The overall benefit of retaining mineral rights is the potential future ability to reap large royalties from future production and/or large signing bonuses for leasing the minerals. The overall benefit of the severed interest may vary depending upon the exact language chosen in the reservation/granting instrument. Thus, landowners are encouraged to seek counsel in creating a severed mineral interest.
Statues on severed rights:Be aware of the Ohio Marketable Title Act and Dormant Mineral Act. Under these statues, a severed-mineral interest may be forever lost in the event of certain circumstances.
Personal liability on severed rights: In certain situations, ownership of the mineral rights may be called into question. As a result, an owner could face personal liability if he/she is brought into disputes regarding ownership of the mineral rights.
Maybe form an LLC? Holding the severed mineral interests in a limited liability company will insulate the members of the company from personal liability and also offers many opportunities for reducing income, estate and gift taxes.