Minnesota Resident Trust Questionnaire

Resident Trust Questionnaire
2023 Schedule M2RT, Resident Trust Questionnaire
2023 Schedule M2RT, Resident Trust Questionnaire
Name of Trust

Federal ID Number

*232411*

Minnesota ID Number

Check all boxes that apply to the trust, and provide additional requested information.

1	 One	or	more	of	the	trustees	(or	the	trust’s	other	fiduciaries)	were	residents	(full-year	or	part-year)	of	Minnesota	
at	any	time	during	the	tax	year	  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 1
1a.	Enter	all	names	and	addresses

2	 One	or	more	individuals	or	entities	represented	the	trust	or	the	trustee	in	Minnesota	in	connection	
with	the	activities	that	led	to	the	income	on	which	Minnesota	taxes	(see	instructions)  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 2
2a.	Enter	all	names	and	addresses

3	 One	or	more	of	the	trust’s	tangible	(real	or	personal)	or	intangible	assets	were	located,	
in	whole	or	in	part,	in	Minnesota	at	any	time	during	the	tax	year  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 3
3a.	Describe	the	assets	located	in	Minnesota	and	enter	their	fair	market	value	on	the	applicable	date(s)		

4	 Administration	of	the	trust	took	place	in	Minnesota	at	any	time	during	the	tax	year .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 4
4a.	Describe	the	trust	administrative	functions	that	took	place	in	Minnesota

5	 The	laws	of	Minnesota	were	specifically	made	applicable	to	the	trust  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .5
5a.	The	trust	documents	contain	a	choice	of	law	provision	designating	Minnesota	for	that	purpose .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .5a
5b.	The	trust	was	formed	under,	or	its	operation	is	governed	by,	the	laws	of	Minnesota  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 5b
6	 One	or	more	of	the	trust’s	beneficiaries	were	residents	(full-year	or	part-year)	of	Minnesota	at	any	time	during	the	tax	year .  .  .  .  .  .  .  .6
6a.	Enter	all	names	and	addresses

6b.	The	resident	beneficiaries	have	some	degree	of	possession,	control	or	enjoyment	of	the	trust	property	or	
							a	right	to	receive	that	property  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 6b
7		 One	or	more	of	the	trust’s	settlors	or	grantors	were	residents	(full-year	or	part-year)	of	Minnesota	at	any	time	during	the	tax	year  . 7
7a.	Enter	all	names	and	addresses

7b.	The	resident	settlors	or	grantors	retained	power	to	dispose	of	the	trust	property	which	amounted	to	a	potential	
						source	of	wealth	to	them  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 7b
8	 Minnesota	courts	had	continuing	supervisory	jurisdiction	over	the	trust	at	any	time	during	the	tax	year  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 8
9	 The	trust	was	created	by	a	will	of	a	decedent	who	at	death	resided	in	Minnesota .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 9
9a.	The	testamentary	trust	and	the	will	under	which	it	was	created	were	probated	in	Minnesota .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 9a
10 Lines 1 through 9 do not apply to the trust  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 10

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2023 Schedule M2RT Instructions
Purpose of Schedule M2RT

Use Schedule M2RT to determine if a statutory resident trust under Minnesota Statute (M.S.) 290.01, subd. 7b also satisfies the requirements
of the Due Process Clauses in the U. S. and Minnesota Constitutions. The Minnesota Supreme Court treats these two Due Process Clauses
“identically.” Fielding v. Commissioner of Revenue, 916 N.W.2d 323, 327, n. 3 (Minn. 2018) (“Fielding”). These two clauses will be referred
to together as the “Due Process Clause.”
The U.S. Supreme Court addressed the Due Process Clause requirements for a state’s ability to tax a trust in North Carolina Department of
Revenue v. The Kimberley Rice Kaestner 1992 Family Trust, 588 U.S. __, 139 S.Ct. 2213 (2019)(“Kaestner”). In Kaestner, the U.S. Supreme
Court applied a two-step analysis to decide if a state tax abides by the Due Process Clause. The first test requires a minimum connection
between a state and the person, property or transaction it seeks to tax. The second test requires the income attributed to the State for tax purposes be rationally related to the taxing State. The Minnesota Supreme Court applied the same two-step analysis in Fielding. Schedule M2RT
focuses on the first step in the due process analysis, the “minimum connection” test.
See Revenue Notice #23-01: Income Tax - Statutory Resident Trusts - Application of the Due Process Clause Minimum Connections Test.

