UNITED STATES DEPARTMENT OF THE OFFICE OF THE --- SPECIAL TRUSTEE FOR AMERICAN --- INDIANS

Transcription

1 OST OST UNITED STATES DEPARTMENT OF THE INTERIOR UNITED STATES DEPARTMENT OF THE INTERIOR --- OFFICE OF THE --- SPECIAL TRUSTEE OFFICE OF FOR THE AMERICAN SPECIAL INDIANS TRUSTEE FOR AMERICAN --- INDIANS Tribal/Interior --- Budget Council Tribal/Interior Washington, Budget D.C. Council Washington, D.C. November 5-6, 2014 March 21,

2 2 Today s Presentation Budget Update OST Organization Chart Follow-up from Billings Probate Reform

3 3 OST Budget Update Currently operating under a Continuing Resolution (C.R.) through December 11, C. R. includes an Across-the-Board reduction of.0554 percent.

4 4 OST Budget FY 2013 FY 2015 ($ in thousands) 2013 Actual 2014 Enacted 2015 President's Budget EXECUTIVE DIRECTION 1,693 2,026 2,031 PROGRAM OPERATIONS AND SUPPORT 136, , ,998 PROGRAM OPERATIONS Field Operations 24,457 24,747 24,952 Appraisal Services 10,598 10,744 10,811 Trust Services 28,834 28,946 29,063 Historical Trust Accounting 23,029 23,045 23,064 PROGRAM SUPPORT Business Management 34,894 34,706 33,539 Business Management 1,602 1,872 1,964 Budget, Finance & Administration 25,411 24,615 23,395 [Litigation Support] [3,986] [3,986] [3,486] [Hearings & Appeals] [8,216] [8,716] [8,516] Information Resources 6,202 6,599 6,631 External Affairs 1,679 1,620 1,549 Program Management 14,553 15,463 15,569 Trust Records 9,284 9,887 9,963 Trust Review & Audit 4,922 4,939 4,964 Risk Management TOTAL OST 138, , ,029

5 OST Organizational Chart 5

6 6 Follow-Up from Billings Financial Education Director Brian Ross New Position Facilitate and Coordinate Development of Financial Education Curriculum and Training Tribal Individual Adult Youth

7 7 Facilitating Probate Reform OST is joining our partners at BIA and OHA to look at ways to reduce the burden of the current probate process and provide meaningful estate planning opportunities to Indian Trust Beneficiaries. Consistent with: Secretary s Commission on Indian Trust Administration and Reform Secretary s Reaffirmation of the Trust Principles Special Trustee s Remarks to Affiliated Tribes of Northwest Indians

8 8 Estate Planning Will Drafting Lifetime Gifting Possible Solutions Transfer/Pay on Death Designations Revocable Trusts/Family Limited Partnerships Small Estate Process

9 9 Estate Planning Will Drafting Third Party Legal Services American Indian Probate Reform Act (AIPRA) allows the Secretary to provide funds for Estate Planning. Engage legal organizations, local law offices and law schools for direct legal services to assist beneficiaries in creating wills. Intestate death of landowner often results in fractionation: Fractionation - process whereby an increasing number of owners hold undivided fractional interests in a tract of land at the passing of each generation. A pilot project by the Indian Land Tenure Foundation in 2005 estimated that the Federal Government s administrative cost of managing a fractionated interest in trust is $115 per year. A conservative estimate for probating a trust estate is $3,000 and approximately 2 years to complete (regardless of value of estate interest)

10 Estate Planning Will Drafting Current Partnerships include: Dakota Plains Legal Services Oklahoma City University Law School North Dakota Legal Services University of Arizona College of Law Wisconsin Judicare California Indian Legal Services Kansas Legal Services DNA Legal Services Oklahoma Indian Legal Services University of Seattle Law School Nebraska Legal Aid Montana Legal Services Oglala Sioux Tribe, Wills/Probate Office University of New Mexico College of Law University of Denver Law School University of South Dakota Law School

11 11 Estate Planning Lifetime Gifts Gift Deeds Transfer interest in real property to intended beneficiaries during lifetime. Ability to retain life estate in property. Avoid probate upon death. Not currently widely offered or used as an estate planning tool due to inconsistent interpretation and application of the regulations and finality (i.e., irrevocability) of transfer. OST working with BIA on a project to standardize and simplify the gift deed process in conjunction with BIA s recently launched Landowner Awareness Project.

12 Future Opportunities Transfer on Death (TOD)/Pay on Death (POD) designations Most common method by which private sector financial assets are transferred to subsequent beneficiaries Provide Indian beneficiaries the opportunity to execute a beneficiary designation for Indian trust assets Revocable Personal Property (IIM Account) Real Property Avoid probate upon death Legislation required to implement (model legislation available - Uniform Probate Code & Uniform Real Property Transfers on Death Act)

13 13 Future Opportunities AIPRA Family Managed Trusts/Partnerships Revocable trusts provide for continued management of individual s property during disability, and avoid a probate administration upon death. Family Limited Partnerships (FLPs) and Limited Liability Companies (LLCs) can be used for these purposes. AIPRA authorizes pilot projects to explore the use of legal entities to efficiently manage interests in trust property. Ad hoc working group to identify potential pilot sites and models, determine and implement a favorable regulatory structure, analyze and recommend appropriate business structures and entities to maximize economic development and self-determination, and develop and execute a detailed strategic plan for tribal consultation and input.

14 14 Future Opportunities Small Estate Process/Affidavit Implementation of the above measures has the potential to significantly reduce the number of Indian probates. For those probates that do remain, however, adopting a true small estate process (i.e., collection by affidavit) has the potential to significantly reduce the length, complexity and cost of transferring Indian Trust assets at death. Widely used in the private sector. Model legislation is readily available that could easily be adapted for our use.

15 15 Questions? For More Information Please Contact: OST Jim James Deputy Special Trustee Field Operations (505) Thank you!