If you have oil and gas rights, it is important to understand what happens to it after you pass away. You likely want to pass it down to others and ensure it is protected. Many Oklahoma residents ask if oil and gas interests have to go through probate. The answer is yes for many people, especially if they did not create an estate plan that bypasses probate. With an effective estate plan in place, you can streamline how your oil and gas rights pass to beneficiaries.
At Prado Law Offices, our Oklahoma City attorneys help you pass down your oil and gas interests, as well as the rest of your assets.
Why Oil and Gas Interests Often Require Probate
In Oklahoma, probate is generally required whenever a deceased person owns property in their name alone. Oil and gas interests are treated like land, and those interests cannot be legally transferred without a court order in many situations.
Without probate, operators and county clerks cannot update title records. As a result:
- Royalty payments may be suspended
- Operators may place funds in suspense accounts
- Heirs cannot sign leases or negotiate new agreements
- Ownership disputes may arise
Probate provides the legal authority needed to transfer title, clear ownership, and allow operators to resume payments.
Types of Oil and Gas Interests That May Need Probate
Oklahoma recognizes several categories of oil and gas interests, and each may require probate depending on how it is titled.
Mineral Rights
Mineral rights include the right to explore for, develop, and produce oil and gas. These rights almost always require probate if they were owned individually and not placed in a trust or transferred through a non-probate mechanism.
Royalty Interests
Royalty interests entitle the owner to a share of production revenue. Even if the interest is small, operators typically require probate documents before transferring ownership.
Working Interests
Working interests involve operational rights and responsibilities. Because they carry financial obligations, probate is usually necessary to determine who inherits both the rights and the liabilities.
Leasehold Interests
Leasehold interests may require probate if the decedent held them individually. Operators will not recognize a new owner without proper legal documentation.
When Oil and Gas Interests May Avoid Probate
Certain estate planning tools can allow oil and gas interests to avoid probate. These include:
Transfer-on-Death Deeds
You can use a transfer-on-death deed for mineral rights and real property. This automatically transfers the ownership rather than requiring probate to do so.
Revocable Living Trusts
Placing mineral interests into a trust allows them to pass to beneficiaries without probate. The successor trustee can manage and distribute the interests according to the trust terms.
Joint Tenancy with Right of Survivorship
If mineral interests are held in joint tenancy, the surviving owner automatically receives full ownership without probate.
How Probate Works for Oil and Gas Interests in Oklahoma
When probate is required, the process typically includes:
- Filing a petition to open probate
- Appointing a personal representative
- Identifying and valuing mineral and royalty interests
- Notifying operators and providing required documentation
- Clearing title and resolving any ownership disputes
- Distributing interests to heirs or beneficiaries
- Recording new deeds or ownership documents
For families with interests in multiple counties, the court may require ancillary filings to ensure title is properly updated everywhere the minerals are located.
Why Proper Title Matters
Oil and gas companies must pay royalties to the legally recognized owner. If title is unclear or outdated:
- Payments may be delayed
- Funds may be held in suspense
- Operators may refuse to issue division orders
- Heirs may lose negotiating power for new leases
Probate ensures that ownership is legally documented, preventing future disputes and protecting revenue.
Create an Estate Plan That Protects Your Oil and Gas Interests in Oklahoma
A comprehensive estate plan is important for all of your assets, but especially any oil and gas interests you have. Whether you own an oil and gas company, shares in one, or have mineral rights to certain property, there are complex aspects you should entrust to a qualified attorney.
Our team at Prado Law Offices can assist you with your estate planning needs. We offer comprehensive services that best fit your requirements. Contact us today for a consultation.