Jack brings more than a decade of experience advising clients on estate planning and probate and trust administration. He enjoys helping clients gain peace of mind by planning for their future needs and guiding family wealth to the next generation.

Regarded as a leader by his colleagues, Jack co-leads a study group of estate planning attorneys and enjoys mentoring law students and new attorneys. He is often asked to present to his peers on probate and estate planning topics.

Jack earned his J.D. at the University of St. Thomas School of Law, where he represented clients as a certified student attorney in the nationally renowned Elder Law Clinic. Prior to law school, he studied history at the University of Minnesota.

Expansion of Dynasty Trusts in Minnesota

Most notably, the law signed by the governor on May 6 amends Minnesota’s rule against perpetuities, which provides an outer limit on how long trusts may exist. The previous rule required interests in a trust to vest within 90 years after the interest was created. Under the new rule, a trust’s interest must vest 500 years after the interest was created.

This significant change allows families to protect their assets for many generations while potentially avoiding federal transfer taxes. This rule only applies to trusts created on or after Aug. 1, 2025, and will not affect existing trusts.

The change brings Minnesota in line with the majority of other states that have already allowed for so-called “dynasty trusts.” Statutes in other states that have modified their rule against perpetuities vary in the length of time they allow assets to be held in trust, and while some states allow trusts to last forever, Minnesota’s generous 500-year period may be attractive for clients looking to establish dynasty trusts in Minnesota.

Duties and Liabilities of Directing Parties

The law also substantially clarifies and updates the duties and liability of directing parties in so-called “directed trusts.” It specifies that distribution trust advisors and investment trust advisors are fiduciaries who are potentially subject to liability unless their duties or liability are limited by the terms of the trust—even then, the statute provides that their duties or liability cannot be eliminated entirely. By contrast, under the amended statute, trust protectors are not fiduciaries unless the governing document provides otherwise. Similar to trustees, directing parties who are fiduciaries can limit their liability exposure by providing regular accountings and reports to the beneficiaries.

Relatedly, the “office of directing party” is now subject to default rules similar to those that apply to trustees with respect to issues such as fiduciary bonds, reasonable compensation, resignation, removal, and replacement unless the trust instrument provides otherwise.

Parental Inheritance Rights

Minnesota Statutes § 524.2-114 now bars parents of adult children from inheriting from their deceased child’s estate if a party can establish by clear and convincing evidence that during the child’s years of minority, parental rights could have been terminated and in the year preceding the child’s death, the parent and deceased child were estranged. Previously, the statute only applied to the estates of children who died before reaching the age of 18.

While it remains a best practice to expressly disinherit family members by way of a duly executed estate plan, this statute seeks to ensure a decedent’s wishes are fulfilled even if they die without a valid will. This statute may also open the door to broader litigation efforts. That said, with the heightened clear and convincing evidence standard, proving that parental rights could have been terminated during a decedent’s childhood may prove to be a challenge depending on the age of the decedent at the time of their death.

Update Reflecting the Tomczik Decision

In July 2023, we published a legal alert discussing Matter of the Estate of Mathew Joseph Tomczik. In Estate of Tomczik, a divored decedent’s former in-laws alleged that they were entitled to inherit under Tomczik’s will because a gift to “my spouse’s heirs” remained in effect following their daughter’s divorce. The Minnesota Supreme Court held that such a position would lead to outcomes that many divorced couples would not intend.

The legislature has now clarified that members of the former spouse’s family who are not also members of the deceased individual’s family (e.g., common descendants) do not inherit under a will, beneficiary designation, or trust following a divorce. Upon a divorce or annulment, the nomination of a former spouse’s family member to serve as a personal representative, conservator, agent, or trustee also lapses.

Time Limit to Contest Decedent's Revocable Trust

Under the clarified statute, a trustee can limit the time in which a person can challenge the validity of a now-deceased settlor’s trust to 120 days by sending the beneficiaries a copy of the trust instrument and a notice informing the beneficiaries of the settlor’s death, the trust’s existence, of the trustee’s name and address, and the time allowed to commence a proceeding. Previously, the notice did not require the trustee to inform a party of the settlor’s death.

Modification of a Trust by Financial Agents

The new law also modified Minn. Stat. § 501C.0411(a) to allow an individual acting under a power of attorney to consent to the modification or termination of a noncharitable irrevocable trust if the power of attorney expressly authorizes it. This change now specifically requires that a power of attorney expressly authorize the power rather than simply designating the person as a financial agent. The statute also makes clear that a Minnesota statutory short form power of attorney does not authorize the agent to participate in the modification or termination of a trust. In addition, an agent may modify or terminate the trust if they are expressly authorized to do so by the terms of the trust.

Modification of Uneconomic Trusts

The new law also increases the threshold for a trustee to modify or terminate an uneconomic trust without court approval from $50,000 to $150,000. If the assets in a trust are worth more than $150,000, the trustee may ask the court to terminate and distribute the trust or appoint a different trustee if the court concludes that the value of the trust property is insufficient to justify the continued cost of administration.

We Can Help

Maslon’s Trust & Estate Litigation and Estate Planning attorneys welcome your questions about trusts, trustees, and legal precedent in this often complex area of law.

For more information or to register, go to Minnesota CLE: "Navigating Diverse Cultural Expectations and Approaches to Wealth Transfer."

Attendees of the 2024 Probate and Trust Law Section Conference may attend this webcast free of charge.

Evan, a litigation partner, describes himself as a “death and dirt” lawyer. He represents clients in trusts and estate disputes, which often come to a head after a family member has died, and in real estate litigation, where clients dispute who owns and controls access to "dirt." Because the two often intersect, as people will gift land (or attempt to do so) via their wills or trusts, Evan’s distinct capabilities prove particularly beneficial.

Peter is a litigation attorney who has successfully represented clients across a broad range of matters, including trusts and estates disputes, shareholder disputes in closely held corporations, business torts, and breaches of contract. Prior to law school, Peter received a Ph.D. from Cornell University in Islamic law. His dissertation focused on the legal development of the Islamic trust or waqf during the first centuries of Islam.

A buy-sell agreement is an agreement that outlines what happens to an owner’s share in an entity when that owner desires to transfer shares upon their death or departure. Buy-sell agreements are frequently used by closely held corporations, LLCs, and partnerships to facilitate transitions in ownership. Connelly has far-reaching consequences for any company with a buy-sell agreement funded by life insurance.

A Tale of Two Brothers

Two brothers—Michael and Thomas Connelly—were the only shareholders in a small building supply corporation. Because they wanted the company to stay in the family upon either of their deaths, they entered into a buy-sell agreement requiring the company to buy the shares of the first brother to die if the surviving brother declined to purchase them. The company obtained a life insurance policy on each brother to make sure it would have enough money to satisfy this requirement. 

