Key Takeaways
- Brokers must maintain trust accounts for client funds
- Commingling personal and trust funds is prohibited
- Earnest money must be deposited within 3 business days of acceptance
- Interest-bearing trust accounts require written authorization
- The Department of Commerce can audit trust accounts at any time
Last updated: January 2026
Trust Account Requirements
Proper handling of trust funds is critical for Minnesota licensees.
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Trust Account Requirements
Who Maintains Trust Accounts
| Responsibility | Details |
|---|---|
| Broker | Must maintain account |
| Salespersons | Cannot hold trust funds |
| Title company | Alternative holder |
Account Requirements
| Requirement | Details |
|---|---|
| Separate account | From operating funds |
| Designated | "Trust" in account name |
| FDIC insured | Bank account |
| Minnesota bank | Must be in state |
| Records | Detailed accounting |
Depositing Funds
Timing Requirements
| Situation | Requirement |
|---|---|
| Earnest money | Within 3 business days of acceptance |
| Other trust funds | Promptly upon receipt |
| Per contract | Follow contract terms if stricter |
| Weekend/holiday | Next business day |
Prohibited Practices
Commingling
| Definition | Mixing trust with personal funds |
|---|---|
| Prohibited | Always |
| Exception | Minimal amount for bank fees |
| Amount | Typically $100-$200 |
Conversion
| Definition | Using trust funds for personal use |
|---|---|
| Prohibited | Always |
| Criminal | May be prosecuted |
| Discipline | License revocation |
Disbursement
When to Disburse
| Situation | Action |
|---|---|
| Closing | Per closing statement |
| Contract termination | Per agreement |
| Dispute | Hold until resolved |
Disputed Funds
| Action | Details |
|---|---|
| Hold funds | Until dispute resolved |
| Interpleader | File with court |
| Notify parties | Written notice |
| Do not release | Without authorization |
Record Keeping
| Requirement | Details |
|---|---|
| Ledger | For each transaction |
| Bank statements | Monthly reconciliation |
| Retention | 6 years minimum |
| Audit | Commerce can audit |
Department Oversight
| Authority | Details |
|---|---|
| Audit | At any time |
| Inspection | Without notice |
| Records access | Must provide |
| Violations | Discipline |
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Test Your Knowledge
Within how many business days must earnest money be deposited in Minnesota?
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Test Your Knowledge
What is commingling in real estate trust accounts?
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