MINNESOTA WILLS AND TRUSTS REQUIREMENTS
Statutory Authority.
Wills:ย Minn. Stat., Chapter 524, Art. 2, Part 5 (Minn. Stat. ยงยง524.2-501, et. seq.).
Trusts:ย Minn. Stat., Chapter 501C (Minn. Stat. ยงยง501C.0101).ย
Minnesota Will Requirements.
To form a valid will in Minnesota, a testator must be at least 18 years old and โof sound mind.โย Minnesota wills must be in writing and must be signed by the testator, a court-appointed conservator pursuant to a court order, or another individual signing for the testator at the testatorโs direction and in the testatorโs presence.ย ย
Along with the testatorโs signature, Minnesota wills must also include signatures of at least two witnesses.ย Witnesses must sign the document within a reasonable time after observing the testatorโs signature or hearing the testator acknowledge the signatureโs validity.ย Anyone who is generally competent to act as a witness under Minnesota law can witness a will.ย A Minnesota will that is witnessed by an interested party (i.e., someone who receives a personal and beneficial interest under the will) is not invalid.
Minnesota law permits wills to incorporate by reference other documents in existence when the will is executed if the will clearly expresses an intent to incorporate the other document and the other document is sufficiently described to allow identification.ย Minnesota specifically recognizes a testatorโs right to incorporate by reference a written statement or list disposing of tangible personal property (often called a โmemorandum of personal propertyโ).ย ย ย
A memorandum must be in the testatorโs handwriting or signed by the testator, be referenced in the will, and identify property and beneficiaries with reasonable certainty.ย The written memorandum can be created before or after execution of the will, and the testator may make handwritten revisions to the document.ย In Minnesota, a memorandum of personal property cannot be used to dispose of real estate, money, coin collections, or property primarily used for trade or business.
Although notarization is not required to create a valid will in Minnesota, state law allows a will to be โself-provedโ if it includes a notarized affidavit executed by the testator and witnesses. ย The affidavit states that the testator signed the will voluntarily in the witnessesโ presence with the required legal capacity and while not under any undue influence.ย When present, the self-proved affidavit serves as evidence of the willโs authenticity and allows for admission in probate without further witness testimony.ย The Minnesota legislature provides a form self-proving affidavit, at Minn. Stat. ยง524.2-504.
In recognition of COVID-19โs impact, the Minnesota legislature enacted a โharmless errorโ rule, allowing for admission in probate of certain documents that do not technically satisfy the required formalities for a written will.ย Under that law, a non-conforming document shown by clear and convincing evidence to be intended as a decedentโs will (or a codicil, revocation, or revival of a decedentโs will) can be treated as though it were a valid will.ย The harmless error rule only applies to potential wills executed after March 13, 2020, but before February 15, 2021.
The Estate Planners Tactical Guide
Essential Legal Protection for Achievers
Amendment, Revision, and Revocation of Minnesota Wills.
A Minnesota will can be amended through execution of a codicil or later will satisfying all formalities for execution of a valid will.ย ย
A Minnesota will may be revoked by any โrevocatory actโ performed by the testator (or another person in the testatorโs presence at the testatorโs direction) with the intent of revoking the will or any part thereof.ย โRevocatory actsโ can include physical destruction, such as through burning or tearing.ย ย
A Minnesota will may also be revoked through the testatorโs execution of a later will that expressly revokes the prior will or includes inconsistent provisions.ย A new will that does not expressly revoke a prior will is presumed to revoke the prior will by inconsistency if the later will completely disposes of the testatorโs estate.ย If a later will does not completely dispose of the testatorโs estate, it is presumed to be intended as a supplement to the earlier will, with the later-executed will controlling in the event of any conflicting provisions.
