The Reasons Why People Sell Mineral Rights!
February 15, 2017
Ownership of rights to oil and gas can be a profitable venture for many; however many average people decide to sell mineral rights they may own in order to gain some income from from that sale. One does not have to be an oil tycoon to buy and sell mineral rights; even small deposits can generate a good sum of money for their owners. There are actually many reasons why people decide to sell their mineral rights.
Diversification of Investment Portfolio
One common reason why those who hold a large ownership in minerals might sell is to diversify their investments. Many people find that investing in multiple assets is safer in the long run and can generate more income over time. Considering this, mineral owners frequently liquidate a portion of their assets to invest in other things.
Retirement and Estate Planning
Mineral rights can be very valuable and provide owners with much-needed income at retirement time. When the time to sell mineral rights has been carefully planned, retirees can enjoy a more comfortable lifestyle with the proceeds obtained from their sale. Since minerals are considered as wealth, any rights must be included in estate planning. Mineral ownership can create a more complex estate, so many people choose to sell their rights before they pass on to alleviate these concerns.
For those looking to invest in a new business or expand a current one, a common way to generate the necessary capital is to sell mineral rights. This can be especially worthwhile for owners who are simply holding their rights and have no immediate plans to explore them, extract from them, or lease them. The money earned can be put to immediate use generating profits in other ways.
Medicaid or Social Security Qualification
Some people may actually need to sell their mineral rights in order to qualify for Medicaid enrollment or to begin receiving social security or other types of financial aid. Circumstances differ for everyone; however, for some who need assistance, liquidation of this asset may be necessary. Depending on the size of the right, selling could also provide a great way to pay for medical bills or generate much needed income.
Rights to minerals are considered wealth and as such, may be subject to laws regarding the division of marital wealth during a divorce. In these circumstances, the proceeds when the rights are sold will be divided between spouses as set forth in the divorce settlement.
Other Financial Needs
Beyond any of the above considerations, many people decide to sell their mineral ownership to simply raise money for other reasons. Whether they want to purchase a new home or renovate an existing one or even go on an expensive vacation, these assets can be liquidated for the cash necessary to do these things.
Every person’s reason to sell mineral rights is different. Yet the one thing all mineral rights owners have in common is the desire to create income from that ownership. For those who do not wish to involve themselves in legalities of leasing and the complexities that can come with royalty payments, selling the rights can be a lucrative option. By working with experienced and knowledgeable oil and gas professionals, rights owners can be sure their asset is properly valued and will sell for the highest sale amount!
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