Monday, August 8, 2016

Daily & Woods, PLLC: Arkansas Pipeline Eminent Domain Lawyers

You receive a telephone call from a pipeline production company and the representative on the phone informs you that they want to bury a pipeline across land that will carry crude oil from one state, say Western Tennessee, across Arkansas, and then into Oklahoma. As an Arkansas landowner, what should you do?  Nothing is more important than knowing your rights and seeking competent legal counsel.

In Arkansas, interstate pipeline companies do have the power of eminent domain and can acquire an interest in a landowner's property for the purpose of burying their pipeline under most circumstances. The interest they acquire is limited though, and in most cases it is only an easement. The taking is not free; rather, the pipeline company must pay the landowner just compensation for the taking.  Most litigation involving pipeline eminent domain cases involve the amount of just compensation.

Just compensation is determined on a case by case basis and depends on the facts of each landlowner's case related to the particular property at issue. In each case the landowner can present experts and testify about the value of the property taken. If the landowner does not accept the pipeline company's compensation offer, then the appropriate compensation can be determined by a jury.

If you have a question about property law, oil, gas and mineral law, or pipeline eminent domain law, please contact one of the attorneys at Daily & Woods, PLLC for a consultation. Daily & Woods, PLLC handles pipeline eminent domain cases for clients in all counties in Arkansas, including, Pulaski County, Faulkner County, Pope County, Franklin County, Johnson County, Crawford County, and Sebastian County, Arkansas.

C. Michael Daily is an attorney with the long-established Fort Smith, Arkansas law firm of Daily & Woods, P.L.L.C. and is licensed to practice in the states of Arkansas, Oklahoma, North Dakota and Wyoming. Mr. Daily can be contacted by telephone at 479-242-3953, by email at mdaily@dailywoods.com, or by regular post at 58 South 6th Street, Fort Smith, Arkansas 72902.  You can follow Mr. Daily via social network using any of the social network links in the right hand column of the page.  Disclaimer:  This blog is for informational purposesis certainly not to be considered legal advice and is absolutely not substitute for any of the benefits that are associated with the attorney-client relationship. 


Friday, April 29, 2016

Arkansas Business Owners: Franchise Taxes are Due May 2, 2016

In Arkansas, for-profit corporations must pay a franchise tax to keep its corporate charter.  Essentially, a franchise tax is a "privilege tax" imposed on corporations and other business entities, including limited liability companies and other non-exempt companies, that transact business in Arkansas.  Ark. Code Ann. 26-54-101, et seq.  An example of a non-exempt company would be a non-profit corporation, a corporation that is exempt from federal income tax, or an organization formed pursuant to the Uniform Partnership Act (1996) or the Uniform Limited Partnership Act (2001). Ark. Code Ann. 26-54-102. 

All franchise taxes and reports due for the prior year must be submitted by May 1st.  Since the the 1st of the month falls on a Sunday this year, franchise taxes and from are due to the Arkansas Secretary of State by May 2, 2016.  If the taxes are not timely paid, penalties will be levied and interest will accrue on the unpaid amounts, and the Secretary of State's office will change the corporation's status from being in "good standing" to "not current." 

If franchise taxes are still not paid by the end of the year, December 31, the corporation will lose its corporate charter on January 1.  Ark. Code Ann. 26-54-111.  A corporate charter can be reinstated, but not until all franchise taxes, interest, and penalties are paid.  There are serious consequences to losing the corporate charter.  The Arkansas Court of Appeals once held that officers and directors of a corporation who actively participated in the operation of the corporation during the time when the corporate charter was revoked for failure to pay franchise taxes were individually liable for debts incurred during the period of revocation. Larzelere v. Reed, 35 Ark. App. 174, 816 S.W.3d 614 (1991).   

If the corporation is no longer doing business, it must formally dissolve to avoid the accruing of interest and additional franchise taxes for future years.  Prior to dissolution, the Secretary of State requires that any outstanding taxes, interest and penalties be paid.  The Secretary of State has a lien on all of the corporation's property until the amounts due are fully paid.  Ark. Code Ann. 26-54-107. Corporate dissolution must occur before January 1 to avoid additional franchise tax liability for the previous year. 

Anyone can view an Arkansas corporation's compliance status by running a search on the Secretary of State's web page.

C. Michael Daily is an oil, gas, mineral law, probate, and business law attorney with the long-established law firm of Daily & Woods, P.L.L.C. and is licensed to practice oil, gas, mineral, probate, and estate planning in Arkansas, Oklahoma, North Dakota and Wyoming. C. Michael Daily can be contacted by telephone at 479-242-3953, by email at mdaily@dailywoods.com, or by regular post at 58 South 6th Street, Fort Smith, Arkansas 72902.  

C. Michael Daily accepts oil, gas, mineral, probate and business law cases in all cities in Arkansas, Oklahoma, North Dakota and Wyoming.   C. Michael Daily represents mineral producers at all stages of production, assists mineral owners with ownership disputes, and represents his clients in state court, federal court and before the Arkansas Oil and Gas Commission. You can follow C. Michael Daily via social network using any of the social network links in the right hand column of the page.  

Disclaimer:  This blog is for informational purposes, is certainly not to be considered legal advice and is absolutely not a substitute for any of the benefits that are associated with the attorney-client relationship.

Thursday, April 28, 2016

If Prince Owned Arkansas Mineral Rights, Who Would Inherit?


Prince passed away last Thursday, and while I personally have not finished mourning, the media has moved on from his passing and now is speculating about the inheritance of his property.  I imagine that the talk will only increase since it was recently asserted in court filings that he died without a will or other testamentary plan in place.

