What is the best way for four family members that are inheriting mineral rights in Oklahoma to avoid probate in the future?
Try An LLC. That is the route we are going.
A decedent’s interest in a limited partnership or in an LLC will be subject to probate unless it is held in a trust or passes by a beneficiary designation form if state law allows for that type of disposition and the organizational documents allow an owner to dispose of his or her interest in that manner. Do not know if OK law allows an interest in an entity to pass by a beneficiary designation or a transfer on death designation.
Lyn- the answer is dependent on what you want to accomplish. Are all of the heirs now & in the future on the same page? What if one doesn’t want to mess with the minerals or another member needs to sell for personal reasons. If one party handles everything is there compensation involved? Partnerships rarely end well just because we are all different and lives & circumstances change.
I’m no expert & can only speak from experience. Our parents had a family trust which was good here in CA BUT Oklahoma does not accept that so we had to go through a probate in OK (had to get a lawyer there) although it was an “expedited probate” but it did cost us and took a little time. If you do have to probate be sure that you get an attorney who is familiar with mineral interests, that is VERY important. It cost us extra time and money (and complications) because our attorney made some errors. We also had a number of family member s involved which complicates things, fortunately all agree to let one of us be the sole representative.
You may have had to do probate in OK because the OK minerals were not transferred to the trustee of the California revocable trust during the life of the mineral owner. I have transferred Texas real estate into California revocable trusts during life of owner, which avoided probate in Texas.
My understanding is we are going to an attorney who specializes in more problematic Estate Planning than our oil and gas attorney is contacting them, can personally do. The Texas plan is for the development of an LLC to place the Oil and Gas interests in. There’s 4 States involved; Texas, New Mexico, Oklahoma and Colorado where mineral interests are owned. Our Attorney is a Texas attorney so may not know Probate would be required in Oklahoma. So that may change “The Plan” of not having to go through Probate.
FYI - We only had interests in Oklahoma and found that there was no way to avoid probate in Oklahoma sine our parents estate had never been through probate in California where a family trust was acceptable (it’s not accepted in Oklahoma). I was told that Oklahoma would accept probate from other states (this is info is available online as to which states accept and which do not) but not a trust. Your case is more complicated. My opinion, bottom line, is to get good advice or it can be a lot more expensive. Our attorney in OK wasted time and cost us money because they were not familiar with mineral interests.
A trust is a convenient way to hold minerals. While some prefer a LLC, it may be subject to probate unless the LLC is owned by a trust. Therefore, many prefer to simply hold the property in a trust and avoid a double tiered approach.
Actually, a California trust should be acceptable in Oklahoma, however, the minerals must be deeded into it.
Yes & No. If a probate is completed in another state the findings are generally followed in Oklahoma. However, if California says that X get Oklahoma minerals this will be be valid unless confirmed by an Oklahoma probate court.
We did a deed on death that specifies who gets it. My dad did it for my sister and I and we did it for our kids. It is not very expensive, you need to find a lawyer in OK to do it. We did not have to probate. Very smooth transition……Our lawyer has retired, but I am sure you can find one.
A transfer on death deed can be a viable tool but it is not for every situation. There are many times that it is a perfect match, there are other times when its use may be harmful. All depends on the facts.
If you desire to protect an inheritance from a beneficiary’s creditors or the beneficiary’s spouse in a divorce proceeding, an irrevocable trust with a well-crafted spendthrift provision can provide such protection while a beneficiary deed will not.