Q: Can a person legally cash royalty checks sent by mistake from mineral rights they sold months earlier?
A: You need to review your sales contract or mineral deed to determine the effective sate of the transfer. If the revenues are for before the effective date they would belong to you. If after the effective date, they belong to the buyer. If you cash the check and the revenues do not belong to you, it is likely the buyer or oil company will ask for the revenues back. Even if you later repay them, they are likely to have already sent the 1099 information to the IRS and then you will have to explain the issue to the IRS also. If the revenues do not belong to you, you will save yourself future headaches if you send the check back to the oil company with a copy of the mineral deed and tell them to correct their records. If you are unable to determine if the revenues belong to you, you should consult an oil and gas attorney.
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