What do Groucho marx and James Dean have in common? Also, did you know that Bing Crosby (yes the same White Christmas bing Crosby) owned mineral rights in Grady County Oklahoma? Today’s guest, Richard Winblad, tells us these fun and interesting stories and more.
Now, you may recognize Richard’s name if you frequent the Mineral Rights Forum as he is a frequent contributor there and has helped many mineral owners make sense of what they might own.
Richard explains what marketable title is and we discuss the ins and outs of probate, estate planning, and when an affidavit of heirship might be useful for clearing up title to your minerals.
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About Our Guest
Richard Winblad is an Oklahoma Attorney focusing on Estate Planning, Probate, Elder Law, Oil and Gas Ownership and Real Estate. He has been a practicing attorney since 1992 and is licensed in Oklahoma.
Before we dive in, just a reminder that we are sharing this for informational purposes only and this episode should not be construed as legal or tax advice. You should not act or refrain from acting on the basis of any content discussed without seeking legal advice from counsel in the relevant jurisdiction.
Introduction
We find out more about Richard’s background including:
- What got you interested in the law and becoming an attorney?
- So I understand two of your speciality areas are estate planning and mineral rights. How did you get involved with mineral rights and royalties?
- What states are you licensed to practice in?
What is Marketable Title?
We start with a discussion around title work as it relates to mineral rights and royalties and the fact that this is an area that can get overlooked. This is evidenced by heirs that are surprised to find out that they’ve inherited minerals and heirs are faced with the often daunting task of having to clear title to get the property in their name.
Then, we talk about marketable title and the steps required to obtain marketable title for mineral rights and royalties.
- What is marketable title?
- Is marketable title to mineral rights a requirement in order to receive royalties if a well is drilled? What if you inherit mineral rights and want to sell them?
Probate
One of the ways that mineral owners look to get marketable title when inheriting mineral rights is through the probate process. Richard explains what probate is and the steps, timing, and typical cost for different types of probate in Oklahoma.
- What is probate?
- Let’s say I inherit mineral rights, why is probate needed if the Will says I get the property?
- What about the case where your relative didn’t have a will. How does that change things?
- I know a lot of heirs end up inheriting mineral rights in another state. If you probate the minerals in your home state, why is it that oil companies require a probate in the state where the minerals or royalties are located before they will begin paying royalties?
- Is this ancillary probate required in every state?
- How long does probate usually take?
- What is the difference between ancillary and summary probate?
- What does a probate cost?
- Do the heirs have to actually attend court or is probate more of an administrative matter?
- Are there any short-cuts available to heirs for when they just have a mineral only probate?
Other Ways To Obtain Title to Mineral Rights and Royalties
After we discuss the probate process, Richard explains some of the other methods that mineral owners can use to clear up title to their property.
Affidavit of Heirship
- What is an affidavit of heirship?
- I’ve heard people ask the question “why didn’t the affidavit of heirship work?” Can you talk about this and when it can be used and when it might not make sense?
- Quiet Title Actions
Trusts and LLC’s
In estate planning, the gold standard for avoiding probate is by placing assets in a Trust. Richard explains the things you should know about trusts and mineral rights and some of the pros and cons of Trusts vs. LLC’s.
- I have heard of people whose parents had a trust but the minerals were not deeded into it. What should they do?
- Is a pour over will an effective way to guard against assets that are not funded into the trust?
- What about cases where someone had a trust and the minerals were part of the trust. Is it necessary to go through the probate process? I think we are at the next question:
- I know trust have the benefit of transferring the property without probate. In your opinion does that benefit potentially outway tax consequences that may exist for assets in a trust? I know this is a moving target since tax rates may not stay the same throughout time.
- What about an LLC or other entity? Is it also advantageous to hold minerals in a LLC to avoid having to go through probate?
- In Texas, it’s not uncommon to hear of trust that caused confusion. To that point, how important is it to ensure the trust is structured in a way that is easy to interrupt in the future.
Wrap-up
What should mineral owners look for when hiring an estate attorney? Is experience with minerals and royalties a prerequisite?
Resources Mentioned in This Episdoe
- MRP 67: Estate Planning and Mineral Rights. In this episode, we learn about the basics of Estate Planning from attorney Ben Kinney. Ben is licensed to practice law in Colorado and Wyoming.
How to Contact Richard
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