When Michael died, Thomas elected not to purchase Michael’s shares, triggering the company’s purchase obligation. The company used the $3 million in life insurance proceeds it received as a result of Michael’s death to buy the shares. As executor of Michael’s estate, Thomas was required to file a federal estate tax return detailing the value of Michael’s assets, including his shares in the company. Thomas engaged a third party who determined that Michael’s shares in the company were worth $3 million; however, the third party excluded the life insurance proceeds when determining the fair market value of the company. Thomas reported the $3 million value on the estate tax return, relying on the Eleventh Circuit’s decision in Estate of Blount, which held that insurance proceeds should not be included in the value of a corporation when they are “offset by an obligation to pay those proceeds to the estate in a stock buyout,” 428 F.3d 1338, 1345.  

The IRS disagreed with Thomas’s reasoning. During its audit of Michael’s estate, the IRS contended that the total valuation of the company should include the life insurance proceeds—thereby making the total value of the company $6.86 million, rather than $3.86 million, when Michael died. Accordingly, the IRS said that Michael’s estate should have paid higher taxes based on the higher valuation of Michael’s stock. The estate paid the taxes and then sued the IRS for a refund. 

Supreme Court: Life Insurance Counts in Estate Tax Valuation

The case made it all the way to the Supreme Court. The dispute focused on the inclusion of the life insurance proceeds as part of the company’s total fair market value for purposes of the estate tax. The Supreme Court sided with the IRS in a unanimous decision, holding that life insurance proceeds that will be used to redeem a decedent’s shares must be counted when calculating the value of those shares for estate tax purposes. The court emphasized that the point of the estate tax is to assess the value of Michael’s shares at the time he died—even if the value would be drastically different a day later, once the life insurance proceeds were paid out.

What It Means for Your Business

A better understanding of the consequences of their buy-sell agreement may have prevented years of litigation for the Connelly family. There were alternate options available. The brothers could have purchased life insurance policies on each other, rather than having the company take out the life insurance. This structure, known as a cross-purchase agreement, would have placed the life insurance proceeds outside the company’s assets, potentially reducing the estate tax burden. (It is important to note that a cross-purchase agreement may have had different tax consequences for the brothers personally, but would have avoided a situation where the company experienced a stark increase in valuation.)

Connelly affects any company—including corporations, LLCs, and partnerships—with a buy-sell agreement funded by life insurance. Companies utilizing buy-sell agreements funded by life insurance should promptly review these agreements to ensure the best possible arrangement is in place to accomplish their owners’ goals and minimize tax liability.

We Can Help

Each estate plan is unique to the individual’s circumstances and wishes. If you own shares in a closely held company, it is imperative that you fully understand the tax implications of both your business succession plan and estate plan. Maslon’s experienced Estate Planning and Corporate groups can work together to help you navigate the complexities of estate planning for closely held businesses to ensure your wishes are met and tax liabilities are minimized.

Named for the late Eugene P. Daly Jr., the award acknowledges those who have gone above and beyond in devoting time, energy, and talent to the section and the estate planning and probate practice in general. The award was presented June 10 by the MSBA's Probate, Trusts and Estates Section.

"I am so very honored to receive this award," Mike said. "It is a privilege to be associated with, and participate in, an organization such as the Probate and Trust Section that is continually striving to find ways to help us improve ourselves as attorneys and practitioners, and to become good community servants. The Section helps us to better our profession as a whole."

Mike's legal practice focuses on high-end estate and tax planning, estate and trust administration, charitable planning, and business succession planning. He is a fellow of The American College of Trust and Estate Counsel and is ranked Band 1 in Minnesota, the highest ranking, for Private Wealth Law in the 2018-2023 editions of the Chambers High Net Worth (HNW) guide.

Mike has served on the Probate, Trusts and Estates Section council for 12 years, including as chair in 2022. He has also been a member of the Legislative Committee since 2008, and served on the special subcommittee that wrote the Minnesota Trust Code, which was enacted in 2015. That year, Mike helped shepherd the bill through the legislature, testifying before several house and senate committees.

In addition, Mike is a frequent speaker at continuing legal education seminars and has served as an adjunct professor at both Hamline and Mitchell Hamline School of Law in St. Paul and the University of Minnesota Law School in Minneapolis.

The Gene Daly Award is not given every year. Previous winners have included Maslon Partner Susan Link, who received it in 2012.

June 10:

• Maslon Board Member and Estate Planning Partner Susan Link moderates the "2024 Probate Panel: Reviewing and Resolving the Latest Issues in Probate Administration," with Paralegal Tina M. Johnson serving on the panel.
• Maslon Board Member and Partner Julian Zebot, chair of Maslon's Trust & Estate Litigation Group, co-presents a session titled, "What to Do with a Bad Personal Representative or Trustee: Assessing the Tools in Your Legal Toolbox."

June 11:

• Trust & Estate Group Chair Michael Sampson moderates "2024 Large Estates Panel: Planning in Uncertain Economic Times."

For more information or to register, go to Minnesota CLE: 2024 Probate and Trust Law Section Conference.

Mike focuses on high-end estate and tax planning, estate and trust administration, charitable planning, and business succession planning. He helps his clients focus on what it is they want to accomplish with their wealth. After assisting his clients in identifying their specific wealth planning goals, he works with them and their other professional advisors to develop and implement wealth transfer strategies that are consistent not only with their goals, but also with their cash flow needs and tolerance for risk.

Susan, a member of the firm's board of directors, practices in the areas of estate planning, probate, and trust administration. She works closely with families to plan the disposition of their assets, both during lifetime and at death, and to accomplish the optimal estate and gift tax planning for clients through wills, trusts, and other instruments. Susan routinely drafts estate plans that include estate tax and generation-skipping tax planning, in addition to drafting and implementing irrevocable trusts, charitable trusts, qualified personal residence trusts, minors' trusts, antenuptial agreements, and postnuptial agreements. She is regularly involved in the analysis and issues of lifetime gifting programs, estate tax planning, and generation-skipping issues.

Julian, a board member and chair of Maslon's Trust & Estate Litigation Group, focuses his legal practice on probate, fiduciary, and trust litigation as well as business and commercial litigation. His probate, fiduciary, and trust litigation practice has involved many different types of contested estate, trust, probate, and elder law matters, including will/trust contests (including claims of undue influence and diminished capacity), construction/interpretation disputes, accounting actions, breach of fiduciary duty claims, fiduciary removal actions, trust instruction proceedings, financial elder abuse claims, and creditor claims against estates. He has also developed a niche practice representing and counseling parties involved in complicated multijurisdictional trust litigation, often involving parallel lawsuits in different states, and has familiarity with associated trust situs, venue, and jurisdictional issues.

Tina is a paralegal with more than two decades of experience managing probate and trust administrations, maintaining trust account ledgers and annual trust accountings, and preparing fiduciary income tax, gift tax, and estate tax returns. She also supports attorneys with clients' long term care planning needs and annual accountings for guardianships, conservatorships, and special/supplemental needs trusts.

