Yesterday afternoon (January 8, 2026), the Minnesota Department of Human Services (“DHS”) alerted providers that the Centers for Medicare & Medicaid Services (“CMS”) directed Minnesota to freeze new provider enrollments in over a dozen categories of health care services, including:

• Adult Companion Services
• Adult Day Services
• Adult Rehabilitative Mental Health Services
• Assertive Community Treatment
• Community First Services and Supports
• Early Intensive Developmental and Behavioral Intervention
• Housing Stabilization Services
• Individualized Home Supports
• Integrated Community Supports
• Intensive Residential Treatment Centers
• Night Supervision Services
• Nonemergency Medical Transportation Services
• Recovery Peer Support
• Recuperative Care

DHS stated that this freeze is the latest action in response to concerns over fraud, particularly in government-run health care programs. This directive by CMS, however, indicates that the federal government is stepping in to assert more control over Medicaid programs typically overseen by state agencies. Notably, DHS had already announced a two-year licensing freeze on home and community-based services and adult day programs.

According to DHS, a start date for the freeze is yet to be determined, and as of right now, there is no clear plan for implementing the necessary operational processes and updates needed to achieve this broad enrollment freeze, or determine how pending enrollment applications already in queue will be handled. Once implemented, however, the freeze is set to last at least six months.

Currently enrolled providers can continue to operate as usual and the freeze on new provider enrollments will not affect new member enrollment in existing programs. DHS also advises that it will issue exceptions to add new providers where capacity is needed, although any exception will require written approval from CMS. It is unclear at this juncture how such need will be determined or what the process or criteria will be to enroll new providers under an exception. The freeze on new enrollments coupled with the widespread payment withholds and prepayment reviews which have delayed or stopped payment to providers raises questions about how DHS will ensure that Medicaid recipients in need will continue to have access to necessary services.

If you are an affected provider and have questions about this pending licensing moratorium, or are facing adverse DHS or CMS action, reach out to the health care regulatory attorneys at Winthrop & Weinstine, P.A.

Minnesota enacted updates to its meal and rest break law, affecting nearly all employers operating in the state. These changes went into effect on January 1, 2026. Employers should ensure policies, timekeeping practices, and handbooks are updated in compliance with the new law.

The following frequently asked questions address common questions from Minnesota employers. For assistance tailoring the new law to your business, please reach out to any members of Winthrop & Weinstine, P.A.’s employment team.

What changed on January 1, 2026?

The new law clarifies that employees must be allowed a paid rest break of at least 15 minutes, or enough time to use the nearest restroom, whichever is longer, within each four consecutive hours worked. In addition, employees must be allowed an unpaid meal break of at least 30 minutes when working six or more consecutive hours.

Recall, the previous law provided adequate time within each four consecutive hours worked to use the restroom and sufficient time when working eight or more consecutive hours to eat a meal.

Who is covered by the new law?

The statute applies broadly to “employees” under the Minnesota Fair Labor Standards Act, unless a specific exception applies. Some exceptions include certain agricultural workers, individuals employees in a bona fide executive, administrative or professional capacity, and certain seasonal day camp staff members.

In what scenarios would a meal break need to be paid?

A meal period may be compensable if the employee is not completely relieved of their duties during the meal break, such as frequently being interrupted for work or performing job-related tasks while eating. If a meal is cut short to respond to work needs, the time should be treated as paid. However, an employer can require the employee to remain at work during the 30-minute meal break. Assuming the employee is completely relieved of their work duties in this instance, this time does not need to be paid.

How should we schedule breaks for an 8-hour shift?

For 8-hour shifts, many employers choose to give employees a meal break around the middle of their shift, usually at the 3 hour mark, then provide a rest break during the second half of the shift when the employee is working four or more consecutive hours. This schedule ensures adequate breaks are provided.

Can the break occur at the end of four hours, or the meal at the end of six hours?

No, rest breaks must be provided within 4 consecutive hours worked, and meal breaks must be provided within 6 consecutive hours worked.

Can employees waive their breaks?

Yes, an employer only has an obligation to allow their employees to take rest and meal breaks. If an employee voluntarily chooses to waive their break, we recommend employers obtain confirmation, in writing, from the employee each time they waive their break.

Can you combine meal and rest breaks?

You can combine meal and rest breaks as long as employees are receiving their 15-minute rest break within each four consecutive hours worked, and a 30-minute meal break when working six or more hours. You must ensure the breaks are scheduled within the consecutive hours worked, not after the hours are worked.

