Mineral rights are property rights to underground substances such as oil, natural gas and precious metals. While in most countries these resources belong to the government, in the U.S. they usually belong to whoever owns the surface. If you inherited mineral rights, the estate executor must transfer them into your name during probate proceedings.
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Mineral rights allow you to extract and sell underground natural resources or lease them to others. These rights are normally defined as rights to resources that exist in deposits located under a specific parcel of surface land. The boundaries of the underground parcel may or may not be the same as the boundaries of a surface parcel -- a surface owner may divide his land into several sections, for example, and transfer mineral rights to separate owners.
When someone dies, his assets become part of a probate estate. If the decedent left a will, the will usually appoints an executor to administer the estate during probate and transfer its assets, including mineral rights, to beneficiaries. The probate court appoints the executor, who is usually named in the will, but may appoint someone else if the executor named in the will is an inappropriate choice, if the will does not name an executor or if there is no valid will at all. Heirs and potential heirs are entitled to dispute the decedent's will and the disposition of estate assets.
Transfer of Rights
To transfer title to mineral rights, a title search must be conducted by an attorney or a title insurance company to confirm the estate actually owns the mineral rights, and a mineral deed must be executed by the estate executor in favor of the beneficiary. A mineral deed is created when mineral rights are sold separately from the surface of real estate. A mineral deed identifies the transferor and the transferee. In an inheritance, the decedent's estate is the transferor and the beneficiary is the transferee. The deed includes a legal description of the rights transferred. When drafting a new mineral deed, it is best to refer to the legal description of rights that appears on the current mineral deed that transferred mineral rights to the estate, if one exists. The deed contains a warranty of title from the grantor and must be signed by the executor. The executor must record the deed with the local land recorder's office.
Instead of title to mineral rights, you may inherit an interest in a mineral lease. Such interests are defined as a percentage of the revenues derived from the extracted minerals. A mineral lease represents the right to extract and sell minerals for a certain period of time, such as 25 years. To transfer title to an interest in a mineral lease, the estate executor must execute a written assignment of these rights in your favor and record the assignment with the local land recorder's office.
References & Resources
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