Husband (resident of Oklahoma) acquired certain mineral interests (in Arkansas) in his name only (per the deed) in 1930 before his divorce with Wife. Wife’s name was not on the deed conveying the mineral interest to Husband. Husband later conveyed one-half of his interest to another party. When he conveyed that half interest, Wife also signed the deed.
Wife could have signed for two reasons:
1) she was a half owner or
2) the Buyer just wanted to make sure she could never make a claim against the Buyer. The latter is often done in community property states--even if property actually the separate property of only one spouse to make the buyers more comfortable that other spouse would never make a claim against the buyer. I’m told that in many non-community property states, the effect is the same…property acquired in the name of one spouse during marriage is the property of both spouses.
Husband and Wife divorce in 1933. Husband marries Second Wife some time thereafter.
The divorce decree doesn't mention anything about any mineral interests.
When Husband died in 1977, Daughter got half of all property and Second Wife got half. At the time of probating Husband's will, all the Oklahoma real property (minerals only properties and actual dirt) to which Daughter was entitled got put into either her name or the name of a corporation she had created (“Corporation”).
Unfortunately, Husband appears to have completely forgotten about the Arkie minerals. Daughter believes that Husband thought they were worthless. The Arkie minerals were not addressed during the probate of his estate I suppose the Arkie minerals could have gone to Wife in the divorce but the deed records in the various counties in Arkansas do not reflect that. The divorce decree does not reflect that.
When Second Wife died in 1978, she left everything to Stepsister.
Of course, when Wife died, everything she owned went to Daughter.
So, the riddle is this: Who the heck is entitled to what share of those Arkansas minerals?
(A) If, following the divorce, the Arkansas minerals were just the property of Husband (most likely scenario per my gut), then Daughter and Stepsister own them in equal shares because half would have gone to Daughter and half to Second Wife upon Husband's death.
(B) If, following the divorce, the Arkie minerals were owned 50/50 by Wife and Husband, then Daughter would own three quarters and Stepsister one quarter (because Husband's half interest would have been split upon his death by Daughter and Second Wife, and Wife's one half interest would have passed to Daughter upon Wife's death).
(C) If all Wife's following the divorce, then Daughter would own them all. I can’t imagine that this is the reality.
That's poorly written but I hope it is intelligible.
Options:
(I) Try to figure out what actually happened to the mineral properties at the divorce with Stepsister perhaps agreeing to assist in defraying the costs of making such determination. As I said, the divorce decree doesn't mention them. The decree granted Wife alimony and child support. When Wife died, she did own some other but Daughter doesn’t know how or when they were acquired. I guess that wouldn’t be too difficult to determine. But, the fact that Wife owned any minerals may be evidence that she somehow got some minerals from the divorce.
(II) Assume that the minerals are owned 50/50 by Daughter (or CORPORATION) and Stepsister and get the ball rolling on getting the record title in the Arkie counties to reflect the current ownership. This is the Option with which Stepsister is most likely to agree (for obvious $ reasons) and she should be willing to split costs to get the title record sorted out.
(III) Assume Daughter has 75% and Stepsister 25% and see if Stepsister will go along. If she does, then maybe Daughter volunteers to cover all the costs to get the title issues sorted out.
(IV) Split the baby. Tell Stepsister we just don't know whether reality is reflected in (II) or (III) and see if she'll go for Daughter ending up with 62.5% and Stepsister with 37.5%.
That summarizes the broad problem. I guess my first hurdle is determining whether Wife was a half-owner of those minerals after the divorce. My head already hurts. Does OK or Arkie law apply?
The immediate problem: new landman is sending Daughter a lease. When Daughter mentioned Stepsister he said "But you were the sole heir of Husband and Wife." Of course that is not true. Daughter was sole heir to Wife and Daughter and Second Wife were the 50/50 heirs of Husband. Landman did not seem at all interested in involving Stepsister or helping to solve the puzzle.
Daughter wrote Stepsister a couple of weeks ago advising her of the newly discovered Arkie minerals. She has not heard back. If Daughter (my mother and client) likes the deal that landman sends, I'm inclined to let her sign and just hold one-half (Stepsister's best position) of any rent or royalties in an interest bearing account pending what is decided in connection with Stepsister. Any ethical problems with that? I guess Stepsister could gripe that she could have negotiated a better deal.
Senator Dorgan now has published a book about the financial crisis that I haven't read yet.
