Resolving the estate of a loved one can be challenging, but New Mexico’s probate and intestacy laws create some guidelines to help you navigate the process.
Jump ahead to these sections:
- New Mexico’s Intestacy Laws Explained
- How Does Probate Work in New Mexico When There Is No Will?
- Who Typically Inherits Assets in New Mexico If There Isn’t a Will?
- Frequently Asked Questions: Dying Without a Will in New Mexico
Intestacy refers to dying without a will. While everyone ideally has a will to ensure their property passes on exactly as they wish, New Mexico law creates a straightforward process that reflects how most people want their property to pass.
New Mexico offers multiple probate options to help you administer an estate, depending on the value and complexity of the assets and estate needs.
New Mexico’s Intestacy Laws Explained
The intestacy laws form a portion of the state’s overall probate code. The probate laws provide the rules and methods for transferring certain assets left behind after someone dies.
Many people think that probate addresses all of a decedent’s property, but it only governs a specific portion of property called the probate estate. The probate estate encompasses property not disposed of through other methods like designated beneficiaries, joint ownership, or a trust.
When someone drafts a will, the will instructs the heirs and executor on how to distribute the assets in their probate estate. If no will exists, the intestacy laws kick in to provide the needed instructions for dividing the probate estate.
How intestacy laws work
Intestacy laws rely on family members’ legal or biological relationships to the decedent to find the person or people who inherit. When you apply the intestacy laws to your family situation, you can think of it much like a flow chart. You can stop as soon as you find a qualifying relative or group of relatives.
Property that passes outside of probate
Remember, it’s unlikely that everything your loved one owned belongs in the probate estate to be passed along via intestacy laws.
Non-probate transfers happen when the decedent named a beneficiary or co-owner to an asset during their lifetime, and it’s set up to automatically transfer the property upon their death. While they may sound complicated, it’s the most common and accessible type of estate planning. So easy that many of us do it without realizing it’s estate planning.
When you open a new bank account, retirement account, or investment account, the financial institution usually asks you to name a payable-on-death beneficiary. Life insurance policies also ask for a beneficiary. If you’ve ever filled out one of those forms, you’ve engaged in estate planning!
Anytime you see something with a payable-on-death or transferable-on-death beneficiary designation, those beneficiaries should be able to collect the account with the decedent’s death certificate and their own ID. No probate orders are required to make the transfer happen– hence, a non-probate transfer.
Non-probate transfers also happen when real estate or cars are titled as joint tenants with the right of survivorship. That title designation means the two (or more) owners own the whole property indivisibly. We often compare property ownership to pie — joint tenancy owners each own the whole pie rather than just a slice. When one owner dies, the surviving owner remains the owner of the entire pie (or house, car, etc.).
How Does Probate Work in New Mexico When There Is No Will?
New Mexico probate law creates several options for transferring estate assets. These options depend on the size of the estate and the heir administering the estate.
What’s the point of probate?
Probate serves a few purposes. First, the process gives someone the authority to transfer the estate’s assets. That authority can come through the appointment of a personal representative or via some of the probate shortcuts written into New Mexico law.
The authority is essential because some entities won’t release any information to anyone without the correct paperwork. Additionally, you only want one person working on the estate, not multiple people operating with their own agendas without consulting each other.
Second, probate establishes the rules of play for the creditors, heirs, estate administrator, and anyone else involved. The process reduces the ability of anyone to initiate a free-for-all and provides recourse if someone still misbehaves and does things the wrong way.
Simple or small estate affidavit
The small estate affidavit yields the fastest, most straightforward resolution of the estate assets for most estates.
It’s the fastest and easiest way because the whole process happens outside of court, so you’re not waiting on the judicial system to process your paperwork. Instead, the heir collecting the assets fills out an out-of-court affidavit declaring their right to do so. Then, they present the affidavit and a copy of the death certificate to anyone holding the decedent’s property, like a bank.
There are two scenarios where an heir can use the small estate affidavit. First, estates valued at $50,000 or less can proceed by affidavit.
Second, the surviving spouse can also use a small estate affidavit to transfer the couple’s marital home into the surviving spouse’s name. The property tax value of the property must be no more than $500,000, and it must be held as community property to qualify.
Simplified probate serves as an alternative to the small estate affidavit for lower-valued estates, but it does involve the court. The administrator files a written request with the court to use the simplified probate process.
Through simplified probate, the court still appoints a personal representative. However, that personal representative can skip the notice to creditors and proceed directly to the distribution of assets.
