Are you in the habit of asking your clients about their Indian heritage? If not, you should consider adding that question to your list of initial facts to gather about your Estate Planning clients. There are certain Federal Laws concerning members of the Five Civilized Tribes that require your special attention for these clients. The following practitioner’s notes are designed to introduce you to the unique rules and considerations surrounding the issues of restricted property in an estate planning context. These notes will also introduce you to the special statutory requirements in estate planning for full-blooded citizens of the Five Civilized Tribes.
What is “restricted property”?
Title to restricted real property is held in fee by individual Indians or Indian tribes, but with the caveat that it cannot be alienated without the consent of Congress. Today, your client’s restricted properties are most likely inherited interests in land allotments that were given to their Indian ancestors in the late 1800’s to early 1900’s. Restricted ownership benefits the client in that most restricted properties are not subject to ad valorem taxes, and also cannot be reached by the owner’s creditors. There are special rules surrounding both the testamentary and non-testamentary transfer of restricted lands owned by members of the Five Civilized Tribes.
An IIM (Individual Indian Money) Account is also restricted property. This is an interest-bearing account held by the Department of the Interior for the benefit of an individual Indian. These accounts typically contain the proceeds from the sale, lease, or use of restricted land (e.g., oil and gas leases).
How do I know if my client has restricted property?
Be aware that if your client is any blood quantum of the Five Civilized Tribes, in just one tribe or in some combination of those tribes, they may own property that is in restricted status. You may find that your client has only a tiny fraction of an interest in restricted property. You may also encounter clients that have had the Secretary of the Interior approve a partition of the property, through a process called Approval of Deeds. Below are some examples of the kinds of initial questions you may want to add to your general repertoire of questions about your client’s property. Including this information in your client’s estate planning documents will help ensure that these assets are correctly probated.
Do you know if you own any interest in restricted property? In most cases, a client is aware that they are the owner of an interest in restricted property. If they know that they own restricted property, you will need to know what percentage ownership they have. You will also need to know the legal description of the land, and whether or not you are dealing with surface rights, mineral rights or both. The fraction of ownership and whether or not the mineral rights remain intact should be noted in the description of the restricted property in the Will.
Did any of your deceased family members own any interest in restricted property? If your client doesn’t know whether or not they owned restricted property, this would be a good place to start. If their deceased family members owned restricted property during their lifetime, your client may be an heir as to that interest. If your client does not have this information, you can make an Inventory Request of the deceased family member through their tribe’s realty office.
Do you have an IIM Account? Your client most likely knows whether or not they have an IIM Account, but you can check on this by contacting the Office of the Special Trustees at 1-888-678-6836.
To whom may my client devise their restricted property?
Any person (related or unrelated) can be the beneficiary of restricted property. However, in order for the property to retain its restricted status and the benefits associated with restriction, the person inheriting the property must be a lineal descendant of the deceased restricted landowner.
If the beneficiary designated to receive the restricted property is not a lineal descendant, the property will “fall out” of restriction by operation of law once the title is transferred through probate. This means it will become unrestricted and is then subject to property taxes and would be within the reach of beneficiary’s creditors.
Special Will Construction Rules for Full-Blooded Clients
The Black and White Law
Federal Law governs the testamentary transfers of restricted property by Full-Blooded members of the Five Civilized Tribes. This law is The Act of April 26, 1906, S 23 (34 Stat. 145), as amended by Act of May 27, 1908 S 8 (35 Stat. 315).
The 1906 Act states: “Every person of lawful age and sound mind may by last will and testament devise and bequeath all of his estate, real and personal, and all interest therein: Provided, That no will of a full-blood Indian devising real estate shall be valid, if such last will and testament disinherits the parent, wife, spouse or children of such full-blood Indian unless acknowledged before and approved by a Judge of the United States court for the Indian Territory, or United States commissioner.”
The 1908 Amendment states: “That section twenty-three of [the 1906 Act] is hereby amended by adding at the end of said section, the words ‘or Judge of a county court of the State of Oklahoma”.
When does a full-blood client’s Will need to be attested to and approved by a district court Judge?
The technical answer is that a full-blooded person does not need to seek the attestation of approval of such a Judge unless that Will disinherits any of the following people as to restricted property: (a) spouse, (b) children or (c) parents. There is little guidance on what qualifies as “disinheritance” under this statute. In Kemp v. Turnbull, a full-blooded Indian with no surviving parent of child devised a life estate plus a 1/3 interest in land to his spouse, and the remaining 2/3 to a third person,
in a Will that was not approve by a Judge. The Court found that as long as the life estate plus 1/3 interest was equal in value to the interest share that the spouse would have received )1/2 of all real estate), then there was no disinheritance under the federal law. In sum, this case held that as long as the devise or monetarily equivalent to what the spouse, child, or parent would have received in intestacy, there is no disinheritance. In another case, Berry v. Brokeshoulder, the 10th Circuit Court found that grandchildren are not children for purposes of this statute.
However, it is good practice to have all of your full-blooded clients go before a district court Judge to attest to and approve the Will, regardless of whether or not they are disinheriting someone, and regardless of whether or not they believe they own restricted property. This avoids any later questions or contests of the validity of the Will in terms of its compliance with the statute. If a court finds that the Will is not in compliance with the statute, the Will may be invalidated as to the devises of restricted property. Note that the Will can usually be partially admitted to probate, but they will be limited in effect to the devises of unrestricted property. Under the Federal statute (as contrasted with State statutes) the existence of a pretermitted child, for example, would invalidate all of the restricted property devises of the Will. In that case, the restricted property would then be distributed to all heirs according to intestacy.
What kind of action is required from the Judge?
A state district court Judge must (1) attest to, and (2) approve the Will. Mere acknowledgment is not enough to meet statutory requirements. No formal action needs to be filed with the court to have the Judge’s attestation and approval, just make an appointment for you and the client to meet with them. Judges are busy and they will appreciate it if you have already had your client formally execute the Will when you bring them in. Also, please note that it must be a Judge of a state district court, and not a tribal district court Judge.
The attestation and approval clause should appear at the end of the Will. An appropriate example is as follows:
“Before me, the undersigned District Judge in and for ________ County, State of Oklahoma, personally appeared ____________________, a Full-Blood (4/4) Muscogee (Creek) Indian, and acknowledged to me that she had executed the same Last Will and Testament as her free and voluntary act and deed for the uses and purposes therein set forth. She stated and declared to me that the said instrument was her Last Will and Testament, and that she understood its contents prior to the execution thereof. Thereupon, at her request, I approve said Will in accordance with the Acts of Congress pertaining thereunto, this ______ day of ______________________, 2014. Signed _________________, Judge of the District Court.”
Disclaimer: This document is not intended to provide legal advice. For questions involving federal statutory requirements in the areas of full-blooded Wills of transfers to restricted property, please contact the Bureau of Indian Affairs, Tulsa Field Solicitor’s Office, at 918-669-7730.