For example, if an employee is working 9 a.m. to 5 p.m., an unpaid meal break could be provided from 12 p.m. – 12:30 p.m., and a paid break could be provided at 4 p.m.

If the meal and rest break is combined into one-hour block, designated as a single meal break that satisfies the rest and meal break requirements, may the entire hour be unpaid?

Yes, as long as employees are completely relieved of their job duties during the one-hour meal break, it need not be paid. For illustrative purposes, using the example above, if an employee is working 9 a.m. to 5 p.m., an unpaid meal break would be provided from 12:30 – 1:30 p.m.

Our team reached out to Minnesota Department of Labor and Industry to confirm the answer to this question.

To comply with the changes now in effect, employers should revise policies to reflect the new timing and duration, train managers on scheduling, and notify employees on their rights under the new laws. Please reach out to any member of our employment team for assistance with compliance.

Employers should also be aware of Minnesota’s new paid family and medical leave program that went into effect on January 1, 2026. For practical guidance on this new law, please see our team’s articles: Minnesota’s New Paid Family and Medical Leave Law and Is Your Business Ready for Minnesota’s New Paid Family and Medical Leave?

The beginning of a new year means new estate and gift tax figures from the IRS! While there has been much uncertainty over the last few years regarding the estate and gift tax exemptions post-2025, the One Big Beautiful Bill Act passed in 2025 has given some certainty to the federal estate tax system, at least for the near term.

Federal Estate and Gift Tax Exemption

The federal estate and gift tax exemption is the amount that an individual can transfer during life or at death without owing federal transfer tax. It is a unified system, meaning that there is one exemption that covers both lifetime gifts (exceeding the annual gift tax exclusion amount, which is described further below) and transfers at death.

The estate and gift tax exemption for 2026 is $15 million per individual. With proper estate planning, married couples can shelter approximately $30 million from federal transfer taxes.

The estate tax rate for 2026 remains at 40% for assets exceeding an individual’s estate and gift tax exemption.

The One Big Beautiful Bill Act passed in 2025 made the $15 million estate and gift tax exemption “permanent” (meaning that the exemption amount will no longer be decreased unless there is new tax legislation signed into law). The $15 million exemption will continue to be indexed for inflation by the IRS.

GST Tax Exemption

The generation-skipping transfer (GST) tax exemption is the amount that an individual can shelter from the GST tax when transferring assets to beneficiaries who are more than one generation younger than an individual (typically, transfers to grandchildren or trusts for grandchildren and more remote descendants).

The GST exemption remains the same as the estate and gift tax exemption, at $15 million per individual for 2026.

Minnesota Estate Tax Exemption

The state of Minnesota also has a state estate tax. The exemption for Minnesota’s state estate tax remains at $3 million for 2026.  Estates of Minnesota residents (or non-residents who own Minnesota sitused property) that exceed the $3 million exemption are subject to state estate tax at a rate of 13-16%.

Unlike the federal estate tax system, Minnesota still does not allow “portability” of a deceased spouse’s estate tax exemption to the surviving spouse. It is critical that married couples with assets exceeding $3 million build estate tax planning provisions into their estate plans to ensure the first spouse to die’s exemption is not wasted.

Annual Gift Tax Exclusion

The IRS sets an annual gift tax exclusion each year, which is the amount an individual may gift per recipient without using any of the individual’s lifetime gift and estate tax exemption. The 2026 annual gift tax exclusion amount is $19,000 per person (remaining the same from 2025). For a married couple, that amount is doubled to $38,000 that the couple may give per recipient in 2026, though unless you are electing gift-splitting on a gift tax return, you should still separately make your own $19,000 gift to a recipient.

Gifts to Non-US Citizen Spouse

When both spouses are US citizens, typically each spouse may transfer unlimited amounts to one another without incurring gift tax. However, gifts to a non-US citizen spouse are limited. For 2026, the amount that can be gifted to a non-US citizen per year is $194,000. Gifts in excess of that amount must be reported on a gift tax return and use some of the available $15 million exemption.

Review Your Estate Plan in Light of Tax Law Changes

We recommend regularly connecting with your estate planning attorney to make sure your estate plan is appropriate for your financial situation. As tax laws change and your balance sheet grows, it is important to ensure that your plan incorporates the proper tax planning for you.

