Oil and Gas Probate
Many Oklahoma families own oil and gas rights, which can be a significant source of income. Unfortunately, mineral owners frequently misplace records detailing their oil and gas rights. Further, title problems arise. As a result, the oil and gas companies delay royalty payments. Among the biggest reasons for this delay is probate.
What is Probate?
Probate is the court-supervised distribution of a deceased person’s property. It involves the filing of a petition with the district court. What’s more, the personal representative or executor must publish notices and attend hearings. Oklahoma law requires probate for all property owned by the deceased individually, even if there is a last will and testament. The process usually takes anywhere from 6 months to 1 year to complete.
Why is it Important for Oil and Gas Rights?
Oil and gas companies typically allow heirs to sign leases based on an affidavit. However, unless the mineral interest is very small, they withhold royalties until probate is finished. That said, one can easily avoid it. First, the mineral owner can transfer the oil and gas rights to a revocable living trust. Second, the mineral owner can execute a Transfer-on-Death Deed. Lastly, the mineral may consider a lifetime transfer of the oil and gas rights to reduce or eliminate estate taxes. The author recommends these techniques only with the guidance of a knowledgeable estate planning attorney.
Oil and gas affects all Oklahomans. If you own oil and gas rights, probate should be top of mind. Although one is best to avoid it. To learn more about revocable living trusts and probate avoidance, click here.