Avoiding probate with your oil and gas mineral interest is ideal for many reasons. For one, it can be incredibly time-consuming and costly. It can also create a lot of different challenges for loved ones that could have been easily avoided. Some of the biggest challenges and obstacles to overcome happen when the decedent established their home in one state, but the royalties from oil and gas minerals come from another state. This is particularly an important concept when it comes to Oklahoma minerals since the state does not accept foreign probate. Here are some simple ways to avoid probate with your mineral and royalty estates.
Trusts
When it comes to trusts, the important thing is to ensure it’s done correctly. Find a reputable lawyer to fill out your trust for you to dictate what will happen to your oil and gas mineral interest when you pass away. This includes who will manage them, who will receive the royalty income, what will happen to the royalty income and much more. The details matter in a trust and can be an easy way to simplify your estate.
Sell Any Royalties
You could sell your royalties before they can even become part of your estate. This is one of the easiest ways to avoid probate because the oil and gas mineral interest isn’t even a topic of conversation. The most common reasons why you would consider selling your royalties outright is if the beneficiaries have no interest in them, they don’t want to deal with the tax implications or would rather have cash than earn royalties.
Life Estates
A life estate can ensure you enjoy your oil and gas mineral properties for the remainder of your life, but still have the title transferred in the meantime. The paperwork to put together a life estate can be a little time consuming, but it is a great way to protect yourself and your beneficiaries and avoid probate when the time comes.
Business Entities
Setting up a business entity is different from an individual mineral owner. It acts similarly to a trust, though, in that when the mineral owner passes, the business entity is governed by the official corporate documents, not the estate. The main considerations in this arrangement have to do with how the business is structured. What happens to the oil and gas minerals once the owner passes depends mostly on the structure of the organization.
Eckard Land & Acquisition can help you prevent difficult situations in the future when dealing with your oil and gas mineral interest. No one wants to think about dealing with probate, but it’s best to be proactive now so you won’t have to think about it later on. You’ll save your beneficiaries many headaches later on and you’ll get your wishes respecting about where you want your investments to go in the future. Be sure to contact us for more tips and advice about anything related to oil and gas minerals.