Our estate planning team can assist with wealth transfer planning strategies to reduce your estate and gift tax exposure during your lifetime and ensure that your estate planning documents maximize the use of your exemptions on your death. Contact a member of our estate planning team for assistance.

Adult day care settings are the most recent target in the Department of Human Services (“DHS”) recent efforts to tighten oversight and combat fraud in Minnesota. On December 16, 2025, DHS announced that it would pause issuing new licenses for adult day centers because, according to DHS, provider capacity currently exceeds the projected needs for that service. In addition, DHS states that this action will align with an Executive Order issued by Governor Walz, aimed at preventing and detecting fraud and abuse in Minnesota’s health care sectors. Adult day services include the delivery of supervision, care, assistance, training, and other activities aimed at supporting seniors and adults with disabilities to help support independent living and provide reprieve to family caretakers.

DHS states that the pause on adult day care licenses is projected to last two-years, from February 1, 2026, through January 31, 2028. During this period, DHS will stop accepting new applications for adult day center licenses and plans to cancel pending applications. In addition, DHS plans to increase its focus on current adult day center providers to ensure they are following state and federal rules. Providers currently operating adult day care centers should prepare for increased audits and oversight by ensuring records are accessible and comply with state and federal documentation requirements.

Minnesota Management and Budget (MMB) today issued the latest Budget and Economic Forecast. For the current budget period FY 2026-2027, there is a projected surplus of $2.465 billion due to what MMB says is a “better-than-expected fiscal year close and higher near-term revenue collections”. These increased revenue collections were partially offset by increased spending estimates.

MMB characterizes the state budget and economic outlook as “stable” for FY 2026-2027 with “structural” challenges in FY 2028-2029. Higher health care costs and slow economic growth cause a $2.96 billion projected deficit in FY 2028-2029. The budget reserve is $3.711 billion.

The Minnesota Department of Human Services (“DHS”) quietly communicated on December 1, 2025, its intent to issue a temporary licensing moratorium for 245D-licensed Home and Community Based Services (“HCBS”), effective January 1, 2026. The licensing moratorium is the latest step in DHS’s heightened efforts to tamp down widespread fraud, waste and abuse uncovered in the Medical Assistance (“Medicaid”) program over the last several months.  Our team’s prior coverage of these actions can be found here.

In a December 1, 2025, letter to the chairs of the House Human Services Finance and Policy Committee and the Senate Health and Human Services Committee, Temporary Commissioner Shireen Gandhi wrote that the decision to implement a moratorium was based on several factors, including (i) growth in the number of HCBS licensed providers has outpaced the needs of enrolled waiver participants; (ii) the number of existing active 245D licenses is nearly equal to the number of pending applications, further supporting the position that license capacity has grown faster than the number of waiver participants over the last five years; and (iii) DHS is not sufficiently funded to process the growing backlog of licensing applications while also meeting federal waiver plan commitments to review every 245D licensed provider at least once every three years.

The moratorium, which DHS states is authorized by Minnesota Statutes section 245A.03, subd. 7a and Executive Order 25-10, will go into effect on January 1, 2026 and last for an anticipated 24 months, ending December 31, 2027.

Under the moratorium, DHS will:

• Stop issuing new 245D licenses;
• Stop accepting new 245D license applications;
• Stop adding new services to existing 245D licenses; and
• Cancel existing 245D license applications, and make licensing application fee refunds available until December 31, 2026, to all affected applicants.

An exception process will be available based on requests from counties, Tribal Nations or managed care organizations responsible for a person’s waiver case management.  DHS states that before January 1, 2026, it will finalize and publicly share the processes and criteria for granting exceptions requested by lead agencies.

Existing licensees should be prepared for DHS compliance reviews and should begin preparing for records requests and on-site visits, including reviewing policies and procedures, ensuring documentation of appropriate staff training and qualifications, and assuring that recipient records are complete and up-to-date. It is also unclear how changes of ownership of existing 245D licensees will be handled since those transactions typically require a new license application.

If you are an affected provider and have questions regarding the new licensing moratorium, or are facing adverse DHS action, reach out to the health care regulatory attorneys at Winthrop & Weinstine, P.A.

