POMS SI 01120.195: SSA Policy for Evaluating Whether the IGRA Trust for Minor
Children is the NH’s Resource for SSI Eligibility.
SSA’s POMS SI 01120.195 “provides instructions for evaluating IGRA trusts established by Indian tribes for
tribal members who are minor children or incompetent adults.”[3] When a tribal member who has an IGRA trust files for SSI, the agency must determine
how to count assets held in the IGRA trust under the agency’s resource counting rules.
POMS SI 01120.195B. Agency policy instructs that the first part of this determination requires the agency
to identify the grantor of the trust. POMS SI 01120.195.B. If the tribe is the grantor of the IGRA trust, the agency is to follow policy
set forth in POMS SI 01120.200 as to trusts established with the assets of third parties to determine if the trust
is a resource. POMS SI 01120.195D. If the tribe is not the grantor of the IGRA trust, the agency is to follow policy
in POMS SI 01120.201 as to trusts established with the assets of an individual to determine if the trust
is a resource. POMS SI 01120.195D. Thus, we first consider whether the Tribes are the grantor of the C-A Tribes’ IGRA
Trust.[4]
POMS SI
01120.195E: SSA
Policy for Evaluating Who is the Grantor of an IGRA Trust for Minor Children.
To find that an Indian tribe is the grantor of an IGRA trust, SSA’s policy in POMS
SI 01120.195 requires analysis of nine requirements.[5] See POMS SI 01120.195E (“SSA treats the Indian tribe as the grantor of an IGRA trust if the trust substantially
complies with the following requirements”). Here, the C-A Tribes’ IGRA Trust appears
to meet all the requirements for the Tribes to be the grantor of the C-A Tribes’ IGRA
Trust. See POMS SI 01120.195E.
Requirement 1: The Indian tribe establishes the trust for the benefit of tribe members who are minors
and legally incompetent adults and it funds the trust using only per capita payments
from gaming revenues.
The C-A Tribes’ IGRA Trust Meets Requirement 1: The C-A Tribes’ IGRA Trust clearly states that the Trust is established for the benefit
of the Tribes’ members who are minors or legally competent adults and the Tribes fund
the trust solely through per capita payments from gaming revenues. See C-A Tribes’ IGRA Trust, Recitals A, C. Specifically, the C-A Tribes’ IGRA Trust states
its purpose to establish a trust for minor and legally incompetent members, “authorizing
distributions to be placed in this Trust and derived from the per capita distribution
of IGRA regulated gaming revenues….” C-A Tribes’ IGRA Trust, Recital C. Thus, the
C-A Tribes’ IGRA Trust meets this first requirement.
Requirement 2: The trust beneficiary is a minor or legally incompetent adult at the time the trust
(or trust account) is established.
The C-A Tribes’ IGRA Trust Meets Requirement 2: The NH, born in 2002, has been a minor at all relevant times. Indeed, the Master
Trust suggests only minor or legally incompetent adults can have a trust account in
the C‑A Tribes’ IGRA Trust. The Tribes stated the purpose of the C-A Tribes’ IGRA
Trust is to establish a trust for minor and legally incompetent members, “authorizing
distributions to be placed in this Trust and derived from the per capita distribution
of IGRA regulated gaming revenues….” C-A Tribes’ IGRA Trust, Recital C. In furtherance
of that purpose, the Tribes establish trust accounts for each minor child and legally
incompetent adult who is a member of the Tribes. See Master Trust, Article 1.02. Thus, the C-A Tribes’ IGRA Trust meets this second requirement.
Requirement 3:The trust only allows contributions while the beneficiary is still a minor or legally
incompetent.
The C-A Tribes’ IGRA Trust Meets Requirement
3: While the C-A Tribes’ IGRA Trust does not specifically state that contributions will
only be made while a beneficiary is a minor, the Trusts’ provisions state that contributions
are made on behalf of minors and legally incompetent adults. C-A Tribes’ IGRA Trust,
Recital F. None of the C-A Tribes’ IGRA Trust provisions defines “minor” as including
any individual over the age of 18. Thus, the C-A Tribes’ IGRA Trust contemplates contributions
only while the beneficiary remains a minor or legally incompetent.
