For almost a year now, trusts being administered in Minnesota have been governed by a new set of laws that had been in the works for several years now. The revisions were meant primarily to update Minnesota’s laws related to trusts, as well as trust administration, to account for modern circumstances. They also bring Minnesota’s law in to greater harmony with other states following some or all of the Uniform Trust Code.
Although it will take some additional months to see the full affects of the law play out, several of the changes promise to impact both trust administration and litigation involving trusts. For example, the new laws places a mandatory duty on the part of the trustee to deal in good faith with respect to interest parties, especially those who stand to benefit from the trust.
A provision in the trust cannot excuse the trustee from this obligation. Moreover, a trust may not modify the statute of limitations in any way, and any attempt to do so will be disregarded.
On the flip side, the new laws make it much easier to use “nonjudicial settlement agreements,” a topic that this blog has discussed in the past. To summarize, a nonjudicial settlement agreement allows those who are having a trust dispute to sign a document effectively changing the trust in order to resolve their differences. Under the new law, anything a court can do to a trust can also be accomplished via a nonjudicial settlement agreement.
Formerly, in many cases, someone would have to sue simply to secure a court order approving a settlement, even if everyone had managed to work their issues out amicably.
These new laws makes several other changes to the way trusts operate in Minnesota. Those who are facing the possibility of trust litigation would do well to familiarize themselves with the laws’ provisions, possibly with the assistance of an experienced probate attorney.