Advise - trust, LLC, or partnership

Many people have set up LLCs to manage minerals. Unless there is a vast amount of minerals owned I don’t see the advantage. If minerals are owned by a trust, there is no separate tax id number while the grantor or grantors (person or persons who establish the trust) are alive. The LLC will require additional tax returns and compliance with the Corporate Transparency Act. see link below:

If you already have a trust, it is relatively simple to transfer your minerals into it and thereby gain probate avoidance. If you establish an LLC, either the membership agreement has to be carefully drawn up. Even then you would probably want a trust and convey the LLC into it.

Also, having an LLC may cause some problems down the road if there is a disagreement. Who breaks a deadlock in a 50/50 ownership? If the minerals are owned individually, or in a trust each can make their own decisions in the event of a disagreement. You could also work as a team when negotiating leases.

Here are some links to previous posts you might find useful.

Keeping Mineral Interests Out of Oklahoma Probate Courts - Blogs - Mineral Rights Forum

New Corporate Transparency Act May Impact LLC Attractiveness - Law & Legal - Mineral Rights Forum

This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.