We note in some instances the C-A Tribe’s IGRA Trust permits the Trustee to hold assets
for a beneficiary who is no longer a minor, but no Trust provision indicates the Tribe
would continue contributing to the beneficiary’s trust after he or she is no longer
a minor. The Master Trust states a beneficiary is not required to request trust funds
at the time he or she is no longer a minor. See Master Trust, Article 3.03. If a beneficiary has not obtained a high school diploma,
then Trust funds are not distributed or available to the beneficiary until age 20.
See Master Agreement, Schedule 2. However, the question of when distributions must be
made does not directly address how long the tribe will make per capita contributions
to the Trust. Thus, a provision requiring the funds be retained beyond age 18 for
individuals without a high school diploma, does not affect the determination as to
whether the Tribes are the grantor of the Trust. See POMS SI 01120.195E NOTE.
Thus, we believe the C-A Tribes’ IGRA Trust meets this third requirement.
Requirement 4: The trust instrument states that it is a grantor trust and the Indian tribe is the
grantor of the trust, and grants to the Indian tribe a power or interest in the trust
assets, such as the ability to vote any shares held in trust.
The C-A Tribes’ IGRA Trust Meets Requirement 4: The C-A Tribes’ IGRA Trust clearly states it is a grantor trust, the Tribes are the
grantor of the trust, and the Tribes retain power or interest in the trust assets.
See Master Trust, Article 2.01. Thus, the C-A Tribes’ IGRA Trust meets the fourth requirement.
Requirement 5: The Indian tribe is the owner of the trust for tax purposes and all the trust assets
and the trust principal and income are subject to claims of general creditors of the
Indian tribe under applicable federal, state, local, and tribal law.
The C-A Tribes’ IGRA Meets Requirement 5: The C-A Tribes’ IGRA Trust states the Tribes are the owners of the Trust for federal
income tax purposes, and that the trust principal and income are subject to the Tribes’
general creditors under applicable federal, state, local and tribal law. See Master Trust, Articles 2.01, 2.07. Thus, the C-A Tribes’ IGRA Trust meets the fifth
requirement.
Requirement 6: At all times while the trust is in effect, the principal and income of the trust
must be subject to claims of general creditors under applicable law. In addition,
the trust documents must require the trustee to cease payments to or for the benefit
of the beneficiary and must require that the trustee hold trust assets for the benefit
of the Indian tribe’s general creditors throughout any period during which the trustee
believes or has reason to believe that the Indian tribe is unable to pay its debts
as they become due, or is subject to a pending insolvency or bankruptcy proceeding.
The C-A Tribes’ IGRA Trust Meets Requirement 6: The C-A Tribes’ IGRA Trust specifically states that on request, the Trustee will
cease payments to and for the beneficiaries’ benefit and hold the trust assets for
the benefit of the Tribes’ general creditors throughout any period during which the
Trustee has been notified that the Tribes are unable to pay debts as they become due,
or are subject to a pending insolvency or bankruptcy proceeding. Thus, the C-A Tribes’
IGRA Trust substantially meets this sixth requirement.
Requirement 7: The trust beneficiary does not have any preferred claim on or beneficial ownership
interest in any assets of the trust, and any rights created under the trust documents
must be unsecured rights. In addition, amounts payable to, or for his or her benefit,
cannot be anticipated, assigned (either at law or at equity), alienated, pledged,
encumbered or subjected to garnishment, levy, or other legal or equitable process.
The C-A Tribes’ IGRA Trust Meets Requirement 7: The C-A Tribes’ IGRA Trust states beneficiaries have no preferred claim on, or any
beneficial ownership interest in, any assets of the Trust; any rights created under
the Trust are mere unsecured rights of beneficiaries against the Tribes; and any beneficiary’s
balance, amounts payable to or for the benefits of beneficiaries under the Trust may
not be anticipated, assigned (either at law or in equity), alienated, pledged, encumbered
or subjected to the beneficiary’s creditors, bankruptcy, attachment, garnishment,
levy, execution, or other legal or equitable process. See
C-A Tribes’ IGRA Trust, Articles 2.06, 2.09. Thus, the C-A Tribes’ IGRA Trust meets
this seventh requirement.
Requirement 8: Trust assets are not available to or for the benefit of the beneficiary until the
beneficiary ceases to be a minor or legal incompetent, except for the distributions
for the beneficiary’s health, education, or welfare made at the discretion of the
trustee and pursuant to the trust instrument.
The C-A Tribes’ IGRA Trust Meets Requirement 8: The C-A Tribes’ IGRA Trust states that Trust assets are not available to or for the
benefit of a beneficiary until the beneficiary ceases to be a minor and meets the
other applicable requirements set forth in Schedule 2, except for distributions for
the health, education, or welfare of the Beneficiary made at the discretion of the
Trustee. See C-A Tribes’ IGRA Trust, Article 2.05. Schedule 2 explains a beneficiary who has obtained
a high school diploma can receive the trust account balance at age 18, but a beneficiary
who has not obtained a high school diploma cannot access the balance until age 20.
See C-A Tribes’ IGRA Trust, Schedule 2. Notably, distributions are not mandatory when
the beneficiary reaches the applicable age but rather, are distributed only on the
beneficiary’s request when he or she reaches the age of eligibility. See C-A Tribes’ IGRA Trust, Article 3.03. Thus, the C-A Tribes’ IGRA Trust meets this
eighth requirement.
Requirement 9: Upon the beneficiary’s death, the beneficiary’s share must be paid to the Indian
tribe, unless the trust document provides for payment either: (1) to persons who may
inherit from the beneficiary under applicable state or tribal inheritance laws; or
(2) based on the terms of a valid will or trust of the beneficiary.
The C-A Tribes’ IGRA Trust Meets Requirement 9: The C-A Tribes’ IGRA Trust states that upon a beneficiary’s death, the beneficiary’s
share will be paid (1) to the beneficiary’s surviving spouse, if that spouse is an
enrolled member of the Tribes; (2) in equal shares to any surviving children who are
enrolled members of the Tribes; (3) in equal shares to surviving parents of the beneficiary
who are enrolled members of the Tribes; (4) in equal shares to any surviving siblings
of the beneficiary who are enrolled members of the Tribes; and (5) if there are no
surviving persons as identified above, to the Tribes as Trustor. See
C-A Tribes’ IGRA Trust, Article 3.05. Alternatively, if the beneficiary has a valid
will or trust, then the Trustee will distribute the beneficiary’s share as directed
in the will or trust. SeeId. Although the C-A Tribes of Oklahoma Law and Order Code does not specifically define
the order of heirship, it permits heirship to be proven through the Tribes’ customs.
See
C-A
Tribes’ of Oklahoma Law & Order Code, Civ. Proc. § 1105(b) (available at
civilprocedure3.html). Because the C-A Tribes’ IGRA Trust states that the Trust conforms
to the IRS safe harbor guidance for treating the Trust as a tribally-owned grantor
trust from which SSA policy derived (C-A Tribes’ IGRA Trust, Recitals A, C; Article
3.10), we believe it reasonable to conclude the Trust document correctly identifies
the tribal custom for order of heirship. Accordingly, upon the beneficiary’s death,
the beneficiary’s share can only be distributed to the Tribe, an heir under tribal
inheritance law, or a devise or beneficiary under a valid will or trust. Thus, the
C-A Tribes’ IGRA Trust substantially meets this ninth requirement.
Again, the C-A Tribes’ IGRA Trust must substantially satisfy the nine requirements
for the Tribes to be considered the grantor of the Trust. See POMS SI 01120.195E. As shown above, the C-A Tribes’ IGRA Trust meets all of the requirements. Therefore,
SSA policy for evaluating IGRA trusts instructs that the Tribes be considered the
grantor of the C-A Tribes’ IGRA Trust. See id.
When a tribe is the grantor of an IGRA trust, SSA follows the policy in POMS SI 01120.200 as to trusts established with the assets of third parties to determine if the trust
is a resource and if disbursements from the trust are countable income. See POMS SI 01120.195D. Here, as explained above, we believe it is reasonable for the agency to find that
the Tribes are the grantor of the Trust upon application of specific agency policy.
Thus, POMS SI 01120.200 is the appropriate instruction for determining whether the assets in the C-A Tribes’
IGRA Trust are a resource for purposes of the NH’s SSI eligibility. We next analyze
whether the C-A Tribes’ IGRA Trust assets are the NH’s resource under the regular
resource counting rules for third-party grantor trusts.
POMS SI 01120.200: SSA Policy for Trusts Established With the Assets of Third
Parties.
POMS SI 01120.200 contains the policy instructions for trusts established with the assets of third
parties. Under the regular resource rules, the trust principal will be a resource
if the individual (1) has the legal authority to revoke or terminate the trust and
use the assets to meet his or her needs for food or shelter, (2) can direct the use
of the trust principal for his or her support and maintenance under the terms of the
trust, or (3) can sell it. See POMS SI 01120.200D1a. For the following reasons, we believe the agency may reasonably conclude that the
assets in the C-A Tribes’ IGRA Trust are not counted as a resource to the NH under
SSI resource counting rules.
