As I write this article, OK-NARO is in “crunch time” mode in preparation for our state convention. With the top-notched speakers scheduled, the 2016 convention should prove to be one of the best and I hope to see you in Tulsa, Oklahoma April 27th-29th!
Now, to my topic this month: Transitioning…the planning and evolution of your minerals to the next generation. This is one of the most important responsibilities you have as a mineral owner. Your minerals, whether obtained by inheritance from your forward thinking relatives or acquired by investing in the fruits of this industry, are valuable assets. We all understand the importance of seeing that our assets of land, stocks and bonds, and retirement accounts are properly transferred to the next generation. However, too many times I see in my business that minerals take a back seat in the transitioning process.
As stated in Mineral Management 101, you must know what minerals you own and where they are located. Then, obtain copies of the documents, deeds or court orders where you and/or your family came into title. I was fortunate in that decent recordkeeping by my relatives gave me a foundation from which to build solid records, both digital and hard copy, to pass on to the next generation. I won’t say it wasn’t time consuming (I should say it was time consuming for my wife!), but the time spent will pay huge dividends in the future not only for you but for your children.
If you’re not sure what you own in a particular section, then you probably need to do some leg work or retain a Certified Mineral Manager or a landman to help you determine your ownership interest. I have had any number of clients that have caught mistakes on either oil and gas leases or division orders from oil companies because they knew the exact acreage of their ownership.
After you have managed to organize your ownership interests, sit down with that next generation and discuss the ownership with them. No matter how well you organize your records, it can be difficult for them to understand. Hopefully, you will have one family member interested in taking the reins on this asset. If not, do your research to find someone they can rely upon for advice.
Finally, engage an estate planning attorney that has a good background in oil and gas. He or she can help you put an estate plan into place that will make the transitioning much easier. The next generation will thank you for all your efforts.
“All good men and women must take the responsibility to create legacies that will take the next generation to a level we could only imagine.” Jim Rohn