A living trust can't avoid probate unless and until it holds all the property of your estate. Funding a trust by moving your property into it is a critical component of creating one. It doesn't have to be a complicated process if you own oil, gas or mineral rights and you decide to fund them into your revocable living trust, but it depends on the exact nature of the rights you own.
Determining the Type of Oil, Gas or Mineral Rights You Own
You must determine the nature of your oil, gas or mineral rights before you can transfer them to your living trust. Is it the actual real estate that contains the valuable oil, gas or mineral deposits? Or is it a right to the deposits that is separate from the land itself? Is it an interest contained in a lease or royalty agreement, or a combination of two or more of these things?
Your options depend on the answers to these questions.
Transferring Deeded Oil, Gas or Mineral Rights Into Your Trust
The process is easiest if you own the actual real estate that holds the oil, gas or mineral deposits. You can simply create and sign a new deed transferring ownership of the real estate from your name into that of your trust. It's basically just a matter of creating a new deed transferring the property from your name into that of your trust or its trustee. Don't neglect to record the deed with the county after it's prepared and signed.
Transferring Non-Deeded Rights
If you own a right to the oil, gas or mineral deposits and that right is separate from the land itself, you'll have to reassign your rights to the separate interest, lease, or royalty interest to your living trust. The same applies if you own an interest in a lease or royalty agreement.
Depending on how ownership of the rights was transferred to you, you might have to record an assignment of your rights to your trust with the appropriate county land records office. You might also have to contact the company that makes the lease or royalty payments to you to determine their exact procedure for transferring your ownership rights.
Consulting With an Estate Planning Attorney
Ownership interests in oil, gas or mineral deposits can be extremely complicated so it's usually best to consult with an estate planning attorney. Look for an attorney in the state where your rights or real estate are located to be on the safe side. You wouldn't want to think you'd managed the transfer only for your trust's beneficiaries to find out at a critical time that it wasn't done properly. An attorney can help to determine the appropriate process under applicable state law for funding your rights into the name of your trust.