Landnews

Mineral rights and wills

  • 1.  Mineral rights and wills

    Posted 20 days ago

    I'm an associate member of AAPL and a petroleum geologist with more knowledge of NM land matters than Texas ones. When I got this question from a friend recently, I wanted to answer but really don't have the knowledge base myself to help. 

    Can someone here answer the question below with enough info to move my friend along?

    "Recently, while updating our Wills, our lawyer suggested that my sister and I should be added as joint tenants to Mom's mineral rights. This morning I had conversations with both the Karnes County and Gaines County clerks offices.  They both made it sound like not too much trouble. But beyond that, I'm not so sure how to proceed. So, if you are able to point me in the right direction, that would be much appreciated."

    And beyond that note of appreciation, I also thank those who may provide me with the info to point her in the right direction.
     Thanks so much!



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    Marilyn Gruebel
    Owner/Consultant
    NMO&Ginfo LLC
    mgruebel@nmoginfo.com
    505.404.8852

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  • 2.  RE: Mineral rights and wills

    Posted 19 days ago
    First, get a good real estate/oil and gas attorney to review your situation and draft the document.  Not all attorneys are conversant with real property and estate law.

    Make sure to add the right of survivorship (JTWROS) - survivorship is not automatically presumed in Texas, and that's the whole purpose for creating a joint tenancy.

    While you're at it, to prevent a frozen account due to death, make sure the bank accounts are JTWROS also.

    Thomas M. Gaston

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    Thomas Gaston
    Lazy Z LLC
    Nacogdoches TX
    (936) 554-0343
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  • 3.  RE: Mineral rights and wills

    Posted 18 days ago
    In recent years Texas has created a "Lady Bird Deed", which allows one to convey an interest in real property and minerals that convey ONLY upon the death of the Grantor.  The Grantor, still owns, can cancel, can borrow can do anything, the Grantee is vested upon death.  Creates a life estate, but with restrictions.  As Thomas mentioned, a good real estate/mineral attorney can best advise. 

    Darrel Munsey

    979-820-4945 (cell)
    Membership Mark Download


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  • 4.  RE: Mineral rights and wills

    Posted 19 days ago
    Marilyn:

    I believe your mom could deed for Love & Affection to you and your sister reserving a Life Estate and any monies earn by those mineral interest.

    I am not an attorney but really believe this would allow the ownership on these interest to pass on at least as effectively as becoming a joint tenant.

    Thank you:

    Mickey Phelan





  • 5.  RE: Mineral rights and wills

    Posted 18 days ago
    I conveyed my minerals to my son and retained a life estate.  I stipulated in the conveyance that I be entitled to all the rights of ownership of the minerals during my lifetime.  That avoids the issue of the life tenant not being able to waste the assets. So the life tenant can spend the royalties, bonus, delay rentals.

    My attorney thought that was a good way to go for my individual situation--and it is something of which I I have a better understanding than other alternatives.

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    James Pennington RPL
    Independent
    Nacogdoches TX
    (936) 546-1088
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  • 6.  RE: Mineral rights and wills

    Posted 14 days ago
    What happens to the remainder mans interest if the life tenant files Chapter 7 before he/she dies?

    Grant F. Rice
    281-381-6000




  • 7.  RE: Mineral rights and wills

    Posted 14 days ago
    I would like to know what happens to the life tenant's interest if the remainderman files bankruptcy--in a production and no production scenario.  Would the life life tenant be unaffected?

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    James Pennington RPL
    Independent
    Nacogdoches TX
    (936) 546-1088
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  • 8.  RE: Mineral rights and wills

    Posted 13 days ago
    A guess on my part but I believe the life tenant would not be effected. When the remainder-man’s Interest vests it may become the property of the creditors . It may also depend on the case ie chapter 11 or 7.

    Grant F. Rice
    281-381-6000




  • 9.  RE: Mineral rights and wills

    Posted 13 days ago
    That's a good question.  I would think it would be dependent on the state, whether the LT is entitled to bonus and royalties, whether it's a mineral or royalty interest, whether it's real or personal property.  Assuming the LT's interest is non-producing, I wouldn't think bankruptcy would affect anything for either LT or remainderman.  Doesn't seem like non-producing minerals or royalty would have enough value to auction them off, in most cases.  Flip side is it producing and does the open-mine come into play?  I wouldn't think a remainderman would be affected or lose his interest by bankruptcy.  The debtor (LT) doesn't really have it to lose.  That's all speculation, IANAL.  I've never run into that issue or even thought about it.  Be interesting to hear from someone who has.

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    Frank Camp, Jr., RPL
    Independent Petroleum Landman
    Tyler, Texas
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  • 10.  RE: Mineral rights and wills

    Posted 13 days ago
    ​The Trustee can only sell what the debtor owned. so, if the bankruptcy debtor only owned a remainder interest, or only owned a life estate, then that is all the Bankruptcy Trustee can sell.

    Now, as to producing properties, he may have a market, therefore, the Bankruptcy Trustee may choose to sell. However, he can always decline to sell if it appears the cost and trouble outweighs any value.
    So, lets compare two extremes. A producing property where the reminderman owns 80 acres in the Permian, and the life tenant is 90 years old. Contrast that where the life tenant is 32, and the property is 10 acres in some county that hasn't had oil and gas produced in years. The BK Trustee is very likely to sell the one, but is unlikely to sell the nonproducing goat pasture interest.

    In any event, the sale will not affect the non-debtor's interest.

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    Tim Dowd
    Oklahoma City OK
    (405) 232-3746
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  • 11.  RE: Mineral rights and wills

    Posted 8 days ago
    The life tenant can only burden his interest that he owns during his or her lifetime.  I have seen this before.  The Life Tenant was foreclosed on and his entire mineral holdings, which was considerable, was lost to the plaintiffs in the foreclosure and only could get the life tenant interest and not the remainderman's interest.  When the life tenant dies then the party that got the foreclosed interest loses the life tenant interest.  The Life Tenant interest terminates and the remainder interest immediately vests.

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    David Potts
    Ardmore OK
    (580) 226-3633
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  • 12.  RE: Mineral rights and wills

    Posted 8 days ago
    I have been looking in to a Ladybird Deed (enhanced life estate).  Can this be changed by the grantor should circumstances call for such?





  • 13.  RE: Mineral rights and wills

    Posted 8 days ago
    As far as I know, a Lady Bird deed is fully revocable by the grantor. Those deeds have been used for a while though I haven't run across too many in TX. I read that the Texas Estates Code changed recently and specifically addresses those and transfer on death deeds, so we'll probably be seeing more of them.

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    Frank Camp, Jr., RPL
    Independent Petroleum Landman
    Tyler, Texas
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  • 14.  RE: Mineral rights and wills

    Posted 19 days ago
    Hi Marilyn,

    A joint tenancy can be created between the three parties by having the mother convey her mineral rights to herself and her daughters under one deed as joint tenants with full right of survivorship. They'll then need to send the deed to be filed of record in the county or counties where the real property is located. Their lawyer should be able to help with the deed form and recording of the same.

    Hope this helps!



    *Disclaimer: I'm not an attorney and the above should not be construed as final legal advice.

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    Calli Alford RPL
    Dallas TX
    (214) 559-0300 Ext 6249
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  • 15.  RE: Mineral rights and wills

    Posted 19 days ago
    I would get with your mom and draw up a new will.  Your joint tenancy would be your mom's decision, because it's your mom's property, which needs to be done, in her will.

    Sent from my T-Mobile 4G LTE device





  • 16.  RE: Mineral rights and wills

    Posted 19 days ago

    Hi Marilyn:

    Generally speaking, the sibling's mother could execute a gift deed to her two children for $1.00 and love and affection to child one and child two as  as Joint Tenants with right of survivor.  That would skip probate of the mother but the child that survives the other would get the property when one of the children dies.  Fine if that is the desire of the mother.
    Executing a gift deed for $1.00 and love and affection to the two siblings and retaining a life estate interest in all rents and royalties would skip probate and the children would would own equally at the mother's death.
    I am not a lawyer.  I am a CPL. Specifically speaking, I would think your friends would be best advised to talk to an attorney and let an attorney advise them and draft the deed.  An attorney could assess their intent and advise them of alternatives and draft a deed to implement their intentions.
    Robert Cline, CPL 


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    Robert Cline CPL
    Sidney NE
    (713) 806-6011
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  • 17.  RE: Mineral rights and wills

    Posted 19 days ago

    Your friend needs to have their attorney that advised them to create a Mineral Deed from their mother conveying the minerals to them as joint tenants with their mother retaining a life estate to the minerals (she receives benefits from the minerals until her death, then the minerals would be owned jointly be the two siblings upon their mom's death).  There can be one Mineral Deed.  Make sure all the properties are described and the Mineral Deed needs to be filed in each County where the minerals are.  (The same deed can be filed in multiple counties, or they can do separate Mineral Deeds for each County.

     

     

     

    Sent from Mail for Windows 10

     






  • 18.  RE: Mineral rights and wills

    Posted 19 days ago
    Joint tenants with right of survivorship is usually for bank accounts. I would have the mother assign all her right title and interest reserving a life estate in said minerals. When she dies the life estate is terminated and survivors then are vested in the mineral estate. This document should be recorded in county where property is located

    Grant F. Rice
    281-381-6000




  • 19.  RE: Mineral rights and wills

    Posted 19 days ago

    I would suggest that your friend ask the lawyer about that for a better understanding of how the joint tenancy interest was created.  Your friend's query sounds like an out of county inheritance situation that is usually memorialized in the county by Affidavit of Heirship or filing a certified copy of a probated Will.   Once again, your friend's lawyer would be the best one to advise on that due to his/her knowledge of the facts.

     

    Cheers,

     






  • 20.  RE: Mineral rights and wills

    Posted 18 days ago
    Like everyone else has recommended, I'd get with an attorney familiar with real property and probate law.  JTWROS may be the answer.  I don't run across many JT deeds in Texas like I see in other states.  When you talk to an attorney, you may ask if a Lady Bird Deed (Enhanced Life Estate) or Transfer on Death Deed would be appropriate.  That may be an option, and it's a way to gauge the attorney's knowledge of the subject.  If the attorney isn't familiar with those types of deeds, I'd probably find another attorney.  Probate code (Estates Code) can be complicated and has changed in recent years.

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    Frank Camp, Jr., RPL
    Independent Petroleum Landman
    Tyler, Texas
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  • 21.  RE: Mineral rights and wills

    Posted 18 days ago
    Thanks to all who provided guidance on this issue! I am passing the information along to my friend in Wisconsin so that she can decide how to follow up.

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    Marilyn Gruebel
    NMO&Ginfo LLC
    mgruebel@nmoginfo.com
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