Texas ranks third in the top mineral-producing states in the US. Its mineral industry value amounts to $4.8 billion due to the abundance of crushed stone, sand, and gravel, cement, and salt. These minerals are highly in-demand all over the country as the construction industry grows in staggering heights.
Many landowners in the lone star state have properties that are rich in valuable minerals. These minerals can be found under their land surface. Under the law, these mineral rights in Texas can be transferred through a lease or a sale to another company.
RELATED POST: TOP 5 MINING TRENDS FOR 2018
If you are a Texan landowner and you are on the fence about whether to sell or lease your mineral rights in Texas, here are some significant reasons why doing so would be the best decision for you and your estate.
1. Ease Your Worry About the Fluctuating Market
Oil, gas, and mineral interests are depleting assets, so ownership is a risky endeavor. The market is fluctuating, so it will be quite a challenge to identify the value of your minerals at any point in time. Mineral and royalty interests may have tempting values at present. However, due to particular national and global situations, no one can tell for sure how much they will be worth in the future.
Bear in mind that you cannot control the value of your royalties, so it may be difficult to plot your future finances. Receiving a lump sum payment as soon as possible provides you with a higher income than if you hold on to your mineral rights in Texas.
2. Enjoy a Lump Sum Cash Payment
Whether you are saving up for your children’s college fund or planning to pay off debt, a lump sum cash payment will ease a big chunk of your financial burdens. You can even use the money to save for retirement or to invest in businesses that interest you. Whatever the purpose, you will benefit from the significant cash flow that you will be receiving.
The key to getting the best value for your mineral rights is to seek the expertise of reputable mineral rights experts. They will help you capitalize on the present increased commodity prices. They can also assist you in the correct valuation of your royalties.
3. Simplify your Taxes and Finances
Owning mineral rights will subject you to several complicated taxations. This added expense could take a lot of your time and money. Royalty revenues incur Federal Income Tax every year. You will also be required to pay Ad Valorem Tax and Severance Tax for extracting a nonrenewable resource.
Deciding to sell your mineral rights will free you from the complex accounting procedures that are needed to pay these taxes correctly. It will allow you to simplify your finances and focus on other endeavors.
4. A Streamlined Estate Management
Consolidating or liquidating an estate can be challenging for any landowner. Transitioning mineral assets to your heirs can be quite challenging. The process may drag on for months, and it can also be expensive for all parties involved. If you sell your mineral rights, you will be able to distribute your cash assets more cost-effectively and efficiently.
ALSO READ: GLOBAL ECONOMIC OUTLOOK IN 2020
Selling mineral rights prove to be the most economical decision for any landowner in Texas. With careful planning and help from reliable experts, you will be well on your way to a financially-free life.