding.
616	615		19.29If the authorized trustee decides not to implement the proposed exercise, the trustee shall
617	616		19.30notify all persons entitled to notice of the decision not to exercise the power and the reasons
618	617		19.31for the decision, and the authorized trustee's decision not to implement the proposed exercise
619	618		19.32does not itself give rise to liability to any person interested in the invaded trust. A person
620	619		19Sec. 26.
621		-	~~S0571-1 1st Engrossment~~~~SF571~~ REVISOR JSK 20.1entitled to notice may petition the court to have the exercise of a power performed and has
	620	+	25-02296 as introduced01/15/25 REVISOR JSK/EN 20.1entitled to notice may petition the court to have the exercise of a power performed and has
622	621		20.2the burden of proof as to whether it should be performed.
623	622		20.3 (i) A copy of the instrument exercising the power and a copy of each of the invaded trust
624	623		20.4and the appointed trust shall be filed with records of the appointed trust and the invaded
625	624		20.5trust.
626	625		20.6 Sec. 27. Minnesota Statutes 2024, section 502.851, subdivision 15, is amended to read:
627		-	20.7 Subd. 15.Prohibitions.~~(a)~~ An authorized trustee may not exercise a power authorized
628		-	20.~~8by subdivision~~ 3 or 4 to effect any of the following:
	626	+	20.7 Subd. 15.Prohibitions.An authorized trustee may not exercise a power authorized by
	627	+	20.8subdivision 3 or 4 to effect any of the following:
629	628		20.9 (1) to reduce, limit, or modify any beneficiary's current right to a mandatory distribution
630	629		20.10of income or principal, a mandatory annuity or unitrust interest, a current right to withdraw
631	630		20.11a percentage of the value of the trust, or a current right to withdraw a specified dollar amount;
632	631		20.12provided, however, and subject to the other limitations in this section, an authorized trustee
633	632		20.13may exercise a power authorized by subdivision 3 or 4 to appoint to an appointed trust that
634	633		20.14is a supplemental needs trust that conforms to the provisions of section 501C.1205;
635	634		20.15 (2) notwithstanding section 501C.1008, paragraph (b), to decrease or indemnify against
636	635		20.16a trustee's liability or exonerate a trustee from liability for failure to exercise reasonable
637	636		20.17care, diligence, and prudence, except that the appointed trust may divide and reallocate
638	637		20.18fiduciary powers among fiduciaries, including one or more trustees, distribution trust
639	638		20.19advisors, investment trust advisors, trust protectors, or other persons, and relieve a fiduciary
640	639		20.20from liability for an act or failure to act of another fiduciary as permitted under section
641	640		20.21501C.0808;
642	641		20.22 (3) to alter or eliminate a provision granting another person the right to remove or replace
643	642		20.23the authorized trustee exercising the power under subdivision 3 or 4, unless notice has been
644	643		20.24provided to the persons under subdivision 11, paragraph (c), or approval is granted by a
645	644		20.25court having jurisdiction over the trust;
646	645		20.26 (4) to make a binding and conclusive fixation of the value of any asset for purposes of
647	646		20.27distribution, allocation, or otherwise;
648	647		20.28 (5) to extend the term of the appointed trust beyond any permissible period of the rule
649	648		20.29against perpetuities of the invaded trust, and any exercise of the power which extends the
650	649		20.30term of the appointed trust beyond the permissible period of the rule against perpetuities of
651	650		20.31the invaded trust shall void the entire exercise of the power; or
652	651		20.32 (6) to jeopardize:
653	652		20Sec. 27.