Nate and Yemaya will present "Probate Property vs. Non-Probate Assets." Nate will team up with Carly for "Probate Disputes and Litigation."

For more information or to register, go to NBI: Minnesota Probate Process from Start to Finish.

Nate, a litigation attorney, helps fiduciaries and individuals navigate often complex probate and estate litigation matters. He also works with a broad spectrum of organizations in business, commercial, and municipal litigation. Nate is dedicated to helping clients through all stages of the process, working closely with them to achieve their goals.

Carly, also a member of the Litigation Group, assists clients across a broad range of general commercial disputes, with a particular emphasis on trust and estate litigation, including guardianships/conservatorships, contested estates, probate, and elder law matters. She also advises clients on contract matters and real estate disputes.

Yemaya is an attorney in Maslon's Estate Planning Group who works with clients to help them achieve their wealth management and legacy goals. She understands the importance of listening carefully to clients’ concerns regarding their financial future, business succession, and family needs.

The event takes place May 8-11, 2024, in Washington, D.C. For more information, go to: 36th Annual ABA RPTE National CLE Conference.

Julian focuses his legal practice on probate, fiduciary, and trust litigation as well as business and commercial litigation. He has counseled and represented individual and business clients in both federal and state courts as well as arbitration proceedings, and he has handled matters for clients at all stages of the litigation process, including mediation, trials, and appeals.

Julian also serves as vice chair of the American Bar Association Real Property, Trust and Estate Law Section Litigation, Ethics and Malpractice Group; and as immediate past president of the National Academy of Elder Law Attorneys–Minnesota Chapter. He was named a fellow in American College of Trust and Estate Counsel in 2020 and serves on several committees for the organization. In addition, Julian frequently writes and speaks on topics relating to probate, fiduciary, and trust litigation, fiduciary risk management, and professional ethics.

Mike, chair of Maslon's Estate Planning Group, will present a session May 6 titled "Planning the Exit: Succession in the Family-Held Business." Also on May 6, Katie, a Corporate & Securities Group partner, teams up with a co-presenter for "Using Earnouts and Rollover Equity to Get the M&A Deal Done."

For more information or to register, go to Minnesota CLE: 2024 Business Law Institute.

Mike focuses on high-end estate and tax planning, estate and trust administration, charitable planning, and business succession planning. He helps his clients focus on what it is they want to accomplish with their wealth. After assisting his clients in identifying their specific wealth planning goals, he works with them and their other professional advisors to develop and implement wealth transfer strategies that are consistent not only with their goals, but also with their cash flow needs and tolerance for risk.

Katie manages and negotiates complex mergers & acquisitions, corporate reorganizations, buy-sell agreements, and business succession agreements. Her expertise also includes negotiating, drafting, and revising a variety of commercial contracts, with particular focus on technology-related agreements.

We published a legal alert on Feb. 28, 2023, discussing Swanson v. Wolf, 986 N.W.2d 217 (Minn. App. 2023). To summarize the issue, the Minnesota Trust Code provides for two types of jurisdiction in trust proceedings: 1) in rem jurisdiction, which refers to the court's authority over the trust's assets, and 2) in personam jurisdiction, which refers to the court's authority over a person interested in the trust.

As provided for in Minn. Stat. § 501C.0203, either form of jurisdiction can be invoked by the specific manner in which notice of an initial petition is provided. An in rem petition is served by publishing in a paper of record, putting the world on notice of the proceeding. An in personam petition is served by personally serving the people interested in the trust. A separate statute, Minn. Stat. § 501C.0202, enumerates the courts' powers in trust proceedings. These powers include the ability to remove a trustee. In Swanson, the Court of Appeals determined that because the ability to remove a trustee was a power "binding on individuals," then the court must have in personam jurisdiction over the trustee to exercise that power.

As we noted last year, Swanson called into question which jurisdiction was necessary for the other items of judicial relief under section 501C.0202 of the Minnesota Trust Code. For example, if a court needed in personam jurisdiction to remove a trustee, does a court need in personam jurisdiction to appoint a new trustee? If a trustee sold a trust's real property, which jurisdiction is necessary for the court to approve that action? The asset would be part of the res of the trust but the court would be asked to confirm an individual's action regarding that asset. Is that in rem? Is that in personam?

By amending the Minnesota Trust Code, lawmakers have answered those questions. Specifically, section 501C.0202 now makes clear that the enumerated powers of a court may be exercised "whether filed by petition under the district court's in rem or in personam jurisdiction …." The legislation also clarifies that an order issued by a court with in rem jurisdiction is binding "upon the trust estate and all interested persons …."

In other words, lawmakers have clarified that a court's powers in a trust proceeding are not limited by whether the court operates under in rem or in personam jurisdiction. With this clarification, the only consideration between in rem or in personam jurisdiction is how the filing party wishes to serve its petition and who will be bound by the court's order.

We Can Help

Maslon's Trust & Estate Litigation and Estate Planning attorneys welcome your questions about trusts, trustees, and legal precedent in this often complex area of law.

For more information or to register, go to Minnesota CLE: Navigating the Tax Maze with Drafting Wills and Trust Agreements Deskbook Forms.

Mike focuses on high-end estate and tax planning, estate and trust administration, charitable planning, and business succession planning. He helps his clients focus on what it is they really want to accomplish with their wealth. After assisting his clients in identifying their specific wealth planning goals, he works with them and their other professional advisors to develop and implement wealth transfer strategies that are consistent not only with their goals, but also with their cash flow needs and tolerance for risk.

As discussed in our Court of Appeals decision legal alert, the trust was established by Otto Bremer, who, during his life, also created a holding company, Bremer Financial Corporation ("the bank"), for his investments in various community banks. The bank operates as a regional financial entity through its wholly owned subsidiary, Bremer Bank. Otto Bremer's charitable trust was originally funded with shares of the bank. The trust and the bank remained linked throughout the years, such that the trustees of the trust were members of the bank board.

The trust is managed by three trustees, who have authorization and discretion to determine the methods and processes for carrying out the trust’s charitable purpose. In 2019, the three trustees were Brian Lipschultz and two other individuals.

Lipschultz, who became a trustee in 2012, admitted to using trust resources for personal uses "probably from the day [he] arrived at the Otto Bremer Trust," the court quoted him as saying. Specifically, Lipschultz admitted to using "staff time, postage, and computer resources" between 2017 and 2019 that amounted to approximately $1,875 (which does not account for any value of potential misuse between 2012 and 2019). He later reimbursed the trust after staff members raised concerns about Lipschultz's use of trust assets, but the trust incurred a self-dealing tax and additional accounting and legal fees due to Lipschultz's actions, which Lipschultz did not reimburse to the trust.

