MinnesotaSF 57194th Legislature, 2025-2026SenateWALLET

Uniform Trust Code, Powers of Appointment, and Uniform Probate Code provisions modifications

Sponsored By: Bonnie S. Westlin (Democratic)

Became Law

Judiciary and Public Safety

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Bill Overview

Analyzed Economic Effects

11 provisions identified: 3 benefits, 1 costs, 7 mixed.

Some estranged parents lose inheritance rights

A parent is barred from inheriting from or through a child who died after reaching age 18 when both tests apply. Clear and convincing evidence must show grounds to end parental rights during childhood, such as nonsupport, abandonment, abuse, or neglect. The same proof standard must show estrangement during the year before death, marked by enmity, hostility, or indifference. For inheritance without a will, the barred parent is treated as having died before the child.

Trustees can end more small trusts

Trustees can end trusts worth less than $150,000, up from $50,000, when the value cannot justify management costs. They must first notify qualified beneficiaries. Ending a trust can reduce costs but also ends ongoing trust management. This authority excludes conservation or preservation easements.

New trusts can last much longer

For trusts created after this section's effective date, the law replaces the 90-year limit with a 500-year limit. This gives certain future property rights and powers to choose recipients more time to vest, be exercised, or end. The longer period does not override trust terms requiring all beneficial interests to vest or end sooner.

Simpler trust transfers with tax-owner notice

An authorized trustee moving property to another trust under the statutory appointment power must use a signed, dated written document. The document no longer needs a formal acknowledgment. The trustee must give the appointment document and copies of both trusts to the new trust's federal tax owners. This includes anyone treated as owning all or part of that trust under federal grantor-trust rules.

Trust transfers must protect tax status

Trustees cannot use the statutory appointment power to jeopardize foreign grantor trust tax status. S corporation shares from a trust that is, or otherwise qualifies as, a permitted shareholder must go to another permitted shareholder trust. If the original trust qualifies, or otherwise qualifies, as a qualified subchapter S trust, the new terms cannot prevent that status.

Trustees can charge for trust transfers

The law removes the ban on paying trustees for moving property between trusts under the statutory appointment power. It does not require a fee or set its amount. Any payment for this work can leave less property for beneficiaries.

Agents face limits on trust changes

For a noncharitable irrevocable trust, an agent can consent to changes or termination only as the trust terms authorize. If the trust is silent about an agent consenting to changes, a power of attorney can expressly grant that authority. A Minnesota statutory short form power of attorney cannot supply authority through this exception.

Divorce cancels some former-in-law designations

Divorce or annulment cancels specified revocable property gifts, beneficiary choices, property appointments, and fiduciary or representative nominations naming former-spouse relatives. This applies only to relatives who are not also members of the individual's family. A governing document, court order, marital-property contract, or retirement plan document can provide otherwise.

Oral trusts need strong supporting proof

People can express an intent to create a trust orally or in writing. An oral trust and its terms must be proven by clear and convincing evidence. Land transfers still follow land-conveyance requirements, except for leases of up to one year. Trusts created through a will must meet their separate legal requirements.

Representatives can bind more trust beneficiaries

A sole holder of a power to choose property recipients can represent beneficiaries whose interests fall under that power. All co-holders must act together; general and special powers exercisable now or through a will qualify. Authorized representatives' agreements, consents, and waivers bind represented people unless they object before the action takes effect. That objection rule does not apply to representation under Minnesota Statutes section 501C.0302.

Trust transfers preserve heirs, shift responsibility

For transfers under subdivision 4, a new trust must include present and future members of the original beneficiary class. For transfers under subdivisions 3 or 4, the new trust can divide duties among trustees, advisors, and trust protectors. It can limit responsibility for another fiduciary's actions only as Minnesota's directed-trust law allows. The transfer cannot reduce a trustee's liability for failing to use reasonable care, diligence, and prudence.

Sponsors & Cosponsors

Sponsor

Bonnie S. Westlin
Democratic • Senate

Cosponsors

Michael E. Kreun
Republican • Senate
Moller
Affiliation unavailable
Scott
Affiliation unavailable

Roll Call Votes

All Roll Calls

Yes: 260 • No: 0

Senate vote • 4/25/2025

Third Reading

Yes: 62 • No: 0

House vote • 4/24/2025

Passage, as amended

Yes: 134 • No: 0

Senate vote • 2/27/2025