Life Estate/mineral rights.

Ok , you lawyers, or folks with experience in the matter.  What happens to the bonus payment and royalty $$$ in a life estate?  Can the "life Tenant" lease the mineral rights on his/her own, without the signatures of the remaindermen?  Would an oil company risk leasing with the life tenant  and extracting the minerals without the ratification from the remaindermen?

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Permalink Reply by searcherone on September 6, 2014 at 1:46pm

And I thought the bonus/signing money went to the life estate holder and the royalties to the remainderman/woman.    Had an uncle as a remainderman on some shallow wells and thought he said the royalties were to come to him, but as his aunt was elderly and needed the money he had royalties sent to her.   I could be very wrong.     Thought the reason the royalties went to remainderman/woman was that it was a depletion of the original asset given to them.  

And is the law different in the various states?    I would really like the answer to this one.

Permalink Reply by bo boboski on September 6, 2014 at 3:49pm

Reading the Ohio laws on law firm websites, it sounds like the Life tenant cant receive the bonus $$, or the royalties. That $$$ goes to the remaindermen, but not until the death of the L.T. A trustee has to invest that $$$ until D.O.L.T. The L.T. CAN  receive the interest on that investment.   someone tell me if I'm wrong. I'm just wondering what a driller may try to get away with if the L.T. leases for some lowball offer,,but the remaindermen don't sign cause they know they will be getting screwed.

Permalink Reply by Buddy on September 6, 2014 at 4:34pm

Could the mineral rights life estate be helpful in protecting heirs for mineral rights inheritance tax or probate?  Could having a life estate avoid having the mineral rights property be appraised at the time of death?  I'm guessing not, but wanted to check if it is something I want to look into.

Permalink Reply by searcherone on September 6, 2014 at 8:09pm

Bo,

Looks like you are correct on this one.   I just read the Porter Wright site and that is what it says for Ohio.  And from what I read if life tenant signs without remainderman the life tenant is held accountable and may have to forfeit the property.

http://www.oilandgaslawreport.com/2012/12/19/life-estates-oil-and-g...

Permalink Reply by bo boboski on September 7, 2014 at 4:25pm

The laws ARE different in other states. Some states have the bonus $ and royalties going to the life tenant until he/she dies. then to thre remaindermen.

Permalink Reply by Philip Thackray on September 7, 2014 at 6:14pm

That is what happened with my friends here in PA.

Phil

Permalink Reply by Kathi Albertson on September 8, 2014 at 8:39pm
This has been a really good thread. Thank you Bo for starting it.
Permalink Reply by bo boboski on September 9, 2014 at 5:45am

Thx; I like to start discussions when the threads get boring or not pertaining to Oil&Gas stuff. It's interesting to see the responses and from whm.. Still it seems there is a lot more to be learned about the Life Estates laws in Ohio if the lawyers visiting this site would put their 2 c. worth in. Or $200. worth?

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