Mineral rights and oil and gas royalties do not behave like typical accounts or a family home. Title chains, lease burdens, operator requirements, and recurring royalty income can create roadblocks during probate or when a beneficiary tries to claim payments. Thoughtful Texas mineral rights estate planning keeps those interests paying without interruption and allows your chosen beneficiaries to receive what you intend. If you own interests in Travis, Williamson, Bexar, Midland, or any producing counties, a tailored plan matters. Our Texas estate planning attorneys serve families in Austin and San Antonio with a clear, educational process that fits real world oil and gas assets.
What are mineral rights and royalties
In Texas, mineral rights are real property interests that grant the right to explore for and produce oil, gas, and other minerals. Mineral rights can be severed from the surface estate, so the surface owner might be different from the mineral owner. The person who holds the mineral estate can lease it to an operator. Under a typical lease, the mineral owner retains a royalty interest. That royalty is a share of production free of the costs of drilling and production. Royalty interests might be expressed as a fraction, a percentage, or a decimal. Over time, multiple conveyances can split these fractions among several owners across many tracts.
Because these assets are recorded in county real property records and tracked by title departments at operators and purchasers, clean title matters. A solid plan anticipates how operators will verify ownership, how beneficiaries will be identified for pay status, and how taxes will be handled. Our team brings business training and experience with oil and gas title research, which helps families align legal documents with practical title and pay deck requirements. That level of detail can prevent suspended royalty payments and curative headaches.
Estate tools for Texas mineral rights
Mineral interests and royalties can pass in several ways. The right approach depends on your goals, your family, debt exposure, and the number of counties involved. Below are the most common planning tools and how they affect title, control, and transfer.
Wills and trusts
A will can transfer mineral rights and royalty interests to your chosen heirs. After death, the will is admitted to probate and the court authorizes the executor to act. Title companies, operators, and county clerks then rely on the probate documents to update ownership. A well drafted will can divide different interests among different people, set aside unique parcels for certain heirs, or leave everything to a single person or trust. A will alone usually requires probate to move title, which can slow royalty payments or cause suspense accounts during the process.
A revocable living trust offers privacy and continuity. During life, you can serve as trustee and keep control. At death, the successor trustee distributes or continues managing the interests without court involvement in most cases. To gain the benefit, the mineral interests must be transferred into the trust during life. That means signing and recording mineral deeds for each county where you own interests. For families with producing interests across several counties, this approach can reduce future costs and delays because the successor trustee can provide a trust certificate and recorded deeds to operators rather than open a probate in multiple places.
Trusts also help with management. You can appoint a trustee with oil and gas experience, grant discretion to pool or ratify leases, and require periodic accounting to beneficiaries who receive royalties. If younger beneficiaries will inherit, the trust can hold the properties until a chosen age, while still distributing income under a schedule that suits their needs. If family members disagree on whether to sell, the trustee can follow the trust instructions without risking gridlock.
Transfer on Death deeds
A Texas Transfer on Death deed allows you to name beneficiaries who will receive real property at death while you keep all rights during life. Mineral interests count as real property, so this tool can work for both producing and non producing interests. A valid Transfer on Death deed for mineral rights must include a legal description, the beneficiary’s name and address, your signature before a notary, and it must be recorded in the correct county clerk’s office before death. If those steps happen, the interest passes outside probate. After death, the beneficiary records an affidavit of death and supplies required documents to the operator. Royalties then move to the new payee when title departments complete their review.
This method suits an owner who wants a simple non probate transfer with minimal change during life. You keep the power to sell, lease, or mortgage the property while alive. You can also revoke the deed if your plans change. If you own interests in several counties, you would record a deed in each county. Care is needed when naming alternate beneficiaries, since some families want mineral interests to remain within a family branch. Clear instructions and correct recording reduce post death conflict.
Lady Bird deeds
A Lady Bird deed, also known as an enhanced life estate deed, also passes real property at death to named beneficiaries while you keep control during life. The key difference compared to a Transfer on Death deed is the life estate structure. You grant a remainder to the beneficiaries, while reserving an enhanced life estate that lets you sell or mortgage the property during your lifetime without consent from the remainder beneficiaries. Many families like the flexibility, especially where health care planning interacts with real property. For mineral interests, this can be a strong fit when you want probate avoidance with the ability to modify plans later. See more on our Lady Bird deed guide which explains how this deed can apply to mineral rights and surface tracts.
