Probate is the legal process through which a deceased person's estate is distributed to heirs and designated beneficiaries, and any debt owed to creditors is paid off. It typically involves an overview of the deceased's assets, payment of any outstanding obligations, and the distribution of the remaining estate under the supervision of a probate court.
In New Mexico, probate laws are essential to understand. Here’s what you need to know.
In this article:
- The probate process: step-by-step in New Mexico
- Which assets are subject to probate in New Mexico?
- What’s the minimum estate value for probate in New Mexico?
- How long does probate take in New Mexico?
- How much does probate cost in New Mexico?
- Who’s responsible for probate in New Mexico?
- How are debts managed in New Mexico's probate process?
- Comparing probate in New Mexico with other states
The probate process in New Mexico: step-by-step
In New Mexico, the probate process generally follows these steps:
Filing a petition: A petition must be filed with the local probate court to either admit the will to probate and appoint the executor. Or, if there's no will, to appoint an administrator of the estate.
Notification: Next, notice is given to all heirs under the will or to statutory heirs (if no will exists), often involving a publication in a local newspaper to alert potential creditors of the deceased.
Inventory of the estate: The executor/administrator then assembles, catalogs, and appraises the deceased person's assets. This is submitted to the court.
Payment of estate debts: Any outstanding obligations or debts of the deceased person are paid off from the estate's funds.
Distribution of the remaining assets: After all debts, taxes, and administrative costs have been paid, the remaining assets are distributed to the heirs or designated beneficiaries.
Which assets are subject to probate in New Mexico?
In New Mexico, the following assets are subject to probate:
Solely-owned property: Any asset that was solely owned by the deceased person with no designated beneficiary is subject to probate. This could include bank accounts, cars, houses, personal belongings, and business interests.
Tenant in common property: If the deceased person owned property as a tenant in common with others, their share of the property is subject to probate.
Interest in a partnership or corporation: The deceased person's interest in a partnership or corporation will generally be subject to probate, depending on the partnership or shareholder agreements.
Investments: Investments, including stocks, bonds, and mutual funds owned solely by the deceased person, will also go through probate.
Other assets that do not have to go through probate in New Mexico, such as:
Jointly-owned property: Property owned in joint tenancy or as tenants by the entirety will pass to the surviving owner(s) without going through probate.
Life insurance policies and retirement accounts: These assets are not subject to probate if a beneficiary is named. The proceeds from life insurance policies and retirement accounts like IRAs, 401(k)s, and annuities will pass directly to the named beneficiaries.
Trust assets: Assets that have been placed in a trust, such as a revocable living trust, are not subject to probate. The trustee can distribute these assets to the named beneficiaries without court supervision.
Pay-on-Death and Transfer-on-Death accounts: New Mexico allows for "pay-on-death" (POD) designations for bank accounts and "transfer-on-death" (TOD) designations for securities. These assets will pass directly to the named beneficiary without probate.
What's the minimum estate value for probate in New Mexico?
In New Mexico, there is no set minimum estate value for probate. However, there are some simplified probate alternatives for smaller estates:
For personal property valued at $50,000 or less, a simple affidavit can be used to transfer the property to the beneficiaries without going through probate, provided that no other probate proceedings have commenced.
If the deceased person owned real estate valued under certain limits, a summary administration process can be used, which is a more streamlined probate process.
How long does probate take in New Mexico?
Probate can be a lengthy process. In New Mexico, it generally takes a minimum of six to twelve months, but it can extend beyond that, often lasting a year or more. Complex estates or disputes among beneficiaries can further lengthen the process.
How much does probate cost in New Mexico?
The cost of probate in New Mexico can vary depending on the size and complexity of the estate. Some of the costs involved include court filing fees, appraisal costs, and other miscellaneous fees. In addition, the executor and attorney fees can add to the cost. If the estate is complicated or if disputes arise, additional legal fees may be incurred.
Who’s responsible for probate in New Mexico?
The executor named in the will, or the administrator appointed by the court if there's no will, is responsible for managing the probate process. This person, often with the help of an attorney, is tasked with inventorying the deceased's assets, paying off debts, filing taxes, and eventually distributing the remaining assets to the beneficiaries.
How are debts managed in New Mexico's probate process?
The executor or administrator of the estate is responsible for notifying creditors of the deceased person's death. Creditors have a certain time frame, typically four months from the date of appointment of the executor or administrator, to file their claims for payment.
If the estate has enough assets, the debts are paid. If not, creditors are generally paid on a pro-rata basis.
Comparing probate in New Mexico with other states
Probate laws vary by state, and New Mexico's are considered less complex and potentially less expensive compared to some states like California. However, the process can still be time-consuming and costly, especially for larger estates or those with disputes among beneficiaries.
Some states, like Colorado and Arizona, have simplified probate processes for small or uncomplicated estates, while others, like Florida and New York, have more complex procedures.