Tice did acknowledge, however, that the risk inherent in this approach for a client is spending considerable time and money on estate planning only to find that your oil and gas interests never appreciate in value.
DeNardo said another potential pitfall for landowners looking to gift their oil and gas interests is misinformation.
DeNardo said he's seen several cases in which lawyers encouraged clients to transfer their oil and gas rights to family limited partnerships or limited liability companies but neglected to inform them that those entities are subject to a 2 percent realty transfer tax.
That means that a landowner with oil and gas rights valued at $500,000 could unwittingly find him or herself saddled with a $10,000 real estate transfer tax bill, DeNardo said.
To avoid this issue, DeNardo said he's been encouraging more and more clients to set up dynasty trusts, which, if properly drafted, are not subject to the real estate transfer tax.
Everyone the Delaware Law Weekly spoke to said complex tax law plays a major role in determining whether it's advisable for a client to initiate the process of transferring his or her oil and gas interests.
Steve Saunders, an oil and gas and mineral rights attorney in Scranton, Pa., said it's for this reason that when he is contacted by landowners with oil and gas rights who are interested in estate planning, he refers those matters out to trusts and estates lawyers.
"It's not the kind of thing I recommend anyone dabble in," he said.
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Evan Guthrie Law Firm
The United States has so much natural wealth and it is important to do estate planning to protect that wealth for future generations.
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