Below are some of the most common reasons to sell mineral rights in Texas.
Remember that each situation is unique. Deciding whether you should sell is personal. Never let anyone put pressure on you to sell mineral rights or to hold mineral rights. Take a look at your situation and make the right decision for you.
Common reasons for selling mineral rights in Texas:
Taxes: The number one reason to sell mineral rights in Texas is to save money on taxes. Check our are mineral rights taxes article for more information.
Diversification: If you have more than 5% of your net worth / retirement savings in mineral rights, you should diversify. It simply doesn’t make sense to hold mineral rights that wildly fluctuate in value. Sell the mineral rights and put them in a diversified ETF in the stock market.
Simplify your Estate: A very common reason to sell mineral rights in Texas is to simply your estate. Mineral rights are complicated. They create a tax burden on your heirs and dividing mineral rights decreases the value. Over time, as generations pass, mineral rights get further and further divided. Eventually they become so small the value goes down. We frequently help multiple family members who sell as a package to get a better price.
Qualify for Medicaid: You can only have $2,000 in assets to qualify for medicaid. It’s very common for mineral rights to be worth more than that and disqualify someone from Medicaid. Selling mineral rights to qualify for medicaid is very common.
Medical Expenses: If you are in a situation where you need funds to pay for medical expenses, it makes sense to sell mineral rights and use those funds today.
Pay off Debt: If you are paying 20%+ interest rates on credit card debt, there is no reason you should continue holding your mineral rights. When you consider the tax savings of selling along with paying down high interest debt, there is no question you should sell the mineral rights and pay down the debt.
Pay for School: School is an investment, and unfortunately it’s expensive. Take a moment to look at how much money you will make after going to school vs how much money you royalties will generate. Paying for school, or paying down school debt, is an excellent reason to sell mineral rights.
Starting a Business: When you start a business, it takes capital. Selling mineral rights to fund a business start up can make a lot more sense than taking on high interest debt.
Helping a Family Member: There are always situations that come up where a family member needs help. If selling mineral rights will give you the ability to help a family member in need, it can make sense to sell.
There are many other reasons to sell mineral rights in Texas. We recommend taking some time to figure out what your mineral rights are worth and then deciding whether selling makes sense for your situation.