My Dad prepared a Quit Claim Deed in 2007 to transfer his New Mexico mineral rights to his living trust. The deed was signed, notarized, and delivered to the grantee (my Mom). My Dad died in early 2008. My Mom recorded the Quit Claim deed in late 2008 in the appropriate NM county courthouse. She was the surviving Trustee. My Mom died in 2023. Is it safe to assume that the NM mineral rights are assets of the trust and that the first successor trustee can convey the mineral rights to the trust beneficiaries via Quit Claim deeds?
You will need a New Mexico licensed attorney to chime in on this. States have different requirements regarding whether delivery is sufficient or whether recording prior to death is necessary.
This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.
Here is my challenge. I would like to find a lawyer in New Mexico (Eddy Country) and Oklahoma (Jackson Country), where I could sit down with them for a max of two hours and get answers to my questions - and pay a reasonable fee for their time. I have no idea where to find such lawyers. We tried to find a lawyer in Lubbock, Texas for similar questions on Texas farm mineral rights. They wanted $6K to $8K to take a quick look at the situation. IMHO, that is not reasonable.
Its not that cut and dry. But generally speaking, yes this makes sense. There’s always title considerations and nuances, but what you propose here should transfer the ownership from your dad to the trust beneficiaries.
The Trust should have record title now. Assuming the Trust document named a successor Trustee, that Trustee can distribute the assets of the Trust pursuant to the terms of the Trust Agreement. Depending on your goals, you might need to also record a Trust Certification in the county.
The mineral rights are leased and I assume that they are producing. The original lease was from 1981. The lease was for 3 years unless the wells were producing at the end of three years.
Any recommendations for a NM lawyer that would be reasonable in cost. It appears that the mineral rights (even though there are producing wells) have little value because 4 acre mineral rights are divided between 250 owners. My gut feeling right now is to just abandon the situation and do nothing.
@Richard_Winblad gives you solid advice. Follow up with a NM attorney on whether the after death filing of the deed is valid before you go further with this issue. It should be a brief consultation on the issue.
Kenny Rogers comes to mind. You gotta know when to hold em, and you gotta know when to fold em.
(assuming your facts are correct)
This is one of the not infrequent cases of something having been divided so many times over the decades, there are simply no economics to sweeping up the pebbles… very tiny pebbles at that.
I am not an attorney and don’t know a thing about New Mexico, but in Texas almost every title attorney has told me NEVER use a quit claim. They don’t establish ownership of a property, but dis-ownership. So you don’t transfer ownership with them. Basically it is stating, I don’t think I have ownership in this property, but if I do, in the event that I do, I am disclaiming here and now any rights to that ownership.
Unfortunately I’ve pretty much seen the FREE 30minute legal consultation go away. I think because it doesn’t for the most part generate business. So it just eats up time with no fee. Maybe in some small town, you find an old time attorney or a new attorney that doesn’t have any business, that will give you a few minutes and give you and idea if it is worth spending more money on. Otherwise I think you’re looking at $250-$400/hr or more to spend time answering your questions. Maybe some chance you could go to a free legal clinic at a law school? Maybe some bar associations might have a free legal clinic. Not sure you get to spend 2 hours for free at a clinic, but maybe 15-20 minutes with a student lawyer. I’m thinking you probably need a probate lawyer to transfer title. Maybe an oil and gas attorney. You probably need to think about how much revenue is coming in and decide if the juice is worth the squeeze. If you’re getting $5/month but probate costs you $2500…that sure is a long payback period. Very possible to let those go and spend the $2500 buying some new producing minerals for a better return?
Texas is considered an outlier in the use of quitclaim deeds. There was a case based on a statute that said that a grantee of a quitclaim deed would not be a bona fide purchaser and could be subject to unrecorded agreements. This is a whack case and whack statute. Texas has now amended the statute that says that after four years, the grantee can be considered a bona fide purchaser.
Quit claim deeds are not problems in NM or Oklahoma.
IMHO, the mineral rights in New Mexico are not of any value since there are so many owners. The yearly royalties are miniscule. My concern is who has legal ownership of the rights. If the rights are in my mother’s trust, then we need to transfer out the rights to someone else so that we can close the trust. If the rights are not in the trust, then we can close the trust right now. My father prepared a Quit Claim deed in 2007 for the mineral rights and indicating that the rights should be transferred to his trust. He died in early 2008. My mother recorded the deed in Eddy County in late 2008. A certificate of trust was never recorded, so that in itself could mean that the mineral rights are not in the trust. I am OK with that. Worst case, the trust beneficiaries could just ignore the mineral rights and the recorded QCD and close the trust.
I would be willing to do that if I could find a lawyer that would not charge more than a couple of hours of time. We know that the current mineral rights have no value, so it would not be logical to spend a lot of money with a lawyer to tell us that the recorded deed is not legal.
The Quit Claim deeds for the Texas mineral rights were never recorded. We have the copies. Since they were never recorded, then it would seem to be fair to assume that the mineral rights are not in the trust. That means that we do not need to dispose of those mineral rights in order to close the trust. Same situation for the Oklahoma farm mineral rights.
Based on your posts, it appears that your father prepared his own quit claim deed without consulting a New Mexico title attorney. The QCD was filed by your mother after the grantor’s death, again without consulting a New Mexico attorney. Adding to this situation, the QCD was to a living trust which may or may not have been properly established in New Mexico. No one can tell you if the QCD is valid without reading the exact wording of the QCD and determining whether or not the QCD complies with the requirements under NM law to transfer title, whether it is effective when filed after death (as there is no NM probate), and also determining the New Mexico status of the trust. And no lawyer will give you any definitive legal opinion without reading all the documents. The important lesson here for mineral owners is that is not a good way to handle mineral title. Saving the up-front legal fees has created more headaches for the heirs who now face higher legal costs to clear it up.
Why in the world would you hire an attorney for a 4/250ths mineral acre interest? It would be fiscally irresponsible to do so unless you just want to prove a point to someone? No reason to spend time nor money on the interest, walk away from it and youll come out ahead. Hard to do I know, since your parents owned it, but this one of those times where its just not worth it.