Being the second-largest state in the United States, Texas was able to earn the reputation of being the country’s largest producer of oil and gas, thanks to its abundant source of mineral deposits.
Living in Texas also means that you could be sitting or lying on top of a vast mineral deposit that could be the source of your fortune. No matter how big or small is the portion of your property’s mineral rights, you should consider yourself fortunate as this asset cannot just be a source of money, but can also be passed down to your heirs.
But gone are the days when landowners preserve their Texas mineral rights and pass it on to generations of children and grandchildren, most property owners are now more open to the possibility of selling their mineral rights for different reasons.
Some sell their mineral rights to fulfill a financial need, while others want to get rid of further documentation headache. Regardless of your reasons, did you know that this move can do you more good than harm? Below are some of the benefits of selling mineral rights:
When you sell your mineral rights in Texas, you will receive a quick lump sum cash payment equivalent to the value of your mineral asset. The instant money may help you pay off debt, invest in a business venture, save for retirement, etc.
Compared to leasing where you only get royalties once minerals are found, selling your mineral rights means receiving money regardless if there are worthy minerals extracted from your property. Additionally, selling will get you off from future burdens as the rights are transferred completely no matter what happens to the property.
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Sell a portion of your rights
Selling mineral rights does not always mean letting go of the entire property. If you have a vast land with a mineral deposit, you can still sell a part of it and keep some portion to yourself. It gives you the option to maintain the same rights while getting the value of your property.
Aside from having the benefit of getting instant cash, you also get to hold on something that you can pass onto your family or also sell in the future.
Easy estate management
Any amount of mineral right is something that you can pass on to generations of your offspring, but the division and transfer of title can be a headache. Instead of getting the value of your mineral assets, the heirs have more expenses just by dividing and transferring the mineral assets.
Selling mineral rights and converting it into cash gives you the freedom to easily manage your cash assets and so it will also not be a cause of conflict within your heirs.
Property owners in Texas who decided to sell their mineral rights are eligible for long-term capital gains tax. It’s lower than the standard income rate that you get when you choose to lease or receive royal payments from oil companies.
However, to qualify for long-term capital gains tax, the landowner must have owned the mineral rights for more than a year already before making the sale.
Whether you want instant cash, easy estate management, or take advantage of the lower tax rates, selling your Texas mineral rights will always be a good idea. Just make sure to work with reputable companies with clean records and mineral assets, so you get your property’s worth.