My mother owns about 75% of land and mineral rights on about 5 acres in Eddy County, NM. Occasionally, she receives royalty payments (maybe a few hundred dollars a year). She is listed in the county records as the owner and she pays the property taxes.
She inherited the property and mineral rights from her mother who inherited it from her father, the purchaser of the land. My mother’s mother, one of seven children inherited 1/7 and through quit claim deeds was able to get a total of 5/7 ownership from her siblings. These were filed with the county.
The other 2/7 has been passed down to succeeding generations so that about 20 people own the remaining 2/7 but each one not owning much more than 1% and most much much less.
My mother was able to get a few quick claim deeds so that she owns about 75%, but most of the other owners never responded and probably do not know that this property even exists.
First question - What does my mother need in her trust to pass her share of ownership to her heirs?
Second question - How does one clean up such a mess of ownership? Not much can be done with property until it is cleared up, I believe.
I know that I will need an attorney but I thought that I would ask to see if others have experienced this situation and what their course of action was. Thank you!
If you mother has marketable title currently, then she can execute a deed to the Trust for a simple transfer of her ownership. As to the remaining owners, the surface and minerals issues are different.
Selling a fractional share of a surface tract generally decreases the market value. You can try to purchase the other fractional interests or speak with an attorney about a partition suit. You will have to evaluate the market value in both instances.
As to the mineral interests, NM has forced pooling statutes that mitigate small fractional interests affects on drilling and development.
HIRE AN ATTORNEY!!. A lot depends on the State and how the State determines what mineral right are. In WV, mineral rights are “real property” and that would be covered in any trust.
What is a marketable title? I have looked through over 100 years of documents that the family has and unfortunately have not run across what I believe is an actual deed. I do have a certified copy of the document which transferred the property from the seller to my mother’s grandfather, who is the original purchaser of the property in the family. It is dated 1909 (not relevant but fun to know).
A few quick tests for you, but they do not mean marketable title. Has you Mom ever mortgaged the property. Who has is listed on the Tax Assessors bills? Neither of these proves marketable title, but they do indicate the potential. A title review has to be performed to determine marketable title.
Marketable title is established by deeds and probate records filed in county deed records which show the assignments and inheritance over the years. Every deed is relevant. You said you have some quit claim deeds from siblings to your mother. You need to search the Eddy county records to see if there are any deeds or probate filed from your great-grandfather to your grandmother and then to your mother and her siblings. You may be able to do this online or may need to go to county in person. A landman can help you with this. Get copies for your files. This will determine what needs to be done for title. There should be done records as your mother is in pay for royalties.
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There is a probate from my great-grandfather to my grandmother and her siblings. There are quit claim deeds from 4 of my grandmother’s 6 siblings to her. This is how she got a share of 5/7. There is a probate from my grandmother to my mother transferring her 5/7 to my mother. There are also a few quit claim deeds from succeeding generations of relatives of the remaining 2/7 to my mother (they represented small percentages), but there are still about 20 persons (a couple generations younger) who never responded to my mother’s ask if they would be willing to sign a QCD to her to clean up the ownership. Their shares are less than 1% due to the number of children per generation.
My grandmother was the youngest of her siblings by quite a bit. My mother is the last survivor of her generation. Thus, the 2/7 has been passed on to the next generation (a few still survive) but most of the 2/7 has been passed on to even the next generation. I have records of who those people are but not necessarily accurate contact information.
I appreciate the responses!
Just a comment…I also searched county recorders online looking for the original Deed which granted mineral rights to my Father and had no luck. I finally discovered the county did not list both Grantor and Grantee in the digitized documents…so I had to search under other family names and luckily my Sister remembered our min rights were from a brother in law of our Dads. I had to get the Deed under the bro in law. Don’t know if this helps but don’t search only under your Mothers name
It appears that you have all the deeds and probate which establishes your mother’s title to her share of the land and minerals. She can pass that by deed today to her trust (if she has not already done so) and then the trust can hold or distribute. Or she can deed the interest directly to her heirs today. If she is a NM resident and will be filing NM probate, then she can retain the interests in her name. If she is not a NM resident, then if the land and minerals remain in her name, ancillary probate would need to be done in NM after her death. Your mother does not need to own 100% to do this. Nor does she need 100% of the minerals to sell the minerals. Selling only 75% of the surface separately from the minerals is more problematical to a buyer.
To TennisDaze, I am very much in agreement with your reply. My mother went through a similar process when her mother died to get her share of the property in her name. I also absolutely agree that not owning 100% of the mineral rights is necessary to sell them but not owning 100% of the surface is a problem if they were to be sold.
A few years ago, the New Mexico Gas Co put a pipeline through the property and was supposed to pay her for the easement rights. Unfortunately, she never received her share (about $6K) because none of the other owners ever responded to the offer of payment. Payment was withheld. It would be nice to get everyone on the same page or else get them out of the picture altogether.
In Texas, the pipeline company would not have been able to do that. It is rather like a trespass to install a pipeline and refuse to pay your mother. There should have been a written easement agreement. Did you consult a NM attorney about this and to send a demand letter?
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Yes, there was a written easement agreement which my mother signed. Have not yet consulted an attorney. Thanks for the encouragement. I will look into that.
Did the pipeline company provide a written response as to why they withheld payment for the easement? Did they escrow the funds? If this is a utility easement, I would encourage you to file a complaint with the NM utility commission.If this is a gathering pipeline easement, then possibly a complaint to the NM O&G Commission may help to lead you to a cost effective solution.
Never got a written response from the pipeline company. I need to review the correspondence documents that my mother has to refresh my memory. A lot of what I know is through discussions with her. There was also written correspondence between her and I believe a landman who was trying to determine ownership of properties. Thanks for the suggestion.