Mineral Rights in Texas When Someone Dies

Mineral rights in Texas can be transferred, inherited, or sold, and they can provide substantial income through royalties. However, transferring these rights in the event of the holder's death can be complicated and nuanced.

This article aims to clarify the rocky process, offering clear guidance for those navigating the inheritance of mineral rights in Texas, with or without a will.

In Texas, land ownership comprises two distinct elements: the surface estate and the mineral estate, or mineral rights. The surface estate pertains to the land’s surface, granting the owner rights over its use, while the mineral estate deals with the rights to substances beneath the surface, like oil, gas, and other subterranean resources.

The mineral rights can be held separately, known as severed, from the rest of the estate which means that in the event of the owner's death, the mineral rights may or may not be included in inheritance.

The first step after a loved one’s passing is to determine the ownership and whether the owner held both surface and mineral rights which can be identified by reviewing property deeds, wills, and insurance policies. This will identify who will inherit these assets and dictate the necessary legal proceedings.

In Texas, mineral rights can be traded, transferred, leased, or owned separately from the surface estate, known as severed, which gives the holder of the mineral estate distinct rights regarding the extraction of minerals

The mineral estate includes five severable rights:

• The right to develop
• The right to lease
• The right to receive bonus payments
• The right to receive delay rentals
• The right to receive royalty payments

Essentially, mineral rights take precedence over surface rights, which means the holder of the mineral rights also has the right to use the surface estate as necessary for resource extraction. Generally the use of land for extraction has been established in agreement with the corporation extracting the resources.

For surface owners, this separation imposes limitations on land use, like potentially hindering development plans that conflict with those of mineral owners. Severed mineral rights can also significantly diminish the income of surface owners through lucrative lease agreements and royalty payments.

Understanding Mineral Rights and Inheritance Laws

In Texas, the distribution of mineral rights upon an owner’s death is subject to the same inheritance laws as any other asset. The process is dictated by a legal framework that hinges on the presence of a will.

If the deceased did not leave a will, the Texas Estate Code outlines how the estate, including mineral rights, is allocated among the heirs. If there is a will, the mineral rights are transferred according to its terms.

Often, heirs may not be fully aware of their entitlement to mineral rights or the extent of their ownership. In such cases, a professional known as a Landman can be instrumental in identifying and locating mineral rights ownership, and facilitating negotiations with oil companies.

A will is instrumental in transferring mineral rights because it ensures that the deceased’s intentions are honored and it facilitates a smoother transition process. When there is a will the estate enters probate, which is a court-supervised process that authenticates the will and oversees the estate’s distribution.

Clear Estate has outlined the specific probate process and timeline for Texas, here.

During probate, the court confirms the will’s validity and appoints an executor, typically named in the will, to handle the estate. For mineral rights, the executor must prepare and file a mineral deed transfer in the county where the property resides, which legally transfers the mineral rights to the beneficiaries.

It must be precise if the mineral rights are severed from the surface rights and should contain most relevant information regarding the mineral rights and royalties.

Steps for Heirs Receiving Mineral Rights Through a Will

Heirs designated to inherit mineral rights must:

1. Record the Change: Post-probate, heirs need to record the new ownership by filing a deed with the county clerk where the property is located.

2. Verify Mineral Rights Status: Heirs must thoroughly investigate the current status of the mineral rights they are inheriting, including reviewing any existing leases, production agreements, or exploration activities currently underway. It’s important to understand the terms of these agreements, as they can affect the value and use of the mineral rights. Heirs should also check for any pending obligations or payments due, such as royalties or rental fees.

3. Understand Rights and Responsibilities: Inheriting mineral rights comes with a set of legal and financial responsibilities and heirs should educate themselves on the rights they now possess. Heirs also need to be aware of their responsibilities, such as paying taxes on the mineral rights and adhering to any environmental regulations. Understanding these aspects is crucial for effective management and to avoid potential legal issues.

Without a will, mineral rights in Texas are distributed according to intestate succession laws. These laws treat mineral rights as real property, subject to the same rules as other real estate, which prioritizes beneficiaries according to family structure.

Here’s a simplified breakdown of how mineral rights may be distributed under Texas intestate succession laws:

• Spouse and Children: If the deceased is survived by a spouse and children, the spouse typically receives a portion of the community property and possibly a life estate in a third of the separate property, with the remainder going to the children.
• Spouse Only: If there are no children, the spouse may inherit all the community property and a significant portion of the separate property.
• Children Only: If there is no surviving spouse, the children inherit everything.
• No Immediate Family: If there are no surviving spouse or children, the estate, including mineral rights, may be divided among other relatives such as parents or siblings.

In cases where ownership is not clear or disputes arise, it may be necessary to conduct a deed search or consult with a probate attorney who has experience in oil and gas law to determine the rightful heirs to the mineral rights.

Verifying and Claiming Mineral Rights Without a Will

Verifying and Claiming Mineral Rights In the absence of a will, heirs in Texas must navigate specific procedures under intestate succession laws to verify and claim mineral rights. These procedures include:

1. Affidavit of Heirship: Filing this affidavit is a critical step. It’s a sworn statement that outlines the deceased’s heirs and their relation to the deceased, aiding in establishing a clear chain of title for the mineral rights.
2. Judicial Determination of Heirship: In cases where ownership is contested or ambiguous, heirs may need to seek a court determination of heirship—a legal process where the court formally identifies the deceased’s heirs.
3. Mineral Deed Transfer: After establishing heirship, heirs must prepare and file a mineral deed transfer with the county clerk where the minerals are located, legally documenting the rights’ transfer from the deceased to the heirs.

Effective Management of Inherited Mineral Interests

It is important to consider the implications and complexities of managing inherited mineral rights. It can include negotiations with extraction companies, land use and conservation concerns, taxation, and an array of future estate planning concerns. For example, heirs need to consider the way that the mineral rights and extraction may impact future land use, sale, or development of the surface estate.

We recommend speaking with professionals to ensure the proper management and security of the inherited mineral rights because the right support system can mean that your mineral rights can continue to benefit your family for generations. Book a free consultation to meet with our seasoned team of experts to discuss your specific estate needs and get some peace of mind.