Estates are eligible for simplified probate if the estate value — less liens and encumbrances — is not more than the personal property allowance, family allowance, administration costs, funeral expenses, and the medical expenses from the final illness.
Formal and informal probate
Finally, estates not settled through one of the previous methods can go through full probate. This process is broken down into informal and formal probate.
Formal probate comes with additional steps and requirements for the personal representative, resulting in a formal estate taking longer to administer than an informal estate. In both processes, the court appoints a personal representative to manage the estate and issues letters of administration. The letters serve as the personal representative’s proof of authority to act on behalf of the estate.
In both formal and informal probate, the personal representative provides notice to creditors. Creditors then have the opportunity to lodge a claim, which is how someone can say the estate owes them money.
Debts can come from a variety of sources. They may be the decedent’s unpaid credit cards, medical expenses from the final hospital stay, personal loans, and more.
In both processes, the personal representative pays any taxes due. They will also prepare an estate inventory and accounting that discloses the estate assets to the heirs and creditors.
Formal probate requires a petition to finalize the estate, which is called the petition for an order of complete settlement. After the personal representative provides notice to heirs and interested parties, the court can issue the order of complete settlement. In comparison, the personal representative for an informal probate case simply files a verified statement and certificate of full administration.
While formal probate is more complex, it gives the personal representative the peace of mind of the court’s approval of their actions on behalf of the estate. This diminishes the personal representative’s liability, making for more efficient estate administration in situations with high-conflict heirs.
Who Typically Inherits Assets in New Mexico If There Isn’t a Will?
As in other states, the decedent’s children and surviving spouse are most likely to inherit the probate estate under the laws of intestacy. However, New Mexico’s status as a community property state adds another layer to inheritance when a marriage is involved.
New Mexico makes intestate succession straightforward in most scenarios. The order of succession is as follows: the surviving spouse, descendants, parents, and siblings. The first person or group to be found inherits.
Inheritance becomes more complicated when a decedent leaves both a spouse and descendants. Descendants include children and any issue of the descendant, including grandchildren or great-grandchildren.
First, the intestate assets must be identified as either separate or community property. In community property states like New Mexico, assets acquired during the marriage are usually considered community property. Separate property is the assets that either party came into the marriage with, or it’s property one spouse inherited during the marriage and kept separate from the marital property.
The surviving spouse inherits all of the community property. The descendants inherit three-fourths of the separate property, with the spouse retaining the remaining quarter of the separate property.
Frequently Asked Questions: Dying Without a Will in New Mexico
For complicated family situations, the opinion of an experienced probate attorney can help you determine how the intestacy laws will play out in your family. However, other straightforward family dynamics are easier to predict.
What happens when your parent dies without a will?
If your parent passes without a will, your inheritance varies based on whether your parent was married upon their death.
If your parent was unmarried, you and your siblings could expect to inherit the entire intestate estate.
Alternatively, if your parent was married at the time of their death, their spouse will likely inherit the bulk of the estate. The surviving spouse inherits all of the community property and one-fourth of the separate property. The descendants only inherit three-fourths of the separate property.
What are a surviving spouse’s rights if there’s no will?
The surviving spouse would inherit the entire estate if the decedent died with no issue, including children, grandchildren, etc.
If the decedent has descendants at their death, the spouse still inherits all of the community property. However, the descendants inherit one-fourth of the separate property in the intestate estate.
Are there any probate exemptions if you die without a will in New Mexico?
New Mexico law establishes several probate shortcuts to help families manage their loved one’s estates without opening a full probate case.
The small estate affidavit serves as the fastest, easiest, and only out-of-court probate method. It transfers assets in estates up to $50,000 in value.
Also, remember that assets sometimes pass outside of probate through non-probate transfers. Look for payable-on-death beneficiaries on accounts and assets.
How long does probate take when there is no will?
New Mexico law places a six-month waiting period between the appointment of a personal representative and the closing of an estate. However, estates can take longer than six months to administer due to filing taxes, finding or identifying heirs, dissolving a business, or taking care of other estate-specific needs.
Who is considered next of kin in New Mexico?
The surviving spurs or children are often the next of kin. Next of kin varies based on who survives the decedent.
Estate Planning Can Further Simplify the Process
New Mexico probate laws make it manageable for families to wrap up their loved one’s estates. As easy as the process may be, engaging in estate planning is a gift you give your loved ones to save them more time and effort down the road.
- New Mexico Compilation Commission. “Chapter 45 - Uniform Probate Code.” Uniform Probate Code, NM Laws, 15 Feb. 2022, Nmonesource.com.