The Family Legacy: an Irrevocable Mineral Trust

We meet many clients who have inherited mineral interests from their parents, grandparents, or other family members. These interests are often regarded as far more than real property—they are almost viewed as family heirlooms! Most people are very concerned about keeping these assets in the family and ensuring that they are available for their descendants for years to come. An excellent way to make sure this occurs is with an irrevocable mineral trust.

An irrevocable trust is—as its name suggests—irrevocable. This means that once it is created, it cannot be revoked or changed. While this loss of control makes some people nervous, it is usually not a problem for minerals. Generally, people don’t change their minds when it comes to what they want to do with minerals; for example, most people won’t suddenly decide they want to sell their minerals like one might decide with surface property. As a result, the irrevocability of an irrevocable mineral trust is usually not an issue.

In many ways, the irrevocability is actually a positive. Because the minerals are technically no longer under your control, they are not considered part of your estate. This can be useful to protect them from creditor claims or estate taxes. 

Beyond this, the irrevocable mineral trust provides a smooth distribution process for your family. The trust can be drafted in such a way that you still receive the income from royalties during your lifetime. Following your passing, you can choose to either have your beneficiaries continue to receive income only while the minerals remain in the trust, or you can have the minerals deeded outright. If your goal is to protect your minerals and keep them in the family, distributing only income might be the best way to do that. This protects the actual minerals from creditor claims against your descendants, property disputes during divorce, and other threats. 

Keeping minerals in the family is so important to many of our clients. Setting up an irrevocable mineral trust will allow you to protect your minerals and give you the comforting knowledge that you are leaving an excellent family legacy.