You or your children may be worth a lot more money than you think. Oil, gas, or other mineral interests which may not have been productive for decades are now arising as valuable assets with the advent of new technologies and new applications for things that can be extracted from the ground. Fifty years ago, there was no good way to discover whether there was oil or gas 10,000’ below a farm in Kansas, Oklahoma, Texas, or other places. Now, technology can not only locate those minerals, but new techniques have made it possible and cost effective to recover them and sell them at great profit.
Frequently in the past, farms were sold with the seller retaining all or part of the mineral interests in the land. If there was no drilling on the property once it was sold, the retained interest was often forgotten or not effectively passed from one generation to the next. After several years and generations, the interests might have become so fractionalized it is hard to know with whom to make an oil lease. A potential developer might just give up and move on the next prospect. Eventually, descendants don’t remember where the old farmstead was or even that great granddad even owned a farm. The property goes undeveloped or production Royalty payments are made to the Secretary of State.
Through careful planning, we have helped families protect such interests so that nieces, nephews and other descendants can enjoy the benefits of multiple oil wells drilled on their ancestor’s real estate.
The lesson to be learned here is to think about those hidden or forgotten assets when you plan your estate. Maybe you will be cashing royalty checks in some exotic vacation destination!
(Bob has been helping individual, business and estate planning clients since 1973. He is a champion of the firm’s team approach to help client resolve their matters as efficiently as possible.)
