Outside of personal preference, mineral and royalty estates may need to be split up or sold off between family members for a number of reasons but the two most common are for estate planning and financial diversification purposes.
1. Estate Planning
Organizing family mineral and royalty estate affairs is a smart action that I recommend to all my clients. It should be done early and reviewed periodically and certainly not only when end of life decisions need to be made. Over the years I have received countless phone calls from stressed out family members concerned about their family’s assets.
The topics of these calls vary considerably, and some can get pretty interesting, but a lot of the time they start with the fact that they inherited minerals and royalties. They have no idea how much are minerals worth, where the interests are located, and what or how much they inherited.
Others have called me in a big shock wanting to know how they can reverse minerals being passed down to some other person besides them, too.
- Be Proactive To Avoid Issues
Communicating with family members about their plans to transfer assets is of vital importance to prevent family disputes, or worse, legal action down the road. This is especially important if:
- Mineral and royalty owners have been divorced and step-parents and children are involved
- Family members are estranged
- There is a great deal of funds being held in a suspense account after the previous owner is deceased
- Consider A Mediator
Family disputes over asset division can be challenging. Coordinated decision-making becomes crucial, and conflicts may arise if owners have differing opinions on how to manage the family’s assets, like how much should go to whom and from what piece of the pie. Here, an experienced mediator can be invaluable in navigating these sensitive situations to reach a consensus.
- Communication And Organization Is Key
To facilitate a smooth separation process, maintaining open communication and amicable relationships with family members and keeping documents organized are key. Make sure someone trustworthy knows where important documents such as leases, deeds, etc. are kept. Another often overlooked step is to digitize these important documents and also have them accessible to a trusted individual.
- The Necessity Of A Will And Probate
In states like Texas, intestacy laws dictate the distribution of assets when there is no will. This means assets are automatically passed to the spouse and children, which can be streamlined with a clear and probated will. It is a vital step, especially for those considering selling mineral rights in Texas.
If there is not a probated will in place, the process of dividing up the mineral estate can get lengthy, complicated, and expensive.
- No Will? A Professional Landman Can Help
In cases where there is no will, a skilled Landman can facilitate the transfer of assets, offering a more cost-effective alternative to attorney fees and legal proceedings. Oddly enough, it’s been my experience that many attorneys will actually suggest you get a Landman to help instead. They can help in drafting the necessary documents for a property rights transfer, an essential step in negotiating mineral rights in Texas. Despite the fact that this process is common, it needs to be well-planned and overseen by an expert.
2. Financial Diversification
When dealing with oil and gas royalties in Texas, interest owners within a family unit might decide to sell mineral and royalty interests to diversify their financial portfolio in an effort to mitigate risks associated with the exploration and extraction of oil and gas and the volatility of commodity prices in which royalty income is derived from, and to increase the potential for income from other sources.
- Selling Mineral Rights
There are steps that need to be taken to complete the transfer, or conveyance, of property rights. Depending on your specific case, you may need the following:
- A title review to find the deeds needed to shift property rights from one family member to another (e.g., general warranty deed, special warranty deed, quitclaim deed, distribution of property, etc.).
- Affidavits of heirship to prove family history as these could also be used to spell out how the estate should be split
If family members decide to sell their share of assets, it’s important they work with a trusted professional who is an expert in the area their interests are located and who has a transparent and solid reputation. The Venergy team has a lot of experience, 5-star Google reviews and an A+ rating with the Better Business Bureau.
Understanding The Process Duration
The time required to separate mineral and royalty assets depends on factors such as organizational efficiency, communication between interest owners and oil and gas professionals, and Operator responsiveness. Another crucial aspect is whether the predecessors had a will and if it was probated, which is particularly important for Texas mineral rights inheritance.
Venergy Momentum: Your Partner In Family Estate Matters
At Venergy Momentum, we specialize in dealing with family mineral and royalty estates, offering guidance and support throughout the process. Our experience in handling complex family dynamics positions us to effectively manage your family’s assets. It’s important to have a proficient mediator and expert during this process to ensure all parties are satisfied and confident of their ownership standings going forward.
We can also help with selling mineral rights in the Permian Basin, mineral rights inheritance in Texas, and in many other states including , Louisiana, Colorado, and North Dakota.Check out our services and set up a complimentary consultation or email me directly at [email protected].