My mom is going into a nursing home. Can she gift her royalties to her children or does she need to sell them? If she needs to sell them how do we find the value of each she has around 5.
Hi, Melanie!
An Attorney may be able to explain this much more clearly, but unless the royalties are a hindrance of some sort (affecting her medicare coverage eligibility or something), you Mother doesn't need to do anything. Even if it is just a small amount of money, she will be needing it.
Yes, she can gift them to you and your siblings. Or anyone else she wants to have them.
But if it isn't necessary or if she doesn't need a lump sum of money for some reason, then I don't think she should do anything. Just keep enjoying receiving them every month.
As far as placing a value on them, the general rule that I was taught is to take the average of the last three of each of the royalty checks and multiply those figures by between 36 months and 60 months. 36 months for properties that only have a projected future productive life of between 5 and 10 years, 60 months for properties that have a projected future productive life of more than 10 years.
There are several additional factors that you might also want to take into account, such as future potential: Is a present day royalty from only a small portion of a much larger tract of land, where additional wells can be eventually drilled and that sort of thing.
If you would like, I will be happy to take a look at her various royalties and send you some information on where they are and what wells they are from.
Hope this helps -
Charles Emery Tooke III
Certified Professional Landman
Fort Worth, Texas
Thank you it answers alot
Hi again,
Charles has good comments. You may also want to consider setting up a life trust for Mom depending on her special circumstances. Try to keep the future mineral rights consolidated while your Mother receives all of the income benefits from the minerals during her lifetime. Upon her death, the owners named in the trust become the owners automatically. This may have significant tax and probate cost benefits to the heirs. Depends on personal circumstances. Check with her accountant.
Gary L Hutchinson
Minerals Managment
Dear Melanie,
Count your blessings that these nice people took the time to respond with a wealth of free information that you can take to the bank.
Good luck,
Pat
Thank you I am very thankful
Thank you
Charles, do you know if Medicaid will take the mineral rights? She wants to keep them in the family. We have been trying to find this out 
I suggest you try harder! Access https://www.medicaid.gov/medicaid or phone 1-800-318-2596 and ask them to answer these type questions. Medicaid does have a qualification limit on one's monthly income. Or, you can make an appointment with an Elder Care/Estate attorney who should, also, be qualified to answer your questions and/or implement a family Trust.
Good luck,
Pat
Mel -
I don't think Medicaid can take any properties from anyone, but then again I've never been asked the question. I hope not!
I'd suggest you take Pat's advice and contact Medicaid or an Elder Care / Estate Attorney. Your State's Bar Association's website should have a Directory where you can describe what kind of Attorney you are looking for in your area, or maybe the Retirement Community's Staff might be able to suggest one.
My only two direct experiences with these situations have been one quite recent one, where a woman living on Disability was to receive a lump sum of about $8,800 in royalties and needed to find out what her income limits were. [I found her and her family $150,000 in royalties being held in suspense and helped them with the paperwork. They are now very happy people.]
An Attorney suggested that if the lump sum of royalties exceeded her limit, she could set up what is called a Special Needs Trust and convey / assign the interests to it with one of her sisters as Trustee. Turns out that she didn't have to, but you can Google "Special Needs Trusts" for your State for more information on the idea if you would like.
The only other instance was about 35 years ago, when I was just a Baby Landman, and I have carried a terrible guilt about how that turned out ever since.
I leased a tract of land from a man and paid him $40,000 for it. It was the largest lease I had taken for a client up until then.
He and his Son had told me that he had been ill, but didn't go into any detail. What I remember was how he was so proud to be able to show the family that he was still active and able to bring in a living.
I ran into his son at a grocery store about a year later and he told me the saddest story. Turns out that at the time his father had been riddled with cancer and was completely dependent upon Medicaid for his medical care. The $40K by far exceeded his allowed income limits, rendering him ineligible for continued coverage.
His medical bills were over $20K a month, so the money was gone in a matter of weeks. But when his Father went back into Medicaid to re-apply, they told him he was not eligible because his cancer then a "pre-existing condition".
The Son told me that without any medical care, his Father had died in a matter of weeks.
Ever since then, when I have dealt with people of a "certain age" I make them aware of these kinds of things and suggest they look into these issues before making any decisions.
Hope this helps -
Charles
Thank you so much for this info I will look into it.
Melanie, you have received lots of good information here.
When my folks were in a similar situation we found that the local Social Services folks were very knowledgeable and willing to fully explain things to us.
I suppose your situation could be different-- but if you haven't already, start with them.
Good luck!
I should add that we also worked with an estate planning attorney.
Patricia Sitchler
http://www.patriciasitchler.com/
Patricia is a great resource I heard at an estate planning council meeting for explaining Supplemental Security Income ("SSI") and Medicaid benefits, the related eligibility criteria, along with how the use of Supplemental Needs Trust could protect SSI and/or Medicaid