Who Must File Schedule M2RT

Complete and file Schedule M2RT if you meet the statutory definition of a resident trust but believe your trust may not have sufficient minimum connections to Minnesota for due process purposes.
If you meet these requirements and must file Schedule M2RT, you must also check both the Statutory Resident and Due Process Nonresident checkboxes on page 1 of Form M2. Complete Form M2 as a nonresident and use Schedule M2NM to determine your non-Minnesota
income (loss) to include on lines 2 and 7 of Form M2.

Types of Trusts

The statutory definition of resident trust applies to “inter vivos trusts” and “testamentary trusts” that are irrevocable. An inter vivos trust is a
trust that is created during the life of the grantor. A testamentary trust is a trust that is created in the last will and testament of the grantor (i.e.,
the testator or decedent). An irrevocable trust is one that generally cannot be altered by the grantor.
Kaestner and Fielding dealt with irrevocable inter vivos trusts. Schedule M2RT asks several questions aimed at helping you determine
whether your irrevocable inter vivos trust or irrevocable testamentary trust has sufficient minimum connections with the State of Minnesota
for due process purposes.

Question Instructions

Check all boxes in questions 1 through 10 that are applicable to your trust for tax year 2023. Also provide the additional information requested in the space provided. If the space provided is not sufficient, include the additional information as an attachment to Schedule M2RT.

Question 1

Check the box if one or more of the trustees (or the trust’s other fiduciaries) were residents (either full-year or part-year residents) of Minnesota at any time during the trust’s 2023 tax year. The trust’s other fiduciaries include, but are not limited to, trust protectors, investment
trust advisors, and distribution trust advisors. Include the names and addresses of all trustees or other fiduciaries (regardless of their residency
status) in the space provided.
A “trustee” includes an original, additional, and successor trustee, and a co-trustee, whether or not appointed or confirmed by a court. [M.S.
501C.0103(t)]
A “fiduciary” is a guardian, trustee, receiver, conservator, personal representative, or any person acting in any fiduciary capacity for any per­
son or corporation. [M.S. 290.01, subd. 8; M.S. 501C.0808, subd. 1(e)]
A “personal representative” is an executor, administrator, successor personal representative, special administrator, and persons who perform
substantially the same function under the law governing their status. [M.S. 290.01, subd. 8a]
A “trust protector” is a person given powers granted by the governing instrument that may include but are not limited to one or more of the
powers specified in M.S. 501C.0808, subd. 4. [M.S. 501C.0808, subd. 1(i)]
An “investment trust advisor” means any one or more persons given authority by the governing instrument to direct, consent to, or veto the
exercise of all or any portion of the investment powers of the trust. [M.S. 501C.0808, subd. 1(g)]
A “distribution trust advisor” means one or more persons given authority by the governing instrument to direct, consent to, veto, or otherwise
exercise all or any portion of the distribution powers and discretions of the trust, including but not limited to authority to make discretionary
distributions of income or principal. [M.S. 501C.0808, subd. 1(c)]
The residency status of an individual trustee, or other fiduciary, is determined under M.S. 290.01, subd. 7 and Minnesota Rule 8002.0200. See
the Income Tax Fact Sheet 1, Residency and Income Tax Fact Sheet 2, Part-Year Residents for more information.
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Question 2

Check the box if one or more individuals or entities represented the trust or the trustee in Minnesota in connection with the activities that led
to the income on which Minnesota taxes. See M.S. Sec. 290.17, subd. 2(c). Include the names and addresses of all individuals and entities in
the space provided.

