Houston Estate Planning and Elder Law Attorney Blog
For many of our clients in Texas, oil and gas royalties are a part of economic success. How do these royalties play into an estate plan? How are they part of probate proceedings? On today’s blog, we discuss the basics that our clients need to know in relation to this industry; as always, with more specific questions, contact a Houston estate planning attorney you can trust.
Distribution of Royalties Without an Estate Plan
If a Texas landowner dies without an estate plan, and that landowner has the right to oil and gas royalties from the minerals on their property, the royalties will likely follow the rules of intestate succession. This means that the state of Texas will pass the royalties onto surviving heirs according to the state’s mandated family order.
If there is a surviving spouse, the royalties will go to that person. If there are children but no spouse, the assets will go to the children. If there is a spouse and there are children, the spouse will receive one-third of the royalties, while the children receive the other two-thirds of the royalties. The order of intestate succession can be further complicated when there are disputes among family members about who has the right to the royalties at issue.
Distribution of Royalties with an Estate Plan
If the Texas landowner with royalties does have an estate plan, he or she should include the royalties in the will or the trust that makes up the estate plan. At McCulloch & Miller, we recommend considering a trust that passes the royalties to beneficiaries and avoids probate proceedings altogether. If the estate plan passes through the regular probate channels, the process can take longer with oil and gas royalties, given the extra layer of complexity that the court has to consider.
Estate Planning Considerations for Landowners with Royalties
If you have access to royalties on your land in Texas, there are a couple of key considerations that should be a part of your estate plan. You must make sure that you have recorded the deed to your property and that, if you use an operating company, the operating company has access to the deed. Once the operating company has the deed, the company can aid in transferring the royalties from you to your beneficiary when you die.
It is also important to maintain close contact with the beneficiaries you will name in your estate plan. Oil and gas royalties are often a bit more complex compared to assets such as cash or real property, and your beneficiaries should be aware of the structure of your royalties once you name them as part of your estate plan.
Do You Need a Houston Estate Planning Attorney?
At McCulloch & Miller, we take pride in treating each and every client’s estate plan with the care and attention we believe it deserves. If you have questions about how to structure your estate plan, no matter how simple or complex it may be, call our team of Houston estate planning attorneys to learn about what next step might be right for you.
If you would like to set up a consultation with one of our Houston estate planning attorneys at McCulloch & Miller, give us a call at 713-936-9073. You can also fill out our online form to tell us about yourself and have a member of our team contact you as soon as possible.