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Avoiding Land Fractionation in Indian Country
Options Available
to Prevent Land Fractionation
Part III of IV
The third article in this will discuss options available to individual owners of
Indian trust land to prevent fractionation. The main options are to consolidate
allotments, set up an estate plan, or a combination of both. Consolidation
options include selling interests in the land to your tribe through the Indian
Land Consolidation Act or other methods established by your tribe.
Under
the Indian Land Consolidation Act, funding is available for some tribes to
purchase trust land allotments. The priority is to purchase small allotments
with interests of two percent or less; however, larger percentages may also be
purchased. This leads to a reduction in the number of fractionated interests on
the reservation, and the owner receives the proceeds of the sale.
Some
tribes have established their own land purchasing and exchange programs. On the
Rosebud Reservation, Tribal Land Enterprise (TLE) performs this function. A
tribal member can exchange her allotments for TLE certificates, and either cash
in those certificates, hold them to sell at a later date, or trade them in for
an assignment on land owned by the tribe and managed by TLE that is of equal
value.
Estate
planning options include writing a will or giving a gift
deed.
Writing
a will allows the tribal member to control their assets. If you die without a
will, the BIA must follow state inheritance laws during the probate process
(unless your tribe has adopted its own inheritance code). With a will, you
decide how your trust land is distributed. For example, if you own three
allotments, and you have three children, you could will one allotment to each
child. This will prevent the land from fractionating further because the
allotment will pass from one owner to one owner instead of one owner to three
owners each holding an interest in the whole allotment. This method does not
avoid probate delays, but it does decrease the length of the probate process.
A
second option of estate planning that does avoid probate delays is called a gift
deed. This option allows an owner of trust land to give (or deed) her trust land
to another tribal member now, but retain a life estate. The original owner may
live out her life on the property, and collect any income from the land while
they are alive; however, when they pass, the land automatically passes to the
person they named in the gift deed.
A new law was signed into effect on October 27, 2004 called the
American Indian Probate Reform Act of 2004 (Public Law No: 108-374) which amends
the Indian Land Consolidation Act. This new law will change the way trust land
is passed on when the trust land owner does not write a will and it will change
how the trust land is probated. However, until that law is certified by the
Secretary of the Interior, the information contained in this article remains in
effect.
Note: Dakota Plains Legal Services is providing this information in
partnership with this newspaper as a public service. This article is not
intended as legal advice. Always talk to a lawyer before taking any legal
action. |
