I recently have reviewed three trusts that had a common problem: outdated statutory citations. Older trusts properly utilized the provisions of Minnesota Statutes Chapter 501B. However, Chapter 501B no longer exists!
Effective in 2015 the Legislature repealed Chapter 501B in favor of Chapter 501C. No, 501C is not the chapter for non-profit organizations (non-profits are regulated under section 501(c) of the IRS tax code). Chapter 501C largely adopted the provisions of 501B, with some clarifications and increased flexibility to the trust documents.
Given that many of the provisions of 501B can be tracked to 501C you may expect that there isn't anything to worry about. To a real degree that's true, but doing something now to avoid problems is the best course of action. For example, if the trust wants to acquire or mortgage property and the only internal reference is to 501B.181, the lender may deny a loan because the trust agreement does not permit the trustee to mortgage property owned by the trust. Curing the deficient statutory citation now will eliminate that problem.
Trust agreement updates are quite straightforward and easy to do. I am happy to meet with you, update your agreement to reflect current laws and save you time and money in the future.
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