Benefit of Royalty Deed

Forgive me in advance for such a lengthy post…

Question: Is a Mineral / Royalty Deed beneficial/necessary based on the situations presented below? Why or why not. Is there a better solution?

Situation 1) My father owns surface and mineral rights on 22 acres conveyed to him deed from seller to buyer(dad) He receives a royalty check associated with the 22 acres that lists 8 different gas wells .

He is preparing a trust for his estate which specifies his children will inherit equal shares of the 22 acres.

Is it necessary to create and file a mineral deed for the 22 acres to include within the trust? In the future if they are severed will the deed be valid?

Situation 2) My father’s grandmother owned 117 acres. She sold it in 1950 and retained 1/2 mineral rights stated in the deed conveying ownership from grantor (g’ma) to grantee .

She passed, had a will , which did not mention the mineral asset, but was probated.

Her daughter/mother of my father inherited her fractional portion of the mineral rights conveyed according to the Texas laws of descent and distribution .

She died , did not mention the mineral rights in the will plus the will was never probated.

In the 80’s three leases were negotiated by the surface owner. NPRI royalties on one lease was “paid” to an acct in the name the grandmother and the other to his mother which ended up suspense due to no address,

One company performed it’s due diligence, located my father and paid his the fractional interest according to Texas laws of descent and Distribution.

30 years later my father discovered unclaimed property in his mother and g’mother’s name . They were the escheated royalties that had accumulate in the suspense accounts from the other leases.

In order to claim he had to satisfy Title/chain of ownership/ heirship requirements by Compiling and submit documents for g’mother ,mother, and heirs of theirs who had died = prepare and file affidavits of heirship, obtain birth and death certificates, probated wills, list of names and contact info for legal heirs ) A year later he successful satisfied the requirements and downline heirs were paid.

The wells have since been plugged.

?? My question - Would it be beneficial to have a Royalty Deed drawn up for the 117 acres and filed? My thoughts are the deed can be transfer to his heirs vs relying on the Tx laws of D&D. And if by chance there is ever another lease, it would prevent descendents from having to go through document compilation process my father did to prove heirship.

Thank you in advance for your time and advice.

Your father needs to discuss his will and trust plans with has an estate attorney to make sure that his assets pass to his heirs in the manner he intends. This can be complicated and he needs professional advice.

2 Likes

1 - If all 22 acres + mineral rights to it are being transferred to the trust, there is no need for a separate mineral deed. The deed for 22 acres will transfer every interest your dad has unless it contains exceptions/reservations otherwise.

2 - Mineral deed isn’t needed for the 117 acre NPRI. Not only that, but who would be signing it if the interest was acquired by heirship? All of your heirship paperwork should be filed in the deed records, which will put the world on notice of the ownership. Talk to an attorney familiar with mineral rights and heirship curative.

Thank you for the advice. One more question, If the 22 acres is sold, but the seller retains the mineral rights/buyer gets surface rights (severed) and is so stated on the new deed… Then is it necessary for the seller-retaining mineral rights to file a mineral reservation deed or appropriate document ?

Thank you for your great advice. He is working with an attorney, we are just preparing information to include.

Yes. Say A sells the surface to B, excepting and reserving the mineral rights. B retains the mineral rights. Later if B wants to transfer them, B will need to execute and record a mineral deed.

Yes it is. Since a mineral interest is an interest in real estate, at least in Oklahoma, it is necessary to deed it to the Trust/Trustee. Many attorneys miss this step especially those in non-oil producing states.

This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.

Thank you so much for the info.