Author Archives: admin

Types of Deeds in Arkansas

There are broadly, five types of deeds in Arkansas:

  1.  Warranty Deed:  The Cadillac of deeds.  This property transfers all title with a covenant of warranty.  The warranty assures the buyer that the person giving title (grantor) has full title free of flaws and claims by other people.  If there are other claims or flaws, the grantor may be sued for breach of warranty.  The warranty will also transfer any title acquired by the grantor after the conveyance.
  2. Special or Limited Warranty Deed:  With this type of deed, it is hard to understand what the grantor is really giving.  Typically, the warranty is for “acts done and suffered by the grantor and no other.”  What does that mean?  It means that if the problem with the title did not arise during the grantor’s tenure of ownership, the grantor is off the hook.
  3. Quitclaim Deed:  A quick and dirty conveyance of the property.  This is the 1970 Volkswagon Beetle of deeds.  It transfers only what the grantor owns right then and there and nothing in the future.  The quitclaim deed offers no protection to the purchaser.  It is title given caveat emptor “as is, where is.”
  4. Fiduciary Deed:  A deed given by a court-appointed fiduciary.  This usually happens with a guardian, executor, receiver, or administrator.  It may or may not include a warranty. Usually, it includes only the “right title and interest” of the person whom the fiduciary represents.  E.g. “all right, title and interest of the Estate of John Smith, deceased in the property.”  The phrase “right, title and interest” do not carry a warranty.  Fiduciary deeds must usually be authorized by the Court.
  5. Beneficiary Deed:  A statutorily authorized “pay on death deed.”  It transfers no present interest in the property, but becomes an irrevocable transfer upon death.  This is a great estate-planning tool for non-residents of Arkansas because it avoids probate.

How to Transfer Property in Arkansas

If you’ve come into some property in Arkansas or perhaps you have a loved one who wants to gift some Arkansas property to you, you must obtain a deed to that property.  There are many Arkansas deed forms on the internet, but as my father (a physician in practice for over 50 years) told his patients when they’d contradict his advice with something they read on the internet:  “Just try to sue Dr. Internet when that course of treatment makes you sicker.”  If you find an Arkansas deed from out there on the net, most likely, the deed form will not fit your particular needs and will make your situation worse.   What deed will work for your situation?  It depends and that, frankly, is why you should consult an Arkansas lawyer.  Most deeds cost less than $300 to prepare.  A professionally prepared deed can save thousands down the road.

Take for instance a situation I once noted in an oil and gas title opinion I rendered.  We’ll protect the innocent by calling them the “X” family.  (I never represented them, but I will still respect their privacy).  Back in 1965, Grandpa X wanted to give his grandson Mr. X a piece of the family farm.  Grandpa deeded 40 acres of the farm to Mr. X and his new bride Mrs. X.  The farm was in the X family for generations.  It was the patrimony of Mr. X, his uncles, aunts, and cousins.  There were no outsiders in the farm.  So they thought, at least.

Fast forward 15 years later.  Mr. and Mrs. X divorced in their hometown in County A.  The X family farm is in County B.  The lawyer handling the divorce knew nothing about the farm property.  It never dawned on Mr. X to even think about the farm as anything but belonging to the X family, and to Mr. X, Mrs. X was out of that family due to divorce.  The property was never mentioned in Mr. and Mrs. X’s divorce decree.

Twenty years later, Mr.  X had gone on to glory.  Eight years after that, gas was discovered on the X family farm. Nothing in the real estate records revealed the death of Mr. X, so this darn pesky oil and gas title examiner (me) started asking questions.  The divorce decree came up and the death did too.

The family did not take the news well.  The original deed created a survivorship estate in the young couple.  That is, when “death do us part” happened, the survivor of the marriage got the property.  When they divorced, however, and the decree did not mention the property, an obscure statute kicked in which turned the survivorship estate into a tenancy in common (that is, one half each absolutely).    The result was that the entire X family wound up with an unwanted partner in their farm and gas wells–the former Mrs. X.

Grandpa messed up the deed to his grandson by doing it himself.  If he’d have had counsel, the lawyer would have asked questions about the property and explained the ramifications of including Mrs. X on that deed.   But now, a total stranger to the family has just as much right to occupy the X family farm as they do.

The tl;dr of this post–pay a lawyer to draw up your deeds.  You might be clever, but I assure you that you’re not clever at everything.

