Oil and Mineral Rights in Divorce

Although it may be common knowledge that a divorcing couple must divide marital property, many people do not consider the full scope of what that entails. For example, in addition to determining how any tangible property will be divided, the courts must determine how assets such as a couple’s oil or mineral rights will be allocated in a divorce. Oil and mineral rights are often valuable assets, and anyone seeking to end a marriage can seek legal counsel to determine how this type of property may be affected by a marital dissolution. The Dallas divorce lawyers of McClure Law Group can gather the evidence needed to assist you in seeking a fair division of assets, and will work tirelessly to help you protect your rights.

Under Texas law, when a couple divorces all community property is subject to equitable division. Community property is the term used for property that belongs to both spouses equally. Generally, community property includes any property that either party acquired during the marriage, including income, interest on bank accounts, and oil or mineral rights. There are some exceptions, however, such as property obtained through inheritance or a gift, property specifically precluded from becoming community property via a pre-nuptial or post-nuptial agreement, and property awarded as damages for bodily harm in a civil lawsuit. Any property that is not considered community property is deemed separate property. This includes any property owned by either spouse prior to the marriage. It is important to note that while community property is divided equitably in a divorce, that does not always mean the division will be equal.

In Texas, real estate is comprised of surface rights and mineral rights. Surface rights include the right to control the land and everything on it, such as existing structures and the airspace directly above the land. Mineral rights, conversely, include the right to control anything underneath the surface of the land, such as oil, minerals, water, and other resources. Generally, when a person purchases real estate, the person will gain ownership of both the surface rights and mineral rights, unless the deed states otherwise. Thus, when a couple decides to divorce, they must determine the value of both their surface and mineral rights prior to determining how the value of real estate should be divided.

Determining the division of mineral rights can be complicated in cases in which a spouse or couple leases mineral rights to a third party, but a seasoned divorce attorney can help. Generally, when a party leases mineral rights, they receive a bonus upon signing of the lease and royalty and working interest payments when oil or minerals are extracted from the property. If mineral rights are owned jointly by a couple, they will be considered community property and will be subject to equitable distribution. If mineral rights are the sole property of one spouse, however, they will likely remain the property of that spouse following the divorce. Additionally, while income earned by either spouse during a marriage is generally considered community property, the Texas courts have ruled that oil royalties are not considered income, but have the same character as the land that contained the oil. As such, they are treated the same as proceeds from the sale of the land, and if the mineral rights are separate property, the royalties are separate property as well.

The division of assets such as oil and mineral rights in a divorce can be complicated, and it is important for anyone seeking a marital dissolution to speak to an attorney regarding their options. At McClure Law Group, we have ample experience helping parties fight for a just division of assets, and we will zealously argue on your behalf. We assist people in divorce lawsuits in Dallas, Richardson, Garland, Irving, Fort Worth, Rockwall, McKinney, and Frisco. We also represent parties in family law cases throughout Dallas, Denton, Grayson, Rockwall, Collin, and Tarrant Counties. You can contact us via our online form or by calling 214.692.8200 to set up a meeting.