The Winning Lotto Ticket You Didn't Buy
The leasing of a mineral interest that you didn’t know your family had is like winning the lottery, but you didn’t buy a ticket. However, you should be careful with this winning lotto ticket and if the lotto ticket is still in your parents or other relatives’ names you may want to wait to cash it in. If the mineral interest is not in your name, but you sign a lease containing a warranty clause, then the oil and gas company may justifiable expect that you incur the cost and time to update the title to your name. In some instances, the cost to update the title may exceed what you received as a bonus payment which suddenly makes your winning lotto ticket seem like a loser. Before you agree to lease this forgotten mineral interest, you should take the time to confirm whose name the mineral interest is titled before you sign the lease.
Transferring of Decedent’s Mineral Interest
Assuming the mineral interest is titled in the name of a deceased family member, then the mineral interest may be transferred by recording a death certificate, probate, and/or a quiet title. The appropriate course of action will depend on how the mineral interest was titled and what makes sense for your particular situation. A death certificate is typical when the minerals were titled jointly and there is an owner still living. A quiet title is often used when there are discrepancies in the title or a problem in the chain of title that needs corrected. Probates are generally used in all other situations. In Colorado, there are different probate processes. The presence or lack of a Will, the likelihood of a dispute among the heirs, whether there was a probate in another state, and the passage of time since the death of the owner will likely dictate the appropriate probate process. An attorney experienced in Colorado probate matters can assist in recommending the best course of action to transfer including navigating the appropriate court process as needed.
Transferring a Mineral Interest Into Your Name - When Not To Go Forward
If the transfer is complicated or exceeds the bonus payment being offered, then it may not make economic sense to proceed at present with the probate or the lease. So long as any assessments to the county treasurer continue to be paid, you can simply continue to let the mineral interest sit in your parents’ or other relatives’ names so long as you haven’t signed a lease compelling you to update the title. One exception to this may be if there are complicating title issues or deeds that adversely affect your interest as such presumptions may dictate that you need to proceed with a quiet title promptly. Additionally, it never hurts to ask the company if they will assist by contributing to the legal fees for updating the title. If they are particularly interested in the area, then they may help you bring the title current. Again, this is something best negotiated in advance of signing the lease.
Jenna H. Keller, Esq.
Attorney at Keller Law, LLC. (www.kellerlawllc.com)
Jenna H. Keller defends property rights and 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.
DISCLAIMER: The information in this article is for general information purposes only. This article 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 this article does not constitute, an attorney-client relationship. You are encouraged to contact an attorney for legal advice concerning the information provided in this article