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If ever there were people with a right to claim “trust issues” throughout their history, it might be the indigenous people of this continent. The history of federal government promises and failures with respect to native peoples is long, shameful and involved. But resilient indigenous people are still here, seeking ways to take back inherent rights to manage their own affairs.

Trust is a complicated thing. So are legal trusts. Here is some background on the issue.

What is a “trust”?

A trust arrangement protects property – such as land, buildings or money – on behalf of a beneficiary. A trust document usually spells out who can make decisions about using the assets in the trust, and under what circumstances some or all of the assets will be released to the beneficiary.

One of the benefits of a trust is that it lives on, past the lives of the people who set it up. Assets can be passed from one generation to another, for example, by placing the assets in a trust that provides an allowance until the beneficiary reaches a specified age, when the trust assets can be released to her. A trust arrangement can also restrict the uses of property, as when land is put into a trust to protect a natural habitat. The “beneficial owners” of the trust may live on the land and use it as they wish, as long as their activities and development do not disrupt the natural habitat specified in the trust.

In most cases, the “trustee” is a third party, such as a bank or an organization, which ensures that the requirements of the trust are carried out. But sometimes the “beneficial owner” (or the “trustor”) manages trust assets during his or her lifetime, with the trust document itself specifying who will pick up management responsibilities when the original owners are no longer able to handle that role.

Indian lands held in trust

The federal government holds title to about 326 Indian land areas – administered as federal Indian reservations. These lands, totaling more than 56 million acres, are held in trust for various Indian tribes and individuals.

  • These lands are protected against encroachment by others, except when the federal government itself decides to sell off, develop, or otherwise encumber Indian lands, as when eastern lands were taken over and western lands were “checker-boarded” to accommodate the railroads.)
  • The federal government is responsible for collecting and accounting for income received for mining, drilling, and other extractions from the land. The federal government’s colossal failure to manage this responsibility has been chronicled in the Cobell v. Salazar case.
  • These lands are exempt from state and local property taxes, and income earned on federal reservations is not subject to state income tax.
  • The federal government does not levy income tax on income from trust lands.

In the case of Indian lands, the trustor/trustee relationship is clouded by history and law. Native Americans were forcibly removed from their lands, often by act of war. The lands they were assigned were held in trust, not necessarily by the election of the conquered people. The “trust documents” the collection of treaties and laws that describe the federal trust relationship – are far less clear than modern trust documents drawn up for two willing parties, which carefully specify who controls the assets in the trust and who makes decisions about their use.

Moving (Slowly) Forward

Over the last 40 years the federal government has evolved toward a deeper and broader understanding of the implications of tribal self-governance. As part of that progression, and partly, perhaps, in response to the experience of the Cobell decision, the federal government is now willing to take another look at the management of Indian land trusts.

Until the passage of the Hearth Act in 2012, a tribe could not lease its own lands for public, religious, educational, recreational, residential, business, or agricultural purposes, without the express permission of the Secretary of the Interior. Such permission was routinely years in coming, frustrating collaborative attempts to make needed improvements on Indian lands. The Hearth Act set up a structure that will allow tribes to establish an expedited approval structure with the Secretary of the Interior, enabling the tribe to approve projects as long as the fall within the structure of a pre-approved agreement between the Secretary and the tribal government. The Hearth Act grew out of a multi-year demonstration program with the Navajo, which hold more than 16 million acres in Arizona, New Mexico, and Utah.