What documents are needed for an oil co. when ownership changes hands in order to start receiving royalty checks? Would an oil company that is currently leasing on my Dad’s land when he passed away have a copy of his deed to his land or copy of his Trust showing he owned the land? And if so, how difficult is it to get them to give me a copy?
You would need to start by contacting the operator of the lease. I doubt they have a copy of your dads deed, you would need to find that in the county recorder or county clerk's office in the county where the property is located. The operator of the lease should give you specific requirements necessary to change the ownership for your situation.
Ok thank you! After extensive searching I finally found the original deed filed! Hoping this is what is needed!
Your initial question was what was needed to change payees on royalty checks. Depending on the state you are in, you will need a) a probate, b) a will or an affidavit as to heirs, or c) some combination of the above.
I’m in Tx and it’s an Estate Trust
I would think your father's estate would have to go thru the probate process. We will take a lease on an Affidavit of Heirship, but we won't pay royalties until the probate process has taken place. Most if not all title opinions will require probate in order to pay royalties. Contact the operator and see what they require. I think they would say the same.
Jeremy
Probating is a lengthy process. In Texas, you can probate (before five years is up) real property as Muniment of Title. This is asking the court to find that it is a valid Will, and telling the court that no other action is needed. This is for "real" property only. We had an attorney implement a Muniment of Title for three different properties. It was quick and very affordable.
Good luck,
Pat
Is a Probate needed for a Trust? The Trust was set up by my g-grandmother for my Dad and stated that it was to pass down to his children at time of death.
If your grandmother's estate was probated, and the trust document is part of the record, you can record the probate documents and trust agreement in the county deed records, and that, along with the Death Certificate on your Dad, would pass it to you.
However, today a lot of people set up trusts to avoid probate. In that case, you need to record an affidavit of heirship to show how the property passed through the trust. If the trust is still active, and the trustee has the power to go ahead and distribute the minerals to you, you can do a deed from the trustee to you. But if the property records do not explain how it got into the trust, you have to do the affidavit of heirship also.
In short, the reason it is called a "chain" of title, is there is supposed to be recorded in the deed records, every link in the chain. i.e. every owner and who they passed it to.
1 Like
I believe it differs from state to state, no? In North Dakota my mother's will had to be probated as did those of her siblings in order to transfer ownership. Upon searching my mother's papers after her death I found a considerable amount of mineral rights that had not been properly probated upon the death of her mother in 1969. I have had to reopen probate on Grandma's estate in order to get the proper ownership in the correct hands, mine and those of my cousins and an Aunt and Uncle. This is a rather costly and lengthy process and we first had to evaluate whether there were sufficient assets outstanding to justify the costs. The seach, thus far, has been done by me alone, but we will eventually also have to have our attornies due a full seach to be certain that we haven't missed anything.
My Uncle is Trustee and has been since it was set up. From what he explained to me, is he is still the Trustee, so I’m assuming it’s still active. As far as the property records explaining how it got into the Trust I’m not sure what it says.
Sounds as if you want to clarify some things that aren't clear. Why don't you ask your uncle for a copy of the Trust and ask him to explain things. The Trust is run like a business. Whatever the Trust says, is the way the Trust is run.
Good luck,
Pat
Thank you!
You have a question that is specific to your state. But to address universal concepts:
A Trust is an artificial entity; just like a corporation. If a piece of property is owned by a trust, then the ownership does not change with that death. Possibly the trustee (person controlling the trust) may change, but the ownership is the same. First question: is it owned by the trust? In other words, is there a deed for the property to the trust? If owned by the trust, then the Trustee has control of the royalty (money).
If the property is not owned by the trust, it is extremely likely that a probate is required to resolve the title into the heirs' names. If the surface is still attached to the minerals, then just assume that you will have to take some sort of legal action to transfer the title. Probate is a necessary function to provide continuous title to property and avoid fraud. You want to be certain as to the title when you buy land, right?
If the minerals are severed from the surface, there are some alternative methods to probate, but you should still consult a competent attorney to determine your best course. Estate administration is far cheaper to deal with TODAY versus putting it off on your children to pay even more. Just get an attorney that truly understands oil and gas - otherwise it will come back to haunt you 20 or 30 years from now.
My next question is about Probate. What happens with distribution of royalties while the Trust is being Probated if there’s a Trustee?
Why don't you ask the Trustee? The Trustee has a fiduciary duty to run the Trust like a business and, as a beneficiary, you have the right to know what's going on.
We don't know how your Trust reads or if all your g-grandmother's assets were deeded into the Trust. We don't know the particulars.
That's what a Trustee is for.
Good luck,
Pat
If the oil and gas rights were deeded or willed to the trust by your grandmother, then the trust owns the rights and it is the duty of the trustee to collect the royalties and distribute them according to the terms of the trust. In this situation, probate is not necessary because your dad didn’t own the rights, the trust does and ownership did not change when your dad died. The trustee simply must now pay the royalties to the new beneficiaries according to the terms of the trust document, since the original beneficiary has died. As far as the gas company is concerned, they are obligated to pay to the owner-- that is the trust.
Ms. Pat Malone said:
Probating is a lengthy process. In Texas, you can probate (before five years is up) real property as Muniment of Title. This is asking the court to find that it is a valid Will, and telling the court that no other action is needed. This is for "real" property only. We had an attorney implement a Muniment of Title for three different properties. It was quick and very affordable.
Good luck,
Pat
Hi Pat: I agree with your comments to this discussion, but I have one question: Why did you write: This is for "real" property only.
Mineral estate is real estate, so why the "real"?
John B. Gustavson, Certified Minerals Appraiser