2018 Legal Updates on Minnesota LLCs and Estate Planning

Effective January 1, 2018, all Minnesota LLCs are subject to the Minnesota Revised Uniform Limited Liability Company Act under Minnesota Statutes Chapter 322C. All Minnesota LLCs created prior to August 1, 2015 were created under a different law, Minnesota Statutes Chapter 322B. If have multiple owners, should have LLC articles, bylaws, operating agreements, and any agreements among owners reviewed.

Effective January 1, 2018, all Minnesota residents and all non-Minnesota residents with property in Minnesota dying this calendar year have an estate tax exemption in the amount of $2.4 million from Minnesota estate taxes pursuant to Chapter 1 of Minnesota Laws, 2017, 1st Special Session. However, this is subject to continued negotiations between the legislature and the governor. This is an increase from $2.1 million for the last calendar year (2017), and next calendar year (2019) is to increase to $2.7 million.

Also effective January 1, 2017, the federal estate and gift tax exemption was doubled under the Tax Cuts and Jobs Act of 2017 from $5.6 million to $11.2 million per person. The exemption will increase annually with inflation. However, the law expires December 31, 2025.

The annual gift tax exclusion for 2018 increased to $15,000 per recipient.