Minerals in Irrevocable trust

[NancysOilCompanyLOL]

@Richard_Winblad

hat if it was a DIY document that it violated the rule against perpetuities. This is a provision that requires that an interest either vest or fail within a period of time. Under common law this period was “a life in being plus 21 years”. The question would be whether this would be under Minnesota law where the document was formed or North Dakota law where the property is located

Wow, thanks for this insight. That’s definitely something to check into, since this trust was created in 1972, and there’s really very little verbiage defining the actual terms of the trust, other than it will last until both primary beneficiaries are gone (one is still alive). It’s not a DIY (there was an attorney or maybe just the original bank involved), but the oil didn’t start producing until after 2003 (grantor death+21 years) Thanks so much for that direction!

[Mikro1TX]

Was able to get some docs, but not all. Still working on this 7 years later. Just found more problems within the past two months that date back to 1985. While the trust is no longer (2016) We keeping finding more issues of mishandling by the trustee/bank. MK

[Richard_Winblad]

@NancysOilCompanyLOL

oil didn’t start producing until after 2003 (grantor death+21 years) Thanks so much for that direction!

The life in being + 21 years typically refers to a beneficiary of the trust, not the grantor. Sorry for the confusion.

This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.

[TripleF]

This has been a very interesting and thought provoking topic. Thanks to everyone! I’m learning a great deal!

Out of frustration as I am dealing with ownership issues spanning several generations, I was thinking maybe a trust would be a better way of dealing with it all going forward. But I’m seeing there are so many things to consider that I haven’t even thought of yet! If there was one person in the family who wanted to really manage the trust that would be simple initially. But how about later generations?? SMH . . .

Clearly, I’m seeing it would likely not be financially smart to appoint a trust department to manage the holdings given our relatively small but diverse mineral rights (5 states, 31 counties, 78 deeds) but small NMAs.

[sclausen]

A trustee has the common law duty of full disclosure to the beneficiaries. You may want to engage an experienced trust attorney to make a formal demand for the records pertaining to the management of the mineral interests. It has been my experience that corporate trustees who have been in place for a long time regularly make mistakes an beneficiaries who want rid of them can force a resignation with threat of breach of fiduciary duty suit or go to court to seek removal. Not all beneficiaries have to agree on filing a petition to remove a trustee. Competent legal counsel can help you understand your rights and what legal action make sense to take.

[Smith_Ranch]

Nancy, we work with a Austin based company to manage our assets which they have two methods of management fees:

5% of cash flow if they are actively replacing depleted reserves for you by giving you access to buy into their oil and gas deals they actively purchase;

or

3.5% of cash flow if they are just doing the back office work, negotiating OGLs, distributing cash flow, etc…

I hope this helps!

[NancysOilCompanyLOL]

@Smith_Ranch

5% of cash flow if they are actively replacing depleted reserves for you by giving you access to buy into their oil and gas deals they actively purchase;

Hi Smith_Ranch! Thanks for the information. What Austin company are you working with? We are paying more than that, I’d like to contact other companies to see if their fees are more reasonable. Thank you very much for your help!