It is a fair question.  Several people cruise through life without a will.  It is especially common for young professionals, the generation that grew up listening to Prince.  Truth be told, young professionals, along with newlyweds, are the demographics who may need an estate plan in place the most.  I'll explain in more detail in a future post. First, let's see what would happen if Prince had owned Arkansas property, and died without a will.

Inheritance Laws In Arkansas 

Without a testamentary plan in place, inheritance of all property is dictated by Arkanas law.  That's right, the Arkansas legislature has enacted a set of rules that will direct the inheritance of your accounts, stocks, house, or any other property you own when you pass, in the absence of a will.  In Arkansas, heirship and inheritance in this situation is determined in this order:

1)  All of the decedent's estate will pass first to the intestate's descendants (children and the children of deceased children a/k/a grandchildren);

2)  If the decedent was not survived by a descendent, then all of the property passes to the decedent's surviving spouse, but only if the decedent and spouse were married continuously for more than three years.  If they were married for less than three years, then the spouse takes only half of the estate;

3)  If any portion of the estate remains, then it passes to the decedent's parents.  If both are living, they share equally.  If one is deceased, then the the estate passes to the sole living parent;

4)  If there are no descendants, no parents, and only a surviving spouse of less than 3 years, then the rest of the estate goes to said surviving spouse;

5)  Many intestate estates are resolved by this point, but if items 1-4 do not answer the question, then Arkansas law dictates that the estate must pass to the decedent's brothers and sisters (and the descendants of any deceased brothers and sisters).  In other words, a separate share is created for every sibling, even if they predeceased the decedent.  Direct descendants, if there were any, would inherit the deceased sibling's share;

6)  If number 1-5 is no help, then the remaining estate will pass to grandparents, uncles, and aunts of the decedent, and in equal shares.  If there are deceased aunts and uncles, then a share is created for them anyway and their portion would pass to their direct descendants (decedent's first cousins).

7)  Having fun yet?  If number 6 doesn't get you there, then play the same game with great-grandparents, great-uncles and great-aunts.

8) Next up are the decedent's spouses's heirs, assuming the spouse is also deceased, and there are any heirs.

9)  If none of the above resolve the controversy, then guess who gets your stuff?  The government gets it, that's who.

See Ark. Code Ann. 28-9-214; 215.

It gets a little more complicated if the decedent was survived by a spouse.  He or she also is entitled to a dower/curtesy interest in all property owned by the decedent, which amounts to a fractional share off the top of the estate before it passes to anyone on this list.  Prince was not survived by a spouse, so let's not get into that today.

Who Would Inherit Prince's Hypothetical Arkansas Property?


Even though Prince lived in Minnesota, Arkansas law would dictate the inheritance of his Arkansas mineral interests if he had any. It would require that his heirs also open a separate estate in Arkansas as well.  We know from news reports that Prince was married twice while he was alive, but was not married at his death.  He also did not leave any surviving children or grandchildren.  He had one child, but that child died soon after he was born.  Prince was not survived by his parents.  This takes us past level 4 on the list.

According to the petition filed to open his estate, Prince was survived by one whole-blood sister (Tyka) and five half-siblings (John, Corrine, Sharon, Alfred, and Omar).  He was predeceased by another half-sibling (Lorna), who apparently died without descendants.  In Arkansas, whole siblings and half-siblings inherit in the same manner. Therefore, his estate would initially be divided into seven separate shares, Lorna included.  Since Lorna is deceased, and did not have descendants, her share would pass to her remaining living parent, if there was one, or if no living parent, then to her other brothers and sisters.  

Sound complicated?  Determining heirship percentages is easy compared to the actual division of assets among the heirs.  Consider Prince's hypothetical Arkansas mineral rights.  Conceptually, each of Prince's heirs would share in its ownership, as a tenant in common.  As co-tenants, they each would have an equal right to access and mine for minerals, but would be required to account to the others for their pro rata share of royalties and expenses.  What if his property also included farmland? All heirs need to be on the same page when deciding how to use and manage the farm.  If even one  heir disagreed over the use of the property, then the property could be sold at a partition sale auction.

I Own Arkansas Property.  How Does This Translate to Me?  

Prince may not have owned property in Arkansas, but you do.  If there is no other reason to have a will (and there are several other reasons to have a will), it is to avoid the nightmare scenario of a family squabble over the management, use, and division of your assets.  A will can resolve all conflicts before they happen by establishing rules for property distribution.  You can give more or less to a single heir, or even none at all.  You can also appoint the person who will manage your estate ahead of time.

Without a will, you are stuck with Arkansas law and the consequences associated with allowing the legislature to choose the fate of the estate.  And if you die heirless, all of your estate will pass to the government, in essence amounting to a 100% tax on your life's earnings.  I cannot imagine that anyone would sincerely want that result to happen to their property.  

C. Michael Daily is an oil, gas, mineral law, probate, and business law attorney with the long-established law firm of Daily & Woods, P.L.L.C. and is licensed to practice oil, gas, mineral, probate, and estate planning in Arkansas, Oklahoma, North Dakota and Wyoming. C. Michael Daily can be contacted by telephone at 479-242-3953, by email at mdaily@dailywoods.com, or by regular post at 58 South 6th Street, Fort Smith, Arkansas 72902.  

C. Michael Daily accepts oil, gas, mineral, probate and business law cases in all cities in Arkansas, Oklahoma, North Dakota and Wyoming.   C. Michael Daily represents mineral producers at all stages of production, assists mineral owners with ownership disputes, and represents his clients in state court, federal court and before the Arkansas Oil and Gas Commission. You can follow C. Michael Daily via social network using any of the social network links in the right hand column of the page.  

Disclaimer:  This blog is for informational purposes, is certainly not to be considered legal advice and is absolutely not a substitute for any of the benefits that are associated with the attorney-client relationship.