Transfer of mineral and royalty ownership, tax question

[Richard_Winblad]

Sorry for your brother’s condition.

@DavidR

We want to avoid probate in the event of his death.

This could be accomplished a couple of different ways. A simple land trust could be created, then the properties would be deeded into the trust. Upon your brother’s death the trust would transfer property to you. Oklahoma has no estate taxes. Another option may be to use Transfer on Death Deeds for the properties. Upon his death you as beneficiary would file affidavits to claim the properties.

@DavidR

In terms of incomes taxes, my brother’s portion of the royalties which I would receive and send to him would be reported as my income which will affect my tax bill. For tax purposes, how can I deduct my brother’s portion of the royalties from my income while he is still alive?

That would be a problem. Perhaps a better solution is to name you as his power of attorney so that you can help him manage his income while alive. That way he is still liable for his own taxes for that income.