My parents created a Trust in 2013 to pass along all the mineral rights they own to their children. My father passed in 2014, and my mother passed this spring, and I am now the Trustee.
We have producing wells in Uintah County UT, but the royalty payments are made out to BMI Energy - an old business my father created in the 1980’s, rather than the trust. They are mailed to my mother’s old address, with her listed as the Power of Attorney for BMI Energy, and she has been cashing these checks for many years. I am also the executor of her estate.
So, I can’t cash the checks to the trust since they aren’t made out to the trust. The energy company put a hold on the checks until I can show that title is held by the trust, and not BMI Energy.
I seriously doubt my mother had the desire (or the ability) to move the title out of the trust and back into some old, defunct LLC. More likely the energy company failed to update records that these wells were transferred into the trust. But how do I prove that?
I contacted Uintah county and they found the trust documents recorded in 2013, and nothing since. But they couldn’t do an exhaustive search. They suggested I hire a Land Man to show the history of title transfers.
Is that the only/best way to show that the Trust holds title to the wells? The energy company is asking for some sort of operating agreement for BMI Energy, but those records have been lost to time. I haven’t found anything in my mom’s files about it at all.
Thanks for any advice. Harley
Harley: I am not an attorney, nor do I know the laws of Utah. Based on what you have stated and the way most states statutes are, the mineral interest would have been needed to be deeded from BMI Energy to the Trust in order for the Trust to be the owner. You will need an attorney to help you sort this out. You will need to provide as best you can, information on BMI Energy. There are lots of questions, some of which are: Is it a Corporation that is still in good standing, is it an S-Corp, C-Corp, LLC, etc. Are there Articles of Dissolution? If you can’t find the Articles of Incorporation or an Operating Agreement, you might check at the Utah Secretary of State to see what they show. There are numerous other questions that will need to be answered and that is why you need to hire an attorney to help solve the riddle. Good Luck.
Hello Harley,
I can recommend a local attorney, Gayle McKeachnie, who is well versed in Minerals and Title law in Utah. He lives and practices in Uintah County and we have used his services several times.
Regards,
John
Oftentimes parties create a trust, but fail to deed the interests into the trust. That is likely what happened. So if you can’t find an old deed from BMI into the trust you will need to execute and record a new deed from BMI into the trust.
As far as looking for a recorded deed, you don’t need to hire a landman. Uintah County’s records are online. You can go to the recorder’s page and create a subscription account and search for the deed. It takes a minute to get comfortable with it, but you will figure it out.
As far as executing a new deed from a defunct corporation, it is tricky, but it can be done.