Hi. Thank you for your time and willingness to help. I have read your replies as well as the others. I believe i understand what has been said.
In a bit more detail…
I have already inherited the minerals and they are in my name and oil companies are paying me directly. And no longer paying my grandfather/his estate.
My aunt and my brother are Co trustees of the estate and are trying to get it settled. At the moment it cannot be settled/dispersed because of the discrepancy in the mineral value.
A. The estate is valued at 5 million cash + the minerals.
B. There are 5 beneficiaries, me being 2 of them.
C. Trust states that everything should be divided equally.
D. The minerals MUST go to me and no one else. I also cannot sell minerals for 99 years.
Since the minerals must go to me, the value of those minerals count against my equal share. Because my father and uncle passed away, I am receiving both their shares. The minerals are assigned to my fathers share that I’m inheriting. My aunt wants to value the minerals as high as possible to take up as much of that one share as possible. (Which puts more cash in her pocket)
My aunt without the knowledge/signature/agreement of my brother the other co trustee, went to MHA in Colorado and gave them my grandfathers check stubs, my check stubs and all well information. Her valuation came in at 1,028,000. She charged this valuation to the estate at 25,000.00. I had a valuation done by PetroValues to disagree with her valuation. PetroValues valued the minerals at 230,000.00. We don’t owe any taxes on any of the inheritance. The trust states that we must get mineral value at time of death so that the mineral value can be deducted from that one share, then the rest divided equally.
Her valuation from MHA states…
700k in future production
300k in current production
Totaling the 1million+ dollars that she is stating.
My valuation from PetroValues states…
600k in future production
230k in current/fair market value.
I’m more than happy to share both valuations and trust documents with you.
For the last 60+ years my grandfather made roughly 20k a year from the minerals. The year before he died, 1 new well started bringing bigger money that he had ever seen. His first check was 27k/January then 20k, February, then March of 18K. I inherited around this time. All my checks from this one well have been MUCH lower than even the 18K.
The same oil company had been applying for permits for more wells around this time. The MHA valuation looked up these permits (which were after death of my grandfather) and they just multiplied that same higher paying well 3 times. So they are saying that I am getting minerals producing 27k a month X’s 3. Yet this is no where the case. I am now being paid on all 3 of these wells and not receiving anywhere near this much money.
It’s my belief that these minerals should be valued at time of death. And further how could they be valued at anything higher than what someone would pay for them. And based on the income I’m getting, I’d bet my left arm no one is going to pay more than 300k for them.
If i still have your attention, its also my believe that since we are not valuing them for taxes or for the IRS or to sell. I believe that i also lose value in the dividing the estate equally in the following ways…
- all other family members will be inheriting 1 million cash. I am inheriting a depleting asset, that has risk and uncertainty.
- I cant sell the minerals, I cannot invest the minerals. I don’t even have 100% decision making power over the minerals as they are just 20% of a much larger family.
- The entire estate is free of inheritance tax as there was no tax that year.(long story, but I’m sure). Everyone else gets the million dollars cash tax free. And i inherit a depleting asset that i now have to pay personal income tax on.
I would appreciate ANY advise thoughts etc on my situation.
Thank you so much in advance.
I apologize for the formatting above the forum seems to alter it.