If you're a trustee managing mineral rights, here's what you need to know about selling trust-held minerals.
Many families hold mineral rights in trusts. This is often the result of thoughtful estate planning by previous generations who wanted to avoid probate, keep minerals consolidated, or provide for efficient management across multiple beneficiaries.
If you've been named as a trustee and the trust holds mineral rights, you may find yourself managing an asset you didn't expect to deal with. Or perhaps you established the trust yourself and are now considering whether selling makes sense.
Key point: Selling mineral rights from a trust follows a similar process to individual sales, but requires attention to the trust document and trustee authority.
Mineral rights can be held in various types of trusts, each with different characteristics:
Most common type for mineral rights
Grantor retains control during lifetime
Can be modified or revoked
Typically grants broad trustee powers
Cannot be easily modified
Often used for estate tax planning
May have more restrictions on sales
Designed for multi-generational wealth
May span multiple generations
Often professionally managed
Created by a will after death
Goes through probate initially
Trust terms set in the will
The trustee is the person (or entity) with authority to manage and sell trust assets. However, that authority comes from and is limited by the trust document.
Trustees have a fiduciary duty to beneficiaries
Authority to sell must be in trust document
Most trusts grant broad investment powers
Some trusts restrict sale of specific assets
Some trusts require beneficiary consent
Co-trustees may need to agree
Trust may prohibit certain sales
Court approval may be needed in some cases
Important: Always review the trust document before proceeding with a sale. If you're uncertain about your authority, consult with an attorney who can review the trust terms.
Confirm the trustee has authority to sell real property (mineral rights are real property). Look for any restrictions or requirements for beneficiary consent.
Collect the trust document, Certificate of Trust, trustee identification, and any succession documents if you're a successor trustee.
If the trust requires beneficiary approval or co-trustee agreement, obtain these consents before proceeding.
As trustee, you have a fiduciary duty to act in the best interest of beneficiaries. Obtain a fair market valuation and consider multiple offers.
The trustee signs the deed and conveyance documents on behalf of the trust. The buyer will need trust documentation for title purposes.
Sale proceeds go to the trust. Manage and distribute according to trust terms, and maintain proper records.
When selling minerals from a trust, the buyer will need documentation to verify the trust's ownership and the trustee's authority. Be prepared to provide:
Trust document (or relevant sections)
Certificate of Trust (summary document)
Trustee identification
Succession documents (if successor trustee)
Beneficiary consents (if required)
Trust tax ID (EIN)
Certificate of Trust: This is a condensed document that summarizes key trust information without revealing all the details. Many trustees prefer to provide this rather than the full trust document for privacy reasons.
If you've become trustee because the original trustee passed away or became incapacitated, you're a successor trustee. You have the same authority as the original trustee, but you'll need additional documentation.
Death certificate (if prior trustee deceased)
Incapacity documentation (if applicable)
Acceptance of trusteeship document
Affidavit of successor trustee
Review trust for successor provisions
Notify beneficiaries of your role
Update accounts and records
Maintain detailed records of all actions
There are many valid reasons why a trustee might decide selling trust-held minerals is in the best interest of beneficiaries:
Convert to liquid assets: Cash is easier to manage and distribute
Simplify administration: Eliminate ongoing royalty tracking and reporting
Reduce management burden: No more lease negotiations or operator correspondence
Facilitate distributions: Easier to divide cash among beneficiaries
Diversification: Trust terms may favor a diversified portfolio
Declining production: Lock in value before further decline
Fiduciary duty: Trustees must act in the best interest of beneficiaries. If holding minerals no longer serves that interest, selling may be the right decision.
Review the trust document: This is the first and most important step
Document your decision: Keep records showing why the sale serves beneficiaries
Consider tax implications: Consult a tax professional about trust taxation
Communicate with beneficiaries: Even if consent isn't required, keeping beneficiaries informed is good practice
Seek professional guidance: An attorney can help navigate complex trust provisions
Yes, a trustee can typically sell mineral rights if the trust document grants the authority to sell trust assets. Most trust documents give trustees broad powers to manage and sell assets, but specific restrictions may apply. The trustee should review the trust document carefully or consult with an attorney to confirm their authority before proceeding.
To sell trust-held mineral rights, you'll typically need: a copy of the trust document (or relevant sections showing trustee powers), a Certificate of Trust if available, trustee identification, documentation showing trustee succession (if you're a successor trustee), and any required beneficiary consents as specified in the trust. The buyer will need these documents to verify ownership and authority for title purposes.
It depends on the trust document. Some trusts require beneficiary consent for the sale of certain assets, while others give the trustee full discretion. Review the trust document for any provisions requiring beneficiary approval. Even when not legally required, many trustees choose to inform beneficiaries about significant transactions as a matter of good practice.
Sale proceeds go into the trust and become part of the trust assets. The trustee then manages and distributes these funds according to the trust terms. This may mean holding the funds in trust, investing them in other assets, or distributing them to beneficiaries as the trust document directs. The trustee should maintain detailed records of the transaction and any subsequent distributions.
Yes, minerals in an irrevocable trust can often be sold if the trustee has the authority under the trust document. However, irrevocable trusts may have more restrictions than revocable trusts, and the trustee must be careful to follow all trust provisions. The trustee should carefully review the trust document and potentially consult an attorney, as improper sales could create liability issues for the trustee.
Buckhead Energy works with trustees regularly and understands the documentation requirements. We can provide a free valuation and work with you through the process.
Get a Free ValuationOr call us at (404) 604-6364
Disclaimer: This information is provided for educational purposes only and does not constitute legal, tax, or financial advice. Trust laws are complex and vary by state. Trustees should consult the trust document and qualified professionals (attorneys, CPAs) for advice specific to their situation. Buckhead Energy does not provide legal advice regarding trust administration.