In Montana, it is common to have mineral rights which are separate from land ownership. Most mineral interests are inherited from someone who has died. Often, the first indication a person receives that they own a mineral interest is when they receive a royalty check in the mail. The check is evidence the company leasing the land and producing minerals from the land has merely changed its records to show you as one of the people to receive a royalty payment – it has not changed the legal title of the mineral interest.
Mineral interests are defined under Montana law as “land”, which is defined as “the solid material of the earth, . . . whether soil, rock, or other substance.” (MCA §70-15-102) Land is real property. As real property, a mineral interest is recorded in deed form, and when mineral interest title changes, a deed must be recorded to evidence the transfer. However, because a mineral interest does not give the holder of a mineral interest an interest in the real property, the recorded mineral deed will not be found on Montana Cadastral.
If you discover you own a mineral interest, then it is important to ensure that the mineral interest is transferred into your name. Contact the County Recorder where the mineral interest is located and ask for a copy of the deed. It will probably cost you a small fee. Take a copy of the deed to an experienced real estate lawyer and hire them to transfer the title for you.
Do not be surprised if the transfer is not a simple procedure. I once had a mineral interest case in which we had to trace back through seven deaths because persons receiving royalty checks did not transfer title. As each person receiving royalty payments died, the company updated its records, but no one transferred title to the mineral interests. It was a complex matter to get the title cleared.
Transfer title to the mineral interest while you are alive. Don’t leave it for your children to do. An estate planning client of mine had inherited a large number of mineral interests in North Dakota, which were still in the name of my client’s parent. The parent had died (the last of the client’s parents to die), and the interests, by Will, went to my client and a sibling. The sibling had since died and the sibling’s interest went to the sibling’s children. At the time, I strongly recommended that my client get the title transferred. My client didn’t feel it was necessary, but I pushed and my client hired me to trace the title and get the mineral rights transferred, and reluctantly paid the costs to do so. I assured my client that if the area was put into production, my client would be glad to have transferred the title. Not very many years later, the Bakken exploded into production.
Mineral interests are easy to overlook or count as negligible. But if they are a part of your estate, they should be included in any estate plan you create.