Mineral rights are a problematic topic when it comes to both estate planning and estate administration.
The United States is one of the few countries that will legally separate the surface property from the mineral assets underneath. Still, most people who inherit them aren’t really sure what they’re getting. Executors of an estate, too, can be unsure how to handle these assets.
Here are two tips that can help with the estate administration process:
1. Recognize that the mineral rights could be worth a lot – or virtually nothing.
As people have gradually moved away from rural areas and into urban ones, many of those mineral rights have become fragmented over time. Fragmentation is what happens when mineral rights get divided and re-divided over successive generations.
For example, your grandmother may have owned 100% of the mineral rights under the old family farm. She may have left 20% to each of her five daughters, including your mother. Your mother and her sisters each had four children and divided their share of the mineral rights they’d inherited equally among all the cousins. The net result is that you may end up inheriting only 5% of the land’s mineral rights.
That’s not the only issue that can affect the value of mineral rights. There could be an active well on the land, a long-term lease with a currently inactive well and numerous other situations.
2. Understand that you probably need experienced guidance.
A “landman” is a specific type of professional who can help you find out more about the mineral rights in an estate and what’s actually been inherited. Their services may be necessary if it’s no longer clear who owns what or the asset’s value.
Transferring ownership of the mineral rights can also be a complex process, although having a will in place does make it a bit easier. However, if the mineral rights happen to be located in a different state, you may have to begin a second (or “ancillary”) probate process there.
Remember: Probate is challenging, and most people aren’t familiar with how it works. Don’t be afraid to seek experienced legal guidance for your family’s needs.