If a testator is divorced after executing a Minnesota will, any provisions in favor of the former spouse are deemed to have been revoked unless the will, a court order, or a marital property agreement expressly provides otherwise.ย Any property subject to provisions revoked by divorce is treated as if the former spouse had predeceased the testator. Provisions deemed revoked due to divorce are revived if the testator later remarries the same spouse.ย ย
If a testator marries after executing a will and the surviving spouse survives the testator, the surviving spouse inherits the same share of the estate he or she would have inherited had the testator died intestate.ย A later-wed spouseโs share is inapplicable if the spouse has waived the share through a pre- or post-nuptial agreement; the will or another writing provides evidence that the omission was intentional; the surviving spouse is designated as a devisee or provided for under a trust referenced in the will; or the testator provided for the spouse outside the will and intended the other provision to take the place of a share under the will.
If a child is born to or adopted by a testator after execution of a Minnesota willโand if the testatorโs will does not provide for or appear to intentionally omit the childโthe child inherits a share of the estate.ย If the testator has no other children, the share is equal to what the child would have inherited had the testator died intestate.ย If the testator has other children provided for under the will, the share is based upon devises to other children.ย An after-born childโs share is inapplicable if the testator devises substantially all of the estate to the after-born childโs other parent.
Holographic and Oral Wills.
Minnesota law does not recognize holographic (or handwritten) wills.ย Subject to the above โharmless errorโ rule, a will written in the testatorโs handwriting must satisfy all other requirements for creation of a valid will to be admissible in probate.
Oral (or โnuncupativeโ) wills are not recognized under Minnesota law.
Minnesota Trust Requirements.
Minnesota trusts are primarily governed by the Minnesota Trust Code, enacted by the legislature at Minn. Stat., ยงยง501C.0101, et. seq.ย The purpose of a Minnesota trust must be lawful, not inconsistent with the stateโs public policy, and capable of being achieved.ย In general, the purposes of a trust and the trust itself must be for the benefit of the trustโs beneficiaries.ย ย ย
Minnesota trusts can be created through transfer of property by a grantor to a trustee (either during life or through a will or other testamentary instrument), a grantorโs declaration that identifiable property is owned as trustee, or by exercising a power of appointment in favor of a trustee.ย Under certain circumstances, a trust can also be presumed under Minnesota law if property is purchased by one person and the purchase price is paid by another.
For a trust to be valid under Minnesota law, the settlor must express an intent to create the trust and have adequate capacity (for revocable trusts, measured under the same standard applying to wills). A Minnesota trust is void to the extent its creation was induced through fraud, duress, or undue influence.
Minnesota trusts must have a definite beneficiary (subject to exceptions such as for charitable trusts, trusts for the care of animals, and certain trusts created for noncharitable purposes) and a trustee with actual duties to perform.ย A Minnesota trust in not invalidโand title to assets is not deemed to โmergeโโif a trustโs sole trustee is also its sole beneficiary.ย ย
The trustee of a Minnesota trust has a duty to administer a trust prudently, taking into account the trustโs terms, purposes, and surrounding circumstances. Trustees who manage assets are governed by the โprudent investor rule,โ though that rule may be expanded, restricted, or eliminated by the trust instrument.ย To the extent a trust is revocable, a trusteeโs duties are owed exclusively to the settlor under Minnesota law.ย
Though most trusts are evidenced by a written instrument setting forth the trustโs terms, Minnesota law allows oral trusts in some situations.ย However, the creation and terms of an oral trust must be established by clear and convincing evidence, and testamentary trusts and trusts involving conveyance of real estate must be evidenced in writing.
Similar to wills, Minnesota trusts may be amended by a separate written list or statement making dispositions of tangible personal property not specifically addressed in the trust instrument.ย The list must be referenced in the written trust, written in the settlorโs handwriting or signed by the settlor, and the items and beneficiaries must be identified with reasonable certainty.ย The written listโwhich may be prepared before or after the trust instrument and can be altered by the settlorโcannot be used for distributions of cash, coin collections, or property used in trade or business.
Minnesota trusts terminate upon revocation or expiration under the trustโs own terms, when there is no purpose of the trust remaining to be achieved, or when the trustโs purposes become unlawful or impossible to achieve.ย A trust may also be modified or terminated by a court upon the petition of the settlor, trustee, and/or beneficiaries.ย In some circumstances, modification or termination of a trust may be made upon the consent of the trustee and all beneficiaries.ย A court may also modify a Minnesota trust to conform to the settlorโs intentions, to achieve the settlorโs tax objectives, to correct mistakes, or if the trust has become uneconomical.
