Hay Legal Group PLLC

By John Hay

Recently, an article by MarketWatch highlighted the importance of having a Will: “Why you need to write a Will now, even if you’re not ‘rich’”

In my view, the article is spot on for several reasons, including the following.

A properly executed Will:

However, the article does come up short, specifically in some of the following important estate planning nuggets.  A properly drafted, executed and witnessed Will:

Lastly, a properly drafted, executed and witnessed Will package also includes estate planning documents as well-designations of guardians, power of attorneys, medical power of attorneys, and medical directives, among other documents.  Translated into regular English, if you were to have a medical emergency, is someone designated to make critical medical decisions for you?

For the third year in a row, John A. Hay III, Founder and Managing Partner of The Hay Legal Group PLLC, has been selected to the 2016 Texas Super Lawyers Rising Star list.

Each year, no more than 2.5 percent of the lawyers in the state are selected by the research team at Super Lawyers to receive this honor.

The selection process for the Rising Stars list is the same as the Super Lawyers selection process, with one exception: to be eligible for inclusion in Rising Stars, a candidate must be either 40 years old or younger or in practice for 10 years or less.

All attorneys first go through the Super Lawyers selection process. Those who are not selected to the Super Lawyers list, but who meet either one of the Rising Stars eligibility requirements, then go through the Rising Stars selection process. While up to five percent of the lawyers in the state are named to Super Lawyers, no more than 2.5 percent are named to the Rising Stars list.

Super Lawyers, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates and peer reviews by practice area. The result is a credible, comprehensive and diverse listing of exceptional attorneys.

John A. Hay III, Founder and Managing Partner of The Hay Legal Group PLLC, has been selected for the 2015 list of “Nation’s Top Attorneys” by the National Association of Distinguished Counsel (NADC). Each year, lawyers from around the country are selected through an objective, rigorous, multi-stage process to identify the finest lawyers in the country.

Members of NADC represent the Top 1% of lawyers throughout the country, and are dedicated to promoting the highest standards of legal excellence. Hay’s selection is one of only 6 in Austin and 93 throughout the state of Texas.

The NADC is an organization with a mission to objectively recognize the attorneys who elevate the standards of the Bar and provide a benchmark for other lawyers to emulate. By virtue of their extensive research process, only the elite few – who have demonstrated the highest ideals of the legal profession – are named “Nation’s Top Attorneys.”

The post of 2/18/15 dealt with the scenario of buying a ranch from a Seller that wants to reserve her mineral rights. Texas law provides that the mineral estate is dominant to the surface estate, meaning the Seller, or any oil company she leases to, will have broad rights to use the surface of the ranch to develop the mineral estate.

In the event you acquire the ranch subject to Seller’s mineral reservation, and Seller subsequently signs an oil and gas lease, the oil company will have the right to conduct the following activities without compensating you and without obtaining your permission:

Seismic testing: The oil company may acquire a seismic survey that will be examined to determine optimal drilling locations. A seismic company will likely send a “thumper truck” to the ranch to obtain seismic data, or, alternatively, could use dynamite shots on or around the ranch to obtain the seismic data.

Surveying: Once drillsite locations are chosen, company employees or contractors will come to the ranch to stake the wells and prepare a plat.

Padsite preparation: Before the drilling rig arrives, the oil company will prepare a level pad site and an access road to the site. This may require removing trees and vegetation.

Digging of pits: Reserve pits and disposal pits may be dug to support drilling operations.

Use of water: The oil company will have the right to use the groundwater under the ranch to support its drilling operations, including the right to drill water wells on the ranch.

Drilling the well: This process will likely involve a substantial amount of time, people and equipment. The oil company will rent a drilling rig, and will then drill, case, perforate, and complete the well. Sophisticated, horizontal wells can be thousands of feet long and can involve numerous stages of fracing. The fracing process involves the high pressure pumping of water, sand, and chemicals into the well in order to cause fractures in the rock formation that will release the targeted oil or gas. Fracing jobs can use millions of gallons of water, and the oil company may need to construct a frac pond on the ranch.

Constructing Pipelines and Tank Batteries: An extensive pipeline network may be necessary to serve the wells drilled on the ranch, and tank batteries may be placed on the ranch to store oil production.

Maintenance: Once the well is completed, you are not done seeing oil field employees and contractors on the ranch, as the wells may require extensive maintenance.

Injection wells: Once the reservoir begins to lose pressure, the oil company may drill injection wells on the ranch to enhance recovery. Injection wells may also be drilled to dispose of waste water produced during the initial drilling process.

The above list is not exhaustive and is only meant to give a cursory overview of operations that may occur on the ranch without the consent of the surfaced owner.

LIMITING MINERAL OWNERS USE OF THE SURFACE ESTATE

The general rule that the mineral estate is dominant to the surface estate is subject to a legal principle known as the accommodation doctrine. Under the accommodation doctrine, the oil company may be required to modify its drilling operations to accommodate existing surface uses; however, the oil company is only required to accommodate such existing surface uses when there is no other reasonable way that the surface could be used, and where there are reasonable alternatives to access the minerals without disturbing the surface owner’s existing use of the land.

Additionally, the oil company’s use of the ranch for mineral exploration must be in compliance with the regulations of the EPA and the Texas Railroad Commission, and, depending on the location of the ranch, local ordinances that might prohibit drilling activities altogether, or at least restrict them.

