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How can I make sure my mineral interests are part of my family’s legacy?

On Behalf of | Jan 27, 2025 | Estate Planning

Mineral interests allow an individual to own the rights to the minerals below the surface of a piece of land. This asset can be substantial and serve an important role in a family’s financial portfolio. These rights can include ownership of natural resources like oil and natural gas, as well as other substances such as limestone and gypsum. In many cases, those who own mineral rights do not properly include the asset in their estate plan, leading to complications, and potentially requiring the use of the probate process.

What is probate?

Probate is the legal process for distributing assets to heirs and designated beneficiaries and paying off any of the estate’s debt. Due to the value and legal complexities involved, probate can become particularly intricate for mineral rights. If an estate plan is not in place to properly designate intended beneficiaries, the ownership rights of minerals may be subject to probate court decisions, potentially passing to the state.

How can I account for mineral assets within my estate?

Those who own mineral rights are wise to take steps to prevent such issues. Owners can use a will or trust to name their intended beneficiaries and better ensure they transfer the asset according to their wishes.

Planning for a beneficiary is just the first step. The beneficiaries will also need to take action to complete the transfer. This can include completing and recording conveyance documents as well as reviewing and updating death and inheritance records. Many families have multiple generations of ownership, and without taking the time to update the records, mineral deeds may be out of date. In these situations, oil companies may not provide the family with the benefits they are entitled to. This can mean the family does not receive the signing bonus or monthly royalty payments.

What else can I do to make sure my mineral rights pass in accordance with my wishes?

It is also a good idea to appoint a trusted individual to act on your behalf in the event of incapacitation. This can occur after a serious accident or illness results in medical issues that render you unconscious or unable to communicate. When set up wisely, this representative can help to better ensure that your estate, including your mineral rights, is managed according to your wishes when you are unable to do it yourself.

These are just a few of the reasons families with mineral rights are wise to take steps to protect these assets within their estate. Proactive planning tailored to your family’s estate can reduce the risk of legal challenges in the future and better ensure this valuable asset remains with your family.

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