In 2019, the bank board considered whether to sell the bank. The trustees, including Lipschultz, were interested in selling as it would benefit the trust, but the remaining board members of the bank were not interested in selling. Frustrated, Lipschultz orchestrated a plan for a "hostile takeover" of the bank board. The plan was to sell the trust's nonvoting shares to investors, convert those shares to voting shares, and thereby obtain more than 50% of the voting power over the bank between the trustees and the investors.

Lipschultz aggressively pursued this plan and appeared willing to follow through with it regardless of the consequences. Lipschultz texted a consultant that he wanted investors "who live for this kind of thing" and that he was "looking forward to observing the carnage" if the bank tried to withhold investor shares. Lipschultz expected lawsuits comparable to "an aerial bombardment, the likes of which sleepy St. Paul has never seen." When investors did not sue after the bank refused to recognize the sale of stock, Lipschultz was frustrated since he assumed the investors were “aggressive animals that would swoop in and go for the [bank's] jugular without any coordination required.” Further, Lipschultz told associates that he had substantial resources to fund a protracted legal battle—the trust's resources.

Lipschultz also exerted pressure on charitable beneficiaries of the trust to support his plan. Specifically, Lipschultz told the CEO of a nonprofit, which had been a trust beneficiary for years and for whom the trust was the largest donor, that the nonprofit needed to "prove" that it was the trustees' partner if it wanted to obtain future funding. Following Lipschultz's actions, the nonprofit returned the trust's $1.2 million donation and severed ties with the trust.

The district court found that Lipschultz's actions—his admitted "self-dealing, aggressive behavior during the bank sale, and abuse of grant-making powers"—when considered together, amounted to a serious breach of trust justifying his removal. The court also found that Lipschultz had "displayed a crude, vulgar, and otherwise offensive brashness that has no place in the charitable world." The Court of Appeals affirmed.

The Minnesota Supreme Court affirmed the lower courts rulings that a series of smaller breaches may constitute a "serious breach of trust." The Minnesota Supreme Court stated that the official comments to the Uniform Trust Code apply to Section 501C.0706(b), which includes this standard.

While the holding of Bremer Trust is closely tied to its facts, the case still teaches trustees an important lesson—minor breaches of trustee's duties can be grounds for removal if these breaches become pervasive and commonplace. Trustees should be professional and civil in their interactions with others, even when, and perhaps especially when, there is potential conflict related to trust administration.

Feb. 6: Susan and Matt present "Opening an Estate, Inventory, and Disclaimers," an in-depth look at the important considerations of opening an estate, including choosing formal vs informal proceedings, the role of the personal representative, inventory, and more.

Feb. 16: Julian co-presents "Estate Litigation and Appeals," which covers disputes concerning the construction or validity of a testamentary instrument, disputes involving surviving spouse’s right to an elective share, resolving contested matters through settlement, litigation by and against a personal representative, and alternative dispute resolution in contested matters.

For information or to register, go to Minnesota CLE: 2024 Probate A to Z.

Susan, a member of the firm's board of directors, practices in the areas of estate planning, probate, and trust administration. She works closely with families to plan the disposition of their assets, both during lifetime and at death, and to accomplish the optimal estate and gift tax planning for clients through wills, trusts, and other instruments. Susan routinely drafts estate plans that include estate tax and generation-skipping tax planning, in addition to drafting and implementing irrevocable trusts, charitable trusts, qualified personal residence trusts, minors' trusts, antenuptial agreements, and postnuptial agreements. She is regularly involved in the analysis and issues of lifetime gifting programs, estate tax planning, and generation-skipping issues.

Matt provides dedicated counsel in estate planning, trust and estate administration, guardianship and conservatorship law, and estate and trust litigation. His experience with complex estate planning law and his social work background make him uniquely equipped to navigate sensitive family dynamics while preserving his clients' legacy. He enjoys getting to know his clients and learning what goals and values are most important to them. Matt frequently writes and presents on estate planning issues. His areas of expertise include mitigating risks in estate planning and the ethical issues attorneys face when working with clients with mental illness or diminished capacity.

Julian, chair of Maslon's Trust & Estate Litigation Group and member of the board of directors, focuses his legal practice on probate, fiduciary, and trust litigation as well as business and commercial litigation. His probate, fiduciary, and trust litigation practice has involved many different types of contested estate, trust, probate, and elder law matters, including will/trust contests (including claims of undue influence and diminished capacity), construction/interpretation disputes, accounting actions, breach of fiduciary duty claims, fiduciary removal actions, trust instruction proceedings, financial elder abuse claims, and creditor claims against estates. He has also developed a niche practice representing and counseling parties involved in complicated multijurisdictional trust litigation, often involving parallel lawsuits in different states, and has familiarity with associated trust situs, venue, and jurisdictional issues.

Maslon Partner Michael Sampson, chair of the Estate Planning Group, will present two sessions on Nov. 14 as part of Minnesota CLE's Hot Topics in Advanced Estate Administration seminar. In "Post-Mortem Planning," Mike will discuss the most important decisions to be made after the decedent's death. His second session focuses on estate and income tax issues. Attorneys Evan Nelson and Carly Johnson present "Litigation and Post-Trial Practice," in which they discuss key issues related to estate litigation and appellate issues.

For more information or to register, go to Minnesota CLE: Hot Topics in Advanced Estate Administration.

Mike focuses on high-end estate and tax planning, estate and trust administration, charitable planning, and business succession planning. He helps his clients focus on what it is they really want to accomplish with their wealth. After assisting his clients in identifying their specific wealth planning goals, he works with them and their other professional advisors to develop and implement wealth transfer strategies that are consistent not only with their goals, but also with their cash flow needs and tolerance for risk.

Evan describes himself as a “death and dirt” lawyer. He represents clients in trusts and estate disputes, which often come to a head after a family member has died, and in real estate litigation, where clients dispute who owns and controls access to "dirt." Because the two often intersect, as people will gift land (or attempt to do so) via their wills or trusts, Evan’s distinct capabilities prove particularly beneficial.

Carly is a litigation attorney focusing on will/trust contests, guardianship and conservatorship proceedings, as well as construction, real estate, and contract disputes. She represents both institutions and individuals serving as trustees, personal representatives, or attorneys-in-fact for clients and loved ones.

The ACTEC Fall Conference takes place from Oct. 26-29.

Julian focuses his legal practice on probate, fiduciary, and trust litigation as well as business and commercial litigation. He has counseled and represented individual and business clients in both federal and state courts as well as arbitration proceedings, and he has handled matters for clients at all stages of the litigation process, including mediation, trials, and appeals.

Julian was named a fellow in ACTEC in 2020 and serves on several committees for the organization. He also serves as vice chair of the American Bar Association Real Property, Trust and Estate Law Section Litigation, Ethics and Malpractice Group; and as president of the National Academy of Elder Law Attorneys–Minnesota Chapter. In addition, Julian frequently writes and speaks on topics relating to probate, fiduciary, and trust litigation, fiduciary risk management, and professional ethics.

The event is free and open to the public. For more information or to register, go to Mental Health Education Conference.

