Texas families often pass mineral interests from one generation to the next. Oil and gas royalties can support an heir for years if title is clean, division orders are current, and taxes are handled correctly. This guide explains texas mineral rights inheritance from first principles. It also covers probate tools that transfer title, how payors process ownership changes, and practical steps that help heirs receive suspended checks sooner. The goal is clear action for heirs and clear documents for operators.
Who inherits in Texas
Title passes under Texas law at the moment of death. If there is a valid will, the will controls, subject to probate. If there is no will, the Texas Estates Code governs who takes mineral interests. Texas community property rules add an extra layer when a surviving spouse and children are in the picture.
The intestacy statute says that all property owned at death vests in the heirs at law. See Texas Estates Code Chapter 201. Community property follows one pattern when all children are from the marriage, and a different pattern when a child is from another relationship. Separate property follows different shares for real property versus personal property. Mineral interests are real property in Texas, so separate property mineral title passes under the rules for separate real property. This matters for surface tracts with severed minerals, for pooled units, and for nonparticipating interests that stand alone.
Even when title vests at death, the operator will not pay heirs until title is proven. Heirs can expect a request for probate documents, curative affidavits, or deeds. The type of proof depends on the facts. A careful reading of Chapter 201 gives a roadmap to the correct distribution if there is no will. Pair it with practical curative tools so the operator can rely on the record.
What counts as mineral rights
Mineral rights include the right to explore for and produce oil and gas. They also include the right to receive bonus, delay rentals, and royalties under a lease. Texas allows a separation of the mineral estate from the surface. It also allows the carving of specific interests within the mineral estate. Common variations include a mineral fee interest, a royalty interest carved out of the minerals, or a nonparticipating royalty interest. A nonparticipating royalty interest receives a share of production without the right to sign a lease or receive bonus. Title language controls. Accurate legal descriptions are critical for deeds, probate orders, and affidavits.
Royalty checks follow division orders that reflect each owner’s decimal. A change in mineral ownership should lead to a change in the division of interest. Operators rely on recorded instruments, probate orders, affidavits, and sometimes title opinions to update pay decks. Any gap in the chain triggers a request for more proof.
Proving title after death
Heirs often see royalties suspended after the owner dies. The solution is a set of legal documents that prove both the death and the identity of the new owners. Several Texas tools fit that task. The right choice depends on whether the decedent left a will, the presence of debts, the size of the estate, and the operator’s requirements.
Full probate remains the most flexible route. The court appoints an executor or administrator. The representative collects assets, pays claims, and distributes the estate under the will or the intestacy rules. A certified copy of the probate order and the will can be recorded in each county where the minerals lie. Operators accept these as proof of authority and often issue division orders to the heirs once the chain is clear.
Muniment of Title offers a simpler path when it fits. The court admits the will to probate as a muniment without appointing a personal representative. This can speed up title work for minerals, since the order itself authorizes transfer. Learn more about this option at Muniment of Title in Texas. It works when there is a valid will and no unsecured debts other than those secured by real property. Heirs can record the court’s order in the counties where the mineral interests are located, then use it to update division orders.
Some families have no probate. In that case, an Affidavit of Heirship may help. Texas recognizes this tool as a way to describe the family tree and the facts of ownership. Two disinterested witnesses must sign before a notary. The affidavit must be filed with the county clerk where the property is located. It is not conclusive right away. Under Texas law it becomes prima facie evidence after five years on record. Many operators will accept it sooner, yet some banks and title companies may not. Read the details at Affidavit of Heirship in Texas. This tool often cures title for modest estates where probate is not practical. It can also serve as a stopgap until a family completes a probate later.
Each path has tradeoffs. Probate gives stronger proof. Affidavits cost less but carry limits. A clean record accelerates division order updates, which restarts royalty payments faster.
Getting royalties flowing
Texas law sets rules for division orders and payment timing. Payors have deadlines to remit proceeds. They also have protection when title is unclear. See Texas Natural Resources Code section 91.402 and related sections.
Operators must make initial payment within a set period after the first sale, then continue on a regular schedule. Absent a different contract timeline, the statute uses general periods such as 60 days for oil and 90 days for gas after the payor receives sufficient proceeds. These timelines pause if there is a title dispute or a reasonable doubt about clear title. Payors may require a signed division order that meets statute limits. The division order cannot change the lease terms. It can confirm the decimal and address of the owner.
Heirs should expect a suspension until the payor receives curative documents. The suspensions are lawful where there is reasonable doubt about title. The fastest route back to payment usually follows a simple pattern. Complete probate or a muniment of title if a will exists. File an Affidavit of Heirship if probate is not on the table. Record any Transfer on Death Deed if one was signed before death. Then submit certified copies to the operator along with a W 9 and contact information. Ask the division order department to confirm what else they need. Many operators will then issue a new division order that reflects the heir shares.
Keep the operator informed. Send a death certificate early. Ask for suspense codes. A clear line of communication saves time for both sides. Once title is cured, interest on late payments may apply if the statute’s conditions are met. The Natural Resources Code governs these details.
