While it may seem like good fortune to be placed in the position of receiving gas or oil royalties, there may be times when the long term money may not be suitable for the recipient. Here are some of the top reasons why one may want to sell oil and gas royalties.
If there are multiple recipients of royalties toed to one estate, the amount that each person gets after the money is divided may be a small pittance when thinking in terms of distribution over the course of time. For this reason, many people may prefer to just take their share in one payment and not have to deal with the hassle of dividing the money up between siblings or other relatives.
Many times, beneficiaries of royalties underestimate the amount of paperwork and tax preparation that needs to be done. This paperwork is not a one-time occurrence, either, it must be dealt with on an annual basis for as long as the person is receiving royalties, no matter how large or small the amount may be. To relieve themselves of this kind of needless stress, many people choose to just sell their claims to any royalties outright.
Never let it be said that the oil and gas industry is without risk. In fact, with the fluctuation in market prices and political uncertainty, there could be times when the royalty payments could amount to next to nothing. To avoid this uncertainty and cash in when the price is still at a fair rate, it may be wise to sell your claim to any royalty payments and just get paid in one lump sum.
Many people enjoy the convenience and relative safety of selling their royalties in return for a guaranteed lump sum payment. This frees up their time to take the money and travel, buy a new home, pay off debt, or any number of things that they may have been wanting to do but could not when being paid in small annual or bi-annual royalty payments. For recipients of these smaller payments, they are much happier with their single payment.