Question 3

Check the box if one or more of the trust’s tangible (real or personal) or intangible assets were located (in whole or in part) in Minnesota at
any time during the trust’s 2023 tax year. This includes assets owned at any point during the taxable year.
Include a description of the assets located in Minnesota and their dollar values in the space provided. The dollar value should be reported at
the asset’s fair market value at the earliest of the following events:
•	 Sale of the asset
•	 Termination of the trust
•	 End of the tax year
In Kaestner and Fielding, the Courts discussed the location of intangible assets (e.g., stock) in terms of (1) where the custodian of the intangible asset is located; and (2) where the trustee (the legal owner) of the intangible asset resides. [Kaestner, 139 S.Ct. at 2218, 2220, 2222;
Fielding, 916 N.W.2d at 331, 332, n. 8]

Question 4

Check the box if any part of the trust administration took place in Minnesota at any time during the trust’s 2023 tax year. Include a description of the administration functions that took place in Minnesota in the space provided.
“Administration of the trust” includes, but is not limited to, the following:
•	 Investment of trust assets
•	 Conducting trust business
•	 Distribution of trust assets
•	 Conducting litigation or administrative proceedings
•	 Undertaking administrative services including, but not limited to, record-keeping and the preparation and filing of tax returns
•	 Fiduciary functions, including decisions regarding any of the above

Question 5

Check the appropriate boxes if any of the following were applicable to the trust in its 2023 tax year:
•	 The laws of Minnesota were specifically made applicable to the trust;
•	 The trust documents contain a choice of law provision designating Minnesota for that purpose; or
•	 The trust was formed under, or its operation is governed by, the laws of Minnesota
There are circumstances when Minnesota state law (or the law of another state) will govern a trust even when the trust agreement designates
another state law be applied. [M.S. 501C.0107]

Question 6

Check the box if the trust’s beneficiaries were residents (either full-year or part-year residents) of Minnesota at any time during the trust’s
2023 tax year. Include the names and addresses of all beneficiaries (regardless of their residency status) in the space provided.
A “beneficiary” is a person who has a present or future beneficial interest in a trust or, in a capacity other than that of trustee, has a power of
appointment over trust property. [M.S. 501C.0103(c)]
Check the box for question 6b if the Minnesota resident beneficiaries had some degree of possession or control of the trust property at any
time during the trust’s 2023 tax year. This may include, but is not limited to, the following: (1) the beneficiary received trust assets or income
in the tax year; (2) the beneficiary has a legal right to receive trust assets or income in the future; or (3) the beneficiary has a legal right to
demand receipt of trust assets or income in the future.
The residency status of an individual beneficiary is determined under M.S. 290.01, subd. 7 and Minnesota Rule 8002.0200. See the Income
Tax Fact Sheet 1, Residency and Income Tax Fact Sheet 2, Part-Year Residents for more information.

Question 7

Check the box if the trust’s settlors or grantors were residents (full-year or part-year) of Minnesota at any time during the tax year. Include the
names and addresses of all settlors and grantors (regardless of their residency status) in the space provided.
A “settlor” and “grantor” is a person, including a testator, who creates or contributes property to a trust. [M.S. 501C.0103(o)]
Check the box for question 7b if the Minnesota resident settlors or grantors retained power to dispose of the trust property in the trust’s 2023
tax year and that disposal amounted to a potential source of wealth to them.
The residency status of an individual settlor or grantor is determined under M.S. 290.01, subd. 7 and Minnesota Rule 8002.0200. See the
Income Tax Fact Sheet 1, Residency and Income Tax Fact Sheet 2, Part-Year Residents for more information.

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Question 8

Check the box if Minnesota courts had continuing supervisory jurisdiction over the trust at any time during the trust’s 2023 tax year.

Question 9

Check the box if the trust was a testamentary trust and created by a will of a decedent who was a Minnesota resident at the date of death. Also
check the box for question 9a if the trust and the will under which it was created were probated in Minnesota courts.
The residency status of an individual is determined under M.S. 289A.01, subd. 7 and Minnesota Rule 8002.0200. See the Income Tax Fact
Sheet 1, Residency and Income Tax Fact Sheet 2, Part-Year Residents for more information.

Question 10

If questions 1 through 9 did not apply to the trust, check the box next to question 10. The question 10 box should only be checked if boxes 1
through 9 are blank and do not apply to the trust.

Optional Attachments

We may request the following information when reviewing Schedule M2RT. You may provide the following optional attachments with your
Schedule M2RT:
•	 A copy of the trust agreement(s) and other legal document(s) governing the trust, including all amendments
•	 A copy of any order(s) from a Minnesota court exercising continued supervisory or other existing relationship with the trust
•	 A breakdown of distributions made, if any, from the trust to each beneficiary during the tax year
•	 A breakdown of the allocation of principal or income from the trust during the tax year
•	 An explanation of the reason for change in residency status

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