I wanted to get some feedback from anyone willing to post on the following title problem. I will use the names John and Joan Smith, H/W as examples. Any information will be greatly appreciated.
John and Joan Smith, H/W acquired their interest in and to a 2 acre tract in Louisiana back in the early 1990s. Joan Smith passes away and leaves no will or no adminstration of her estate. This interest was not conveyed into Joint Tenancy so it is assumed the interest was conveyed to the husband and wife as Tenants in Common unless I'm missing something. John and Joan Smith had 4 children together that are all still living to this day. A lease was taken covering John's interest in 2008 and I'm guessing I would need the 4 children to ratify this lease if they acquired an interest through their late mother's death. I'm familiar with the intestate succession laws in Oklahoma but not in Louisiana. Does anyone know if her interest automatically reverts back to her surviving spouse or do the kids inherit in equal shares her portion of the interest in and to this tract of land? Thank you for any help.
A couple of things to get out of the way: first, I am not a lawyer (IANAL). But, I have done a fair amount of landwork in Louisiana. That being said, the concepts of Joint Tenancy, Tenants in Common, or Rights of Survivorship do not exist as they do in common law states. There is either community property (husband and wife), or separate property (usually declared as such). In cases where there may be some confusion or possible comminglement of assets (e.g., property acquired during the marriage but acknowledged to be purchased with separate funds, with no reasonable basis or provision of separate funds, or property acquired from a family member in which the spouse does not intervene to acknowledge separate property), it is a good idea to have both husband and wife execute the document, but I digress.
In the case above, if the immovable property is located in the State of Louisiana, Louisiana laws of descent and distribution apply. As the property was acquired as husband and wife, presumably with no declaration as to separate property by either spouse, the property is community property. As such, since the mother (Joan) passes away leaving four children, each will share in an equal interest of their mother's undivided one-half interest (thus each child becomes vested with a one-eighth interest). However, the children's interest is subject to the usufruct of the John, who thus has the right to receive bonuses and rents due under the lease until such time as he either dies or remarries (as which time, the usufruct terminates).
Based upon the wording of your hypothetical, it would appear that the lease was executed after Joan had passed. As such, John would be able to sign as an individual (as to his one-half undivided interest), and as usufruct for his late wife's one-half interest, provided that he had not since remarried (you do not mention this). If these assumptions are correct, he would have had the right to receive all of the bonus due under the terms of the lease; however, he is not entitled to encumber the property without the consent of the naked interest owners, being the children. Thus, it would be appropriate to have the four children ratify the lease.
In the State of Louisiana, title is generally vested into a decedent's heirs and successors by the opening of a succession, which culminates in the issuance of a Judgment of Possession. Because Louisiana still maintains forced heirship (though it has been greatly modified since 1997), as a landman it is still the best idea to "hang your hat" as to the vesting of title in such situations on a JOP, and certainly in situations in which the decedent passes prior to 1997. If the examining attorney determines that only affidavits of death and heirship are required, then by all means, listen to your attorney and not to me, and it is generally considered reasonable to perform the curative as I have related above. It is important to remember that wills affecting immovable property in LA must be examined in light of LA law. Specifically, as to dates of death in or after 1997, any child of decedent (or grandchild, if the child has predeceased the grandparent) under the age of 24, or any such heir of any age who is not capable of administering their own affairs due to mental or physical defect is considered a forced heir, and is eligible to receive their proscribed portion of the estate of decedent irrespective of or absence of any provision in the will.
Also, it is important to understand that as to descent and distibution, all children of decedent share equally (not just the children of the husband and wife at issue). Multiple marriages which result in different sets of parents result in: HIS CHILDREN (all of them) receive HIS undivided half of the community existing between THEM, HER CHILDREN (all of them) receive HER undivided half. This is a point that can get lost when obtaining Death and Heirship Affidavits - all children of decedent must be accounted for, not just the children of the surviving and deceased spouse, and not excluding those children that "don't count" (an inside joke).
The discussion of the intricacies of the forced heirship law are well beyond my qualifications to expound upon, particularly as to the laws in effect prior to 1997, at which time these statutes had significantly more "teeth" as to what could be done and not done in the disposition of a decedent's assets, as well as what portion of one's estate would be considered disposable, and what is not. In general, sales and transfers of immovable property to individuals being contemplated to either avoid succession or the forced heirship statutes in particular are looked upon as suspect by the court in my experience, and are readily subject to attack. There are estate planning tools available, however, I'll leave the discussion of those attorney's who specialize in such areas.
All things being said, as a LA landman, I'm looking for a JOP. Other than that, I am doing the curative set forth in the title opinion.