Rachel is a partner in the Estate Planning Group specializing in comprehensive estate planning, probate and trust administration, guardianships and conservatorships, and business and farm succession planning. Her work across all is enhanced by extensive prior experience in business formation, real estate, and agriculture law.

Carly is a litigation attorney focusing on will/trust contests, guardianship and conservatorship proceedings, as well as construction, real estate, and contract disputes. She represents both institutions and individuals serving as trustees, personal representatives, or attorneys-in-fact for clients and loved ones.

Yemaya is an estate planning attorney who works with clients to help them achieve their wealth management and legacy goals. Her work ranges from advising clients about estate planning strategies they can implement during their lives to guiding clients through the probate and trust administration processes after the loss of a loved one.

For more information or to register, go to: Minnesota CLE: The Estate Planning, Probate & Trust Law 50.

Evan describes himself as a "death and dirt" lawyer. He represents clients in trusts and estate disputes, which often come to a head after a family member has died, and in real estate litigation, where clients dispute who owns and controls access to "dirt." Because the two often intersect, as people will gift land (or attempt to do so) via their wills or trusts, Evan's capabilities prove particularly beneficial. Evan also maintains an active pro bono practice, with significant experience in environmental, administrative, and Government Data Practices Act litigation.

Carly assists clients across a broad range of general commercial litigation matters, including trust and estate, construction, real estate, contract, and employment disputes. Her practice is informed by her active civic engagement and service, which includes her election to the Oak Park Heights City Council shortly after earning her undergraduate degree in biology from St. Thomas, and her re-election in 2022.

For more information or to register, go to Minnesota CLE: Understanding Estate and Gift Taxation.

Mike focuses on high-end estate and tax planning, estate and trust administration, charitable planning, and business succession planning. He helps his clients focus on what it is they really want to accomplish with their wealth. After assisting his clients in identifying their specific wealth planning goals, he works with them and their other professional advisors to develop and implement wealth transfer strategies that are consistent not only with their goals, but also with their cash flow needs and tolerance for risk.

Only 11 other Minnesota private wealth law attorneys achieved the Band 1 ranking.

Susan serves on the firm's board of directors. Michael leads Maslon's Estate Planning Group.

The Chambers guide ranks the top lawyers and law firms for international private wealth law based on extensive interviews and research to assess technical legal ability, client service, depth of team, commercial vision and business understanding, diligence, value, and other qualities most valued by clients.

To view Maslon's full Chambers High Net Worth rankings, go to: 2023 Chambers High Net Worth.

About Chambers and Partners
Since 1969, London-based Chambers and Partners has published world-famous guides to the legal profession. A team of over 200 researchers conducts continuous, in-depth telephone research for all guides.

At First, a Mystery

Originally, Aretha Franklin’s family thought she had no will when she died in 2018, meaning her property would have been divided equally among her four sons. Months later, they found two handwritten wills: one inside a locked cabinet dated 2010 and the four-page couch-cushion will that was drafted in 2014. Neither was prepared with the assistance of an attorney nor included the signatures of attesting witnesses, although the 2010 will was notarized. A jury decided on July 11 that the later, couch-cushion will was in fact the valid document to control distribution of Aretha Franklin's $80 million dollar estate.

The 2014 will that the jury decided would control the estate gave Franklin’s $1.1 million home to her son, Kecalf, and his grandchildren, and did not include a provision from the earlier will requiring Kecalf and another son, Edward, to take business classes or receive a degree to inherit from the estate.[1]

Minnesota Law on Handwritten Wills

Many states around the country, including Minnesota and Franklin’s home state of Michigan, recognize handwritten wills that comply with state requirements.[2] Under Minnesota law, a will must be signed by the will-maker and also signed by two people who witnessed the will-maker’s signing.[3] Other states, such as Michigan, do not always require witnesses.

Even if Minnesota courts do not normally recognize wills that were not witnessed, they will do so if the will is valid in a state that permitted them at the time the will was drafted.[4] This situation might apply to someone who was staying part of the year in their Minnesota cabin or living in Minnesota at the time of their death but drafted a valid will elsewhere.

Handwritten or typed, however, both of Franklin’s wills would likely have been considered invalid in Minnesota, as neither were witnessed. As a result, distribution of the singer's estate would be entirely controlled by Minnesota inheritance laws, and each of her sons would inherit equally.

The Battle of the Wills

If both wills had been properly executed, how would a Minnesota court have determined whether a later will merely changes an earlier will or, instead, completely revokes and replaces it?

In Minnesota, absent an explicit statement, a new will is presumed to fully replace and revoke a previous will if it distributes all of the will-maker’s assets.[5] On the other hand, a later will is presumed to only supplement the earlier will if it does not include (and distribute) all of the will-maker’s property.[6]

Importantly, however, these presumptions may be overcome by clear and convincing evidence that the will-maker intended something else.[7] Therefore, in Minnesota, in the absence of clear and convincing evidence showing otherwise, Aretha Franklin’s couch-cushion will would completely replace the 2010 will, because it disposed of the entirety of her estate.

What You Can Do

The legal dispute over Aretha Franklin’s wills provides valuable lessons. Minnesota law requires that wills be drafted with certain formalities—including two witnesses, a signature of the will-maker, and the date. If you draft a new will intending to replace an old will, that intention should be stated. It's wise to be as clear as possible about all of your intentions in the document.

Taxes are another important consideration, especially with sizeable estates like Aretha Franklin’s. Had she consulted an attorney, her estate might have benefited from tax planning. Parents of children who are eligible for government benefits should also obtain advice on how to supplement their child’s benefits while not affecting the child's eligibility.

Finally, don't put your will under a couch cushion. It's best to keep it in a fireproof, waterproof safe in your home, and make sure your loved ones know where and how to access the document.

We Can Help

Don’t leave your estate planning to chance. Maslon’s estate planning attorneys use their extensive experience and expertise to help clients ensure that all of the legal formalities of a will are met.

If your family is in a dispute over the validity of a family member’s estate planning, our trusted team of trust & estate litigation attorneys can walk you through the legal process.

Please contact us for assistance.

Summer associate Dany Berbari contributed to this article.

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[1] https://www.washingtonpost.com/lifestyle/2023/07/11/aretha-franklin-will-dispute/; https://apnews.com/article/aretha-franklin-will-dispute-d7aba286b05ea0d0e6318ce6abc887d5

[2] Minn. Stat. § 524.2-502

[3] Minn. Stat. § 524.2-502

[4] Minn. Stat. § 524.2-506

[5] Minn. Stat. § 524.2-507 (c)

[6] Minn. Stat. § 524.2-507 (d)

[7] Minn. Stat. § 524.2-507 (c)-(d)

The ruling reversed a Minnesota Court of Appeals decision that had been troubling Minnesota estate planning attorneys since it was issued in May 2022. In the Matter of the Estate of Mathew Joseph Tomczik, the Court of Appeals determined that if a person names their former spouse in a will, an alternate residuary gift in that will to "my spouse's heirs" remains in place in the event of a divorce.[1]

In its recent ruling, the Minnesota Supreme Court determined that the Court of Appeals' decision could lead to outcomes that many divorced couples would not intend. And while the new ruling provides a needed clarification in the law, it also serves as a reminder that people should consider updating their estate plans, especially after key life events such as divorce.