If you own real estate in Minnesota, you will soon receive (if you haven’t already) an estimate, known as the “Truth-in-Taxation” or “Proposed Property Tax” notice, of your real estate tax liability payable in 2026. Prior to receipt of this notice, typically in March or April of each year, Minnesota property owners receive an estimate of your property’s value as of January 2025, as determined by your respective local assessor. While you may have been pleased or disappointed with this “first look” estimate, your November notice will tell you approximately how much you will owe in the coming year. It is important to note that the Truth-in-Taxation notice is only an estimate and is not your tax bill (which will be sent in March), but it does provide you with the opportunity to budget for the tax payment or consider contesting the proposed valuation.

How are property taxes determined in Minnesota? 

In Minnesota, property taxes are paid in arrears, meaning that the 2025 taxes are due and payable in 2026, usually in two installments due in mid-May and mid-October. The tax bill you will receive in March 2026 will be a percentage of the January 2025 value. Real estate taxes are a function of the tax rates set by government entities and the valuation of each property. Particularly if you own real estate in the greater Twin Cities area, don’t be surprised if your effective tax rate (taxes/estimated market value) rises. If property values have fallen, as they have on office buildings in the Cities’ central business districts, a city needs to tighten its budget and/or increase its tax rates to continue funding its service priorities.

How is my property’s tax value determined?

Local government assessors are charged with estimating the fee simple market value of the properties to which they are assigned—namely, the probable selling price, as of a specific date, in cash or cash equivalent, of the fee simple title, after reasonable exposure in a competitive market, assuming the parties would each act prudently, knowledgeably, in their own self-interest and under no duress. While assessors have a pretty good overall feel for valuations of the various types of properties — apartments, offices, medical offices, industrial, retail, residential, etc.— located within their respective jurisdictions, they typically don’t know the unique aspects of a particular property very well (if at all). Instead, they take a macro view of the market, performing mass appraisals at least every five (5) years. That said, a specific property may vary in value from the average due to a variety of factors, rendering a property less competitive on the marketplace. Some common factors include:

• Deferred maintenance;
• New competition and/or neighboring development;
• Traffic, access or visibility issues; or
• Obsolescence.

How do I know if the assessed tax value is correct?

While any number of factors can affect value, you may not know your property is overvalued for tax purposes unless you (i) recently bought it, (ii) have a current appraisal, or (iii) otherwise know that the property is underperforming. If you suspect that your valuation is too high, now is a good time to engage an appraiser to evaluate your property, its financials, and comparable sales statistics to help you determine whether further inquiry or a tax appeal is justified. Many appraisers will perform an initial “look-see” verbal assessment at limited cost, which you can then use to help evaluate your options and next steps.

Although an appraiser’s input up front is not necessary to pursue an appeal, it is often a good idea, particularly if you are unfamiliar with the market. In the case of rental properties, an appraiser’s input early in the process can be particularly helpful, since owners of income-producing properties will need to provide financial statements to the assessor in the course of a tax appeal. If the financial statements support a higher value, the assessor can perhaps use that information to justify an increase the assessed value in future years. Furthermore, if the case goes to trial, the court has the discretion to raise taxes for the year appealed. Having an appraiser review financial statements in advance and advise on whether an appeal may be appropriate can help avoid that risk down the road.

How do I appeal my tax value?

While the government-established tax rates are unappealable, if you have good reason to believe that your property may be overvalued, misclassified, or taxed unequally, filing a property tax appeal may result in some relief. Filing a property tax petition with your local district court, allows you to negotiate with your County assessor. Most (not all) cases settle out of court. Property tax appeals for taxes payable next year must be filed on or before April 30, 2026. This deadline is hard, with extremely rare exceptions. It is generally too late to appeal for taxes payable in 2025 and prior years.

Our team has helped clients over the years with hundreds of property tax appeals and would be happy to answer any questions you have about the process.

On November 4, 2025, voters in Duluth, Minnesota approved a Right to Repair ballot initiative, granting tenants a right to repair certain defects in residential rental units when applicable requirements are met.[1]  This ordinance affects landlords of property in the city of Duluth and went into effect on November 10, 2025.

What is a Right to Repair?

