Chapter 501C — Knowledge

501C.0101 Short Title This chapter is called the Minnesota Trust Code and governs how trusts work in Minnesota. 501C.0102 Scope Defines what types of trusts this chapter covers, including express trusts and charitable trusts. 501C.0103 Definitions Defines key terms used throughout the Minnesota Trust Code, like beneficiary, settlor, and trustee. 501C.0104 Knowledge Explains when a person is considered to have knowledge of a fact under the trust code. 501C.0105 Default and Mandatory Rules Lists which trust rules can be changed by the trust document and which rules are mandatory. 501C.0106 Common Law of Trusts; Principles of Equity Keeps the common law of trusts in effect unless changed by this chapter. 501C.0107 Governing Law Explains which state's laws govern a trust when multiple states are involved. 501C.0108 Principal Place of Administration Explains how to determine and change where a trust is mainly run from. 501C.0109 Methods and Waiver of Nonjudicial Notice Sets methods for giving notice to people interested in a trust without going to court. 501C.0110 Others Treated as Qualified Beneficiaries Allows certain people to be treated as qualified beneficiaries even if they are not named. 501C.0111 Nonjudicial Settlement Agreements Lets trust beneficiaries and trustees settle disputes by agreement without going to court. 501C.0112 Rules of Construction Provides rules for interpreting trust terms when their meaning is unclear. 501C.0201 Role of Court in Administration of Trust and Nature of Judicial Proceeding Defines the court's limited role in trust administration and how proceedings work. 501C.0202 Subject Matter of Judicial Proceedings Lists the types of trust matters that can be brought to court for a decision. 501C.0203 Order for Hearing and Notice Sets rules for court hearings on trust matters, including notice requirements. 501C.0204 Order and Appeal Explains how court orders in trust cases work and how to appeal them. 501C.0205 Court-supervised Trusts Allows a court to supervise trust administration when needed. 501C.0206 Personal Jurisdiction Over Trustee and Beneficiary Gives courts personal jurisdiction over trustees and beneficiaries in trust proceedings. 501C.0207 Venue Determines which county court handles trust proceedings. 501C.0208 Application States when the judicial proceedings rules in this article apply. 501C.0301 Representation: Basic Effect Explains how one person can legally represent another in trust matters. 501C.0302 Representation by Holder of a Power of Appointment Allows the holder of a power of appointment to represent people who might receive trust property. 501C.0303 Representation by Fiduciaries and Parents Allows fiduciaries and parents to represent beneficiaries in trust proceedings. 501C.0304 Representation by Person Having Substantially Identical Interest Lets one beneficiary represent others with the same interest in a trust. 501C.0305 Representation by Court; Appointment of Representative Allows a court to appoint a representative for unrepresented trust beneficiaries. 501C.0401 Methods of Creating Trust Lists the ways a trust can be created, including by written document, will, or court order. 501C.0402 Requirements for Creation Sets the requirements for creating a valid trust, including intent and a beneficiary. 501C.0403 Trusts Created in Other Jurisdictions Recognizes trusts created under the laws of other states or countries. 501C.0404 Trust Purposes Requires that a trust be created for a lawful purpose. 501C.0406 Creation of Trust Induced by Fraud, Duress, or Undue Influence Allows a court to void a trust that was created through fraud, threats, or undue pressure. 501C.0407 Evidence of Oral Trust Sets rules for proving the existence of a trust that was created orally, not in writing. 501C.0408 Trust for Care of Animal Section 501C.0408 has been repealed and is no longer in effect. 501C.0409 Noncharitable Trust Without Ascertainable Beneficiary Allows trusts created for a purpose but without a specific person as beneficiary. 501C.0410 Modification or Termination of Trust; Proceedings for Approval or Disapproval Describes how to change or end a trust through court proceedings. 501C.0411 Modification or Termination of Noncharitable Irrevocable Trust by Consent Allows modification or termination of an irrevocable trust if all beneficiaries agree. 501C.0412 Modification or Termination Because of Unanticipated Circumstances or Inability to Administer Trust Effectively Lets a court modify or end a trust when unexpected events make the original terms unworkable. 501C.0414 Modification or Termination of Uneconomic Trust Allows termination of a trust that is too small to justify the cost of running it. 501C.0415 Reformation to Correct Mistakes Allows a court to fix mistakes in a trust document to match the creator's true intent. 501C.0416 Modification to Achieve Settlor's Tax Objectives Lets a court change a trust to better achieve the creator's tax planning goals. 