The Challenges Posed by In re Tomczik

In this Minnesota case, Mathew Tomczik and his then-wife, Sara Tomczik, drafted wills that were mirror images of each other. In Mathew's will, he named "Sara Tomczik" as his wife. Mathew's will included an alternate residuary provision giving half to his heirs and half to "my wife's." Seven years after these wills were drafted, Mathew and Sara divorced. Mathew died two years after the divorce without ever revising his will. Neither Mathew nor Sara had children.

Under the Minnesota Uniform Probate Code, divorce revokes a gift made to a former spouse in a will that was made before the divorce. Therefore, Sara could get nothing. And because neither Mathew nor Sara had any children, the alternate residuary provision—half to his heirs and half to his wife's—kicked in.

Upon Mathew's death, his brother, who was named executor of the estate, assumed that the residuary provision's gift of half to "my wife's heirs-at-law" was no longer valid because Mathew did not have a spouse when he died. However, when the brother petitioned a court to probate Mathew's estate, claiming Mathew's siblings as the only beneficiaries of Mathew's will, an objection came from an unlikely source—Mathew's former parents-in-law, Calvin and Patricia Headley.

While the Headleys agreed that Mathew's ex-wife, Sara, could not receive a gift under the will, they still argued that they were beneficiaries under the alternate residuary provision because they were Sara's heirs-at-law and "my wife" was defined as "Sara Tomczik." They argued that there was no provision in the law that addressed divorce's effect on gifts to a former spouse's family, nor any reason to assume that Mathew intended for the divorce to invalidate the gift to Sara's heirs.

The Minnesota Supreme Court's Decision

The Supreme Court held that divorce may invalidate a gift to a former spouse's family—depending on the language in the will. First, the court affirmed that a gift to someone described by their familial relationship and also named is not made invalid if there is no longer a familial relationship due to a divorce. For instance, the court recognized that, in a previous Minnesota case, a gift to "my stepdaughter Dawn" was not rendered invalid by divorce; even if Dawn was no longer a stepdaughter as a result of the divorce, Dawn was still identified in the will.

The court further noted that "my wife's heirs-at-law," were not specifically named in the will. The court reasoned that, since Mathew had no wife at the time of his death, the class of people who would be "my wife's heirs-at-law" did not exist.

Further, the Supreme Court held that it is a reasonable inference—a reasonable assumption—that any person who divorces another would no longer want to include a gift to their former spouse's heirs, because any familial relationship between that person and their ex-spouse's heirs was dissolved by the divorce. Therefore, the court inferred that Mathew intended for the gift of his alternative residuary provision to be for the benefit of people defined by their familial relationship to him, not his ex-wife.

We Can Help

Although In re Tomczik clarified how estate plans should be interpreted following a divorce in a way that likely aligns with most people's wishes, it is always best to check and periodically update your estate plans. This is especially important after major life events such as divorce, the birth of a child, a child reaching the age of 18, or a major shift in your financial situation.

Maslon's estate planning attorneys follow developments in the law and use their extensive knowledge and expertise to navigate complex estate planning issues for their clients. Our attorneys can offer guidance on how to best protect your assets and ensure your wishes for your estate are properly carried out upon your death. Please contact us for assistance.
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          [1] It is common for estate planning attorneys to draft "alternate residuary provisions" for married couples that take effect in the event that all of the beneficiaries of the will die before the testator—the person making the will—and cannot receive their gifts. These provisions generally state that the assets of a married testator should be split equally between their "heirs-at-law" and their spouse's heirs-at-law.
              The term "heirs-at-law" or simply “heirs” refers to anyone who has a legal right under state law to inherit a person's assets when that person dies without a will, typically children or grandchildren, but potentially parents, siblings, etc. The idea of an alternate residuary provision is to keep an estate's gifts in a person's family when circumstances change dramatically after the will is drafted.

June 12:

Maslon Board Member and Estate Planning Partner Susan Link moderates the "2023 Probate Panel: Reviewing and Resolving the Latest Issues in Probate Administration."

Maslon Board Member and Partner Julian Zebot, chair of Maslon's Trust & Estate Litigation Group, and litigation attorney Evan Nelson present a session titled, "Do I Have to Make a Distribution to the Beneficiary Who’s Suing Me? Trust and Estate Administration During Litigation."

June 13:

Partner Rachel Dahl and attorney Yemaya Hanna co-present "Your First Probate: How to Manage Important Timelines and Deadlines."

Trust & Estate Group Chair Michael Sampson moderates "2023 Large Estates Panel: Planning in Uncertain Economic Times."

Partner Bradley Pederson co-presents "The New Corporate Transparency Act: Disclosure Obligations for Your Clients and You."

For more information or to register, go to Minnesota CLE: 2023 Probate and Trust Law Section Conference.

Julian will join other panelists for a session titled “Arbitration of Trust and Estate Disputes: Should It Be in Your Toolbox?” The panel will address the basics of arbitration, the pros and cons of arbitrating trust and estate disputes, and what can and cannot be arbitrated. It will also offer real world experiences of those who have drafted and arbitrated trust and estate disputes.

For more information, go to American Bar Association: 35th Annual RPTE National CLE Conference.

Julian focuses his legal practice on probate, fiduciary, and trust litigation as well as business and commercial litigation. He has counseled and represented individual and business clients in both federal and state courts as well as arbitration proceedings, and he has handled matters for clients at all stages of the litigation process, including mediation, trials, and appeals.

Julian serves as co-chair of the Ethics and Malpractice Committee of the American Bar Association's Real Property, Trust and Estate Law Section. He is also a fellow in the American College of Trust and Estate Counsel (ACTEC), and he frequently writes and speaks on topics relating to probate, fiduciary, and trust litigation, fiduciary risk management, and professional ethics.

For information or to register, go to Minnesota CLE: 2023 ABCs of Probate Practice in Minnesota.

Susan practices in the areas of estate planning, probate, and trust administration. She works closely with families to plan the disposition of their assets, both during lifetime and at death, and to accomplish the optimal estate and gift tax planning for clients through wills, trusts, and other instruments. Susan routinely drafts estate plans that include estate tax and generation-skipping tax planning, in addition to drafting and implementing irrevocable trusts, charitable trusts, qualified personal residence trusts, minors' trusts, antenuptial agreements, and postnuptial agreements. She is regularly involved in the analysis and issues of lifetime gifting programs, estate tax planning, and generation-skipping issues.

