Many married couples in Texas own mineral rights. Some have high-producing properties, while others have been waiting for years. If a divorce is on the horizon, mineral rights will be lumped in with other assets to divide marital property, which, in this state, will be a 50/50 split because it operates under community property guidelines.
Perhaps well-meaning relatives or friends have been advising you to sell your mineral rights before you enter property division proceedings in divorce. Others might be telling you to hang on to them at all costs. You and your spouse will ultimately have the final say and must come to an agreement to achieve a fair settlement. Keeping several issues in mind may help you make an informed decision.
You could use proceeds to invest elsewhere after divorce
Especially if you own mineral rights on properties that are currently not producing, you might benefit from selling before you finalize your divorce. If you and your spouse agree to sell, you’ll then split the proceeds of the sale 50/50 as part of your settlement. You would then be free to use that money as you see fit, perhaps investing it in a new business venture or using it to turn a profit elsewhere after your divorce.
Why you might want to hold onto your mineral rights
Owning mineral rights on non-producing property doesn’t create a liability because you typically only must pay taxes on active production sites. So, if the only reason you’re considering selling is because you’re worried about the cost of retaining your rights, you’ll be glad to know that there basically is no cost to owning mineral rights on land that is currently not producing.
It’s easier to split profit from a sale than to determine actual value
One reason you might consider selling your mineral rights before you finalize your divorce is that it’s difficult to determine the true value of such assets. If an interested party makes an attractive offer, it might be easier to accept it and split the profit 50/50 than to retain ownership and try to determine the true market value of the assets.
Selling your mineral rights might enable you to simplify
If you own mineral rights on multiple properties, there’s a certain amount of upkeep involved in retaining them as you head to court to finalize your divorce. Each property would carry paperwork, separate tax information and other administrative tasks that you might not want to deal with as you move forward in life without your spouse.
In short, it’s one less thing you’ll have to deal with if you and your ex agree to sell your mineral rights and take an equal share of the profits when you settle your divorce. If you’re unsure which options best protect your financial interests, it’s helpful to seek guidance from a financial adviser ahead of time, as well as to seek clarification of Texas laws that may be relevant in your case.