Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on June 23, 2010 at 2:04

The mineral rights when severed from the surface estate represent a mineral servitude which is subject to the 10 year prescription law in all cases except the granting of a perpetual servitude by the state or federal government such as the I-49 Right of Way.

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Permalink Reply by adubu on June 24, 2010 at 0:45

sure glad my minerals are in Texas we do not have 10 year prescription law. The minerals stay in our estate for ever unless sold or not reserved on land sell. I have several undivided minerals in different tracts that surface was sold by parents and grandparents, great grand,etc many years ago but minerals were reserved in deed of sell and passed to heirs.

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Permalink Reply by Mac Davis on June 23, 2010 at 2:15

IANAL

That's an interesting question. If you currently own both the land and mineral rights at death, it seems pretty clear that the rights would "expire" 10 years after the death or succession, unless there is production.

The question would be if there are any tricks into severing the mineral rights from the land ownership at death or at the time of the succession. Do you need to do anything special to establish or record the mineral severance and ownership? It would seem that this would be done as part of the judgment of possession. It would be particularly important to be sure that all the paperwork is done and recorded right.

Are you planning to give one child the mineral rights and give the land to another child?

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Permalink Reply by P.G. on June 23, 2010 at 2:33

Are there differences between "Mineral Rights" and "Mineral Servitude"?
Does anyone actually own the minerals still in the ground or just the right to reduce them to possession?

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Permalink Reply by Skip Peel - Mineral Consultant on June 23, 2010 at 2:37

A servitude is created when the surface and mineral rights are severed. The servitude is a right to produce the minerals for the period of prescription along with the surface access to do so.

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Permalink Reply by P.G. on June 23, 2010 at 2:44

Sounds like Louisiana is fairly specific in the minerals being attached to the land but allowing the granting of limited rights to access the minerals, huh?

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Permalink Reply by Skip Peel - Mineral Consultant on June 23, 2010 at 3:11

The LA. Mineral Code is primarily designed to facilitate the exploration for and production of minerals for the financial benefit of the state. Prescription only occurs when minerals are not being produced (or no effort is made to produce them) during the ten year period. If the owner of one estate (surface or subsurface) is to be favored, I find it reasonable to do so for those who hold the surface estate. I have a friend whose father bought 400 acres to enlarge the family farm (Red River - Bull Bayou Field) and received one half of the mineral rights. Years later the rather inconsequential production ceased and the prescription clock began to run. After no production nor "good faith" efforts to produce, the clock struck 10 years and that 200 acres of mineral rights reverted to my friend who had inherited the farm and continued to run it. Shortly thereafter he signed a lease which led to the drilling of Haynesville Shale wells.

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Permalink Reply by The_Baron on June 23, 2010 at 3:19

In Louisiana, you do not own the minerals per say, but own the "mineral rights". That is the right to explore and produce the minerals. Only when the minerals are brought to the surface, are they "reduced to possesion" and owned by someone.

§6. Right to search for fugitive minerals; elements of ownership of land

Ownership of land does not include ownership of oil, gas, and other minerals occurring naturally in liquid or gaseous form, or of any elements or compounds in solution, emulsion, or association with such minerals. The landowner has the exclusive right to explore and develop his property for the production of such minerals and to reduce them to possession and ownership.
Acts 1974, No. 50, §1, eff. Jan. 1, 1975.

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Permalink Reply by Dion Warr, CPL on June 23, 2010 at 5:52

Shaleeee:

You mention leaving the "mineral rights only"; to whom would you propose to bequeath the surface? If the bequest was made to the State or a recognized political subdivision thereof (e.g., Dept. of Wildlife and Fisheries as a reserve), the conditions of such a bequest may be able to be structured such that a designee (or heir) would receive these minerals in perpetuity (or at least as long as the DWF owns it).

If the surface was left to a "friendly" third party, the surface owner could intervene and interrupt prescription by acknowledgement properly filed prior to prescription (as necessary) per LA R.S. 31:54. But the will cannot compel a third-party owner to execute such instruments, as I understand it (IANAL).

You should be able to leave residual rights (or rights held under a previously created mineral servitude) to whomever you wish, as long as one understands that the servitude is subject to prescription due to nonuse, irrespective of the actions or wishes of the owner of such a servitude.

I don't know if I have assisted in answering all of your questions, but good luck to you.

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Permalink Reply by Shaleeee on June 23, 2010 at 8:14

Thanks Dion and to all - We have three children and three properties - and want to give equally to each - the larger property is not as valuable (land value) as the smaller properties - but if the larger property is leased and drilled the royalty payout could be much greater than the smaller property due to more acreage. After reading this I feel we should divide each property equally and advise each of our children to keep ownership of their share of the land even though it may hamper their individual use of the the land. Was just hoping their was a way to simplify all of this . . . never easy!

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Permalink Reply by Dion Warr, CPL on June 23, 2010 at 9:00

Shaleeee:

You can do that (right now, if you wished). Check with your attorney as to the feasibility and mechanics (because I'm not one - IANAL), but I believe you could donate these properties to your children in indivision, reserving minerals and reserving usufruct of the surface, and then have the children partition the smaller properties equally amongst themselves subject to the mineral reservation, with you appearing and intervening in favor of the partition. The minerals could then be administered during your natural life by having the children interrupt the prescription as necessary in favor of you, and you could bequeath the mineral rights to them in indivision upon your death.

The problems with donations of this nature could include the divestment of assets to the detriment of the heirs (considering that you would ultimately be donating to the heirs, usually not an issue), or donating immovable property to the extent that you significantly impair your standard of living or completely or substantively divest yourself of all assets, but again, an attorney whose scope of practice involves successions and estate planning can properly advise you of what is available.

Hope this helps, and again, good luck to you.

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Permalink Reply by The_Baron on June 23, 2010 at 11:23

It might be worth considering severing the minerals into a LLC in which the three children would hold equal shares. You could even transfer the minerals and retain the executive rights.

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