Like a Transfer on Death deed, a Lady Bird deed requires proper drafting, acknowledgment before a notary, and recording in the county where the interest sits. Both can be revoked or replaced while you are living. The best choice turns on your goals, whether you want alternate beneficiaries, and how your other planning documents fit together.
Probate options for title transfer
When a will exists or when no non probate transfer was used, Texas probate offers several pathways to move title. Mineral interests can continue to pay during probate if the operator receives clear authority. The right probate method depends on debts, the presence of a valid will, and the mix of assets and liabilities.
Muniment of Title
Muniment of Title is a streamlined form of probate that validates a will and authorizes asset transfer without appointing a full executor or administrator. It fits when the decedent left a valid will, there are no unpaid debts other than those secured by real property, and the goal is limited to transferring title. This can be a good match for a decedent who held only real property interests, including mineral rights, and had settled debts. Our Muniment of Title probate resource explains how the court order functions as proof for county clerks and title departments. With a muniment order, operators can move royalty payments once they verify the chain of title.
Speed and cost control appeal to many families. The court order is often accepted by operators as curative proof of ownership, which moves the pay deck forward without the additional steps required in full administration. If new debts surface later, or if property must be recovered, a different probate path may be needed. An experienced probate attorney can spot those issues early and recommend the best route.
Affidavit of Heirship
When a person dies without a will and the estate consists only of real property, Texas law allows an Affidavit of Heirship. Two witnesses who knew the decedent sign before a notary, and the affidavit is then recorded in the correct county or counties. In some situations, operators accept the affidavit to update ownership and resume royalty payments. You can read more about the process and the tradeoffs in our Affidavit of Heirship guide.
This tool carries risk. Title companies and operators may reject an affidavit when the family tree is complex, when prior probates or divorces affect title, or where multiple counties and older reservations create uncertainty. Affidavits can be challenged. If a title examiner sees gaps or conflicting records, they will ask for probate or additional curative documents. Families should treat the affidavit as a possibility for simple cases rather than a replacement for probate in every case, especially for valuable producing interests.
Tax and income considerations
Royalty checks carry tax consequences. Operators generally issue a Form 1099 for royalty income each year. Texas severance taxes are withheld from production revenue. Depreciation is not available for mineral interests, but percentage depletion or cost depletion can apply for federal income tax in the right circumstances. A trust or estate may need to file fiduciary income tax returns if income flows through those entities. If an interest is sold, capital gains rules and basis matter. For inherited property, basis may step up to fair market value on the date of death. Families should work with a CPA who understands oil and gas accounting to help with depletion, suspense recovery, and basis tracking. Our attorneys coordinate with tax advisors so estate documents and accounting match.
Gift and estate taxes can come into play for larger estates or for owners who plan to transfer interests during life. Using gifts to a trust or to family members can remove growth from the taxable estate, but the tradeoffs include basis and control. Every situation deserves a review of current federal thresholds and state law. We can connect clients with tax professionals so the plan fits both legal and tax goals.
Common pitfalls and tips
Failing to retitle mineral interests into a trust robs the trust of its benefits. Many families sign a trust then forget to record deeds in each county where they own interests. Without those deeds, probate may still be required. A trust funding review fixes that gap.
Confusing mineral interests with royalty interests creates drafting errors. A deed that conveys only royalty does not grant leasing power. A will that divides the mineral estate by tract but gives the royalty by fraction can set up future conflict. The plan should state with precision whether the gift includes the mineral estate, executive rights, non participating royalty, overriding royalty, or all of the above. When in doubt, gather prior deeds and leases for review.
Operators need clean paperwork. If you use a Transfer on Death deed or Lady Bird deed, recording in the correct county is essential. Beneficiaries should be named with full legal names and current mailing addresses. After death, beneficiaries must supply a death certificate and other documents the operator requests. Missing documents can place royalties in suspense.
Lease terms can affect value. An older lease may allow for deductions that reduce royalty checks. Some leases require ratification before pooling or unitization adjustments. If a trust or deed names a trustee or beneficiary, be ready to ratify the lease through the new owner so payments continue without interruption.
Multiple counties mean multiple filings. If you own minerals in several counties, every conveyance or affidavit must be recorded in each county before operators can update title and pay status. An estate plan that accounts for this work keeps families from scrambling later.