The ordinance grants residential tenants a right to repair certain defects in their unit upon giving proper notice to their landlord and waiting fourteen (14) days. It states that in order to provide notice, the tenant must: (1) send written notice to the landlord to the address where the tenant pays rent, (2) either call, text, email, or send a message through the rental portal communicating the needed repair to the landlord, and (3) notify the landlord of the repair that is needed and the tenant’s intent to deduct the cost of the repair from the tenant’s rent. Once the tenant has given proper notice, the landlord has fourteen (14) days to either complete the repair or provide a scheduled repair date to the tenant. If landlord does not do so within the 14-day period, the tenant may contract to complete the repair and withhold up to half of a month’s rent, or $500, whichever is greater, to pay for repairs.[2]

Following proper notice and repair in accordance with the above requirements, the tenant may then deduct the cost of repairs (up to the maximum threshold)[3] from their future rent or pay for the repair and then receive reimbursement from the landlord.[4] If the lease terminates before the tenant is able to deduct repair costs from future rent, the landlord must reimburse the tenant.[5]

Repairs are subject to this ordinance only to the extent necessary to comply with the municipal code.[6]

Eligible required repairs include but are not limited to the following:[7]

• Holes in walls and ceilings and floors
• Leaks in pipes or faucets
• Electrical fixtures
• Appliances the landlord supplies or is required to supply
• Heating facilities and gas-fire appliances
• Smoke alarms, sprinkler systems, and fire alarm systems
• Hall and stairway lighting and other safety measures
• Reasonable energy efficient measures like weatherstripping, caulking, and storm windows
• Small window repairs
• Bathroom fans
• Doors and cabinets
• Insect and pest extermination

The ordinance also includes a catch-all provision that states an eligible repair is anything necessary to address a circumstance in which the landlord fails to maintain the dwelling unit and common areas in a fit and habitable condition.[8]

Who Must Comply with the Ordinance?

The ordinance defines “landlord” as any person directly or indirectly in control of a rental property.[9] If the residential rental unit has a tenant, that tenant may invoke the right to repair if the landlord does not respond in accordance with the ordinance within fourteen (14) days.[10]

Can a Landlord Dispute the Need for a Repair?

The landlord may dispute that the repair is needed if they send a written notice disputing the repair to the tenant within fourteen (14) days of the tenant’s notice.[11] The landlord must then arrange for a building official to inspect the property within thirty (30) days of the landlord’s notice of the dispute.[12] If the inspection does not happen within thirty (30) days or if the inspection confirms that a repair is needed, the tenant retains the right to initiate the repair.[13]

What are the Limitations of the Right of Repair?

The tenant cannot exercise their right to repair at the landlord’s expense if the condition was caused by the tenant’s deliberate or negligent act, or the tenant’s omission.[14] This limitation extends to damage caused by the tenant’s family, friend or guest who was on the premises with the tenant’s consent.[15]

A tenant exercising their right of repair must ensure that if applicable, the repair is completed by a person licensed to perform the required work.[16]

A tenant must provide a receipt to the landlord before subtracting the amount paid for repairs from the future rent.[17]

What are Potential Consequences for Violations of the Ordinance?

The ordinance provides a private right of action for tenants.[18] If a landlord is found in violation of the ordinance, the tenant is entitled to penalties which may include rent reduction, rescission of the lease, up to a $500 civil penalty per violation, and reasonable attorney fees.[19]

Key Takeaways:

• If a tenant provides written notice and either calls, texts, emails, or sends a message through the rental portal requesting a repair, it is critical that landlords respond in accordance with the ordinance within fourteen (14) days. Otherwise, the landlord waives their right to dispute the repair. The landlord’s response can be to:
  • Complete the repair; or
  • Contract for the repair and send a scheduled repair date to the tenant; or
  • Dispute the repair in writing and arrange for the building official to conduct an inspection within thirty (30) days of the written dispute.
• The tenant may not contract to fix the repair at the landlord’s expense if the poor condition was caused by the tenant’s deliberate or negligent action, or an omission by tenant.
• A landlord may not take negative action against a tenant for exercising the tenant’s right to repair.[20]
• The ordinance does not apply to short-term rental units such as an Accessory Home Share, [21] or a Vacation Dwelling Unit.[22]

[1] Marisa Ornat, Duluth residents vote “yes” to Right to Repair Ordinance, Northern News Now (Nov 4, 2025, at 11:17 CST), https://www.northernnewsnow.com/2025/11/05/duluth-residents-vote-yes-right-repair-ordinance/

[2] Duluth, Minn., Ordinance No. 25-015-0, Right to Repair (2025) (to be codified at Duluth City Code Ch. 29A).

[3] Up to half of a month’s rent, or $500, whichever is greater, to pay for repairs.

[4] Duluth, Minn., Ordinance No. 25-015-0, Right to Repair (2025) (to be codified at Duluth City Code Ch. 29A).

[5] Duluth, Minn., Ordinance No. 25-015-0, Deduction; reimbursement, (c) (2025) (to be codified at Duluth City Code Ch. 29A).

[6] See Duluth, Minn., Ordinance No. 25-015-0, Tenant contracting repairs; notice; eligible repairs, (d) (2025) (to be codified at Duluth City Code Ch. 29A).

[7] Id.

[8] Id.

[9] Duluth, Minn., Ordinance No. 25-015-0, Definitions, (b) (2025) (to be codified at Duluth City Code Ch. 29A).

[10] Duluth, Minn., Ordinance No. 25-015-0, Right to Repair (2025) (to be codified at Duluth City Code Ch. 29A).

[11] Duluth, Minn., Ordinance No. 25-015-0, Tenant contracting repairs; notice; eligible repairs, (c) (2025).

[12] Id.

[13] Id.

[14] Duluth, Minn., Ordinance No. 25-015-0, Right to Repair, (c) (2025) (to be codified at Duluth City Code Ch. 29A).

[15] Id.

[16] Duluth, Minn., Ordinance No. 25-015-0, Tenant contracting repairs; notice; eligible repairs, (b) (2025) (to be codified at Duluth City Code Ch. 29A).

[17] Duluth, Minn., Ordinance No. 25-015-0, Deduction; reimbursement, (a) (2025) (to be codified at Duluth City Code Ch. 29A).

[18] Duluth, Minn., Ordinance No. 25-015-0, Enforcement; Penalty, (a) (2025) (to be codified at Duluth City Code Ch. 29A).

[19] Id.

[20] Duluth, Minn., Ordinance No. 25-015-0, Eviction or Retaliation Prohibited (2025) (to be codified at Duluth City Code Ch. 29A).

[21] Accessory Home Share is a habitable bedroom or bedrooms in an owner-occupied dwelling offered for trade or sale for a period of 29 nights or less. (Duluth, Minn. Code, art. 6, § 50-41.1)

[22]Vacation Dwelling Unit is a residential unit offered for trade or sale for a period of 2 to 29 nights. (Duluth, Minn. Code, art. 6, § 50-41.22).

This past legislative session, Minnesota enacted a new statute, Minn. Stat. § 609.2334, creating an order-for-protection (OFP) mechanism specifically targeting the financial exploitation of vulnerable adults. Beginning January 1, 2026, courts across the state are authorized to issue protective orders aimed at preventing, mitigating, or halting suspected or ongoing financial exploitation.

The statute is focused on protecting vulnerable adults from financial harm and has direct operational implications for financial institutions requiring compliance with court-issued orders including but not limited to placing transactional holds on accounts, restricting access to accounts or assets, and furnishing records. Those in the banking and financial services industry must be aware of the implications of the new statute and, in anticipation of the new statute taking effect January 1, 2026, should take action to implement the law’s requirements, through policy updates, workflow changes, training, and documentation protocols.

Key Provisions and Definitions Relevant to Financial Institutions

The law was created to be intentionally broad to allow flexibility to address bad behavior, which poses potential issues in implementing a Court’s Order. While the precise terms of any individual order will be case-specific, financial institutions should anticipate the following features as typical of this type of protective regime:

1. The statute authorizes petitions by or on behalf of a vulnerable adult, and it empowers courts to grant relief tailored to prevent or remedy financial exploitation. Relief may include prohibiting respondents from initiating or completing financial transactions; restricting access to accounts, property, or payment instruments; directing the safeguarding or return of funds; and authorizing disclosures necessary to effectuate the order. Orders may be issued on an expedited or ex parte basis where immediate protection is warranted, with subsequent hearings for longer-term relief.
2. The statute imports or aligns with Minnesota’s existing definitions surrounding vulnerable adults and financial exploitation, which generally encompass adults who, due to age, disability, or dependency, are susceptible to abuse, neglect, or exploitation, and conduct that includes the wrongful taking, use, or retention of funds or assets, or undue influence to obtain control over assets or decision-making. Financial institutions should use these benchmarks in assessing how to operationalize requests and in training frontline staff.
3. Orders may expressly direct financial institutions to implement holds or restrictions, decline certain transactions, freeze or segregate funds pending a hearing, or provide account-level information to the court or certain parties, consistent with confidentiality requirements. Orders may also address or impose requirements on instruments such as powers of attorney, fiduciary accounts, beneficiary designations, and access credentials, that are implicated in suspected exploitation.
4. The statute  compels compliance with court orders and may include liability protections for good-faith compliance. Conversely, willful noncompliance with a duly issued order will likely carry legal consequences, including contempt exposure. Institutions should confirm the availability and contours of any safe harbors and immunities under the statute and related Minnesota law with their legal counsel.
5. The Court has the ability to issue an ex parte temporary order for up to 14 days. Prior to or on the 14^th day, the Court is required to hold a hearing, at which point the order may be extended  by an additional 14 days.
6. Each Order will be case-specific and will have different timelines as to account freezes and the release of those freezes. Proper review and interpretation of each Order is important to ensure correct compliance with the Order.
7. Note, any assets held in a conservatorship account may only be frozen by an Order entered by the Court overseeing the conservatorship proceeding. If an institution is served with an OFP under the new law, it should be accompanied by a second Order from the Court overseeing the conservatorship proceeding.

Effective Date as a Compliance Milestone: January 1, 2026

January 1, 2026, is the operative date for institutional readiness. By that date, institutions must be capable of promptly recognizing, routing, and implementing qualifying orders. Internal systems should be calibrated to ensure accurate identification of these court orders and efficient execution without violating customer rights, privacy obligations, or other legal duties. Given intersecting operational and legal issues, a cross-functional readiness program should be completed by the close of 2025.

Operational Impacts for Banks and Financial Institutions

The statute will affect multiple functions across banking organizations. At the front line, branch and call-center personnel must be trained to recognize court instruments specific to financial exploitation and to escalate immediately to legal or specialized teams, ensuring that exploitation concerns are triaged alongside ongoing fraud investigations and suspicious activity monitoring, without duplicative or conflicting actions.

For payments and transaction processing, institutions will need mechanisms to apply temporary holds or restrictions in response to an order while observing regulatory timelines and network rules for ACH, wire, card, and P2P transactions. Where Orders intersect with Regulation E error resolution, UCC Article 4A wire rules, or network chargeback requirements, the bank will want to have escalation protocols that address timing and documentary requirements.

Account operations will need procedures to segregate or restrict funds, halt disbursements, or suspend access to online and mobile channels when ordered, with clear parameters for what remains permitted (e.g., essential living expenses if the order so provides). Fiduciary and wealth management units should prepare for Orders affecting powers of attorney, trustee or conservator authority, or beneficiary designations, including steps to validate the identity and authority of purported fiduciaries and to reconcile the Order with existing account agreements and governing instruments.

Legal and subpoena teams will need standardized templates and checklists for intake, validation, scope interpretation, and response, along with guidance on permissible disclosures under state law, the Gramm-Leach-Bliley Act’s exceptions for fraud prevention and legal process, and bank secrecy obligations.

Recordkeeping and audit functions should ensure that holds and order compliance actions are fully documented and retrievable to support examinations, litigation defense, or law enforcement inquiries.

Preparing for Compliance

Financial institutions should adopt a structured readiness plan that addresses governance, people, process, and technology. Steps could include:

1. Designation of a point person at the bank and owner of the internal process to cover  legal, BSA/AML, fraud, operations, payments, digital banking, retail, wealth, and privacy areas.
2. Policies should be updated to recognize the new orders bank may receive in light of the new law, articulate escalation thresholds, and set decision rights for initiating or lifting holds on accounts in conformity with court directives.
3. Procedurally, transactional controls should allow for partial or tailored holds when an order specifies affected accounts, instruments, or counterparties. Where orders contemplate releasing funds for essential expenses or setting spending limits, workflows should support those parameters without blanket freezes that exceed the order’s scope.
4. Risk management protocols should include enhanced monitoring for attempted circumvention, such as opening new accounts, cash withdrawals at different locations, or third-party transfers designed to evade restrictions.
5. Communication protocols should be carefully managed. All customer or third-party communications about a Court Order should be centralized through designated teams to avoid misstatements, protect privacy, and reduce litigation risk.
6. Institutions should coordinate with Adult Protective Services and law enforcement only through approved channels and consistent with the Court Order’s terms and applicable confidentiality laws.

