by Morgan Dodd
Do you have a small interest in minerals and wonder how to dispose of them after your death? Even if you have not, perhaps you should. Many people might rely on an Affidavit of Heirship or a Proof of Death and Heirship (PDH), allowing a relative to execute this Affidavit under the belief that the heirs could then take their proper shares. But this is a mistake!
This is because of a little “loophole” in Oklahoma law: we have no Statute of Limitations on probating an estate in Oklahoma. This means that someone could still come around years later—long after any such PDH has already been filed—and tell a judge that they found your long-lost will. If the judge believes it, then everything that people believed from the PDH (for example, that your spouse takes 1/2 of your mineral interest and your kids divide the remaining 1/2 of your interest among themselves) can be undone.
Q: Why do you highlight small mineral interests?
A: Because probating an estate can be pretty expensive, and the smaller the interest that you have, the more likely your heirs are to simply think that going through the whole process just is not worth it. However, the dilemma would still apply if you have a large mineral interest and your heirs still decide not to probate your estate.
Q: What if any long-lost will of mine says the same thing as what a PDH would say? What if my will gives 1/2 of my interest to my spouse and the remaining 1/2 of my interest to my kids (or however the intestacy laws would apply in your situation)? Can there really be any damage if the will and the PDH agree?
A: The big danger in that case is that your heirs will not get paid until your estate is probated. Let’s say that after you pass, your heirs execute a PDH. Then they go even further and include your will, attached to the PDH. Then an oil company wants to drill in the area where your mineral interests are located. They might feel comfortable enough with the PDH and the will to lease your heirs, but they might not feel comfortable enough with those documents to actually pay your heirs their share of the proceeds from production. Even if the lands are already leased when you pass, the oil company will still need to know who to pay. And if it pays heirs that are later found not to be the parties that it should have paid, then the oil company has liability and reimbursement issues to worry about.
Q: I just will not make a will. Then they have to go with the PDH. Good?
A: No. You might change your mind and still make a will before you die, and maybe only some people close to you know about it. The judge needs to rule on that. And then, even if there really is no will, we still need a judge to weigh in on that.
Q: What can I do?
A: Aside from talking with your family about this issue, you might consider a Deed during your life to take care of this. The most common solution would be a Joint Tenancy Deed, wherein you convey to yourself and someone else (usually the spouse) as joint tenants. Upon the death of one of the joint tenants, the surviving joint tenant can then file an Affidavit of Surviving Joint Tenant and attach a death certificate, and in this case, that is all the proof that a title examiner needs. But if you want to get more complicated, then the solutions will become more complex as well.
This is an interesting legal issue for Oklahoma. Different oil companies have different standards on what documentation is sufficient to pay royalty owners. Some will be satisfied with a PDH, others will want a will or other evidence from the family, and still others want something where they can see a judge’s signature. I am looking forward to writing a more in-depth article in the near future. I will stay tuned, and I hope that you will, too.
In the meantime, if you have any mineral, title, or estate planning questions, then we will be glad to help.
For more information, contact Morgan Dodd at 819-5461 or firstname.lastname@example.org
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Posted on Mon, November 21, 2016
by Andrews Davis filed under