Tool comparison at a glance
The right path depends on your goals and the mix of assets. This table highlights how common tools work with Texas mineral rights and royalties.
| Tool | Probate avoided | Control during life | Recording needed | Best fit | Watchouts |
|---|---|---|---|---|---|
| Will | No, probate usually required | Full control until death | No transfer until probate | Owners who want court oversight | Delays can cause suspense, multiple counties add cost |
| Revocable living trust | Yes, if assets retitled | Grantor trustee controls during life | Deeds for each county | Multi county owners and ongoing management | Forgets to fund trust, operators need trust proof |
| Transfer on Death deed | Yes | Owner keeps all rights | Yes, before death | Simple non probate transfer | Must record correctly in each county |
| Lady Bird deed | Yes | Owner keeps enhanced life estate rights | Yes | Probate avoidance with flexibility | Careful drafting for alternates and reservations |
| Muniment of Title | Functionally avoids full administration | N A after death | Court order recorded | Valid will with settled debts | Not suited if debts or disputes exist |
| Affidavit of Heirship | Yes, if accepted | N A after death | Yes, in each county | Small simple estates | May be rejected or challenged |
Practical steps for owners and heirs
Organize your records. Gather prior deeds, leases, division orders, check stubs, and any probate papers from relatives who owned the interests before you. Create a spreadsheet showing counties, legal descriptions, and net mineral acres or decimal interests. Operators will ask for these details. A clear packet shortens review times.
Decide how you want interests to pass. If you want one branch of the family to receive a specific tract or county, spell that out. If you want a trustee with energy industry experience to manage leasing and royalty for minors or students, name that person and grant clear powers. If equal shares among children is the goal, define equal clearly, including how to handle new wells that start producing after death.
Choose the right transfer mechanism. A trust may fit a family with assets in multiple counties. A Transfer on Death deed may fit a single county mineral interest. A Lady Bird deed can help where flexibility during life ranks high. When a will exists and debts are resolved, Muniment of Title can move title efficiently. Without a will and with only real property to transfer, an Affidavit of Heirship may be considered, with counsel on its risks.
Coordinate with taxes. Bring your CPA into the process. Discuss depletion, basis for inherited property, and how royalty income will be reported if a trust or estate holds the assets for any period. Align legal documents with tax reporting to avoid mismatches that lead to amended returns or penalties.
Communicate with beneficiaries. Share where records are stored. Let your executor or trustee know which operators pay the checks and which counties hold the filings. Provide contact details for your attorney and CPA. A little clarity now saves months of delay later.
How Hailey Petty Law helps
Families trust Hailey Petty Law for clear planning and practical follow through. The firm serves Austin and San Antonio with a team focused on education and client service. You can read about the firm’s background in business, finance, and the firm’s oil and gas expertise, including experience with title research in the energy sector. That experience gives clients confidence that deeds, trusts, and probate orders will match what county clerks and operators require.
We tailor each plan to the owner’s objectives. Some clients want to preserve producing interests for grandchildren through a trust with designated management. Others want a clean non probate transfer using a deed that honors blended family dynamics. We draft, we record, and we coordinate with operators. We also assist heirs with probate, including simplified probate for mineral rights when a Muniment fits, or full administration if needed. For small estates without a will, we evaluate whether an heirship affidavit for mineral interests will be accepted as curative title or whether probate offers a stronger path.
Our team offers a free virtual estate planning workshop to explain core documents and answer common questions. You can access it from our Hailey Petty Law Firm homepage. When you are ready to apply the ideas to your minerals and royalties, schedule a consultation. We serve clients from offices in Austin and San Antonio and can meet virtually for out of area owners with Texas property.
Case style examples
A ranching family in the Hill Country owns minerals across three counties with separate leases and royalty division orders. The parents use a revocable living trust and record deeds into the trust for each county. They appoint their daughter, an engineer with oil and gas experience, as successor trustee. At the second spouse’s death, the successor trustee supplies operators with a trust certificate and the death certificate. Royalties continue with minimal downtime. The trust instructs the trustee to distribute income equally among siblings for ten years, then sell non core interests and divide proceeds. The plan meets management needs and matches family goals.
An Austin couple holds a small mineral interest in Loving County that pays modest royalties. They want a simple transfer to their son without probate. A Transfer on Death deed is prepared with the correct legal description and recorded in Loving County. Years later, after the last parent’s death, the son files an affidavit of death with the county clerk and provides the operator with the recorded deed. Payments move to his account soon after title review.
A San Antonio owner passes away with a valid will that leaves everything to his spouse, and all debts are paid. The spouse uses a Muniment of Title to validate the will. The court order is recorded in the producing county. Operators accept the order as proof of title and update payee information. The spouse then signs a Lady Bird deed to name children as remainder beneficiaries while keeping control during life. The plan simplifies probate and sets up a future non probate transfer.
