North Dakota Mineral Interests and Elder Law Issues

Transcription

1 North Dakota Mineral Interests and Elder Law Issues Susan E. Johnson-Drenth, CELA* JD Legal Planning PLLC 2525 University Drive South, Suite B Fargo, ND [email protected] Certified as an Elder Law Attorney by the National Elder Law Foundation

2 Important Notice These materials and the related presentation are intended to provide the participants with guidance in estate planning and administration. The materials and the comments of the speaker do not constitute, and should not be treated as, legal advice regarding the use of any particular estate planning technique or the tax consequences associated with any such technique. Although every effort has been made to assure the accuracy of these materials and comments, the speaker and JD Legal Planning do not assume responsibility for the reliance of any individual on the written or oral information disseminated. You should independently verify all statements made in the materials and in the seminar before applying them to a particular fact situation, and should independently determine both the tax and non-tax consequences of using any particular estate planning technique before using it or recommending it either on your own behalf or on behalf of another. 2

3 3 NORTH DAKOTA REAL PROPERTY AND MINERAL INTERESTS

4 MINERAL INTERESTS In 2004, Grantor sells land and the deed stated all mineral rights retained. Can Grantor sell gravel from the land in 2013? TRUE OR FALSE 4

5 MINERAL INTERESTS Mineral interests include the reasonable use of the surface to allow for the exploration and production of minerals. May be created by granting mineral rights, or retaining mineral rights. 5

6 ROYALTY INTERESTS Not the same as a full mineral interest, because there is no right to use the surface for exploration. A royalty interest owner owns a share in the ultimate production, free of the costs of exploration and production. 6

7 NET MINERAL ACRES PERCENTAGE OWNERSHIP X TOTAL ACRES 10% of Mineral Interests in a 160 acre parcel = 16 net mineral acres 7

8 KEEPING YOUR MINERALS A surface owner may bring an action to perfect title in the abandoned mineral interests below, if the mineral interest owner has not used the mineral interests or has not recorded a Statement of Claim within the previous 20 year period 8

9 KEEPING YOUR MINERALS WHICH OF THE FOLLOWING IS NOT ADEQUATELY USING YOUR MINERALS? A. MINERALS ARE PRODUCING B. ROYALTIES ARE PAID TO A PERSON WHO CANNOT BE FOUND C. MINERALS LEASED FROM A TRUST D. STATEMENT OF CLAIM IS RECORDED 9

10 ND REAL PROPERTY GENERALLY PROPERTY TAX: Must be paid before a deed may be recorded Is paid one year in arrearage 10

11 ND REAL PROPERTY DEED ISSUES *No state deed tax *No well disclosure statement *Recording fees are based on the number of pages *May use Affidavit of Non-homestead instead of spousal signature on deed *Attorney-in-fact may sign without Affidavit 11

12 ND REAL PROPERTY DEED ISSUES *Statement of Full Consideration is required on deed, unless an exception is met and listed (instead of CRV in MN) *Transfer-on-Death deeds in place for surface and mineral rights since 2011 *Life estate deeds are not subject to Medicaid estate recovery or life estate liens 12

13 13 NORTH DAKOTA ESTATE PLANNING AND PROBATE

14 WHICH IS VALID IN ND? A. Agent failed to sign the acceptance on the Health Care Directive B. Attorney-in-fact in applying for MA for principal after the AIF made gifts of principal s assets 72 months ago C. Probating a will before the testator dies D. Third-Party Special Needs Trust for minor created by parent 14

15 NORTH DAKOTA HEALTH CARE DIRECTIVE Requires agent to accept appointment by signature. NDCC form at Section ND Health Care Directive Registry is pending and may be available to MN residents who use ND healthcare facilities 15

16 NORTH DAKOTA DURABLE GENERAL POWER OF ATTORNEY No statutory short form POAs available All common law POAs, therefore all POAs are different. Be careful to check if springing POA. 16

17 NORTH DAKOTA WILLS, PROBATE AND ESTATE TAX Holographic wills are valid, whether or not witnessed, if the signature and material (i.e.-dispositive) portions are in the testator s handwriting Notice to creditor period is 90 days Western ND has local rules (see Ex. A) ND Estate Tax is perpetually federalized (identical to federal level) 17

18 NORTH DAKOTA TRUSTS ND s version of the Uniform Trust Code enacted in 2007 More direction regarding the modification and termination of a trust now, including to achieve the settlor s tax objectives Pet trusts are allowed Trustee may be removed by court action requested by all qualified beneficiaries, and removal not inconsistent with material purpose of trust 18

19 NORTH DAKOTA SPECIAL NEEDS TRUSTS Self-settled special needs trust (Federal Law-d4a or d4c) Third-party special needs trust (State Law) No SNT is referred to as a supplemental needs trust 19

20 NORTH DAKOTA SPECIAL NEEDS TRUSTS Attorney-in-fact may not create a SNT Guardian or conservator may create SNT and serve as trustee, unless a corporate entity No state or county inventory or accounting requirements, but SNT must be reported within 10 days of funding ND has 2 pooled SNTs (self-settled and third-party) GAPS and GFAS (see Ex. B) 20

21 ND GUARDIANSHIP AND CONSERVATORSHIP Which is correct in ND? A. A proposed ward/conservatee has no court-appointed attorney advocate. B. A guardian must give proper notice of intent to dispose of personal property. C. A conservator must petition for the sale of real estate. D. A proposed conservator must have a background check. 21

22 22 NORTH DAKOTA MEDICAID

23 ND MEDICAID ND Medicaid Manual is online (See Ex. B) 2013 Community spouse asset allowance Not less than $23,184 Not more than $115,920 Community spouse income allowance is not needs-based like MN. $2,267 total income allowed for CS. 23

24 ND MEDICAID TRUE OR FALSE? An engraved headstone is a countable asset for MA purposes, unless it is part of the pre-need funeral contract. 24

25 ND MEDICAID Single Premium Immediate Annuity purchases to increase community spouse income are allowed, even postasset assessment. ND DHS, as its interest may appear, must be irrevocably named as the primary beneficiary. 25

26 26 ND MEDICAID Which option is an inadequate Medicaid valuation technique for agricultural land? A. Appraisal B. Written statement from the local AG lender. C. Fair Market evaluation from land broker. D. True and full assessed valuation from tax records

27 ND MEDICAID 2013 North Dakota monthly average cost of care = $6,792 Usually updated every January 1 27

28 28 ND MEDICAID On January 1, 2006, Attorney-in-fact with proper gifting authority signs a quit claim deed conveying a remainder interest, subject to the retained life estate in the principal. When does the Medicaid lookback period expire? A. December 31, 2008 B. December 31, 2010 C. January 1, 2009 D. Never

29 ND MEDICAID FILIAL LAW A 1877 ND LAW STILL IN EFFECT THAT STATES CHILDREN ARE RESPONSIBLE FOR THE CARE OF THEIR PARENTS. ND nursing homes plan to use this more for the return of assets 29

30 ND Unauthorized Practice of Law Preparing ND Deeds when you are not licensed to practice law in ND violates Rule 5.5 and is the unauthorized practice of law. 30

31 I have enjoyed my time with you today. If you have any further questions, please contact me at: , Susan E. Johnson-Drenth, CELA* *Certified Elder Law Attorney by the National Elder Law Foundation 31