Avoiding probate for minerals
Families often prefer to pass mineral rights outside probate. Texas recognizes deed tools that transfer real property at death without court action. Each has specific signing and recording rules. Mineral interests qualify as real property for these purposes.
Transfer on Death Deed overview
A Transfer on Death Deed allows an owner to name beneficiaries who take title at death. It is revocable during life. The deed must contain a legal description and identify the beneficiaries with addresses. The owner must sign before a notary. It must be recorded in the county deed records while the owner is alive. All of these steps are required for a valid Transfer on Death Deed in Texas. Read the full guide at Revocable Transfer on Death Deed. Mineral rights can be included. A TODD does not move personal property. It covers land, buildings, uncut timber, and mineral interests.
Coordination with a will matters. A TODD passes outside probate by operation of law. A will passes through probate. Use both when helpful, but avoid conflicting gifts. Many families use a will for the general estate, then use a TODD for specific tracts or royalty interests. That can put revenue into the hands of heirs faster while the will works through court.
Lady Bird deed overview
The Lady Bird deed, also called an enhanced life estate deed, offers another Texas solution. The owner keeps control during life. The deed reserves a life estate with the right to sell or mortgage. The beneficiaries take title at the owner’s death. The transfer happens outside probate. It is also revocable. See the 2025 update at Lady Bird Deed in Texas. Mineral interests can be included if the deed describes them accurately. Lenders often worry about due on sale clauses. Inheritance generally does not trigger these clauses. The Lady Bird deed can also pair well with Medicaid planning in some cases.
Transfer on Death Deed versus Lady Bird deed comes down to goals. A TODD must be recorded during life and then lies dormant until death. A Lady Bird deed gives the owner broad retained rights during life. Both pass minerals outside probate. Both require careful drafting for legal descriptions and beneficiary names. Title companies and operators understand both tools, yet document details still matter.
Trust planning for minerals
Trusts can hold mineral interests during life and after death. A revocable living trust solves probate for trust assets. The trust must be funded to work. That means recording a mineral deed that conveys the interests to the trustee. A pour over will then sends any untitled assets to the trust at death. The trustee has authority to sign division orders, negotiate leases, and receive royalties. This can simplify management for out of state trustees or for blended families.
Trust language should speak to leasing rights, bonus payments, pooling, division orders, and depletion allocations. Clear management provisions reduce confusion with operators. Beneficiaries can receive income according to trust terms with protection from probate delays. When using a trust, avoid conflicts with any Transfer on Death Deed or Lady Bird deed. A deed to the trust during life will normally supersede a gift by TODD at death for the same tract. One path at a time reduces surprises.
Some families prefer a testamentary trust inside a will. In that case, the will still must be probated. The executor funds the trust after the court admits the will. That trust can hold the minerals for minors, for spendthrift protection, or for tax reasons. The operator will need a copy of the relevant trust pages and proof of trustee authority before issuing division orders in the name of the trustee.
Taxes on royalty income
Royalty checks to heirs are taxable as ordinary income under federal law. The Internal Revenue Service states that royalties from oil, gas, and mineral properties are taxable. Most owners report them on Schedule E. Owners of operating interests may use Schedule C. Depletion may be available where the facts qualify. See IRS Publication 525 for the full discussion. Heirs should keep check stubs and year end statements. These show gross proceeds, taxes withheld, and post production deductions. Good records make tax filing smoother.
Inherited property often receives a new tax basis as of the date of death. That concept affects gain or loss on a later sale of the mineral interest. It does not change the income tax treatment of royalties received after death. State tax treatment matters too. Texas imposes no state inheritance tax today. The Texas Comptroller confirms this repeal took effect Sept 1, 2015. See Texas Inheritance Tax Repealed. Federal estate tax may still apply for large estates, so coordination with tax counsel is smart when values are high.
If you inherit a working interest with expense responsibility, the tax picture changes. Operating costs can convert the activity into a trade or business for tax purposes. That often means Schedule C reporting and self employment tax risk. Get advice before signing a joint operating agreement as a successor owner. Many heirs prefer to convert or assign working interests to a third party to avoid expense exposure.
Common pitfalls to avoid
Mineral title suffers when the record is incomplete or contradictory. A few recurring problems cause delays with division orders. Watch for them early.
Unrecorded deeds create confusion. If a parent gave minerals to a child informally without a recorded deed, the operator cannot verify the change. Record properly executed deeds during life or use a TODD or Lady Bird deed when appropriate. Make sure the legal description matches the original vesting deed. Errors in survey calls or unit descriptions can break the chain.
Unprobated wills sit in drawers across Texas. A will has no effect on title until a court admits it to probate within the allowed time. After four years, a will may still be used as a muniment of title under specific conditions. If the time has passed and no probate is possible, consider an Affidavit of Heirship to bridge the gap. Operators will weigh the risk and may still request more proof.
