Oil/Gas/title to lease
My husband's grandmother passed in 97, his mother in 2001 no wills on either. Grandmomma always claimed she got oil or water money, Somehow the issue came up recently and we discovered that she did have royalties, they have been paid to the state. We have talked to the oil company and they suggested an heirship affidavit for the 3 surviving grandsons. This is in Wood County Tx. We did the affidavit and have filed it in Wood County.
The oil company has changed, Crystal Oil Co. , Chaparral Energy LLC(who we are working with),and now Ram Energy
Question 1: How do the 3 grandsons go about getting the title changed names and divided into 3 persons?
Question 2: When the oil company begins to pay out will there be some sort of back taxes?
Question 3: Do we need to go to Wood county to look at records? We don't even know what part of the lease that she held. Would this be a way to find out?
Question 4: How do we prove to the state of Tx that the monies they hold belong to the grandsons, we have no proof of her address that they have on file? We do have death certificates for both the grandmother and the mother that have their SSN on them .
Thank you for any and all answers,
Answer to Question 1: The Affidavit of Heirship normally is sufficient for this purpose, and you have done that. Now what you should do is to mail a photocopy of the recorded Affidavit to each of the companies: Crystal, Chaparral and Ram. Chaparral is probably the operator of the well, but circumstances could cause all three of them to have owed money to the three heirs but they didn't know who they were or how to find them. Now they will, after you send them a copy of the recorded Affidavit showing the file number or volume & page where it is filed into the public records in Wood County and providing the addresses for all of the living heirs listed in the Affidavit.
NOTE: The Affidavit of Heirship that the 3 companies need to receive (recorded copy, of course) is the one for your husband's Grandmother. His mother should be listed as an adult child and date of her death stated where indicated. Then all of the children of his mother (living or deceased) will be listed in the Affidavit. If the Affidavit was not prepared this way, it needs to be re-done. I am assuming that your husband's mother had no brothers or sisters--if she did, they or their children will be entitled to a statutory part of the grandmother's interest.
Answer to Question 2: When the company/companies begin to pay the three heirs, no taxes will be withheld from the royalty check. They will have to pay taxes on it themselves, as capital gains tax or whatever category of tax their tax preparer/CPA determines is correct with the IRS. However, there will NOT be any back taxes on money they have not received. However, they can file a claim with the State of Texas (if his grandmother's last address was anywhere in Texas) and when the State of Texas pays the three of them what was paid to Texas as "abandoned property" they will have to pay taxes on that, but only after they receive it. Verify this with your tax preparer/CPA.
Answer to Question 3: No, that would not be a good way to find out because you need to have special training to know how to look at the county records in a way that you can determine with any real certainty what your grandmother owned. It most likely would be a wasted trip for you, unfortunately. However, you can write a letter (in writing, best not to call for this) to Chaparral (or whichever of the 3 is the operator of the well) when you send them the copy of the recorded Affidavit, and in the letter ask them to tell your husband exactly what decimal of interest was credited to his grandmother and how it was calculated. Then when they give that to you, you will add the fraction of your husband's share to the calculation to know what they should then credit to him and begin paying him based on. But you mentioned your husband's grandmother was being paid for "water", which could mean she was the owner of the surface land where a salt water injection well is located, and she may have had a water injection agreement with the previous operator that they had to pay a certain amount per gallon for salt water the company separated from the production coming out of a nearby wellbore and had to put it back into the ground. You need to ask Chaparral about a salt-water injection well on her property, preferably in the letter. The year 1997 seems too early in Wood County for horizontal drilling fracking operations that require large amounts of fresh water, so I doubt she was being paid for fresh water used from her property, but I could be wrong. And that would have only been during the drilling process, not after the well began to produce.
Answer to Question 4: Unlear on this question. The money could have been paid to the state using an address of "Address Unknown, State of Texas". A photocopy of the Affidavit of Heirship plus a photocopy of each of the death certificates should suffice. Her last known address should be reflected on the death certificate, proving what her last address was. Just because the money was paid to the state using an old address you don't know is NOT grounds for the state to withhold your husband's money.
Please send a follow-up if you still have any questions, especially if any of the 3 companies rejects the Affidavit as sufficient, so I can explain to you why this can happen.