In previous articles I talked about the differences between a will and a trust when creating your estate plan. Generally, your state law governs how these documents are to be written and how your property is to be distributed through the probate process upon your death.
Under New Jersey law, you can place property and assets in a trust account and designate yourself or someone else to be the trustee (person responsible for managing the trust). Your ownership rights to the property and assets are not compromised by placing them in a trust because you still have the option to manage the trust yourself.
In addition, you have the option to designate someone else to become the subsequent trustee upon your death, giving the designee of your choice complete control over the estate.
If you are a Native American residing on a federally recognized reservation, your estate planning is governed by the Federal Government under the American Indian Probate Reform Act (“the Act”).
One important distinction to make is that the reservation is a “trust property” at the outset, and automatically managed by the Federal Government, which is a condition to becoming a federally recognized tribe. Therefore, even though the people residing on the reservation are the owners of the land, they do not have the option of designating themselves or anyone else as trustees, which results in them not technically having any control over decisions made about the land.
Typically the trust property is divided up among families residing on the reservation. When someone dies, the land is distributed according to the Act, so it is important to have a will. However, whether there is a will or not, the land is still transferred through a trust that continues to be managed by the Federal Government.
Similar to our state probate laws, if there is no will, your property will be distributed to the next of kin pursuant to federal law. If you have a will, your property will be distributed according to your wishes, except that what is being transferred is trust property that remains under the management of the federal government.
Even though the Act gives Native Americans the option to designate who the property should be transferred to, the new “owner” does not have any control over how the land is managed, because the transfer is made in trust with the Federal Government as trustee.
One of the main reasons for the formation of the Act was to encourage consolidating ownership interests in order to limit the number of small divisions of the land and preserve the overall trust status of the reservation. Therefore, under the Act, individuals, families, or the tribe have an opportunity to consolidate land at the time of probate by purchasing the trust interest from your heirs, thereby consolidating small divisions into larger parcels.
This certainly would make it easier for the Federal Government to manage the various portions once there are not so many different ownership interests.
Nonetheless, whoever receives ownership rights to the fractionated trust land takes it with a grain of salt.
Information contained in this article is not intended to be legal advice nor applicable to all situations. For legal assistance, contact an attorney in your state of residence. You can visit Arleen’s website at arleenrichards-law.info.
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