Drafting tips that prevent title problems
Use the exact legal description found in the last deed that brought the interest in. If unit designations or pooled unit descriptions changed over time, add the current description for clarity without removing the original metes and bounds or survey description. County records remain the source of truth, so the legal description in a will, trust schedule, or deed should mirror those records.
Clarify which sticks in the bundle pass. Reserve executive rights if you want to retain leasing power but pass non participating royalty. Give the trustee power to ratify, pool, and sign division orders. If you prefer that beneficiaries make those calls directly, say so clearly and align the deed with your intent.
Choose alternate beneficiaries with care. Mineral interests often stay in a family for generations. If a named beneficiary predeceases you, state whether that share passes to that person’s descendants or to surviving named beneficiaries. Address what happens if a branch of the family line ends. Clarity today avoids heirship litigation tomorrow.
Coordinate with surface rights. If you own both surface and minerals, think through how to protect the homestead while preserving mineral value. You can direct the executor or trustee to coordinate surface use agreements with operators, or to retain counsel for negotiation when new wells are proposed near a residence or water source. A thoughtful clause can balance both estates.
Get guidance today
If you own Texas mineral rights or receive oil and gas royalties, a plan tailored to those assets will save your family time and cost later. Our team helps with wills, trusts, TOD deed for mineral rights, enhanced life estate deed for mineral rights, and probate. We also guide heirs through Muniment of Title or full probate when needed, and evaluate the pros and cons of an Affidavit of Heirship for simple transfers. Take the next step and Contact Hailey Petty Law to speak with a lawyer who understands how title departments view these documents. You can also join our free virtual estate planning workshop to learn the building blocks before we tailor a plan for your family.
Frequently asked questions
Can mineral rights be left in a will in Texas?
Yes. Mineral rights are real property and can be given by will. The will often needs probate so the court can validate it and allow title to move. If probate is a concern, consider non probate transfers such as trusts, a TOD deed for mineral rights, or a Lady Bird deed.
Can a Transfer on Death deed pass mineral rights?
Yes. A properly drafted and recorded Transfer on Death deed can pass mineral interests to named beneficiaries without probate. It must contain the legal description, identify beneficiaries, be signed before a notary, and be recorded before death. Our Transfer on Death deed for mineral rights resource explains the requirements and steps.
What is the difference between mineral and royalty interests?
The mineral estate includes the rights to lease, receive bonus, receive delay rentals, and receive royalties. A royalty interest is a share of production free of the costs of production. It may or may not include executive rights to lease. Some documents convey only royalty without leasing power. Your plan should state clearly which rights pass.
When should I use a trust for royalties?
A trust keeps mineral interests out of probate if the interests are retitled to the trust during life. It also provides management through a trustee who can handle leasing, division orders, and royalty accounting. Trusts offer detailed control for timing and conditions on distributions to beneficiaries. Coordination with title records and a CPA is recommended. Read more about the firm’s background and firm’s oil and gas expertise.
What is Muniment of Title for mineral interests?
Muniment of Title validates a will and authorizes transfer without full estate administration. It is suitable when debts are resolved and no further administration is needed. Operators often accept the court order as title proof for pay deck updates. Learn more in our Muniment of Title probate guide.
Is an Affidavit of Heirship safe for mineral transfers?
An Affidavit of Heirship can be recorded when someone dies without a will and the estate includes only real property. It can work in simple cases, but it carries limits. Title companies and operators may reject it when facts are complex or unclear. See our Affidavit of Heirship discussion for the requirements and risks.
Will royalties stop during probate?
They may pause if title is unclear or if the operator awaits documents. With prompt action and clear court orders, payments often resume. Using tools such as trusts, Transfer on Death deeds, or Lady Bird deeds can avoid the pause by bypassing probate or minimizing the steps needed to update pay status.
How do I get operators to update pay status?
Provide recorded documents that establish title. For probate, supply court orders and any recorded executor deed. For trusts, provide a trust certificate and recorded deeds into the trust. For TOD or Lady Bird deeds, provide the recorded deed and the affidavit of death. Respond to any division order requests promptly. Our team coordinates with operators to streamline these updates.
How can I get started with a plan for my minerals?
Gather deeds, leases, and recent check stubs, then meet with an attorney to discuss goals and beneficiaries. We will recommend the best mix of documents. You can begin by contacting us through our Austin and San Antonio offices. Schedule a consultation or attend our free virtual estate planning workshop to learn your options.