The decision to sell off your mineral rights is one that can and typically should involve plenty of consideration. In making this decision, however, it can be beneficial to know some of the top reasons that compel others to decide to sell right now. So, if you find yourself in the ‘selling” frame of mind, consider the following. These are the top six reasons for selling off mineral rights today.
1. Risk Remediation
Unfortunately, there can be a certain amount of risk involved in the premise of mineral rights retention that is enough to drive away many long-haul investors understandably. In personal and business worlds alike, risk management is paramount to staying out of the red and in the green. If the totality of the risk associated with your mineral rights doesn’t make you feel comfortable versus the potential outcome projections at hand, this may be a great time to act while there’s still time.
2. The Need for Cash
The ever-present and all-important need for cash is another, historically common factor in the decision to sell mineral rights. It is an example of what is referred to as “liquifying assets” in the financial sector. By selling off what was a non-cash asset, the owner now converts to having a more liquid, easily moved asset – in this case, cash instead of mineral rights.
3. The Desire to De-Complicate Personal Affairs
Many people find themselves, at some, feeling a genuine need to de-complicate all of the ins and outs of a life’s worth of business dealings. A very freeing part of such de-complication efforts often involves selling side assets and accounts such as mineral rights. It is mainly due to the many areas of paperwork, accounting, taxes, and so on that commonly accompany mineral rights ownership.
4. Investment Diversification
Diversification is yet another very significant reason that leads to many mineral rights transactions today. To diversify one’s investments means not to hold onto too much of any, one type of investment in case that particular investment doesn’t go so well. Those in ownership of numerous mineral rights arrangements, thus, can find themselves wanting to offload some of that investment type in favor of gaining another to diversify their investments and associated risk.
5. Consolidation for Estate Planning
Estate planning is known for the possibility of becoming quite complicated, and many mineral rights owners decide to sell to avoid the additional stress of asset distribution involving mineral rights and the like. Rather than going through the work of knowing how to correctly will such assets, some owners choose to sell. It is also in conjunction with taxation and other laws.
6. General Goal, Status Changes
Finally, many mineral rights owners sell due to fundamental life goal changes and status changes. The single-owner may eventually marry and consequently totally change their plans and goals, thus no longer needing their mineral rights. Likewise, health changes, divorce, and various other family changes can all have an impact on continued ownership of such an asset as mineral rights.