Name changes cause headaches. A spouse who takes back a maiden name or a child who marries must link names through recorded affidavits or certificates. Provide the operator with marriage certificates, name change orders, or other records that tie the chain together.
Estate disputes freeze revenue. If family members contest the will or fight over the executor, the operator will suspend payments until the dispute ends. Mediation helps in many cases. Clear estate planning documents reduce the chance of conflict.
Heir action checklist
A short plan keeps the work moving. Use this as a starting point when a mineral owner dies in Texas.
- Collect the death certificate, the will if any, and prior deeds.
- List all counties where the decedent owned minerals or royalties.
- Open probate or seek a muniment of title if the will fits that path. If no probate, prepare an Affidavit of Heirship with two disinterested witnesses and record it.
- Record certified probate orders or affidavits in each county with minerals. Include correct legal descriptions.
- Contact each operator with the recorded documents, a W 9, and your current address. Ask for suspense codes and curative requirements.
- Sign new division orders once the operator circulates them. Keep copies of everything.
- Track suspended funds and request interest where the statute allows.
- Consult tax counsel on reporting, depletion, and basis issues before the first tax filing after the death.
Frequently asked questions
Who inherits Texas mineral rights if there is no will
The intestacy rules in Texas Estates Code Chapter 201 control. Community property and separate property pass under different shares. Mineral rights are real property, so separate property mineral title follows the rules for separate real property. A surviving spouse, children from inside or outside the marriage, and other relatives may share depending on the family tree.
Do heirs receive suspended royalties during probate
Not until title is clear. The Texas Natural Resources Code allows payors to suspend when there is a title dispute or reasonable doubt about title. See section 91.402. Provide probate orders, affidavits, or deeds to lift the suspension.
How long does it take to get paid after curing title
Payment timing depends on the operator’s cycle and the statute. After title is cured and a proper division order is in place, payors generally follow regular payment cycles. The statute uses general periods for ongoing payments, such as 60 days for oil and 90 days for gas when no other contract timing applies.
Will an Affidavit of Heirship unlock suspended oil and gas royalties
Often yes, though it is not conclusive. Many operators accept a properly executed and recorded affidavit for modest interests. It must be signed by two disinterested witnesses, notarized, and filed with the county clerk. It becomes prima facie evidence after five years on record. See Affidavit of Heirship in Texas for the requirements and limits.
Can a Transfer on Death Deed include mineral rights
Yes. A Texas TODD can transfer real property including mineral rights. It must be signed before a notary and recorded in the county records during the owner’s life. Learn more at Transfer on Death Deed in Texas.
Lady Bird deed versus TODD for mineral interests
Both can pass minerals outside probate. A Lady Bird deed reserves a life estate with control to sell or mortgage during life, then passes title at death. A TODD names beneficiaries and passes at death, with revocation possible during life. Choice depends on control preferences and how the rest of the estate plan is structured. See Lady Bird Deed in Texas and the TODD guide for side by side evaluation.
What is Muniment of Title and can it transfer minerals
It is a probate shortcut where the court admits the will without appointing an executor. The order authorizes transfer of assets, including real property interests like minerals, when the criteria are met. It fits when there is a valid will and no unsecured debts other than those secured by real property. See Muniment of Title in Texas.
Are inherited royalties taxable
Yes. Royalty income is ordinary income. Most owners report on Schedule E. Depletion may apply where eligible. See IRS Publication 525 for the federal rules. Texas imposes no state inheritance tax at this time.
Do heirs need to sign a division order
Often yes. Texas law allows payors to require a division order with limited terms. It confirms ownership decimals and contact details. A division order does not amend the lease. It is a step toward releasing suspended funds once title is cured.
What should I send the operator after a death
Send a death certificate, certified probate orders or recorded affidavits, any recorded TODD or Lady Bird deeds, a completed W 9, and your contact information. Ask for the division order team. Request confirmation of anything else they require.
Can a trust own Texas mineral rights
Yes. A trust can hold minerals and receive royalties. The trustee signs leases and division orders. Be sure to fund the trust during life with a recorded deed to the trustee. Coordinate the trust with any TODD or Lady Bird deed so there is no conflict.
Does Texas have an inheritance tax on royalties
No. Texas repealed its inheritance tax effective Sept 1, 2015. See the Comptroller notice at Texas Inheritance Tax Repealed. Federal estate tax may still apply for large estates.
What if I live outside Texas but inherit Texas minerals
Texas property law controls the title. Your home state law may affect probate procedure for your estate, but Texas rules control the mineral title chain. Most operators will want Texas probate or Texas recorded curative documents.
What if the decedent owned only a royalty interest
The same title concepts apply. A royalty interest or a nonparticipating royalty interest still passes under the Estates Code or the will. The operator will update the pay deck once it receives proper proof of ownership.
Can heirs claim interest on late payments
Possibly. The Natural Resources Code sets interest rules for late payments when the payor has sufficient information to pay and still delays. Ask the operator for a payment history and calculation once title is clear.