If you’re an owner of oil, gas, and mineral interests and have encountered problems with royalties or lease bonus money being in suspense, then you know first-hand the challenges with getting paid. Well, if you’ve gone through the process of getting funds out of suspense, then be sure you take the precautions to avoid the same problems for your heirs.
Avoiding Probate in Colorado
In Colorado, having assets like oil, gas and mineral rights titled individually means that when you die, your heirs will likely need to probate your estate in Colorado. However, there are effective ways to avoid probate and plan for your assets in Colorado. Commons tools utilized in Colorado include adding a spouse as a joint tenancy owner, utilizing a beneficiary deed or transferring to a trust or entity. If your oil, gas, and mineral rights are titled jointly, then typically only a death certificate needs to be recorded in the county where the rights are located. If you aren’t ready to commit to that joint ownership, then a beneficiary deed can be utilized to hold off on the actual change of ownership until death, but still utilize the efficiency of simply recording a death certificate to transition ownership. Finally, a more concerted effort involves the transfer of the interest to a trust or entity, which trust or entity then owns the rights allowing changes of ownership internally rather than through subsequent deeds or probates.
Deeds in Colorado
The commonality of the foregoing? They all need a deed to start with to make it happen. Deeds, fortunately, can generally be prepared at relatively minimal cost compared to that of a probate. However, if you do venture into preparing a deed yourself or engage an attorney, be sure that the legal description is correct and that you are adhering to all requirements under Colorado law to make that the deed is given effect.
Jenna H. Keller, Esq.
Attorney at Keller Law, LLC. (www.kellerlawllc.com)
Jenna H. Keller provides legal services to farmers, ranchers, rural property owners, and severed mineral interest owners in the areas of estate planning, natural resources (oil, gas, wind), real estate, and water in Nebraska and Colorado.
The information is for general information purposes only. This should not be substituted for legal advice and should not be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or reading does not constitute, an attorney-client relationship. You are encouraged to contact an attorney for legal advice concerning the information provided.