Transfer of a Mineral Estate
When probating or administering mineral interests, it becomes necessary to identify mineral interests for purposes of property inventory and transfer of legal ownership.
Starting Point: Where is the Property?
First, obtain enough information to identify the location and type of mineral interests. Often, you may not have that information readily available. A few ways to determine the type and location of mineral interests is look for:
Mineral Deeds; Stubs from Royalty Checks and/or Division Orders for Producing Royalty Interests; Property Tax Records; Previous Income Tax Returns; and Inventory, Appraisement & List of Claims (Previously Inherited Mineral Interests).
If all you know is where minerals are located, such as the county, basic research is the next step. This starts with distinguishing whether the mineral interests are producing or non-producing.
Producing mineral interests can be researched in the property tax records by searching the owner’s name to locate the operator, or oil and gas company. For example, records may be found at the following website: small counties (http://appraisaldistrict.net/). The operator, along with the name of the well and unit, is usually listed on the tax statement. With this information, you can contact the operator to obtain copies of mineral deeds, assignments, conveyances or unit designations. You may also research the Railroad Commission of Texas records online at http://www.rrc.state.tx.us/ to obtain additional information. It is typically more advantageous to contact the operator before contacting the Commission because the information the operator provides you will be more detailed.
Non-producing mineral interests can be researched in real property records by the grantor/grantee name. Many local county websites allow you to search records at no cost.
You may also research records for a fee at www.texaslandrecords.com. However, most small county real property records are not accessible via the Internet. Even many large county real property records only go back to the late 1980s on the Internet. In those situations, you can contact the county clerk and request a record search of the grantor/grantee indices for a particular name and time period for a nominal fee. In some cases, it may be necessary to hire a landman to locate mineral interests; however, this method can be expensive.
Next Step: Transferring Title
If there is no administration of the estate, such as muniment of title or small estate affidavit, certified copies of the will/order or affidavit should be recorded with the county clerk in all the counties where the mineral interests are located. For estates, where an administrator or executor has been appointed, the personal representative can execute a mineral deed conveying the mineral interests to beneficiaries.
Goal: Getting the Money
In the case of an estate involving producing mineral interests, you will need to contact the operator, or oil and gas company, to request a new division order be prepared. The division order is the document that is signed by the owner (the beneficiary) that reflects new ownership and how royalty payments are to be distributed. Depending on the type of administration, the operator usually requires evidence as to probate or the administration of the estate. You should verify with the operator what type of documentation it requires to issue a new division order.
These are some of the foundation steps used to transfer a mineral interest. Of course, every situation is different and it is prudent to consult an attorney when dealing with an estate and transferring property rights. Weldy Law, PLLC is here to help you navigate the sometimes daunting task of property transfers, if you are looking for assistance call us today for a free initial phone consultation- 806-928-2087.
The above blog is for informational purposes only and is not legal advice nor does any information or communication with the website create an attorney-client relationship.