501C.0417 Combination and Division of Trusts Allows a trustee to combine small trusts or divide a trust into separate parts. 501C.0502 Spendthrift Provision Explains spendthrift provisions that protect trust assets from a beneficiary's creditors. 501C.0504 Right to Compel Distribution Gives a beneficiary the right to demand distributions that the trustee is required to make. 501C.0505 Creditor's Claim Against Settlor Allows creditors to reach trust assets if the person who created the trust is also a beneficiary. 501C.0506 Overdue Distribution Allows creditors to reach trust distributions that are overdue but not yet paid. 501C.0507 Personal Obligations of Trustee Makes a trustee personally liable for debts incurred while managing the trust. 501C.0601 Capacity of Settlor of Revocable Trust Sets the mental capacity needed to create a revocable trust. 501C.0602 Revocation or Amendment of Revocable Trust Explains how the creator of a revocable trust can change or cancel it. 501C.0603 Written Statement Regarding Tangible Personal Property Lets a trust creator write a separate list to give away personal items like jewelry or furniture. 501C.0604 Settlor's Powers Gives the creator of a revocable trust the power to direct the trustee while alive and able. 501C.0605 Limitation on Action Contesting Validity of Revocable Trust; Distribution of Trust Property Sets time limits for challenging a revocable trust and rules for distributing trust property. 501C.0701 Accepting or Declining Trusteeship Explains how a person accepts or declines being named as trustee. 501C.0702 Trustee's Bond Covers when a trustee must post a bond to protect beneficiaries. 501C.0703 Cotrustees Sets rules for when two or more people serve as co-trustees together. 501C.0704 Vacancy in Trusteeship; Appointment of Successor Explains what happens when a trustee position becomes empty and how to fill it. 501C.0705 Resignation of Trustee Explains how a trustee can resign from the role. 501C.0706 Removal of Trustee Lists the reasons a court can remove a trustee from their role. 501C.0707 Delivery of Property by Former Trustee Requires a former trustee to hand over trust property to the new trustee. 501C.0708 Compensation of Trustee Governs how much a trustee gets paid for managing a trust. 501C.0709 Reimbursement of Expenses Allows a trustee to be repaid for reasonable expenses spent managing the trust. 501C.0801 Duty to Administer Trust Requires a trustee to manage the trust according to its terms and for the beneficiaries' benefit. 501C.0802 Duty of Loyalty Requires a trustee to act loyally, putting beneficiaries' interests above their own. 501C.0803 Impartiality Requires a trustee to treat all beneficiaries fairly when managing the trust. 501C.0804 Prudent Administration Requires a trustee to manage the trust with reasonable care and skill. 501C.0807 Delegation by Trustee Allows a trustee to hire agents, lawyers, and other professionals to help manage the trust. 501C.0808 Directed Trusts Allows a trust to give someone other than the trustee the power to direct certain decisions. 501C.0809 Control, Protection, and Delivery of Trust Property Requires a trustee to take control of trust property and protect it from loss or damage. 501C.0810 Record Keeping and Identification of Trust Property Requires a trustee to keep clear records and not mix trust property with personal property. 501C.0811 Enforcement and Defense of Claims Requires a trustee to enforce claims the trust has and defend against claims made against it. 501C.0813 Duty to Inform and Report Requires a trustee to keep beneficiaries informed about the trust and its administration. 501C.0814 Discretionary Powers; Tax Savings Guides trustees on using discretionary powers, especially to preserve tax benefits. 501C.0815 General Powers of Trustee Lists the general powers a trustee has to manage the trust, unless the trust limits them. 501C.0816 Specific Powers of Trustee Lists specific powers trustees have, like selling property, making loans, and paying taxes. 501C.0817 Distribution Upon Termination Explains how a trustee distributes trust property when the trust ends. 501C.0901 Investment and Management of Trust Assets Sets the prudent investor standard for how trustees must invest trust assets. 501C.1001 Remedies for Breach of Trust Lists the remedies available when a trustee breaches their duties. 501C.1002 Damages for Breach of Trust Explains how damages are calculated when a trustee breaches their duties. 501C.1003 Remedies in Absence of Breach Provides remedies even when the trustee has not technically violated the trust. 501C.1004 Attorney Fees and Costs Governs when attorney fees and court costs can be paid from trust assets. 501C.1005 Limitation of Action Against Trustee Sets time limits for filing lawsuits against a trustee for breach of trust. 501C.1006 Reliance on Trust Instrument Protects a trustee who acts in good faith reliance on the terms of the trust document. 