trust termination

[whiskeydave]

What is the name of your state (only U.S. law)? Oklahoma

Our family trust expired May 1, 2006 (termination provision in trust states "under no circumstances is the trust to extend beyond May 1, 2006"). Several months after the trust terminated, the trustee signed a gas lease extension with an oil & gas firm (there was an option for the oil & gas company to extend a pre-existing lease), and took in bonus monies for the lease. We (the beneficiaries of the trust) were not notified of this activity until September, 2007 (when we demanded our quit claim deeds be disbursed for the property owned under the trust so that they could be filed approprately). It was at this time, the former trustee of the expired trust told us he had taken in monies for a lease extension (which we believed had occurred prior to the trust's termination date). When we received a copy of the lease extension, it was dated 2007 and the trustee had held the money since February, 2007. Upon receipt of this information, we contacted the oil & gas company to ask them why they hadn't negotiated and signed an extension with us. They keep saying they have a legitmate lease because the trustee had title to the property. Didn't ownership transfer to us the day the trust terminated on May 1, 2006?

The oil & gas company knew the trust expired May 1, 2006. The trust document is on file at the county court house. The will of deceased beneficiares is on file at the county court house (probated in 2004), so they had access to names of the beneficiaries.

The oil & gas company has never contacted us. We understand that there was an extension provision of the lease that was signed before the termination of the trust. However, doesn't the oil & gas company have to negotiate the extension of the lease with us, i.e. we are the legitmate property owners and have been since the trust expired May 1, 2006? I think Oklahoma law states that when the trust ceases to exist the estate of the trustee ceases to exist. Doesn't this mean the trustee no longer has title to the property once the trust expires. And, didn't the trustee act in bad faith by not forwarding the deeds to us and not notifying the oil & gas company of the beneficiaries names and addresses?

Thanks,
Dave

 

[Dandy Don]

Is there specific language in the trust mentioning or giving instructions as to exactly how to terminate the trust? Have the beneficiaries received a payout check by virtue of the trust being terminated? Can you truly say definitively that the oil company knew when the trust expired? Just because the document is at the courthouse doesn't mean they have acquired a copy of it.

Is this trustee also a beneficiary of the trust? Did he distribute the monies to the beneficiaries? If he didn't, then yes, it does show bad faith. The beneficiaries can be proactive by contacting the oil company themselves so that the royalty records can be changed to take the name of the trust off and replacing that with the names of the individual beneficiaries.

DANDY DON IN OKLAHOMA ([email protected])

 

[whiskeydave]

Trust termination

The oil company resolved the dispute with us individually. At this point, I believe the issue on the lease is resolved. As for the cousin who is the trustee, some battles just aren't worth fighting about and the beneficiaries who were unhappy are now satisfied with the resolution - so it is probably best just to let this go and get on with our lives.

Thank you for your response.
Dave

 

[Dandy Don]

Glad you were able to get this resolved, but you never answered the question of whether the trustee distributed the monies to the heirs or if he kept it himself illegally.