 

Arkansas Oil and Gas Bar Loses Longtime Member

Very sad to hear about the passing of my colleague David Butler of Magnolia, Arkansas.  I met David 10 years ago in Hot Springs.  He was representing Chesapeake Exploration at the time, and I remember he introduced his talk as “I’m purely for entertainment.”  Boy was he!  He had the audience laughing from start to finish.  David was witty, charming and not afraid to mix it up in the hearing room.  David could spin a yarn like no other.  I can’t get over how many hilarious stories the had from his job as prosecuting attorney.  I never saw him in a bad mood or with a bad attitude.  He will be sorely missed at the annual oil and gas convention in Hot Springs.   A link to his obituary is below.   No mention of his work as an oil and gas lawyer, but he was one of the best in Arkansas.

http://www.eldoradonews.com/news/2017/aug/13/david-butler-prosecuting-attorney-13th-judicial-di/

How long does it take to go through probate in Arkansas?

“Going through probate” in layman’s terms means appointing a person to oversee the estate called an “administrator” or a “personal representative.”  This person serves under supervision of the court for period of at least 6 months.  It takes about 1 to 4 weeks to get someone appointed, so as a practical matter, it will take around 7 months to probate an estate in Arkansas in a best case scenario.

How long does it take to probate a will in Arkansas?

It takes as little a day to probate a will in Arkansas, but the will is subject to challenge for 60 days after giving notice by publication in a local newspaper of general circulation in that particular Arkansas county.  Probating a will in Arkansas is completely different from administering an estate in Arkansas.  That is, it is possible to probate a will in Arkansas without administering an estate in Arkansas and vice versa.  If the deceased has money tied up with financial institutions or significant personal property in Arkansas, then it is likely the estate will require an administration.  Administration of an estate in Arkansas has the additional benefit of barring the claims of unknown creditors.  Thus, where there is real property in the estate–such as a home–and the heirs wish to sell the home immediately, estate administration will allow the home sale to close sooner than if there were no administration.

Avoiding probate on small mineral interests in Arkansas.

Clients often call me with a request to probate a will to transfer title to some mineral rights in one of the oil or gas producing Arkansas counties.  Many times, the cost of the probate far exceeds the present value of the mineral rights.  For those mineral owners, it is too late.  The law requires a probate to transfer title if the deceased’s will leaves the property to someone other than the intestate heirs.  This most comes up frequently because many will leave property to a spouse or to a trust, and neither are intestate heirs under Arkansas law.

If you own mineral rights, and want to avoid probate in Arkansas, then an Arkansas Beneficiary Deed is a very good option.  The deed can automatically transfer your Arkansas mineral rights upon your death, much like a pay on death bank account.  Also like a pay on death bank account, the designated beneficiary can be any person, company, or charity.

In my opinion, an Arkansas Mineral Beneficiary Deed is the best option to avoid probate for clients with mineral interests in Arkansas who will have a gross estate that is less than the Federal Estate Tax Exemption.  Contact Law Offices of Mark Robinette for more information.

How to transfer land without a will in Arkansas.

Do you have only a tract of land in Arkansas?  If you live in another state and have a vacation home, rental property, timber land, or mineral interest in Arkansas, you may leave your family with a burden if you utilize a will to transfer title at your death.

Merely filing a will in the County real estate records in Arkansas is not enough.  The law will require your heirs to admit your will to probate.  The average probate costs around $2000.

There is a very low cost alternative to probate.  Act 1918 of 2005 allows beneficiary deeds.  This makes your Arkansas land or Arkansas mineral interest transfer ownership just like a pay on death bank account.  The best part is that it is very flexible and low cost.  The beneficiary of your land at your death can be a trust, company, person, or a charity.

Contact Law Offices of Mark Robinette to learn more.

