Inherited Mineral Rights in the Permian Basin: What to Do Next

Each year, thousands of people inherit mineral rights in the Permian Basin — often without fully understanding what they have received. Maybe a royalty check arrived addressed to a deceased relative, or a probate attorney mentioned mineral interests among the estate assets. If you have inherited Permian Basin minerals — perhaps in an active county like Midland County or Howard County — this guide will help you understand your situation and your options.

Step 1: Confirm What You Actually Own

The first task is to determine the nature and size of your interest. Gather any documents you can find: prior royalty statements, division orders, lease agreements, old deeds, or estate paperwork. These will often tell you the county, the operator, and the specific wells or tracts involved. If you only have a name and a check stub, an experienced buyer or a mineral title company can research the county records to identify your interest.

Step 2: Get the Title Into Your Name

When a mineral owner dies, their interest does not automatically transfer to heirs in the operator's records. The transfer must be documented — usually through probate of the will in the county where the minerals are located, or through an affidavit of heirship if there was no will. This is sometimes called an ancillary probate when the deceased lived in a different state than where the minerals are located.

Affidavit of Heirship vs. Probate

In Texas, an affidavit of heirship is a commonly used, lower-cost way to establish mineral ownership when there was no will, provided the family situation is straightforward. More complex estates — multiple marriages, disputed heirs, or a will that must be enforced — generally require formal probate. A local oil and gas attorney can advise which path fits your situation.

Step 3: Update the Division Order

Once title is in your name, you submit the documentation to the operator, who issues a new division order reflecting your ownership percentage. Signing and returning the division order is what starts (or resumes) your royalty payments. Review it carefully to make sure your decimal interest is correct.

Understand Your Stepped-Up Basis

One of the most important — and financially valuable — aspects of inherited minerals is the stepped-up basis. For tax purposes, your cost basis in inherited mineral rights is generally their fair market value on the date of the previous owner's death, not what they originally paid. This means if you later sell, your taxable capital gain is generally calculated from that stepped-up value, which can significantly reduce or even eliminate the gain. Many heirs obtain a date-of-death valuation to document this basis; your CPA can explain how it applies to you.

Decide: Keep or Sell?

Once your ownership is established, you face the same decision every mineral owner faces: keep collecting royalties, or sell for a lump sum. For heirs, several factors often tilt toward selling:

• Many heirs live far from the Permian Basin and have no interest in managing fractional mineral interests, tracking division orders, or filing the associated taxes each year.
• When minerals are split among several siblings or cousins, a sale lets each heir receive a clean cash share rather than tiny ongoing checks divided many ways.
• The stepped-up basis often means a sale shortly after inheritance generates little or no taxable gain.
• A lump sum provides immediate cash, which some heirs prefer to a series of small ongoing royalty checks.

None of this means you should sell — some heirs prefer to hold minerals that produce strong, stable income or that sit on undeveloped acreage with upside. The right choice depends on your circumstances.

How ARB Helps Heirs

ARB regularly works with heirs and estates, and we understand the process can feel overwhelming. We can help you identify exactly what you own, point you toward resources for clearing title, and provide a date-of-death valuation for your records. If you decide to sell, we handle the paperwork, cover all costs, and close on your timeline — with no fees deducted from your proceeds.

Whether you are ready to sell or simply want to understand what you have inherited, reach out for a free, no-obligation valuation. We are glad to help you make sense of your inheritance, regardless of what you ultimately decide to do.