If you’ve just inherited royalties, you may be a little lost and confused about what comes next. Should you sell inherited royalties? What are they worth? What do I need to know about the royalties I inherited? These are all the common questions we hear form someone who is interested in selling inherited royalties. We’ll help you walk through everything you need to know about your inherited royalties and explain all of your available options.
What are Oil and Gas Royalties?
Before we can talk about what you should do with your royalties and all of your available options, it’s important to have a basic understanding of what royalties are. When oil and gas companies drill for oil and gas, they do technically own the oil and gas they are drilling for. An individual typically owns the mineral rights, so when an oil and gas company starts extracting the mineral rights they must be paid a fee for the right to take away their mineral rights.
This is where royalties come from. Once an operator starts producing the property and extracting the mineral rights, you will start to receive royalty income for your proportionate share of the amount coming out of the ground. This is known as a “royalty interest”.
Should you Sell Inherited Royalties?
First, it’s important to understand that you don’t need to rush into making any decisions. If you’ve start receiving offers or you’re being pressured to sell, take a deep breathe. Royalties are very easy to sell and you can make the decision about when you want to sell the royalties. You may need some time after inheriting royalties before you make any decision so you can make sound decisions. There’s no rush, so take the time you need and decide when you’re ready to pursue selling inherited royalties.
If you are consider selling, the choice to sell comes down to a decision on which option works best for you. If you are receiving royalty income, you have two options:
1. Continue Holding Royalties: You may decide to just keep getting royalty checks each month and enjoy the extra income you get from you oil and gas royalties.
2. Sell Inherited Royalties: You may decide you want to sell inherited royalties so you can get an up front lump sum of cash. Many individuals who inherit royalties decide to sell simply because they don’t want to deal with fluctuating income from royalties and would rather have a guaranteed amount of cash today. Here are some things to consider if you decide to sell inherited royalties:
Pros:
- Guaranteed Value for Royalties
- Less hassle with taxes
- Easy to Sell Quickly
- No risk of decreasing value
- Lump Sum Payment to Meet Cash Need
Cons:
- No extra monthly income
- Possible Taxes for Selling
Value of Selling Inherited Royalties
Once you inherit royalties, one of the first questions you may be asking yourself is about how much they are worth. Oil and gas royalty value can be estimated if you know the amount of monthly income you receive for your royalties. If you have 3+ months of royalty checks, you can take the average amount you receive and plug it into the calculator below to get a good estimated value. If you want more information about how the value of royalties is calculated, our in depth article about royalty value will tell you everything you may want to know!
If you’re unsure how to calculate the value, fill out the form at the bottom of this page. We can help you get a rough idea of the value of selling inherited royalties.
Where to Sell Inherited Royalties
Once you make the decision to sell royalties, the next step is to figure out exactly how to do that. While there are hundred of websites out there offering to buy royalties, we recommend US Mineral Exchange. The reason is simple. When you list your property at US Mineral Exchange, they will get your property in front of a large number of buyers. These buyers will all compete against one another to pay you the highest price which ensures that you get a fair value for selling inherited royalties.
Don’t waste your time visiting websites and getting low ball offers. List the property online with a reputable company like US Mineral Exchange who will help walk you through the entire process and make sure you are treated fairly.
Free Consultation
If you own mineral rights and have questions, fill out the free consultation form below. We can help you with the following questions:
- Mineral Rights Value
- Evaluate whether you have a fair offer to sell mineral rights
- Answer questions about selling mineral rights
- Understanding Market Value of Mineral Rights
- + Any other questions related to mineral rights!
No matter what question you have regarding your mineral rights, we can help! We usually respond to your inquiry within 1 to 2 hours!
Whether you want to sell mineral rights, determine mineral rights value, or simply have some basic questions regarding your mineral rights ownership, fill out the form and we will quickly be in touch.