Potential Legal Risks and Liability Considerations

The principal risk of noncompliance is exposure to court sanctions for failing to implement the Order as directed, including contempt. There is also the risk of civil claims brought by the protected adult or their representatives if an institution negligently permits transactions in violation of the Order, resulting in loss. Conversely, overly broad or prolonged holds that exceed the Order’s scope may prompt claims by respondents or accountholders for wrongful restriction, contractual breach, or unfair practices, particularly if essential transactions are blocked without legal basis.

Privacy and confidentiality risks may arise when responding to requests for records or information. Institutions should ensure disclosures are limited to those authorized by the Order or permitted by law. Institutions should also be attentive to conflicts between this statute and other legal directives, such as existing guardianship or conservatorship orders, powers of attorney, or prior court decrees; legal review should reconcile competing instruments and, where necessary, seek clarification from the issuing court.

Operational errors, such as delayed implementation, system misconfigurations, or failure to release holds upon expiration or modification of an order, present additional risk.

Key Takeaways

Minn. Stat. § 609.2334 introduces a court-administered tool to prevent and remediate the financial exploitation of vulnerable adults, with meaningful operational consequences for financial institutions. With the statute taking effect on January 1, 2026, institutions should treat the remaining time in 2025 as an implementation runway to update governance policies, processes, systems, and training. Early, coordinated preparation will reduce risk, strengthen customer protection, and support timely and accurate compliance with court directives under the new law.

If you have questions about how this new law may impact your organization, or want to learn more about how you can prepare for a smooth transition, please reach out to any member of our Trusts, Wills & Estates team for guidance.

Pursuant to an October 29, 2025, press release, Governor Tim Walz has directed the Minnesota Department of Human Services (“DHS”) to audit fourteen Medical Assistance (“Medicaid”) services identified as high-risk for billing irregularities or potential fraud. According to reports, during the audit period, payments for these services will be paused for up to 90 days while claims undergo a third-party prepayment review process.

This pre-payment audit follows heightened scrutiny of DHS’ oversight of Medicaid billing and program integrity. In an October 27, 2025, letter to the Centers for Medicare and Medicaid and CHIP Services, Interim Commissioner Shireen Gandhi acknowledged that “existing claims edits and ‘pay and chase’ post-payment review processes alone have not sufficiently addressed inappropriate and fraudulent billing in our programs.” In response, Governor Walz has directed this aggressive pre-payment audit that, while intended to rebuild public trust in the Medicaid program, represents a significant and arguably overbroad shift in policy that will penalize compliant providers and disrupt the delivery of care for essential services.

Using funding authorized during the 2025 legislative session, DHS has contracted with Optum to conduct data analytics on Medicaid fee-for-service claims. Optum’s review is intended to identify anomalies such as incomplete documentation, unusually high billing volumes, or inconsistencies that may indicate a claim does not meet program requirements.

DHS will review and verify claims flagged through Optum’s analytics and refer any suspected improper billing to the DHS Office of Inspector General for investigation or the Medicaid Fraud Control Unit of the Minnesota Attorney General’s Office. DHS suggests it will not hold all submitted claims for 90 days, but that providers can expect some submitted fee-for-service claims to be suspended for up to that full time period. DHS states that this practice complies with law, as Minnesota Health Care Programs has 30 days to pay or deny clean claims and 90 days to pay or deny complex claims. Despite acknowledging that this program will delay payments for providers, DHS expects providers to continue to provide services to members as normal.

DHS states that the prepayment review will become a permanent, new business process for the following fourteen Medicaid services, which DHS has designated as high-risk:

• Adult Companion Services
• Adult Day Treatment
• Adult Rehabilitative Mental Health Services
• Assertive Community Treatment
• Community First Services and Supports
• Early Intensive Developmental and Behavioral Intervention
• Housing Stabilization Services
• Individualized Home Supports
• Integrated Community Supports
• Intensive Residential Treatment Services
• Night Supervision Services
• Nonemergency Medical Transportation Services
• Recovery Peer Support
• Recuperative Care

Given the heightened scrutiny of claims by a third-party, providers of these “high-risk” services should ensure their internal documentation and billing procedures are compliant with DHS requirements. In addition, providers should prepare for reimbursement delays and increased payment denials, as well as stricter oversight requirements, including, among other things, initial screening visits and unannounced site visits.

If you are an affected provider and have questions regarding the new pre-payment audit process, or are facing wrongful payment denials, reach out to the health care regulatory attorneys at Winthrop & Weinstine, P.A.