By Dan Barney

Estate Planning & the Law

For the past two weeks we have been reviewing oversights or errors that are frequently made in the preparation of wills, trusts or deeds or by the complete failure to complete those documents.

Such errors can result in substantial expense, trouble and delay for the grantees or beneficiaries of those documents.

Another very common example of a failure to plan that affects future generations is the failure to address and define mineral interests.

• Why is this a frequent problem? Often mineral interests are scattered and not active – as a result people lose track of them.

Inactive interests were often considered of little value, consequently they were forgotten when a person died. Their source was frequently from an inheritance and sometimes the person inheriting an interest does not even know of the existence of his ownership.

Therefore, such interests are often not transferred from one generation to another in any documented manner. These interests often remain in the name of the decedent because small estates that include such interests are frequently not probated.

The title to those interests is never passed from a decedent to the heirs and the county records show ownership remaining in the name of the decedent.

Surprisingly even large estates with trusts and many other interests often overlook minerals or other assets and require substantial post death efforts to clear the title.

• The Complications that Result. Mineral interests may remain in the name of a person who died many years (and generations) ago.

Their heirs are not defined and therefore when such minerals are later discovered, the current living owners are not known and the money is held in suspense by a mineral company and ultimately will end up in the state’s unclaimed property fund.

At that point it can be very expensive exercise to determine the current living heirs, define the amount of interests they now own and correct the ownership records of the county so that those current owners can collect the moneys held for them and receive current payments for present or future production.

The good news is that these errors can be corrected and back money can be reclaimed with current ownership defined.

However, this comes at a cost. Correction usually requires probates for each deceased heir or a separate suit to quiet the title. When action is delayed 50-60 years or more the number of living heirs can balloon to as many as 100 or more persons and the cost of the suit and related research can reach to over $100,000.

The lesson – identify all of your assets, document them and provide for the documented and legal transfer of that property to your devisees and heirs.

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