Sell Mineral Rights in a Trust
Sell Mineral Rights in a Trust
There are a number of reasons why you may need to sell mineral rights in a Trust. Many trustees need to dispose of mineral rights held in a trust for a variety of reasons. We have spoken with a number of attorney’s, financial planners, and other trustees who simply need to find the best way to handle mineral rights held in a trust. We’ll help explain what you need to know about how to sell mineral rights in a trust and how to best accomplish this.
Mineral Rights Market
Before we can discuss how to sell mineral rights in a trust, the first thing you need tell you about is the mineral rights market. Unlike other markets such as the housing or stock markets, the mineral rights market is not as transparent. In addition, it can be difficult and time consuming to dispose of mineral rights held in a trust. Based on the status of the mineral rights held in the trust, the process changes dramatically. Here are the two situations mineral rights could be in when you need to sell mineral rights from a trust:
Non-Producing Mineral Rights: These are mineral rights that do not current generate any royalty income. If you are not receiving royalty checks on behalf of the trust, the mineral rights being held are non-producing mineral rights. These types of mineral rights can be difficult to sell depending on the location. If it’s necessary to sell mineral rights in a trust quickly, selling non-producing mineral rights will likely be at a reduced rate compared to holding them over time.
Producing Mineral Rights: If you are a trustee for mineral rights that are producing, you should be receiving a check for royalty income being produced from the mineral rights. It is substantially easier to sell producing mineral rights because there is much larger demand for mineral rights with existing production and income. You can expect to sell mineral rights in a trust that are producing within 30 to 60 days, and sometimes quicker depending on the buyer.
Value of Selling Mineral Rights in a Trust
Unfortunately, determining the value of mineral rights held in a trust can be a challenge. Selling non-producing mineral rights can make it almost impossible to determine the value. The best way to get an accurate value for non-producing mineral rights is to put them on the market and see what the market is willing to pay.
For producing mineral rights, we can more easily determine how much their are worth based on the royalty checks the trust receives each month. Most buyers are willing to pay between 4 years to 6 years worth of production. With this in mind, you can use the calculator below by plugging in the amount the trust receives each month from royalty income to get a range of the royalty value:
Best way to Sell Mineral Rights in a Trust
If you are a trustee, trying to sell mineral rights in a trust can be a challenge. You need to find a way to sell mineral rights in a market that is difficult to sell in, and you also need to uphold your responsibility to get a fair price for the trust. With this in mind, we recommend listing the mineral rights held in the trust at US Mineral Exchange.
The reason we recommend you list with them is that they will handle all aspects of selling mineral rights. They’ll handle negotiating the best possible price for the trust. They will also review all the oil and gas specific documentation with you so that you’re comfortable with all the terms the trust is receiving during the sale. However, the most important reason we recommend US Mineral Exchange is because they will get your property in front of a large audience of mineral rights buyers. This will ensure that the trust gets fair market value for the mineral rights being sold.
Questions about Selling Mineral Rights in a Trust?
If you are a trustee trying to determine the best way to sell mineral rights held in a trust, fill out the form below. We can help explain everything you need to know to ensure your client gets the best possible deal: