Mineral Interest Probate:

Often a property is inherited but title is not in the name of the heirs.  Generally, a company will require a probate before they begin paying royalties.  Or, a buyer will make probate a title requirement.  Very often, the process is simple for the heirs.  It is also rare that any heir is needed to make a court appearance or travel to Oklahoma.  Finally, many times a mineral only probate is eligible for a summary process which saves time and money.


Get Oil & Gas Help

 

 

 

 

Lease Terms / Negotiation

The devil is in the detail in Oil and Gas leases.  It is important to bargain for the best deal because you can be bound by the contract for decades to come.

Pooling Orders:

Sample heading for an Oklahoma Commission Case.A pooling is a legal process that can force mineral owners to allow development of their minerals.  This is generally used for people who don’t sign a lease or cannot be found.  Fighting forced pooling can be expensive and often futile.  However, a mineral owner still has rights.  If a pooling order is allowed, an owner is given various options.  We explain the pros and cons of the choices offered.  There is typically a time sensitive choice to make.

Simple Probate Avoidance:

People who go through probate often want to save their family from that trouble.  Here are a few ways to avoid probate.

Transfer on Death Deed: 

This is a simple, inexpensive document where you name the person you want to receive your land or minerals after you are gone.  In the meantime, you maintain complete control.  You can lease or sell the property and don’t need anybody’s approval.  After death, the person(s) named files a form with your death certificate and receives the property.  There is no probate or court process.  This works even if you don’t have a Will.

Joint Tenancy:

Joint Tenancy creates an ownership interest in the property in equal shares.  When one joint tenant dies, the other files a form with a death certificate in order.  This removes the deceased person from the title.  However, unlike the Transfer on Death Deed, the person making the deed gives up an ownership interest.  It is generally used by spouses when purchasing a homestead.

Trust:

A trust avoids probate if the minerals (or other real property) is deeded into it. An owner can create a trust the preserves all of his or her rights.  It does not require any separate tax return.

Out of State Trusts:

Too often, out-of-state owners fail to transfer their minerals into their trust.  As a result, those assets become subject to probate.  Creating a mineral deed into a trust is considered the practice of law in Oklahoma. Therefore, an attorney not licensed in Oklahoma cannot prepare the deed.  We can assist in the preparation and filing of the needed forms.

 

  Frequently individuals on the Mineral Rights Forum have posts that involve issues concerning title or the transfer of ownership after death.  The purpose of this paper is to provide some information regarding issues and common questions.  This is not legal advice as your situation may require different actions.

Frequent Questions:

What is probate?

We had a probate in our home state;  why must we probate in Oklahoma?

What if there was a trust?

Why was the company willing to lease and pay a bonus but is now unwilling to pay royalties?

Why won’t the company accept an affidavit of heirship?

What does a probate cost?

What is Ancillary Probate?

What if there has never been a probate?

What is the difference between a Summary and Ancillary Probate?

Will I have to travel to Oklahoma?

How long is the process?

What about Estate Taxes?

What is probate?

As it relates to a person who stands to inherit property, it is a process by which title to property is transferred from the deceased owner to his or her heirs or according to a Will.

We had a probate in our home state;  why must we probate in Oklahoma?

Simply put, it has to do with jurisdiction.  A court of one state does not have authority over real property (including mineral interest) in another.  Therefore, a court outside of Oklahoma cannot award title.  Only an Oklahoma Court can do that.

What if there was a trust?

A trust avoids probate only if property is transferred to the trustee prior to death.  If an interest is titled in the name of the decedent, instead of a trust, then probate will be required.  Typically, those with trusts also create a will.  This will instructs the probate court to transfer assets to the trust.

Why was the company willing to lease and pay a bonus but is now unwilling to pay royalties?

It is not uncommon for a company to take certain risks in order to secure a lease because it provides it with valuable rights.  However, if there is production a “division order analyst” will examine the title to the property.  If there are defects, such as an unprobated estate, the analyst will place payment of royalties in suspense.  This means that the monies will be held until the title issue is resolved.