NON-EXECUTIVE MINERAL INTEREST

Most rural ranches will not be protected from drilling operations by city regulations or the accommodation doctrine. Therefore, your best protection when buying the ranch is to negotiate for at least a partial mineral interest. In the event the Seller would like to retain a mineral interest, you should negotiate for the Seller’s mineral interest to be a non-executive mineral interest. This would give you the executive right (right to execute leases), while allowing Seller to retain the other benefits of her mineral rights, including bonus, royalty, and delay rental payments.

In summary, beware of the consequences of acquiring only the surface estate of your dream ranch, because the mineral estate owners will have broad rights to use the surface without your consent or compensation.

Written by Patton VanVeckhoven

John A. Hay III, Founder and Managing Partner of The Hay Legal Group PLLC, has been selected to the 2015 Texas Rising Stars List. Each year, no more than 2.5 percent of the lawyers in the state are selected by the research team at Super Lawyers to receive this honor.

The selection process for the Rising Stars list is the same as the Super Lawyers selection process, with one exception: to be eligible for inclusion in Rising Stars, a candidate must be either 40 years old or younger or in practice for 10 years or less.

All attorneys first go through the Super Lawyers selection process. Those who are not selected to the Super Lawyers list, but who meet either one of the Rising Stars eligibility requirements, then go through the Rising Stars selection process. While up to five percent of the lawyers in the state are named to Super Lawyers, no more than 2.5 percent are named to the Rising Stars list.

Super Lawyers, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates and peer reviews by practice area. The result is a credible, comprehensive and diverse listing of exceptional attorneys.

One of the most common reactions I get from people upon hearing that my legal background, and current legal practice, includes an extensive amount of Family Law is “it must be tough dealing with such bad situations,” or some variation thereof. The only thing more commonplace than that statement, however, is people’s reaction when I tell them that for the most part, my Family Law cases are actually some of the most enjoyable clients that I have.

How can it be enjoyable to be the attorney for a Divorce? The answer is that, despite the 24/7 news cycle working to disprove the notion, most people are good people. Moreover, most people going through a divorce, despite being hurt, angry, scared, or simply not in love, still care for the other person.

Enter the Uncontested Divorce.

In its most simple form, an uncontested divorce is nothing more elaborate than its title — a divorce where everything is agreed upon by both parties or signed off on by one party to the other. This happens in two situations. The first is when the “marriage” has been over for quite some time, but the documentation of the marriage’s end simply hasn’t been processed. The second is when both parties have come to an understanding that being together simply isn’t best for either of them moving forward.

The former situation, what I call the “paper pusher” divorce, involves the barest of bones for completion. A petition to the Court, a Waiver from being served by the Constable, and a Decree that, in almost every case, gives each party whatever they have in their possession to them, and whatever debts they incurred since the separation to the party incurring that debt. These are the simplest of divorces, and generally I don’t even get to meet my clients in person until the actual day of the “prove up” where the judge grants the divorce.

It is straightforward, simple, and the most common problem isn’t finding common grounds for the divorce, but simply finding the other party to agree to it. Because of its simplicity, a truly uncontested divorce can, and should be, a flat fee arrangement where you know what the lump sum cost is going to be.

While many diligent spouses can do a divorce in this matter pro se (unrepresented), my clients have come to me happy to pay the nominal flat fee simply for the reassurance that the process is done right.

The second situation, where both parties are actively working together to achieve as equitable a split as possible, can be more demanding of time, yet more fulfilling for both parties to be a part of the process. Don’t let my tone lead you to the assumption that an amicable divorce doesn’t involve difficult conversations. However, a good lawyer on board – with the goals of both parties to maintain as much of a relationship as possible – can guide those conversations in a respectful and, more importantly, educated manner.

Couples with children may want a perfect 50/50 split of custody, but with a 7 day, 12 month calendar split up by school events, holidays, and summers, is it even possible? More importantly, is it truly best to achieve an equal split for the child if it involves a one week on, one week off schedule?

What does it mean to split a marital estate? What is a marital estate? What do we do with the mortgage if only one party is getting the family home? Having questions doesn’t mean having confrontation, and for those spouses that want or need an advisor instead of an attack dog, the uncontested route can provide the reassurance, education, and cost efficiency to achieve all of those goals.

In actual practice, an uncontested divorce involves an attorney taking a client from start to finish in a divorce, with both parties promising at the onset to work together respectfully. By doing so, both parties can avoid the discovery, hearings, mediation, and trials that can take an unfortunate situation to an even worse result. Any of those events take an uncontested divorce (along with any flat fee arrangement) and flushes it down the drain along with the hourly fees incurred in fighting those battles.

Make no mistake about it – I have had plenty of divorce proceedings that would make the National Inquirer blush, along with all of the hurt, accusations, and potentially exorbitant legal fees that accompany those Pyrrhic legal battles. If pressed as to how those situations affect or don’t affect me, I think of the simple saying one of my first bosses and mentors told me as I began practicing Family Law: Ducks Marry Ducks.

Ducks do marry Ducks, but what I’ve found is that most ducks want an attorney who will help them get through their divorce, not pick fights to make them “win” their divorce. For those clients, the relative ease and simplicity of an Uncontested Divorce is the ultimate victory.

Written by Colin Newberry, Senior Associate Attorney

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