Addressing the first two criteria, a beneficiary of the C-A Tribes’ IGRA Trust cannot
revoke or terminate his or her individual beneficiary account and use the assets to
meet his or her needs for food and shelter, and the beneficiary does not have the
authority to direct the use of Trust principal for his or her own support or maintenance.
The C-A Tribes’ IGRA Trust specifically states that individual beneficiary trust assets
are not available to or for the benefit of the beneficiary until the beneficiary ceases
to be a minor, except for distributions for the health, education, or welfare of the
beneficiary made at the discretion of the Trustee. See C-A Tribes’ IGRA Trust, Article 2.05. Thus, the Trustee has sole discretion to distribute
funds from the individual beneficiary’s trust account and the beneficiary has no power
to direct use of trust funds for his or her support and maintenance. Importantly,
the C-A Tribes’ IGRA Trust also specifically states that the Trust is irrevocable.
See C-A Tribes’ IGRA Trust, Article 1.04. Agency policy states that if a trust is irrevocable
by its terms and under State law, and the trust beneficiary cannot control or direct
the use of trust assets for his or her own support and maintenance, the trust is not
a resource. See POMS SI 01120.200D2.
Addressing the third criteria, the C-A Tribes’ IGRA Trust indicates that a beneficiary
cannot sell his or her beneficial interest in the Trust. Particularly, the C-A Tribes’
IGRA Trust states that the Tribes are the grantor and owner of the Trust and beneficiaries
have no preferred claim on, or any beneficial ownership interest in any trust assets.
See C-A Tribes’ IGRA Trust, Articles 2.01, 2.06. Additionally, the Trust states that “[a]ny
Beneficiary’s trust balance, amounts payable to or for the benefit of Beneficiaries
under the Trust Agreement may not be anticipated, assigned (either at law or in equity),
alienated, pledged, encumbered or subjected to the Beneficiary’s creditors, bankruptcy,
attachment, levy, execution, or other legal equitable process.” See C-A Tribes’ IGRA Trust, Article 2.09. Thus, a beneficiary cannot sell his or her beneficial
interest in the Trust.
Based on these terms, the NH does not have the authority to revoke or terminate his
individual account in the C-A Tribes’ IGRA Trust to use the assets for his own support
or maintenance. Further, the NH does not have the right to sell his beneficial interest
in the C-A Tribes’ IGRA Trust. Therefore, it is our opinion that the NH’s share in
the C-A Tribes’ IGRA Trust principal is not the NH’s resource under the regular resource
rules in POMS SI 01120.200.
CONCLUSION
In conclusion, as to your first question, we defer to the DOI’s determination that
the C-A Tribes’ IGRA Trust, which provides for the establishment of a trust for minor
children, complies with IGRA. Under the IGRA, the Secretary of DOI has the authority
to approve an Indian tribe’s RAP establishing a trust for minors and incompetent adults
to receive per capita payment from gaming activities. Thus, although you asked whether
the C-A Tribes’ IGRA Trust qualifies as an IGRA trust, SSA does not make such determinations.
Based on the information provided to SSA, we believe it would be reasonable for the
agency to apply SSA policy in POMS SI 01120.195 regarding trusts established under the IGRA for minor children to the present matter
to determine whether the C-A Tribes’ IGRA Trust assets should be counted as the NH’s
resource for SSI purposes. See POMS SI 01120.195B (“When a tribal member who has an IGRA trust files for [SSI], we must first determine
whether the tribe or the member is the grantor of the trust. Then we must determine
how to count assets held in the IGRA trust under our resource counting rules.”).
As to the second question, in applying SSA policy in POMS SI 01120.195 and SI 01120.200 to the C-A Tribes’ IGRA Trust, we believe the agency may reasonably conclude that
the assets in the Trust are not counted as a resource to the NH under SSI resource
counting rules because: (1) the Tribes are the grantor for the C-A Tribes’ IGRA Trust
under the agency’s specific policy instructions; and (2) the C-A Tribes’ IGRA Trust
does not qualify as a resource under regular resource counting rules for third-party
trusts. See POMS SI 01120.195, SI 01120.200.