Why won’t the company accept an affidavit of heirship?

In Oklahoma, an affidavit of heirship must meet five criteria to be deemed to provide “marketable title”.[i]  The biggest hurdle is the requirements is that an affidavit must be on file for 10 years.   Therefore, it is usually best to go forward with a probate if royalties are in suspense.

 

What does a probate cost?

There are several components that make up the expenses related to a probate.  These are:

  • Filing fees
  • Publication Fees
  • Postage
  • Attorney fees
  • Recording fees

Often attorneys are willing to probate mineral interests on a flat fee basis.  That means the expenses listed above are rolled. Into one price.

What is Ancillary Probate?

Generally, this is available if there has already been a probate in another state.  It requires certain documents from the original court.  Once these are assembled, then the process is very quick.

What if there has never been a probate?

If there has not been a probate, generally a shortened “summary probate” procedure is used.  It is available if:

  • The decedent has been dead five or more years; or
  • The decedent lived outside Oklahoma at his or her death; or
  • The value of property within Oklahoma is valued at $200,000 or less.

What is the difference between a Summary and Ancillary Probate?

For the client, there is really no difference.  The summary probate requires a slightly longer timeframe and requires slightly different publication requirements.  In short, it is something that the attorney, as opposed to the client, handles.

Will I have to travel to Oklahoma?

While we would love to have you, the answer is no.  It is extremely rare that anybody other than the attorney need attend a hearing.  Paperwork can be handled through mail or email.

How long is the process?

Once the paperwork is signed and filed, the process can take as little as 30 days (for an ancillary probate) or about 75 days for a summary probate.  These estimates may vary depending upon court availability.

What about Estate Taxes?

Oklahoma abolished its estate tax beginning January 1, 2010.  For those who died prior to 2010, often a release can be obtained or the tax expired due to the lapse of time.

Federal estate taxes are rarely an issue since the taxable amount begins at relatively high levels.

 

[i] 17-O.S. §67(C) says:  . In order to establish marketable title pursuant to this section:

 

  1. The affidavit or recital must state that the decedent died without a will, or if the decedent had a will, that the will was never probated in Oklahoma and a copy of the will is attached to the affidavit or recital, or if the will was probated that the severed mineral interest was omitted from the final decree of the decedent and a copy of the will and final decree is attached to the affidavit or recital;

 

  1. The affidavit or recital must list the names of the decedent’s heirs and their relationship to the decedent;

 

  1. The affidavit or recital must state that the maker is related to the decedent or otherwise has personal knowledge of the facts stated therein;

 

  1. The affidavit or the title transaction that contains the recital must have been recorded for at least ten (10) years in the office of the county clerk in the county in which the real property is located; and

 

  1. During the ten-year period following the recording of the affidavit or the title transaction that contains the recital, no instrument inconsistent with the heirship alleged in the affidavit or recital was filed in the office of the county clerk in the county in which the real property is located.

 

About Richard Winblad

Richard Winblad is a lifelong Oklahoma City Metro resident with a law practice focused on Elder Law and Estate Planning. His practice focus helping seniors and veterans by giving sound legal estate planning advice including Medicaid Estate Planning and Veteran’s Benefit Qualification. In 1984, Richard graduated from OSU with an undergraduate degree in Business he later sought and earned a Law Degree from the University of Oklahoma in 1992. His practice is based in Edmond and is held in a beautiful pre-statehood home close to UCO at 102 E. Thatcher. He is president of the Oklahoma City Commercial Lawyers Association, a group that provides legal an ethical training for attorneys. He is also a member of “Lawyers with Purpose”, an organization that provides in depth training and support to attorneys who practice in the area of elder law. He received an AV Preeminent® rating by his peers through Martindale-Hubbell® Peer Review Ratings™. Dedicated to educating the public, Richard does workshops and presentations all around the state for professionals and laypersons. These programs provide vital information to our veterans and seniors as they look forward in planning living and financial needs that fit their desires.

wp_footer()
show
%d bloggers like this: