My sister and I received mineral interests from our mother's estate when she passed. All but one of the companies involved with our mineral interests created new division orders for each of us, with our decimal interest noted on the orders. But one of the companies did not do this. They simply provided us with a transfer letter, in which they state "This is not a Division Order, merely notification that the requested transfer has been completed." The letter does not reflect our decimal interest; it just shows the percentage of our mother's interest that each of us received (.5%).
Why would a company not provide a new division order, when the former owner is deceased? Are they required to do so, or is a transfer letter acceptable? Are there any potential problems for me, or my heirs, without having a division order in our names? Thank you to all for any help that you can give.
There is an argument to be made that the company cannot make a mineral owner sign a division order. so, they send a transfer letter instead. As long as you get paid, it shouldn't matter to you. (please note other discussions on this site where readers don't want to sign a division order.)
I believe Mr. Dowd has the right of it. If you read a division order, you would see that there is no protection for the mineral owner in the wording, none whatsiever. In fact if you returned a division order that had your interest figured incorrectly and the operator underpaid you and you discovered it later, the operator could say it was your fault, that you agreed to what the division order said your interest was. If you saved a copy of the division orders you did sign and return, you should get them out and read them again looking for anything at all that favors you. I'm fairly certain that you will not find anything that favors you.
Being paid in the present is certainly a concern. In this case, I am being paid. The concern about a division order vs. a "transfer letter"--whatever that is, legally speaking--is with regard to my heirs, and having clear title for them.
I'd be interested to hear from any others who have been party to a situation where a company did not provide a new division order, only a "transfer letter", when the former owner deceased, and if there were any problems for the deceased owner's heirs.
The transfer of title does not come from a division order. It comes from the probate proceedings or Will (depending on your state), that distributed the interest to you and your sister. The Division Order is a document that the company uses. It does not transfer title in any regard.
That's true. Probate, trust, or life estate deed...any of these can distribute the interest to the heirs. I'm still very curious about what a "transfer letter" is, because we've never seen one in our family, ever, when the property passed on to heirs. In all cases but this one, new division orders were created.
tim dowd said:
The transfer of title does not come from a division order. It comes from the probate proceedings or Will (depending on your state), that distributed the interest to you and your sister. The Division Order is a document that the company uses. It does not transfer title in any regard.
Tim’s right. The division order is technically an “internal” document. Our company doesn’t use them for California matters, but we require documentation proving a transfer of interest. Once we have supporting documentation, we make the adjustments here of record in our data management system. Our Houston office, however, uses DOs for all other states in which we have production. Point being - you don’t need a division order/transfer order to be paid. However, having said that, be prepared to confirm any interest you do own and know what you are entitled to receive.
Thanks Scott, for in "insider" POV.