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Native Americans and estate planning: passing on land

On Behalf of | Jan 11, 2013 | Estate Planning |

While estate planning can be a simple process, it can also be quite complex, depending on one’s assets, goals, and family situation. The laws governing estate planning are primarily determined by each state, though some federal laws govern how estate planning is approached, particularly federal tax law. For Native Americans residing on a federally recognized reservation, estate planning is governed by the American Indian Probate Reform Act. One interesting aspect of estate planning for Native Americans is that natives who pass on land do not have a say in how it is managed.

The reservation is a trust property and is automatically managed by the Federal Government. Because of this, those residing on the reservation do not have the option of designating themselves or anyone else as trustees. This means that they technically do not have any control over decision made about the land they own.

What usually happens is that trust property is divided up among families on the reservation. When somebody dies, the land is distributed according to the provisions of the American Indian Probate Reform Act, so it is still important to have a will. Similar to state probate laws, when there is no will, one’s property is distributed to next of kind. For those who have a will, land is distributed according to the provisions of the will. The only distinction is that what is being transferred is trust property that is managed by the federal government. Regardless of whether there is a will, land is transferred through the federally managed trust.

One implication of this is that while Native Americans residing on reservations can decide who their land will be transferred to, they cannot control how it is managed. One reason for this is to encourage consolidation of ownership interests in order to limit the number of small divisions of the land and to preserve the overall trust status of the reservation. Individuals, families and the tribe all have an opportunity to consolidate land at the time of probate by purchases trust interests from heirs.

Source: The Epoch Times, “American Indian Probate Reform Act,” Arleen Richards, December 27, 2012