To those posters contemplating not leaving a will so that descent and distribution take over, consider the following:
If one dies without issue, the lateral heirs (brothers and sisters) of decedent inherit the interest. If decedent was an only child, the mother and father would inherit the interest, as separate property, married or not. Fortunately, my in-laws are pretty good people, and my wife has children from her former marriage. For those of you who do not, have not, or otherwise do not get along with your in-laws, oh, joy. The involvement of these folks in you and your spouse's business could have been easily rectified by a will (as lateral heirs and ascendants are not forced heirs so long as decedent dies testate).
In general (absent a will providing to the contrary): Bonuses and rents are paid to the usufruct, but royalties are paid to the naked interest owner(s) unless specified in the lease. Considering some kids today, good luck getting a child to ratify a lease unless they get paid. If the child does not sign, their interest is placed into suspense until they do sign, or otherwise inherit the interest (by termination of usufruct), at which point they are unleased. One can only imagine two of Joan's children ratifying the lease and directing all proceeds due under the terms of the lease to John, and the other two holding out unleased until John passes on, waiting on "the big bucks". (There's the makings of good Sunday dinners henceforth).
Food for thought.
Quick post-script after reviewing the above: The first worst-case scenario - lateral heirs and ascendant claims apply to the separate property of decedent. In instances where the property is either inherited as separate property, purchased as separate property (declaration), or interests in family property which are acquired both by inheritance and the community, these scenarios can and do play out.
Not necessarily a ratification, what you are addressing here is the fact that you have 5 different mineral owners at the time of the lease. A ratification would be sufficient, but they would also have the ability to negotiate their own lease terms, if I am understanding what you are asking. you are saying that Mrs. Smith passed away prior to the signing of the lease, if she signed the lease then passed away, ratification would not necessarily be required, but would ensure that everyone is covered when a title opinion is rendered. Too often this situation comes up and title opinions do not pick up the affidavit or probate information and the interest is left in suspense due to lack of knowledge by the company regarding the owners. While most of us make every effort to determine the reason for the title issues, we are only as good as the information we can obtain.
Back to mineral rights and power of attorney. If a living relative has granted a POA because they might not be able to make decisions for a while, are you saying that POA needs to state mineral rights or signatures would be invalid? This is Louisiana property. 2022
I am not an attorney but in Louisiana a POA need to say what powers are being granted.
Agree with TD here. POA needs to say what is being granted. If the POA is broad, ie. “Appear and act as Agent in all matters of business as to all of my affairs, including transactions of movable and immovable property”, your Attorney-in-Fact may be duly authorized; however, in my experience (IANAL) the legal community has frowned on these in recent years and examiners usually request a tailored POA specific to the transaction(s) for which the POA is granted. Too many sales, conveyances and other legal actions have been cancelled or declared nullifies due to abuse of the powers improperly granted or exercised via “general” POAs.
For real estate with financing, it is now quite common for either the loan underwriter or closing attorney to forward a specific POA for the transaction if one is required. These guys (and their title policy and/or errors and omissions coverage issuers) are tired of having to cover title failures due to ineffective POAs.
Thank you-- the POA does state mineral rights but the triply owned mineral rights lease offers does state not all parties have to sign for lease if one member signs but others don;t . I think that's what it says about jointly owned and I understand that it could be iffy for individual lease part. if challenged. Again thanks for your responses.
There would have to be three POAs, one for each ownership interest. Sounds like you are an "undivided interest owner". Example: three owners of 30 acres with undivided interest own one third of each acre. If the owners partition to divided the 30 acres of surface into 3 equal 10 acre tracts, each would then own 100% of the minerals under their 10 acre tract.
Undivided ownership interest in mineral rights is quite common. Should the 30 acres remain a single tract with 3 owners, the lease legal property description would be the same for each. The lease bonus paid however would be based on the lessee's assumption of what percentage of the whole each owns. Lease offers are based on legal descriptions in conveyance documents and are offered with limited due diligence. When a Division Order title review is done in preparation for paying royalty on a producing well or wells, the level of due diligence is much greater and may reveal title issues unknown at the time the lease was offered.
Also a lessor's royalty interest in a producing well or wells is not based on the acreage cited in their lease, The well or unit operator will perform a unit survey to determine the size of the unit and each unit tract acreage. It is quite common for a tract stated to be 40 acres for example in conveyance documents to be surveyed as something less or greater. That shouldn't be a surprise since modern surveys are more accurate than older surveys and many conveyance instruments are using the same property descriptions and acreage totals copied verbatim done through multiple conveyances covering decades based on a survey that may be 100 years old or older.
Not quite what lease says, but less complicated overall than what you are suggesting for me, us. And no the last survey done approximately 2006. Thank you, though, You have said before what you write is for all possible interested GH Shalers.