Hello. I have been working with what I think is a landman who is connected to one of the energy companies. I have provided him with a bunch of family records, death certificates, etc. This has taken about 4 months. He has indicated the next step will be is to execute an Affidavit of Heirship.
Question: What happen after you file an Affidavit of Heirship? Can you please walk me through the timeline of what to expect next? Thanks.
Hopefully, others more knowledgeable than I will respond. In the meantime, I will give it a go, but I am not an attorney. It is my understanding that legal title to mineral rights cannot be transferred via Affidavit of Heirship until 10 years have elapsed since the filing of such an affidavit. This is to give other potential heirs a chance to protest. Some oil companies may accept an Affidavit of Heirship and go ahead and purchase a lease. However, the oil companies are not obligated to pay royalties until the mineral owner has a legal title which, in the case of an Affidavit of Heirship would be 10 years. I believe some oil companies will start paying royalties based on an Affidavit of Heirship, but if the title is ever successful contested, they can demand the money back. The person you are dealing with is probably trying to save you the expense of probate, but just be aware that ownership of the minerals cannot be sold or transferred until there is a legal (marketable) title. As always in situations like this, it’s best not to take the advice of a rank amateur and instead consult an attorney who is knowledgeable in oil and gas matters.
Thanks, Monty. I appreciate you taking the time to respond.
A_Monty is correct. It is the “easy” way to transfer title without having a probate. It is up to the company operating the well if they put you in “pay status”.
You can sell minerals you received via affidavit of heirship but that’s up to the company buying the minerals. It is a risk for them. Same goes for leasing.
A-Monty’s recitation is spot-on. Too often I have had people who jump through the Affidavit of Heirship process only to have the company (or the company who takes over) state that a probate is needed. AOH is definitely cheaper. Apart from the 10 year clock to create marketable title, there is a risk that a party examining title will not be satisfied with the AOH, then require a new one thereby restarting the clock. If the minerals are valuable then probate is usually the better answer.
This post is not legal, investment or tax advice, it is for discussion purposes only. Reading or responding to this post does not create an attorney-client relationship.
Thanks, Richard. Say their are many heirs. Is the company able to pick and choose which AOH’s they will accept and which ones they will require probate?
Some companies seem to have a policy regarding title requirements. If the royalties are small, some accept an AOH. Others seen to request them only to turn around and require a probate. AOHs seem to be more accepted in Texas based upon its laws. However Oklahoma has that 10 year caveat. Also, an AOH might not be clear or reveal other issues.
This post is not legal, investment or tax advice, it is for discussion purposes only. Reading or responding to this post does not create an attorney-client relationship.
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