Bing Crosby died in 1977 he had a probate avoidance Trust. In 2015 his grandson filed a probate in Oklahoma. The probate was necessary because Bing did not fund his Trust by transferring the mineral rights into it. This caused the royalties due from the Oil and Gas to be put into suspense. This means that the payments were tied up until the probate was completed. This delay and expense could have been avoided if Bing filed a mineral deed before his death.

Think of a Trust Like a Wagon, It Only Useful When it is Full

Often a wagon is used to describe a Trust. A wagon has a handle over which Trustee has control. The Trust Document contains the rules. The bucket of the wagon receives the assets. The wheels prevent the need for probate. When the original Trustee dies or becomes incompetent the handle drops. The Trust Document names the Successor Trustee and tells him or her what to do with the trust assets. In this analogy he or she picks up the wagon’s handle. But the Successor Trustee can only control what was placed in the wagon.

Why is Funding a Trust with Minerals Important?

Most oil, gas and other mineral rights are an interest in real property. Therefore, these require a deed from the owner to the Trustee in order to properly fund the Trust. If a deed is not prepared, signed and filed with the county where minerals are located, then the Trust is not properly funded. The successor trustees and beneficiaries will not be able to rely upon the Trust to have property conveyed to themselves or to receive royalties and other monies they otherwise would receive.

Omitting Minerals Causes Title Issues Usually Resolved by Probate

If minerals are not deeded into a trust, the trust is considered unfunded. A “Pour Over Will” is often a companion document to a Trust. Basically, it instructs the court to put the omitted property into the Trust at the conclusion of the probate.

Do I Need to Transfer Minerals if They Are Not Generating Income or Royalties?

Often people neglect to put minerals into a trust because they are not currently producing royalties. There may be a huge problem with this approach. Often oil and gas holdings that seem worthless suddenly become valuable. If this happens and the minerals are not in the trust, then your successor trustees and beneficiaries will have to deal with this issue. They will likely be facing a probate that costs many thousands of dollars that could have been avoided for a few hundred dollars.

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What Information is Needed to Deed Minerals into a Trust?

The information is relatively simple:

  • The name and address of the Mineral Owner
  • The name of the Trust, the date it was created, the Trustee’s name and
  • The legal description of the minerals

If the legal description is not known, it often can be identified with review of online records.

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What happens after the Mineral Deed is Prepared?

Once the deed is prepared and signed it must be filed of record in the county where the minerals are located. Along with the deed a Memorandum of Trust (sometimes called a Certification or Affidavit) of trust should be filed to demonstrate the Trustee’s authority. A correct filing fee must also be submitted.

What if I am Currently Receiving Royalties?

If you are currently receiving oil and gas royalties, then it is good practice to contact the operators or parties paying the royalties to inform them of the trust. They may request a W9 and other information to keep your payments coming in.

Can My Trust Attorney Prepare the Deed for Oklahoma?

If your attorney is licensed in Oklahoma, then he or she can prepare an Oklahoma deed. If not, then it would be the unauthorized practice of law in Oklahoma. The same is true for most states. However, your attorney should be able to provide information for the Trust and assist with the Memorandum of Trust.

What if I Don’t Have a Trust but Want to Avoid Probate?

If you don’t have a Trust, you may want to consider a “Transfer on Death Deed”. Click Here

Appreciation for Support of America's Mineral Owners