Rachel is an Estate Planning Group partner specializing in comprehensive estate planning, probate and trust administration, guardianships and conservatorships, and business and farm succession planning. Informed by her childhood in a rural environment, Rachel works with individuals, farm families, and business owners to design estate and succession plans that meet their individual needs and goals, while keeping the farm operation, business, and family structure in mind.

Susan, Rachel, and Morgan co-author Chapter 2: Opening an Estate, Inventory, and Disclaimers. Michael co-authors Chapter 5: Taxation Issues. And Julian co-authors Chapter 9: Professional Responsibility and Chapter 11: Review of Recommended Orders, Post-Trial Motions, and Appeals in Estate Litigation.

The Deskbook comes with a companion eFormbook that includes more than 260 downloadable and editable probate forms.

For more information or to order, go to: Minnesota CLE – Minnesota Estate Administration Deskbook, 6th Edition.

Susan, a Maslon board member, has edited the Estate Administration Deskbook for two decades. She practices in the areas of estate planning, probate, and trust administration, working closely with families to plan the disposition of their assets, both during lifetime and at death, and to accomplish the optimal estate and gift tax planning for clients through wills, trusts, and other instruments. Susan routinely drafts estate plans that include estate tax and generation-skipping tax planning, in addition to drafting and implementing irrevocable trusts, charitable trusts, qualified personal residence trusts, minors' trusts, antenuptial agreements, and postnuptial agreements. She is recognized as a Notable Practitioner in Minnesota for Private Wealth Law in Chambers High Net Worth (HNW) guide (2018-2022) and is a member of The American College of Trust and Estate Counsel.

Michael, chair of Maslon’s Estate Planning Group, focuses on high-end estate and tax planning, estate and trust administration, charitable planning, and business succession planning. He helps his clients focus on what it is they really want to accomplish with their wealth. After assisting his clients in identifying their specific wealth planning goals, Michael works with them and their other professional advisors to develop and implement wealth transfer strategies that are consistent not only with their goals, but also with their cash flow needs and tolerance for risk. Michael is a fellow of The American College of Trust and Estate Counsel and has also been recognized as a Notable Practitioner in Minnesota for Private Wealth Law in the 2018-2022 editions of the Chambers High Net Worth (HNW) guide.

Julian, a Maslon board member, chair of Maslon’s Trust & Estate Litigation Practice Group, and a fellow in The American College of Trust and Estate Counsel, advises clients on probate, fiduciary, and trust litigation as well as business and commercial litigation. His practice has involved many different types of contested estate, trust, probate, and elder law matters, including will/trust contests (including claims of undue influence and diminished capacity), construction/interpretation disputes, accounting actions, breach of fiduciary duty claims, fiduciary removal actions, trust instruction proceedings, financial elder abuse claims, and creditor claims against estates.

Rachel specializes in comprehensive estate planning, probate and trust administration, guardianships and conservatorships, and business and farm succession planning. Informed by her childhood in a rural environment, Rachel works with individuals, farm families, and business owners to design estate and succession plans that meet their individual needs and goals, while keeping the farm operation, business, and family structure in mind.

Susan also serves on the boards of the Basilica of St. Mary, Cars Against Crime, the Stillman Family Foundation, and the Joseph Durda Foundation.

For information on Minnesota Women Lawyers and how to join, go to: Minnesota Women Lawyers Membership.

Susan practices in the areas of estate planning, probate, and trust administration. She works closely with families to plan the disposition of their assets, both during lifetime and at death, and to accomplish the optimal estate and gift tax planning for clients through wills, trusts, and other instruments. Susan routinely drafts estate plans that include estate tax and generation-skipping tax planning, in addition to drafting and implementing irrevocable trusts, charitable trusts, qualified personal residence trusts, minors' trusts, antenuptial agreements, and postnuptial agreements. She is regularly involved in the analysis and issues of lifetime gifting programs, estate tax planning, and generation-skipping issues.

These cases illustrate how courts consider petitions to remove trustees and provide important insights for trustees and beneficiaries of Minnesota trusts.

The Minnesota Trust Code’s Provision on Removing Trustees

By statute, a court can remove a trustee if:
1) the trustee has “committed a serious breach of trust,”
2) a lack of cooperation between co-trustees “substantially impairs the administration of the trust,”
3) the trustee is unfit, unwilling, or persistently fails to administer the trust effectively, or
4) due to a “substantial change in circumstances” or on the request of all beneficiaries, removing the trustee is in the interests of all the beneficiaries and is “not inconsistent with a material purpose of the trust” and a suitable successor trustee is available.

Two Recent Court of Appeals Decisions Discussing Trustee Removal

1. Swanson v. Wolf

In Swanson v. Wolf, the Minnesota Court of Appeals drew a line in the sand between a district court’s in rem and in personam jurisdiction—a distinction that, before Swanson, generally had no impact on the remedies sought by petitioners. (In fact, it was a distinction that did not exist until the Uniform Trust Code was adopted in Minnesota in 2015.) With regard to a trust, in rem jurisdiction refers to the court’s authority over the trust itself, while in personam jurisdiction refers to the court’s authority over a trustee. Following the Swanson decision, the Court of Appeals left petitioners who seek judicial relief under the Minnesota Trust Code—including, but potentially not limited to, removal of a trustee—with a new, uncharted dilemma: to plead or not to plead in personam jurisdiction? That is the question.

In Swanson, Marcia Swanson petitioned the district court to, among other things, remove her sister, Denise Wolf, as trustee of a trust established by their father. Wolf objected to Swanson’s petition and moved to dismiss it, arguing that the district court lacked jurisdiction to remove her. Wolf’s position was, essentially, that despite the court’s in rem jurisdiction over the trust, the district court lacked in personam jurisdiction over her. The Court of Appeals, in what may be considered a surprising decision, agreed.

As the Court of Appeals explained: “In a trust matter, the district court may exercise in rem jurisdiction, in personam jurisdiction, or both, depending on which form of jurisdiction the petitioner invokes.” The court defined the two different jurisdictions as follows: “While a judgment in rem affects the interests of all persons in designated property, a judgment in personam imposes a personal liability or obligation on one person in favor of another.” Petitions that fail to expressly invoke in personam jurisdiction default to in rem jurisdiction.

From these principals, the Court of Appeals then determined that a district court must have in personam jurisdiction to remove a trustee: “Because in rem jurisdiction is over the trust estate and in personam jurisdiction is over the person, we discern that to issue an order granting a petition to remove a trustee, the district court must exercise in personam jurisdiction. … To hold otherwise,” the court explained, “would collapse the distinction between the two types of proceedings.”

