Keeping It All In The Family
In times past, when people sold property it was common to retain the rights to profits from oil and gas in the ground underneath the property. As a result of the practice, many people have been blessed to receive a substantial amount of monthly income from oil and gas royalties. This is the story of one woman’s unsuccessful attempt to keep the royalty income flowing to her descendants after she passed away.
Grandma told her only child, her daughter (Mama), that she could expect to receive all of the royalties upon Grandma’s death. Moreover, Grandma made Mama promise that she would only leave the royalties to their blood relatives upon Mama’s passing. Grandma didn’t want any spouses, step children or anyone else outside of the bloodline to get any of the royalties. She considered that this would be part of their inheritance for generations to come.
Grandma passed away and Mama did as Grandma wished by leaving the royalties to her three children (the grandchildren) in her estate plan. Because the royalties were inherited, her husband did not share in the right to the income. Sadly, Mama died, but not before making her three children aware of Grandma’s wishes to keep the royalties exclusively in her bloodline.
Unfortunately, soon after Mama died, one of her sons also died. He had no wife, no children and no will or trust. According to the default laws of the State of California, his only heir was his father. So now, Dad has inherited a portion of Grandma’s royalties from his son. And Dad, by the way, has two other children from a previous marriage and is hoping to get married again. Whether Dad honors his mother-in-laws’ wishes is totally up to him. Perhaps he will leave the royalties to just his two children in Grandma’s bloodline. However, if he does leave the royalties to his other children, or even his new wife, there will be nothing anyone can do about it!
In order to keep from turning over in her grave, Grandma could have made sure that only her future generations got the royalties by putting the royalties in a trust. The trust could specify that the ownership of the royalties remained in the trust and the royalty income would be distributed to only to those in her bloodline. Grandma could thus rest in peace. © 2013 by Marlene S. Cooper. All rights reserved.