How Probate Works In New Mexico

How Probate Works In New Mexico


Probate New MexicoWhen a person dies, their estate is officially settled with court supervision through the process of probate. If the individual died without a will, someone, normally an adult child or surviving spouse, is appointed as the personal representative. When there is a will, it usually names the personal representative. Another name for the personal representative is the executor. The court grants the executor the legal authority to access the estate’s value, pay taxes and other bills and, distribute the estate’s assets to its beneficiaries or heirs. This is how probate works in New Mexico.

The legal system established probate to protect the assets after death. In medieval times probate prevented family members from stealing a castle after its Lord died. The process freezes the assets until the court determines if a will is legitimate and that all concerned parties are notified. Probate also provides time for identifying all the estate’s properties and their appraisal. It gives a chance to pay any bills due and catch up on any taxes due. After these matters are settled, the judge issues an order to distribute the property and close the estate.

In some cases, an estate may not go through probate. Estates that fall below the legal threshold, or small estates, do not require the supervision of the courts to settle. Click this link to learn more about the small estate threshold and settlement procedures in New Mexico.

When an individual dies, some of his assets are not subject to probate. Instead, they automatically transfer at the time of death without requiring probate. Common assets to pass without probate include

  • Joint Tenancy – With these assets the surviving joint tenant owns the entire asset on the death of the other tenant, without needing a court order. These assets pass through the “Right of Survivorship”. Homes are often owned in joint tenancy of a husband and wife. If one spouse dies, the property passes to the second.
  • Community Property – These properties are sometimes described tenancy by the entirety. They carry the right of survivorship. These properties are only available to couples who are married.
  • Beneficiaries – Life insurance policies and retirement accounts often include a named beneficiary. When the account holder dies, the beneficiary receives the assets or proceeds from the account.
  • Payable on Death – These bank or brokerage accounts have a designated beneficiary and transfer like other beneficiaries. Account owners complete forms that designate the owner upon their death.

Living trusts also prevent estates from requiring probate, unless there are assets outside the trust that exceed the small estate limit. Most beneficiaries include their largest assets in the trust, but leave smaller ones outside it. Living trusts were first created to help avoid probate after the death of the grantor of the trust.

If New Mexico estates exceed the threshold for a small estate and there is no will or a will without a living trust, the estate requires probate in order to transfer properties to the heirs and beneficiaries of the estate.

New Mexico has a cannon of laws called the Uniform Probate code, or UPC. This code covers how estates are settled in New Mexico in most cases. These laws cover the general procedures for settling an estate, paying bills and distributing the properties. These laws are accepted in 14 states other than New Mexico.

The UPC provides for three types of probate informal probate unsupervised probate and supervised formal probate. Each involves some specific processes.

Informal

This is the most common type of probate in New Mexico. It is a good option when the heirs get along well, the estate does not have creditor issues and trouble is not expected.

You begin the process by completing an application to serve as the estate’s personal representative and filing it with the court. Most people think of the personal representative as the executor of the will. After you have your approval, you are able to act for the estate. The court’s Letters of Testimony show your authority.

Your responsibility includes:

  • Mailing formal notices
  • Publishing a newspaper notice to let creditors know the estate is being settled
  • Show satisfactory proof the notices are mailed and published
  • Inventory the belongings of the estate and prepare an appraisal of all assets
  • Keep all estate property safe
  • Close the estate and distribute property to the rightful new owners

After the property distribution, informal proceedings are closed with the final accounting filed with the court along with the closing statement indicating all the bills are paid, property distributed and accounting filed.

Unsupervised Formal

Formal probates, even when unsupervised are court proceedings. Judges must approve some of the personal representative’s actions, including selling estate property, the distribution of assets or paying any attorney fees. The judge serves to settle any beneficiary disputes, interpret the will and set the amounts due to creditors. If there are disputes, the informal process does not work so the court must act, and the unsupervised formal probate offers one way for help without going through a full supervised formal probate.

Supervised Formal

Some estates require formal supervision of the court for the process from start to finish. This is the most involved type of probate available in New Mexico. Distribution of the properties requires court approvals with this type of probate. It is also the most expensive way to settle an estate after the death of a loved one.

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