Mineral Rights Allegedly Received as Gifts Found To Be Community Property in Divorce Case

This case was a divorce that included a trial and appeal. During the parties’ marriage, the husband’s mother died. The husband’s father, on behalf of the husband’s mother’s estate, deeded mineral interests from the husband’s mother’s estate to the husband and his siblings. A few days after the date of the deed, the husband’s father allegedly gave the husband and his sibling funds from their mother’s estate to buy the mineral interests. There was conflicting evidence about how much the funds were.

The husband asserted in the divorce trial that the mineral interests and royalties from the mineral interests were his separate property. After a trial, the judge determined that the mineral interests and royalties were community property. The judge found that the husband’s evidence and testimony about funds he used to buy the mineral interests were inconsistent and not credible. The judge also found that businesses the husband claimed as his separate property, bought with royalties, were community property.

The husband appealed, and the court of appeals upheld the trial judge’s orders. The husband asserted in the appeal that the trial judge did not consider the presumption that a transfer of property from a parent to a child is a gift. The court of appeals determined that nothing showed that the trial judge failed to consider this presumption. 

The husband’s primary argument in the appeal was that the trial judge was wrong to determine that the mineral interests and royalties were community property. The husband asserted that the mineral interests were gifted to him by his parents. The court of appeals found that the husband’s own evidence overcame the presumption that he received a gift from his parents. The deed transferring the mineral interests from the mother’s estate to the husband and his siblings stated that the interests were sold for adequate compensation, which supported the trial judge’s determination that the mineral interest deed was not a gift.

The husband also asserted in the appeal that he adequately proved the purchase of the mineral interest from gifted funds. The husband testified that he wrote a check to his mother’s trust for the purchase of the mineral interests and that his father gave him the funds to purchase the interest. However, the copy of the check carbon allegedly received from the husband’s father did not have an account number, signature, or memo noting its purpose. The husband pointed to two transactions on a bank statement that were close to the amount of the alleged gift and mineral deed purchase, but the statement did not identify who participated in those transactions. Additionally, other transactions  occurred between the two identified transactions. There was no line item on the statement indicating a check was ever deposited for the amount shown on the copy of the unsigned check carbon. The husband did not provide clear documentation to show where the funds came from, nor did he provide documentation to support what the subsequent payment was for. The court of appeals determined that the husband did not prove that he purchased the mineral interests with gifted funds.