654		-	~~S0571-1 1st Engrossment~~~~SF571~~ REVISOR JSK 21.1 (i) the deduction or exclusion originally claimed with respect to any contribution to the
	653	+	25-02296 as introduced01/15/25 REVISOR JSK/EN 21.1 (i) the deduction or exclusion originally claimed with respect to any contribution to the
655	654		21.2invaded trust that qualified for the annual exclusion under section 2503(b) of the Internal
656	655		21.3Revenue Code; the marital deduction under section 2056(a) or 2523(a) of the Internal
657	656		21.4Revenue Code; or the charitable deduction under section 170(a), 642(c), 2055(a), or 2522(a)
658	657		21.5of the Internal Revenue Code;
659	658		21.6 (ii) the qualification of a transfer as a direct skip under section 2642(c) of the Internal
660	659		21.7Revenue Code; or
661	660		21.8 (iii) the qualification as a foreign grantor trust under section 672(f)(2)(A) of the Internal
662		-	21.9Revenue Code; or
663		-	21.10 (~~iii) (~~iv) ~~any other specific tax benefit for which a contribution originally qualified for~~
664		-	21.~~11income, gift,~~ ~~estate, or generation-skipping transfer purposes under~~ the Internal Revenue
665		-	21.~~12Code.~~
666		-	21.~~13 (b) If the property~~ of the ~~invaded trust includes shares of stock in an S corporation~~, as
667		-	21.~~14defined in section 1361~~ of the ~~Internal Revenue Code,~~ ~~and the invaded trust is, or but for~~
668		-	21.~~15the exercise of power to invade~~ the ~~trust principal under this section would be,~~ a permitted
669		-	21.~~16shareholder under any provision of section 1361 of~~ the Internal Revenue Code, the ~~authorized~~
670		-	21.~~17trustee may exercise the power with respect to part or all of the~~ S corporation ~~stock only if~~
671		-	21.~~18any appointed~~ trust ~~receiving~~ the ~~stock is a permitted shareholder under section 1361(c)(2)~~
672		-	21.19of the Internal Revenue Code~~. If~~ the ~~property of the invaded~~ trust ~~includes shares of stock~~
673		-	21.~~20in an S corporation and~~ the ~~invaded~~ trust ~~is, or but for the exercise of power to invade the~~
674		-	21.~~21trust principal under this section would be, a qualified subchapter~~ S trust ~~within the meaning~~
675		-	21.~~22of section 1361~~(d) ~~of the Internal Revenue Code,~~ ~~the appointed trust instrument must not~~
676		-	21.~~23include~~ or ~~omit a term that prevents~~ the ~~appointed trust from qualifying as a qualified~~
677		-	21.~~24subchapter S trust~~.
	661	+	21.9Revenue Code;
	662	+	21.10 (iv) if the property of the invaded trust includes shares of stock in an S corporation, as
	663	+	21.11defined in section 1361 of the Internal Revenue Code and the invaded trust is, or but for
	664	+	21.12the exercise of power to invade the trust principal under this section would be, a permitted
	665	+	21.13shareholder under any provision of section 1361 of the Internal Revenue Code, the authorized
	666	+	21.14trustee may exercise the power with respect to part or all of the S corporation stock only if
	667	+	21.15any appointed trust receiving the stock is a permitted shareholder under section 1361(c)(2)
	668	+	21.16of the Internal Revenue Code. If the property of the invaded trust includes shares of stock
	669	+	21.17in an S corporation and the invaded trust is, or but for the exercise of power to invade the
	670	+	21.18trust principal under this section would be, a qualified subchapter S trust within the meaning
	671	+	21.19of section 1361(d) of the Internal Revenue Code, the appointed trust instrument must not
	672	+	21.20include or omit a term that prevents the appointed trust from qualifying as a qualified
	673	+	21.21subchapter S trust; or
	674	+	21.22 (iii) (v) any other specific tax benefit for which a contribution originally qualified for
	675	+	21.23income, gift, estate, or generation-skipping transfer purposes under the Internal Revenue
	676	+	21.24Code.
678	677		21.25Sec. 28. Minnesota Statutes 2024, section 502.851, subdivision 16, is amended to read:
679	678		21.26 Subd. 16.Compensation; commissions.For the purposes of this section: (1), unless a
680	679		21.27court otherwise directs, an authorized trustee may not exercise a power authorized by
681	680		21.28subdivision 3 or 4 to change the provisions regarding the determination of the compensation
682	681		21.29of any trustee. The commissions or other compensation payable to the trustees of the invaded
683	682		21.30trust may continue to be paid to the trustees of the appointed trust during the term of the
684	683		21.31appointed trust and shall be determined in the same manner as in the invaded trust.
685	684		21.32 (2) No trustee shall receive any paying commission or other compensation for appointing
686	685		21.33of property from the invaded trust to an appointed trust pursuant to subdivision 3 or 4.
687	686		21Sec. 28.
688		-	~~S0571-1 1st Engrossment~~~~SF571~~ REVISOR JSK 22.1 Sec. 29. Minnesota Statutes 2024, section 524.2-114, is amended to read:
	687	+	25-02296 as introduced01/15/25 REVISOR JSK/EN 22.1 Sec. 29. Minnesota Statutes 2024, section 524.2-114, is amended to read:
689	688		22.2 524.2-114 PARENT BARRED FROM INHERITING IN CERTAIN
690	689		22.3CIRCUMSTANCES.
