What are “Mineral Rights” and How Are They Established on Inherited Property?
Mineral rights are the rights to underground resources such as oil and natural gas, minerals and metals such as gold, silver, copper, iron, coal, uranium, and more. Understanding how mineral rights are inherited is an important step for estate planning attorneys as they navigate the throes of property ownership inheritance laws. Inheritance of mineral rights can be a smooth process if you’re aware of the nuances involved, but becomes quite tricky when an estate’s heirs or beneficiaries are missing or unknown. Let’s get into it.
How Are Mineral Rights Different From Surface Rights?
There is a distinction to be made here between mineral rights and surface rights. Surface rights are, as the name implies, the rights to the surface area of a piece of land. This often also includes any structures on the property, such as the rights to farm the land, make use of above-ground resources such as trees, plants, water, or installation of septic tanks (in keeping with local laws and ordinances). Sand, gravel, limestone, and subsurface water typically belong to the surface rights holder and are not considered mineral rights.
How is an Estate Affected by Mineral Rights?
Once mineral rights have been severed from surface rights, they remain that way. In most cases, American landowners possess both surface and mineral rights – and in scenarios where the same owner holds both surface and mineral rights, it’s referred to as a unified estate.
When surface and mineral rights are severed from each other, the separate ownership is called a split estate. It is the landowner’s prerogative to choose to sell the mineral rights, and the buyer may then choose to exploit the underground resources. Once mineral rights have been sold, the original owner retains only the rights to the land’s surface. A landowner may then own the rights to everything on the surface of the property such as the farm area, water, trees, etc., but not own the rights to underground resources such as oil, gas, and minerals.
A third option is a fractional estate, in which mineral rights are split between several owners. This may happen, for example, when a property owner divides rights among several heirs or sells some mineral rights but retains others. These scenarios can become complex, as multiple buyers may also be owners of mineral rights on the same land and own the rights to that particular piece of land.
When beneficiaries are set to inherit property, estate professionals must make sure to thoroughly examine the rights included (whether surface rights or mineral rights) in the property deed.
How Is Ownership of Mineral Rights Proved?
Inheriting mineral rights can get messy when the original owner of the property or the property’s lawful heir(s) isn’t clearly stated. In the cases where there’s no history of family ownership, knowledge regarding mineral rights may be limited. A process called fragmentation or fractionalization has been growing across the U.S. where mineral rights split with each passing generation. For example, if a great aunt owned 100% of a land package, she may leave 25% of the land to each of her four children, and these children may grow up to leave a fraction of that 25% to their kin. To bypass this administrative oversight, mineral rights beneficiaries often sell their mineral rights and inherited mineral interests.
Estate professionals tasked with dispersing inherited minerals rights must ensure a clean title is transferred from the estate through probate. This court-supervised procedure validates the authenticity of the Will left behind as the true last testament of the deceased.
Do you need help locating mineral rights owners?
Mineral rights inheritance laws that apply to Oregon might not be the same as in Oklahoma, so it’s important to seek guidance from a professional firm that is familiar with unique state laws and processes. An experienced legal professional like an estate planning attorney may require help to fill the gaps of an estate that includes mineral or surface rights if the heir(s) is missing or unknown.
HeirSearch’s professional researchers help estate planners and Will executors ensure the transfer of mineral rights assets to an estate’s lawful heirs is executed smoothly and in line with the deceased’s wishes.
HeirSearch™ works with executors, administrators, trustees, fiduciaries, bank and trust officers, and their counsel to establish kinship for legal purposes. Since 1967, we’ve successfully completed tens of thousands of worldwide searches.
If you are the executor of a Will or an attorney representing an executor of a Will that contains complex mineral rights, and need to establish heirship or execute a Will to satisfy the court, HeirSearch can help. We offer no-cost, no-obligation consultations, court-ready documents, and reasonable, non-percentage-based search fees.
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