The Estate Planners Tactical Guide
Essential Legal Protection for AchieversSpecial Considerations.
Estate Taxes:ย The State of Minnesota is part of the relatively small minority of states that still have a state-level estate tax.ย Minnesota estates valued over $3,000,000, qualify for the estate tax.ย An increased exemption of $5 million is available for qualifying small businesses and farms.ย The estate tax is assessed on amounts over the threshold at rates progressing from 13 โ 26%, depending on the total value of the estate.ย Minnesota does not impose an inheritance tax.
Simplified Probate:ย Minnesota law allows the successor to a decedent to claim property via affidavit if the total value of the decedentโs estate (after subtracting liens and encumbrances) is not greater than $75,000.ย The affidavit can enable certain small estates to bypass probate.ย Minnesota also allows for a simplified summary administration process if there are no claims against the estate or if the estate value is below the sum of spousal and childrenโs exemptions, costs of administration, funeral expenses, late-life medical costs, and certain taxes and preferred debts.
Non-Probate Transfers: Along with living trusts, Minnesota provides several additional options for transferring assets outside probate.ย Assets co-owned as joint tenants with a right of survivorship automatically transfer to a surviving owner upon the other ownerโs death.ย Minnesota does not recognize tenancy by the entiretiesโa form of co-ownership between spouses recognized in many other states.ย ย
POD (payable-on-death) and TOD (transfer-on-death) designations, which provide for automatic transfer to a beneficiary upon an ownerโs death, can also be used in Minnesota for many assets.ย For instance, POD designations can be added to financial accounts and CDs, and TOD designations can be used with assets like registered securities and brokerage accounts.ย ย
Similarly, some assetsโlike retirement accounts and life insuranceโallow owners to name a beneficiary who automatically takes ownership of the asset upon the original ownerโs death.
Transfer-on-Death (TOD) Deeds and Vehicle Titles:ย Minnesota is among the minority of states that recognize TOD designations on real estate deeds (often called โbeneficiary deedsโ).ย Ownership of real property with a TOD designation automatically transfers to the named beneficiary upon the ownerโs death, avoiding the need for probate.ย Minnesota does not recognize TOD designations on vehicle titles.
Spousal Shares: If a married Minnesota decedent is intestate, the surviving spouse inherits the entire estate if neither spouse has any children who are not also the children of the other spouse.ย If either spouse has children who are not the children of the other spouse, the surviving spouse receives $225,000, plus a one-half interest in the remainder.ย
To avoid spousal disinheritance, Minnesota law grants a surviving spouse the right to an elective share in the decedent spouseโs โaugmented estate,โ even if the decedent leaves a will saying otherwise.ย The surviving spouseโs elective share in the augmented estate ranges from three to fifty percent, depending on how long the couple was married.ย The augmented estate includes the decedentโs net probate estate, some assets transferred outside probate, and the value of certain non-probate transfers made by the surviving spouse.ย ย
Minnesota Spendthrift Trusts:ย Although the general rule is that creditors of a trustโs beneficiaries may attach a beneficiaryโs interest in a trust, Minnesota law recognizes โspendthrift provisions,โ which prevent creditors of beneficiaries from attaching trust assets until actually distributed to the relevant beneficiary.ย ย
Creditors of a revocable trustโs settlor can attach trust assets as long as the settlor remains living (or, upon death, through estate claims).ย In the case of irrevocable trusts, settlorsโ creditors can attach trust assets that could be distributed for the settlorโs benefit.
Creating a will or trust does not have to be difficult or intimidating.ย However, certain circumstancesโlike second marriages, stepchildren, aging parents, special needs beneficiaries, guardianships, and business interests (to name a few)โcan add a layer of complexity and result in unforeseen long-term consequences.ย Whenever any out-of-the-ordinary issues are present, itโs a good idea to consult with an experienced attorney familiar with and licensed under the laws of the relevant jurisdiction.