691	690		22.4 (a) A parent is barred from inheriting from or through a child of the parent if:
692	691		22.5 (1) the parent's parental rights were terminated and the parent-child relationship was not
693	692		22.6judicially reestablished; or
694	693		22.7 (2) the child died before reaching 18 years of age and there is clear and convincing
695	694		22.8evidence that immediately before the child's death the parental rights of the parent could
696	695		22.9have been terminated under law of this state other than this chapter on the basis of
697	696		22.10nonsupport, abandonment, abuse, neglect, or other actions or inactions of the parent toward
698	697		22.11the child.; or
699	698		22.12 (3) the child died after reaching 18 years of age and there is clear and convincing evidence
700	699		22.13that:
701	700		22.14 (i) during the years of the child's minority, the parental rights of the parent could have
702	701		22.15been terminated under laws of this state other than this chapter on the basis of nonsupport,
703	702		22.16abandonment, abuse, neglect, or other actions or inactions of the parent toward the child;
704	703		22.17and
705	704		22.18 (ii) in the year preceding the child's death, the parent and child were estranged. For
706	705		22.19purposes of this subdivision, "estranged" means having a relationship characterized by
707	706		22.20enmity, hostility, or indifference.
708	707		22.21 (b) For the purpose of intestate succession from or through the deceased child, a parent
709	708		22.22who is barred from inheriting under this section is treated as if the parent predeceased the
710	709		22.23child.
711		-	22.~~24 EFFECTIVE DATE.This~~ section is ~~effective the day following final enactment and~~
712		-	22.~~25applies to actions commenced on or after that date.~~
713		-	22.~~26Sec. 30.~~ ~~Minnesota Statutes 2024,~~ section ~~524~~.~~2-804~~, ~~subdivision 1, is amended to read:~~
714		-	22.~~27 Subdivision 1.Revocation upon dissolution.Except as provided by~~ the ~~express terms~~
715		-	22.~~28of a governing instrument,~~ ~~other than a trust instrument under section 501C.1207, executed~~
716		-	22.~~29prior to the~~ dissolution or annulment ~~of an individual's marriage,~~ a ~~court order,~~ a ~~contract~~
717		-	22.~~30relating to~~ the ~~division~~ of ~~the marital property made between individuals before or after~~
718		-	22.~~31their marriage, dissolution, or annulment, or a plan document governing a qualified or~~
	710	+	22.24Sec. 30. Minnesota Statutes 2024, section 524.2-804, subdivision 1, is amended to read:
	711	+	22.25 Subdivision 1.Revocation upon dissolution.Except as provided by the express terms
	712	+	22.26of a governing instrument, other than a trust instrument under section 501C.1207, executed
	713	+	22.27prior to the dissolution or annulment of an individual's marriage, a court order, a contract
	714	+	22.28relating to the division of the marital property made between individuals before or after
	715	+	22.29their marriage, dissolution, or annulment, or a plan document governing a qualified or
	716	+	22.30nonqualified retirement plan, the dissolution or annulment of a marriage revokes any
	717	+	22.31revocable:
719	718		22Sec. 30.
720		-	S0571-1 1st EngrossmentSF571 REVISOR JSK 23.1nonqualified retirement plan, the dissolution or annulment of a marriage revokes any
721		-	23.2revocable:
722		-	23.3 (1) disposition, beneficiary designation, or appointment of property made in a governing
723		-	23.4instrument by an individual to the individual's former spouse in a governing instrument or
724		-	23.5any members of the former spouse's family who are not also members of the individual's
725		-	23.6family;
726		-	23.7 (2) provision in a governing instrument conferring a general or nongeneral power of
727		-	23.8appointment on an individual's former spouse; and
728		-	23.9 (3) nomination in a governing instrument, nominating an individual's former spouse or
729		-	23.10any members of the former spouse's family who are not also members of the individual's
730		-	23.11family to serve in any fiduciary or representative capacity, including a personal representative,
731		-	23.12executor, trustee, conservator, agent, or guardian.
	719	+	25-02296 as introduced01/15/25 REVISOR JSK/EN 23.1 (1) disposition, beneficiary designation, or appointment of property made in a governing
	720	+	23.2instrument by an individual to the individual's former spouse in a governing instrument or
	721	+	23.3any members of the former spouse's family who are not also members of the individual's
	722	+	23.4family;
	723	+	23.5 (2) provision in a governing instrument conferring a general or nongeneral power of
	724	+	23.6appointment on an individual's former spouse; and
	725	+	23.7 (3) nomination in a governing instrument, nominating an individual's former spouse or
	726	+	23.8any members of the former spouse's family who are not also members of the individual's
	727	+	23.9family to serve in any fiduciary or representative capacity, including a personal representative,
	728	+	23.10executor, trustee, conservator, agent, or guardian.
732	729		23Sec. 30.
733		-	~~S0571-1 1st Engrossment~~~~SF571~~ REVISOR JSK
	730	+	25-02296 as introduced01/15/25 REVISOR JSK/EN