Factors to Consider When Selling Your Mineral Rights

If you’re selling mineral rights in Texas, we need to talk because The Lone Star State is one of our areas of interest. While we buy mineral rights throughout America, states that have concentrations of oil and gas pique our interest every time.

Many people who own mineral rights aren’t even aware that they do because they’re unaware the rights are separate from surface rights. Mineral rights refer to owning the ground underneath a parcel’s surface and all the riches it contains. Entities that own a parcel’s mineral rights have the right to extract what lies beneath the surface and occupy part of the top ground to recover those riches.

In most instances, you’ll own a property’s surface and mineral rights when you purchase the parcel. If you own your property’s mineral rights, you may want to sell them. Deciding whether you should sell your mineral rights is easier if you consider a few key factors.

Debt

When they contact our Austin, TX mineral rights company, some mineral rights owners ask if it’s smart for them to sell their rights to pay off debt. As a general rule, you’ll receive royalty payments when you sell your mineral rights although you might be able to arrange a lump sum payment instead. Regardless of how you’re paid, selling your mineral rights and using the proceeds to pay off debt might be a wise move if you’re struggling to keep up with your monthly debt service.

Estate Taxes

As mineral rights buyers, we know estate planning is important, especially if your estate is large enough to be taxed at the federal level. You might be able to lower your beneficiaries’ exposure to taxes by selling your mineral rights while you’re still alive. You can then gift the proceeds to your heirs every year up to the non-taxable annual limit determined by the Internal Revenue Service.

Production

Did you look over our FAQs about mineral rights? Even if you reviewed them, you might wonder about timing as it relates to your mineral rights. Generally speaking, the more extraction activity that’s occurring on your property when you sell your rights, the more your mineral rights will be worth. For example, your mineral rights will typically be worth more if there are five oil wells operating than they would be with no wells.

Have you decided to sell your mineral rights? If so, we encourage you to reach out to Enfield Minerals to learn how we can help now.