Heir Property and Mineral Rights in Arkansas: Practically Unsolvable v. Solvable Scenarios

I get a call a couple times a month from someone who believes they own mineral rights in Arkansas.  Many calls imply that somebody, somewhere cheated they caller out of their birthright.  I sympathize, I really do.  Mineral rights law is very complicated.  Many actions that seem opaque and shady to a normal person are actually standard operating procedure for oil and gas companies.  There’s a good reason why these actions that appear callous are the standard operating procedure.  It is not personal–believe me.   Folks at oil and gas companies are sympathetic human beings.  The thing is that there are only so many of them, but there are 1000x more of you the royalty owner.  For that reason, the company has to prioritize some requests and outright turn down others.

A simple 640 acre gas unit out in the country may have 100 owners.  In towns, the number will be in the 100’s.   If a company has 64,000 acres in a gas play, it may deal with 64,000 royalty owners.  That company may only have 10 division order analysts.   This is why the oil and gas companies sometimes seem callous.  They are outnumbered and outgunned.  If they hired enough people to answer everyone’s calls and letters the same day, they could not afford to drill and produce.

Because of this asymmetry between owners and company employees, the companies lobbied States to have laws and regulations to pass the responsibility of keeping up with unclaimed royalty money to the State government.  This is how royalty money disappears.  There are exactly zero State employees actively looking to reunite you with your money because frankly if they don’t find you, they get to keep your money.

This is why you call me.   I appreciate the calls, but there are some fact scenarios that are solvable and others that are not.  Here are some common but practically unsolvable situations:

  1. You have no clue whatsoever where the land was and who originally owned it.
  2. You know that one or your parents or grandparents owned the land, but you don’t know or understand how much.
  3. You know that your great grandfather owned the land.  He had 12 children.  They had 8 children each.  Your parents had five children  (or some variation of these numbers where there are 50 plus descendants).

The first one does not help me help you.  I don’t have the time to hunt down your ancestor’s names on deeds in the courthouse.  The second is usually someone who actually is in the third situation but just doesn’t know it yet.  If you are in the third situation, you have such a small interest in the property, it would cost you many times more in your share of any possible royalty money to hire me.  I say “practically insolvable” because the cost/benefit on my fee to your recovery makes recovery impractical.

Solvable scenarios:

  1. Some person or company approached you to buy/lease/integrate your mineral rights.
  2. You’ve seen your name or your parents’ names on a State unclaimed property list.
  3. You know you have fewer than 20 owners in the whole tract of land and there is an oil or gas well on the land.

The first is a big tell that you have something valuable.  You are sitting on a full house and they are bluffing.  The person who approached you did the homework. You need me to figure out what he/she knows, clear your title, and claim your money.  The second is also a good sign and provides plenty of information that will allow me to find your money and mineral rights.  The third is also acceptable because you will likely have enough interest to make it worth your while to hire me.

So there it is.  I hope you found this, read it, and understand what I can and can’t do for you if you think you own Arkansas Mineral Rights and haven’t been paid.

How Long Does It Take to Probate an Estate in Arkansas?

“Going through probate” or “probating an estate” means  the same thing in Arkansas.  It means petitioning a Court with jurisdiction over the person or property in Arkansas to probate a will, appoint a fiduciary (whether administrator, executor, or personal representative), or both.  The proper Court is the Arkansas County of residence or the Arkansas County where the deceased had the most property.   This fiduciary 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.  More practically, the timeline for probating an estate in Arkansas is something like:

Day 1:  Consultation, file setup, fee agreement, and information intake.

Day 2-10:  Draft of petition, review by client, revisions by lawyer.  Client returns signed and notarized petition.

Day 11-20:  Filing of petition, drafting of order admitting will to probate and appointing fiduciary.

Day 21-30: Client returns acceptance of appointment signed. Lawyer files acceptance. Clerk of Court issues letters of Administration.

Day 31-40:  Lawyer runs notice of probate in Newspaper of bona fide circulation.  Lawyer sends notice of probate to parties entitled to notice under statute.  Fiduciary files inventory with Court.

Day 41-220:  This is the six month claims period.  A lot can happen in this time.  Creditors may make claims.  Property might be sold to pay claims, etc.

Day 221-230:  Final inventory prepared.  Final accounting prepared.  Petition for final distribution. Petition to close. Orders for each.

The typical Arkansas probate is around 230 days plus or minus 20 days.  Usually, the time runs longer because clients don’t return signed papers as quickly as they should or some action gets delayed in hopes of avoiding expense (e.g. obtaining entries of appearance instead of filing formal notices).

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.