501C.1007 Event Affecting Administration or Distribution Addresses events that affect who receives trust property or how the trust is run. 501C.1008 Exculpation of Trustee Limits when a trust can excuse a trustee from liability for mistakes or wrongdoing. 501C.1009 Beneficiary's Consent, Release, or Ratification Explains when a beneficiary's consent or approval bars them from suing the trustee. 501C.1010 Limitation on Personal Liability of Trustee Limits the personal liability of a trustee for obligations incurred in trust administration. 501C.1011 Interest as General Partner Addresses trustee liability when the trust holds a general partnership interest. 501C.1012 Protection of Person Dealing With Trustee Protects people who deal with a trustee in good faith from trust disputes. 501C.1013 Certificate of Trust Allows a trustee to provide a certificate of trust instead of showing the full trust document. 501C.1014 Affidavit of Trustee in Real Property Transactions Provides a way for trustees to confirm trust ownership of real estate through an affidavit. 501C.1101 Definitions Defines terms used in the trust income and principal allocation rules. 501C.1102 Duty of Trustee as to Receipts and Expenditure Sets the trustee's duty to allocate receipts and expenses between income and principal. 501C.1103 Income; Principal; Charges Lists specific rules for what counts as trust income versus principal. 501C.1104 When Right to Income Arises; Apportionment of Income Determines when a beneficiary's right to income begins and how income is divided over time. 501C.1105 Income Earned During Administration of a Decedent's Estate Explains how income earned during estate administration is handled before the trust takes over. 501C.1106 Entity Distributions Sets rules for allocating distributions from businesses and entities between income and principal. 501C.1107 Bond Premium and Discount Explains how bond premiums and discounts are handled in trust accounting. 501C.1108 Sole Proprietorships Sets accounting rules for trusts that own sole proprietorship businesses. 501C.1109 Disposition of Natural Resources Governs how trusts account for income from natural resources like oil, gas, and minerals. 501C.1110 Timber Sets rules for trusts that own timber and earn money from cutting and selling trees. 501C.1111 Annuities, Qualified and Nonqualified Employee Compensation, Retirement Plans and Other Property Subject to Depletion Covers how retirement plan payments and annuities are allocated in trusts. 501C.1112 Trustee's Power to Adjust Gives trustees the power to adjust between income and principal to be fair to all beneficiaries. 501C.1113 Charges Against Income and Principal Lists which trust expenses are charged against income and which against principal. 501C.1114 Nontrust Estates Applies the income and principal rules to estates that are not trusts. 501C.1115 Application States when the income and principal allocation rules take effect. 501C.1116 Ascertainment of Income or Principal Addresses situations where it is not clear if a receipt or expense is income or principal. 501C.1117 Uniformity of Interpretation Promotes consistent interpretation of the Uniform Principal and Income Act across states. 501C.1118 Short Title Provides the short title for the Uniform Principal and Income Act. 501C.1201 Memorial Fund Allows creation of memorial funds and sets rules for managing donated money. 501C.1202 Suspension of the Power of Alienation Limits how long a trust can lock up property and prevent it from being sold or transferred. 501C.1203 Trusts Forming Part of Retirement Plans for Participating Members Exempts retirement plan trusts from general trust rules about duration and other restrictions. 501C.1204 Trusts Not Affected Lists types of trusts not affected by the rule against long-term property restrictions. 501C.1205 Trust Provisions Linked to Public Assistance Eligibility; Supplemental Needs Trusts Protects special needs trusts so disabled beneficiaries can keep their public assistance benefits. 501C.1206 Section 501C.1206 has been repealed and is no longer in effect. 501C.1207 Effect of Dissolution of Marriage Revokes trust benefits for a former spouse when a couple divorces, unless the trust says otherwise. 501C.1208 Settlor and Agents of Settlor Governs the relationship between a trust creator and their agents regarding the trust. 501C.1301 Uniformity of Application and Construction Promotes uniform application of the Minnesota Trust Code across different jurisdictions. 501C.1302 Electronic Records and Signatures Allows electronic records and signatures for trust documents when otherwise permitted by law. 501C.1303 Severability Makes individual provisions of the trust code separable if any are found invalid. 501C.1304 Application to Existing Relationships Explains how the trust code applies to trusts and relationships that existed before it was enacted.