Oil, gas and royalty interests are real property, and they pass at death by will, trust, transfer on death deed or intestacy, through documents recorded in every county where they lie. Operators suspend payment when an owner dies and wait for proof of the new ownership, so a plan that ignores minerals can leave royalties in suspense for months or years. A good plan identifies each interest, decides whether to keep the interests together or divide them, and chooses a transfer mechanism that lets operators resume payment quickly.
What families should know
Many families, in Texas and well beyond it, receive royalty checks from wells in the Permian Basin, the Eagle Ford, the Haynesville or older fields across the state. Those checks typically stop shortly after the owner's death, because the operator will not pay anyone until it has recorded evidence of who now owns the interest. If no one provides that evidence, the suspended funds can eventually be reported to the Texas Comptroller as unclaimed property.
Three planning decisions make the most difference. The first is identification: a will or trust that describes each interest by county, survey and abstract, with the operators and owner numbers recorded alongside the plan, saves the executor months of research. The second is fragmentation: dividing a small royalty among five children, and then fifteen grandchildren, produces interests too small to manage or sell. The third is the transfer mechanism: a revocable trust or a transfer on death deed can let operators resume payment without waiting for a probate.
The legal detail
Minerals as real property
Severed mineral and royalty interests are interests in land. They pass under a will's specific or residuary devise of real property, and in intestacy they follow the rules for land, so a surviving spouse may take only a life estate in a fraction of separate-property minerals (Tex. Est. Code § 201.002). A will is not effective to prove title until admitted to probate (§ 256.001), and the order probating it, or a muniment of title, must then be recorded in each county where the interests are located.
Drafting the devise
A specific devise should identify each interest by county and legal description and by type: a mineral interest (with executive and leasing rights), a royalty interest, an overriding royalty, or a working interest with its attendant costs and liabilities. Each type presents different management and liability issues for the beneficiary. The will should also address lapse, since a devise to a beneficiary who does not survive the testator is governed by the anti-lapse provisions of Chapter 255, and ademption, since a specifically devised interest sold before death generally passes nothing.
Avoiding fragmentation
Equal undivided devises are simple to write and difficult to administer two generations later. Alternatives include:
leaving the minerals to one beneficiary and equalizing with other assets;
a trust that holds the minerals for all beneficiaries, with a single trustee who signs leases and division orders; and
a family limited partnership or LLC that owns the minerals, so that succession occurs through transfers of entity interests rather than recorded conveyances in every county.
Keep your most recent royalty check stubs and the operator's owner number for each interest in a folder with your will. Your executor will need them to notify each company.
Nonprobate transfer of minerals
Minerals titled in a revocable trust pass under the trust's terms at death; the successor trustee typically provides operators a death certificate and a certificate of trust, and no probate is needed for those interests. A transfer on death deed can also convey mineral interests, since Chapter 114 applies to any interest in Texas real property, but it must be recorded before death in each county where the interests are located (§§ 114.002(a)(5), 114.055). For owners with interests in many counties, a trust is often the cleaner vehicle.
Owners who live outside Texas
A nonresident's will is ordinarily probated in the state of domicile, and the Texas minerals then require an ancillary proceeding or the recording of the foreign will and order in each Texas county. Titling Texas minerals in a revocable trust during life avoids that second proceeding.
| Approach | Probate needed for the minerals? | Best suited for |
|---|---|---|
| Specific devise in a will | Yes (administration or muniment of title) | Simple holdings; Texas residents |
| Revocable living trust | No | Interests in many counties; out-of-state owners; multiple beneficiaries |
| Transfer on death deed | No | A few interests in one or two counties |
| Family LLC or partnership | No, for the entity's minerals | Larger holdings; long-term family management |
Keep your most recent check stubs, division orders and the operator's owner number for each interest with your estate planning documents. Your executor or trustee will need them to notify each operator.
Frequently asked questions
Does my will cover my mineral rights?
Yes, if it disposes of all of your property, including through a residuary clause. A specific devise that identifies the interests by county and legal description is still preferable, because it removes ambiguity for the executor, the operators and the title examiners.
How will my heirs get royalties transferred after I die?
They deliver recorded proof of their ownership, such as a probated will or a muniment of title, an affidavit of heirship or a trustee's certificate, to each operator, and then sign new division orders.
Should I leave my minerals to all of my children equally?
Not necessarily outright. Equal undivided shares become smaller with each generation. A trust or a family entity can preserve equal economic benefit while keeping a single owner of record for operators to deal with.
Do mineral rights avoid probate?
Only if they pass by a nonprobate mechanism: titled in a revocable trust, covered by a transfer on death deed recorded before death, or owned through an entity with its own succession plan.
What happens if I sell the minerals after making my will?
A specific devise of property that is no longer owned at death generally fails (adeems), and the beneficiary receives nothing in its place unless the will provides otherwise. Review the will after any significant sale.
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About the author
Todd Worrich is a San Antonio native and Texas attorney. He earned his undergraduate degree from Texas A&M University, his law degree from St. Mary’s University School of Law and an LL.M. in Taxation from SMU Dedman School of Law, and he has been recognized multiple times by Texas Super Lawyers. His practice focuses on estate planning, probate and helping Texas families recover oil and gas royalties. More about Todd
This article is general information about Texas law, not legal advice for your situation, and reading it does not create an attorney-client relationship. Laws change, and results depend on the facts of each matter. Attorney responsible for this content: Todd Worrich, San Antonio, Texas.
