I’m 77, practiced law but its been years, so familiar with most conveyances. I know there are some sharp minds on here, are there any “new conveyances” other than life estate deeds to convey property in Texas and Oklahoma so that it doesnt have to go to probate?
We are in the process of setting up a Living Trust. This according to our council, will circumvent going before probate. Just received a draft so cant say for certain if there are any other avenues besides the route we are planning.
Bob77: Don’t know about Texas, but in Oklahoma you can use a Transfer on Death Deed. You can look it up or ask Mr. Winblad on this forum.
Texas also has TODD, often called Lady Bird deeds.
In Oklahoma there is the Transfer on Death Deed. Ownership and executive rights remain with the owner until death. The owner can revoke or even sell the property without the beneficiary’s consent. After death the beneficiary files an acceptance with death certificate to come into title.
Obviously, a trust avoids probate.
I don’t like life estates for estate planning for a variety of reasons. One big concern is drafting it so that the life estate owner does not require remainderman to join in decisions for leasing or pooling order elections.
A simple trust typically works better. Plus, you can build in contingencies not available with TODDs, Life Estates, etc.
I’m not licensed in Texas, but my understanding is that Transfer on Death Deeds are not favored there.
This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.
Thanks for the replies, I only own 100 acres in Texas so going to go with the Transfer on Death Deed for minerals/land/house to make it easier on my 2 kids, getting old is no fun.
Bob77- getting old is the easy part as we really have no choice. But growing up is difficult because we must change our ways.
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Isn’t that only good to transfer minerals while you are alive?
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If you want to plan, especially to avoid probate or other transfer hassles, doing so while alive is the only way.
This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.
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No, can do it on all properties and Im still alive and tickin!
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We have taken Life Estate interests as collateral on royalty loans, and been able to negotiate leases without the consent of the Remainders in Texas. I can’t speak for Oklahoma, but in Texas Life Estate frequently occur when a spouse dies intestate and has children from a previous husband. It’s automatic. Then of course it can also be specified in a will.
Donald:
I believe you are confusing intestate succession and life estates. A life estate is not automatic and must be set up by a grantor and sets forth the actual interest conveyed to the remaindermen. Intestate succession occurs if there is no will and is “automatic” if that is the word you want to use.
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Quite right. An intestate succession can result in a Life Estate with Remainders if there are children. I don’t know if other blood relatives would be Remainders in the absence of children of the deceased?
My point was that a Life Estate interest can negotiate leases without the consent or involvement of the Remainders. I have done it.
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That is not correct. Taking free legal advice on a website is dangerous.
Then again, one could always look on YouTube on how to do your own dental work.
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I have a life estate and Koda definitely wanted the participation of the Remainder person. Maybe they were just being extra careful. It was not much of a problem. Proving my interest was where the work occurred.
In my instance the Life Estate and Remainders were not on speaking terms.
Donald, that was good for your situation. However, the life tenant generally has a duty to not create waste.
I am aware of a mother who granted her greedy daughter a remainder interest. The mother attempted to execute an oil and gas lease. Greedy daughter sued because the life tenant has a duty not to create waste. Daughter claimed part of the lease bonus. Ultimately no lease was executed.
My point is that life estates are seldom used as an estate planning tool. Why not use a tool that accomplishes the goal without the hassles.
This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.
So true. I may adopt the disclaimer that other have on this site which is that I am not offering legal advice and neither am I practicing law in Texas without a license.
What I have described is a situation with a life estate mineral interest that we took as collateral on a royalty loan, and were able to negotiate leases without the involvement of the Remainders. This is not legal advice, but a description of an actual event that passed the legal hurdles of ConocoPhillips and other significant Permian Basin players, as I negotiated and executed at least 3 separate leases in the last 18 months.
Mineral owners should not necessarily avoid a life estate in their estate planning for fear that the interest will be unduly restricted in the future. In the process of our royalty lending collateral, we in effect purchased the life estate (again without any involvement from the Remainders). Of course the life estate will transfer to the Remainders upon the death of our borrower. Whether acquiring the life estate, or leasing the life estate, we consulted with our in-house Texas oil and gas counsel.
Nothing in this comment should be deemed legal advice. Consult legal counsel licensed in the state where your property is located. There are excellent oil and gas attorneys that advertise with this site and are listed in the Directory.
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Tim is entirely correct about not taking posts as gospel legal advice. They are only some guidance. State law and ALL of the exact terms of a legal document, whether an oil and gas lease, deed, trust, etc., determine the outcome. For example, whether or not a life estate or trust can validly execute an oil and gas lease without the consent of the remaindermen depends on (1) whether or not such power to lease minerals in the document terms and (2) what state law requires or allows. In Mike20’s situation, the life estate may not have explicitly given the power to lease to the life estate beneficiary. Therefore, if the oil company did not get the consent of the remaindermen, then it would run the risk of the lease being voided upon the death of the life beneficiary. It is my understanding that this is the law in Texas. In Donald Skotty’s situation, the life beneficiary may have been granted the explicit power to lease absolutely under the document terms or the law in the state where the minerals were located may have automatically granted that power to the life beneficiary unless the document otherwise required the consent of the remaindermen. So two people can have opposite personal experiences because of the law and written words. IT IS ALL IN THE DETAILS.
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Life estates are overly complicated in a mineral ownership setting. A simple mineral trust provides a more workable framework in most settings. It is extremely unlikely that I would ever recommend a life estate for estate planning purposes. At least in Oklahoma.
This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.
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