In what Arkansas Counties can you utilize a beneficiary deed?  All 72, of course!  This includes Arkansas County, Ashley County, Baxter County, Benton County, Boone County, Bradley County, Calhoun County, Carroll County, Chicot County, Clark County, Clay County, Cleburne County, Cleveland County, Columbia County, Conway County, Craighead County, Crawford County, Crittenden County, Cross County, Dallas County, Desha County, Drew County, Faulkner County, Franklin County, Fulton County, Garland County, Grant County, Greene County, Hempstead County, Hot Spring County, Howard County, Independence  County, Izard County, Jackson County, Jefferson County, Johnson County, Lafayette County, Lawrence County, Lee County, Lincoln County, Little River County, Logan County, Lonoke County, Madison County, Marion County, Miller County, Mississippi County, Monroe County, Montgomery County, Nevada County, Newton County, Ouachita County, Perry County, Phillips County, Pike County, Poinsett County, Polk County, Pope County, Prairie County, Pulaski County, Randolph County, Saline County, Scott County, Searcy County, Sebastian County, Sevier County, Sharp County, St. Francis County, Stone County, Union County, Van Buren County, Washington County, White County, Woodruff County, Yell County

What is the statute of limitations for probating a will in Arkansas?

If the deceased is a resident of Arkansas, the time limit to probate a will is 5 years past the date of death.  With non-residents, the time limit is more flexible.  Any will admitted to probate in another state in a timely manner may be probated in Arkansas at any time.  There are date restrictions.  The will of anyone who died prior to the effective date of Act 166 of 1963, whether a resident or non-resident is subject to a strict 5 year statute of limitations.   Prior to Act 166 of 1963 and the effective date of Act 140 of 1949, the strict 5 year statute of limitations applied.  Prior to Act 140 of 1949, there was no statute of limitations.  The courts have contradictory holdings on the retrospective application of Act 140 of 1949.  Contact Law Offices of Mark Robinette to discuss if you face this complicated, but rare problem.

How long do I have to probate a will in Arkansas?

If the deceased is a resident of Arkansas, the time limit to probate a will is 5 years past the date of death.  With non-residents, the time limit is more flexible.  Any will admitted to probate in another state in a timely manner may be probated in Arkansas at any time.  There are date restrictions.  The will of anyone who died prior to the effective date of Act 166 of 1963, whether a resident or non-resident is subject to a strict 5 year statute of limitations.

Landowners Prevail in Cleburne County Arkansas Mineral Rights Litigation But Damages Lacking

Cleburne County landowners Bruce and Jan Smith won on appeal in the case of Smith v. Mountain Pine Timber, Inc., 2016 Ark. App. 193.  In this case, Mountain Pine timber previously sold the minerals to land later sold to the Smiths.  Mountain Pine then sold the land to the Smiths with full warranty of title and with no mineral reservation.

Under Arkansas law, a warranty of title is actionable as a breach of contract.   The statute of limitations does not begin to run until a third party disturbs the purchaser’s rights to possession of the property.  This is particularly important feature of the law when it comes to minerals.  Minerals are not possessed until produced.  Many years can pass before the requisite mineral development and production takes place.

In the Smith case, they purchased the land from Mountain Pine Timber in 1987.  It was not until 2008, when the Smiths were approached to sell their mineral rights that the Smiths discovered that Mountain Pine previously sold the Cleburne County mineral rights.

Another point of black letter law in Arkansas is that the damages for breach of warranty of title are “so much of the consideration paid as is proportioned to the value of the land lost, with interest.”  Furthermore, the damages cannot exceed the total value of the purchase price.  The Court of Appeals therefore reasoned that the property point in time to fix damages was the time of the conveyance.  In this case, that was the 1987 conveyance to the Smiths from Mountain Pine.  The Smith trial court awarded only $250.22 in damages or $1/acre.

Notably, the only evidence offered on the value of the Cleburne County mineral rights in 1987 was from one of the Defendants who testified that the mineral rights were sold by Mountain Pine for $1 per acre in 1985.  This underscores the importance of offering expert testimony of damages.  Most likely, the actual value of the Cleburne County mineral rights was much higher than the $1 per acre awarded by the trial court, and the low damages award was the result of insufficient testimony by the Plaintiffs.   I’ve seen numerous mineral deeds in the Cleburne County records prior to the Fayetteville Shale discovery that easily exceeded $1 per acre.

Justice, however, was in some manner served for the loss suffered by the Smiths.  In a companion appeal of Mountain Pine Timber v. Smith, 2016 Ark. App. 197, the Court of Appeals upheld an award of attorney’s fees in the same case.  Arkansas law allows attorney’s fees to the prevailing party in a contract action (which a deed covenant is) provided the fees are reasonable.  The court awarded $17,500 in attorney’s fees.  The Appeals Court concluded the award of attorney’s fees was not excessive.