Linda Barry, CDOA

� Probate Transfer – Death of an owner

� Inter Vivos Transfer – Sale from one viable person or entity to another person or entity.

� Although property transfers immediately to the new owners the Analyst’s problem is to determine who the new owner is.

� Determination of Ownership is made in one of two ways:◦ Per the Will and Probate, or◦ Per the Statues of the State where the property is

located.

� Is there be probate in this estate? (Note: Remember probate can be held in an estate even if there is no Will.)

� If , ask for:◦ Copy of Will◦ Order Admitting Will to Probate or Order of

Administration◦ Copy of Letters Testamentary or Letters of

Administration� Who can I pay when I receive all these things?◦ The Executor/Executrix or Administrator of the

Estate

� Final accounting for the estate (proof that taxes were paid)

� Final Decree (AKA Decree of Distribution or Final Order)

� Any deeds from the Executor/Administrator or Personal Representative

� The Analyst would ask for Ancillary Probate Proceedings if the probate proceedings were held in a state other that the state where the property is located.◦ Exceptions:� Texas – Interest is transferred if the proceedings from

another state are recorded in the county where the property is located

� New Mexico – Proof of Authority which allows the Executor to execute documents related to New Mexico property (example: Executor’s Deed)

� An Analyst should not accept “foreign” probate to transfer an interest in oil and gas.

� If the Will is not probated the analyst should not transfer the interest based on the un-probated Will.

� When a Will is not probated in the state where the property is located the Analyst cannot transfer the property in accordance with the terms of the will.

� If there is ◦ no probated Will, ◦ Or the only probate is “foreign”, ◦ Or the Will exist but will not be probated then most companies will allow the transfer of an interest based on the Laws of Descent and Distribution of the state where the property is located. But the analyst should check his/her company’s policy.

� When transfer is based on the Laws of Descent and Distribution the heirs are usually determined using an Affidavit of Heirship.

� This transfer is as good as the information provided by the person completing the Affidavit.

� Because there will not be a document from the courts establishing record title ownership there is always risk involved. So this type transfer should be used when the amount of funds paid to the deceased owner is minimal. The Analyst should always check your company’s policies regarding this type of transfer of interest.

� The analyst should request the following:◦◦ completed by a

which has been acknowledged and recorded in the county and state where the property is located.

�

�

�Death Certificate�

�Both Husband and wife own ½ interest (only decedent's property transfers)

�

�Owned individually acquired�Prior to Marriage�Under a Will�As a gift�Inheritance

��Provision the law of some states (example:

Arkansas) that provides for the widow/widower.�The Surviving Spouse is entitled to a dower or

curtsey interest which is usually 1/3 to ½ of the interest of the deceased spouse.

� Oklahoma Transfer-On-Death Deeds� Since 2008 in Oklahoma a mineral owner is allowed

to name a beneficiary to the property in a Transfer-On-Death Deed.

�The mineral owner retains control of the interest until time of death and the property will transfer directly to the designated grantee without going through probate.

� Sale of Royalty or Minerals – Deed� To be valid a conveyance MUST have◦ Grantor◦ Grantee◦ Date◦ Consideration◦ Granting clause – Bargain, sell, grant, convey◦ Description of rights conveyed◦ Legal Description◦ Executed and acknowledged and recorded

� Assignor and Assignee rather than Grantor and Grantee

� Otherwise same elements to be valid

• – Documents such as DBA or registration with Secretary of State

� Conveyance from Partnershipo Who can execute an assignment or deed for

Partnership?� Conveyance from a Corporation ◦ Who can execute an assignment or deed from a

Corporation?◦ Is an Seal Required?◦ Do you need the Power of attorney or corporate

minutes?

� Chapter 7 – Liquidation – There is always a Trustee◦ 90 Days from date of petition to file claim ◦ Pay Trustee

� Chapter 11 and 13 Reorganization – Debtor usually remains in possession◦ Plan or reorganization◦ Pay debtor unless instructed to pay Trustee◦ Be careful about preference◦ Be careful about suspense◦ Be careful about set-off debt for a working interest

owner

� A Sheriff Sale is the sale of a property due to non-payment of taxes.�Process and procedures for the sale of a property

due to non-payment of taxes varies from state to state.

�Set out below are some items that are common to most oil and gas states:• Taxing Authority determines that the taxes are

delinquent• Judgment of Rendition is issued by the clerk of court to

the sheriff where the property is located• Sheriff publishes the notice of sale• On date of sale the property is auctioned• If bid is accepted by court the Sheriff executes an deed

� In a Sheriff’s sale always make sure to obtain a recorded copy of the Sheriff’s Deed.

� Consider the possibility of Redemption.

� Do not pay unless Deed is recorded.

� Definition of an express Trust:◦ Written arrangement◦ Property transferred with the intention of

administration by a Trustee◦ For the benefit of another person

� Trust relationship is among three parties:◦ Settlor◦ Trustee◦ Beneficiary

� Created by Settlor during his/her lifetime (Living Trusts). These trusts may be: ◦ Revocable◦ Irrevocable

� Created under a Will (Testamentary)◦ Always irrevocable

� Trustee has a fiduciary responsibility� The Trust document states powers of Trustee� Lists assets (Corpus)� Names beneficiary or beneficiaries� Apportions income� Exists for a fixed period of time -Gives

Termination date

� Assets may be listed in Corpus and the Trust Agreement is then recorded (Almost never happens)

� Set out in a conveyance into the Trust (and recorded)

� Probate of an estate places the property into the Trust

NOTE: A Transfer of ownership into a Trust is not valid unless the property is listed in the assets of the Trust and the Trust is recorded or the property is conveyed into the Trust and the conveyance is recorded.

� Who can hold title to the property (Trust or Trustee)?

� Is the Trust named on the Deed a valid Trust and is the Name of the Trust or Trustee correctly stated?

� Does the Trustee have the power necessary to administer the property?

� Is the Trust in effect?

� Trust Agreement� Pages of the Trust Agreement� In Kansas a Certificate of Trust can be

furnished and accepted by the analyst.� The analyst should then request a copy of the

recorded conveyance into the Trust or a recorded copy of the Trust document.

� Use these guidelines when making changes of ownership to your company’s records.

� When in doubt ask:◦ The Team Lead, Advisor, Supervisor◦ The Land Administration Manager◦ The Legal Department

There are excellent checklists found in the Addendum to the CDOA Study Guide • For the see page 31 of the

Addendum• For a see the checklist

on pay 34 of the Addendum.