My parents each own half of producing leases in Oklahoma. We are all residents of Texas. They would like to sell or transfer these to me. Can we use a quit claim deed for either of these? If I buy them, will it keep the mineral rights from going through probate in Oklahoma? Also, what is the tax implication? I have read that OK takes about 28% from out of state owners. Does that mean I would have to file Oklahoma State Tax Return, or would the income be covered under Federal. Any help would be appreciated.
Probate can be avoided in three ways *Deed now ( may trigger gift tax filing requirements for your parents, also you lose a “stepped up valuation” which could mean increased capital gains taxes if you sell later.
*Trust, if your parents have a trust the property can be deeded into it. The Trust can make you the beneficiary of that property. You achieve stepped-up valuation which can reduce capital gains if you sell later. If they don’t have a Trust, a simple Oklahoma Mineral Trust can be created…
*Transfer on Death Deed. Your parents retain ownership and all rights. Upon death you would file a simple affidavit and death certificates and the property becomes yours. Again, a stepped up value.