The Minnesota Court of Appeals’ decision in Swanson will have a profound impact on the way petitions to remove trustees must be pled. Trust and estate litigators in Minnesota can no longer rely on in rem jurisdiction when bringing a petition to remove a trustee. The true effect of the court’s decision in Swanson, however, is yet to be seen. While the court has held that a proceeding for removal of a trustee must be brought in personam, there are 23 matters for judicial relief under section 501C.0202 under the Minnesota Trust Code, including approving payment of a trustee’s fees and requiring a trustee to account. The Swanson decision may raise questions as to which type of jurisdiction is necessary to achieve the other 22 types of relief.

1. Matter of Otto Bremer Trust

In Matter of Otto Bremer Trust, the Court of Appeals affirmed the district court’s removal of one of three trustees of a large charitable trust that held approximately $2 billion in assets. Removing the trustee was proper, the Court of Appeals said, because the cumulative effect of the trustee’s several “improprieties” amounted to a serious breach of trust. Perhaps most significantly, the trustee made several aggressive attempts to implement a “hostile takeover” of a company whose shares were held by the charitable trust. In short, Minnesota trustees are expected to be Minnesota nice.

The facts of the Bremer Trust case are fairly complex. To summarize, the trust was managed by three trustees, who had authorization and discretion to determine the methods and processes for carrying out the trust’s charitable purpose. In 2019, the three trustees were Brian Lipschultz and two other individuals. The trust had been established by Otto Bremer, who, during his life, had also created a holding company, Bremer Financial Corporation (BFC), for his investments in various community banks. His charitable trust was originally funded with shares of the BFC. The trust and the BFC remained linked throughout the years, such that the trustees of the trust were members of the BFC board.

Lipschultz, who became a trustee in 2012, admitted to using trust resources for personal uses. Specifically, Lipschultz admitted to using “staff time, postage, and computer resources” between 2017 and 2019 that amounted to approximately $1,875, which he reimbursed to the trust. Still, this self-dealing led the IRS to impose a self-dealing tax on the trust and caused the trust to incur additional accounting fees (which Lipschultz did not reimburse to the trust).

In 2019, the board of the BFC considered whether to sell BFC. The trustees, including Lipschultz, were interested in selling; the remaining board members of the BFC were not interested in selling. Lipschultz orchestrated a plan for a “hostile takeover” of the BFC board. The plan was to sell the trust’s nonvoting shares to investors, convert those shares to voting shares, and thus obtain more than 50% of the voting power over the BFC between the trustees and the investors. At that point, Lipschultz and the investors would replace the BFC board members. Lipschultz pursued this plan aggressively, texting a consultant hired to investigate the plan that Lipschultz expected lawsuits “the likes of which sleepy St. Paul has never seen” and that he “look[ed] forward to observing the carnage.” Further, Lipschultz told associates that he had substantial resources—namely, the trust assets—to fund a protracted legal battle.

Lipschultz also exerted pressure on charitable beneficiaries of the charitable trust to support his plan. Specifically, Lipschultz told the CEO of a nonprofit, which had been a trust beneficiary for years, that she needed to “prove” that the nonprofit was “the trustees’ partner” if the nonprofit wanted to obtain future funding.”

The court found that these actions constituted a series of breaches of trust—Lipschultz’s admitted “self-dealing. aggressive behavior during the BFC sale, and abuse of grant-making powers”—which, considered together, amounted to a serious breach of trust justifying his removal. The court went on to find that Lipschultz “displayed a crude, vulgar, and otherwise offensive brashness that has no place in the charitable world.”

The Court of Appeals affirmed. The court rejected Lipschultz’s argument that his self-dealing—which amounted to less than $2,000—was de minimis when considering that the trust held approximately $2 billion. The court pointed out that there is no de minimis defense when self-dealing violates the duty of loyalty. The court also concluded that Lipschultz’s hostility and aggressive pursuit of a sale of BFC resulted in “actual vindictive acts of administration”—specifically in his interactions with the nonprofit.

While the holding of Bremer Trust is tied closely to its facts, the case still teaches trustees an important lesson: the law holds trustees to a higher standard of behavior. Trustees cannot abuse their power. Trustees should be professional and civil in their interactions with others—even when, and perhaps even especially when, there is disagreement about the administration of the trust.

We Can Help
Maslon’s Trust & Estate Litigation attorneys welcome your questions about trusts, trustees, and legal precedent in this often complex area of law.

To register, go to: Minnesota CLE, Litigating Probate and Trusts Disputes in 2022 Seminar.

Julian focuses his legal practice on probate, fiduciary, and trust litigation as well as business and commercial litigation. He has counseled and represented individual and business clients in both federal and state courts as well as arbitration proceedings, and he has handled matters for clients at all stages of the litigation process, including mediation, trials, and appeals.

Julian's probate, fiduciary, and trust litigation practice has involved many different types of contested estate, trust, probate, and elder law matters, including will/trust contests (including claims of undue influence and diminished capacity), construction/interpretation disputes, accounting actions, breach of fiduciary duty claims, fiduciary removal actions, trust instruction proceedings, financial elder abuse claims, and creditor claims against estates. Julian is a Fellow in the American College of Trust and Estate Counsel (ACTEC), and when not litigating and resolving disputes, he is a frequent author and speaker on topics relating to probate, fiduciary, and trust litigation, fiduciary risk management, and professional ethics. Among other board and bar committee responsibilities, he is a member of the litigation committee of the Probate and Trust Law Section of the Minnesota State Bar Association and serves as co-chair of the Ethics and Malpractice Committee of the ABA's Real Property Trust and Estate Law Section.

Nate helps fiduciaries and individuals navigate through often complex probate and estate litigation matters. He also works with various organizations in business, commercial, and municipal litigation. He assists his clients at all stages of the litigation process and works closely with them to help them achieve their goals, often drawing on his experiences living and studying internationally to approach his clients' concerns from unique angles.

Nate received his law degree, summa cum laude, from Mitchell Hamline School of Law, where he was a published author with the Cybaris Intellectual Property Law Review, and devoted more than 150 volunteer hours with the Minnesota Justice Foundation.

Among his many points of advisement featured, Michael shares, "Sometimes people take control too far by not including enough flexibility for the beneficiaries. As a result, what seems like a reasonable provision in a trust today might make no sense some years down the road."

To read the full article, go to: Construction Magazine Network, "Protecting Valuable Assets from Outside Threats."

Michael's legal practice focuses on high-end estate and tax planning, estate and trust administration, charitable planning, and business succession planning. Michael helps his clients focus on what it is they really want to accomplish with their wealth. After assisting his clients in identifying their specific wealth planning goals, Michael works with them and their other professional advisors to develop and implement wealth transfer strategies that are consistent not only with their goals, but also with their cash flow needs and tolerance for risk.

It is this practical focus on the real-life impact of wealth transfer planning that distinguishes Michael's approach from that of the typical estate planning attorney. Beyond preparing legal documents, he also serves as his clients' wealth coach, personal CFO, professional pest, and skeptic-for-hire. Michael also provides his clients with access to his deep network of contacts, which often leads to solutions for many of life's little problems, even if they're completely unrelated to what you would normally think of as "estate planning."