Minnesota adopted the Uniform Trust Code in 2016, providing a modern and comprehensive framework for trust administration. The state allows perpetual dynasty trusts (having abolished the Rule Against Perpetuities) but also imposes a state estate tax with an exemption lower than the federal threshold. This combination means Minnesota offers powerful planning tools alongside a more demanding tax environment than many neighboring states. The Minnesota Trust Code is found at Minn. Stat. Sections 501C.0101 and following.
This guide applies to both revocable and irrevocable trusts in Minnesota.
Where Minnesota trust law lives
Minnesota's trust statutes are codified in Minn. Stat. Chapter 501C. The code follows the standard UTC structure with some Minnesota-specific modifications. Prior to 2016, Minnesota trust law was governed by a less organized set of statutes and common law.
Accounting and notice requirements
Minnesota follows the standard UTC notice framework. Trustees must notify qualified beneficiaries within 60 days of accepting trusteeship of an irrevocable trust. Annual accounting to qualified beneficiaries is required under the default rules.
While the trust is revocable and the trust creator is alive and competent, the trustee's duties run primarily to the trust creator.
Minnesota's statute of limitations for breach of trust claims follows the UTC's standard framework.
Trustee duties
Minnesota trustees must administer the trust in good faith, in accordance with its terms and purposes, and in the interests of the beneficiaries. All standard UTC duties apply: loyalty, impartiality, prudent administration, and prudent investing.
Compensation follows the trust instrument first, with reasonable compensation as the default.
What makes Minnesota different
Perpetual dynasty trusts. Minnesota has abolished the Rule Against Perpetuities for trusts, allowing trusts to last indefinitely. This puts Minnesota alongside Missouri, Ohio, and Illinois among Midwest states offering perpetual trust duration.
State estate tax. Minnesota imposes a state estate tax with an exemption that is significantly lower than the federal threshold. This means estates that would not owe any federal estate tax may still owe Minnesota estate tax. For 2025, the Minnesota exemption was approximately $3 million, well below the federal exemption. This is an important planning consideration for Minnesota residents, and it makes trust-based estate planning more relevant for a broader group of families than in states without an estate tax.
No asset protection trusts. Minnesota has not adopted self-settled asset protection trust legislation. Families interested in asset protection through trusts may need to look at establishing trusts in other jurisdictions.
Trust-buster statute history. Minnesota enacted Section 501C.1206, sometimes called the "trust-buster" statute, which was struck down by the Court of Appeals in 2021. This provision had attempted to give beneficiaries broader rights to modify or terminate trusts. While the statute was invalidated, its history reflects Minnesota's active legislative approach to trust law.
Standard UTC modification tools. Minnesota provides the full range of UTC modification options: nonjudicial settlement agreements, court modification, and consent-based modification. These are practical tools for updating trusts without litigation.
TrustHelm tip: Minnesota's state estate tax means that even moderate estates may face tax obligations that do not exist at the federal level. TrustHelm's asset tracking features can help you understand the total value of trust assets and plan accordingly, so there are no surprises for your family.
The most common Minnesota trust mistakes
Not funding the trust. The most common trust mistake in every state: assets not properly transferred into the trust remain subject to probate.
Ignoring the state estate tax. Many Minnesota families assume that because their estate falls below the federal exemption, there is no estate tax to worry about. Minnesota's lower exemption threshold means more families are affected than they might expect.
Missing the 60-day notice deadline. When a trust becomes irrevocable, the trustee must notify qualified beneficiaries within 60 days. This common deadline is easy to miss during a difficult period like a family death.
Not providing annual accountings. Regular accountings start the statute of limitations clock and protect the trustee. Failing to provide them creates unnecessary exposure.
When to talk to an attorney
You should consult a Minnesota trust attorney if you need to understand how the state estate tax affects your trust planning, if you are considering a dynasty trust, if you have been named as trustee and need to understand your obligations, or if you need to modify a trust to address changed circumstances.
If you need help finding a qualified estate planning attorney in your area, visit TrustHelm's Find an Attorney tool.
This guide is for educational purposes only and does not constitute legal advice. Consult a qualified attorney for decisions about your trust.