When families are mourning the loss of a loved one, the last thing they want to do is focus on the legalities related to settling their estate. However, the estate administration process must begin soon after the decedent’s death to ensure that assets can be distributed as soon as possible to the decedent’s beneficiaries and heirs. The person the decedent named in their will to serve as personal representative is responsible for the duties and responsibilities related to the process which is overseen by the Probate Court. In New Mexico there is a Probate Court in each county. New Mexico’s probate code governs the process. N.M. Stat. Ann. § 45-1-101 et seq. During probate administration, the decedent’s debts must be paid and their assets that are deemed probate property are transferred according to the directions in their will or according to New Mexico law.
Probate and Estate Administration in New Mexico
Every estate must go through an administration process during which the decedent’s assets are managed, debts are taken care of, and assets distributed. There are several steps in the process, including:
- Alerting creditors, beneficiaries, and family
- Inventorying probate property
- Getting assets appraised
- Paying any debts owed by the estate and resolving claims against the estate
- Filing tax forms and paying taxes owed
- Paying expenses of administration
- Distributing assets that remain in the estate
In New Mexico the administration process generally takes about 6 months to a year. However, if there are complications during the process such as probate disputes, the process can take significantly longer. On the other hand, if the estate is small and uncomplicated, it may be able to take advantage of expedited procedures.
When disagreements develop during the probate administration process, the parties may end up having to settle the disputes in court. When this happens, it is called probate litigation. The parties to probate litigation can be beneficiaries, heirs, fiduciaries, or creditors. Some of the common reasons that for probate litigation include:
- Conflicting interpretations of wording in the will or trust
- Disputes over guardianship appointments
- Challenges over the validity of the will, resulting in a will contest
- Modification of trusts
- Lawsuits by creditors
- Questions over the fiduciary’s actions
- Disputes over ownership of estate assets
- Objections to the final accounting
Expedited Asset Distribution
Administration of estates is often long and complicated. While it is important for estates to be settled in an orderly manner, there are some circumstances where the long, formal process is not required.
Summary Administrative Procedure
With the summary administrative the procedure, the personal representative can distribute estate assets without giving notice to creditors. They are only required to file a closing statement with the probate court and send each creditor a copy.
To be eligible for this procedure, the value of the estate must not be greater than the personal property allowance, family allowance, costs of administration, funeral expenses, and medical expenses related to the decedent’s last illness. N.M. Stat. Ann. § 45-3-1203
Collection of Personal Property by Affidavit
This process allows those who entitled to property from the estate to collect it from those who are holding the property without going through administration. N.M. Stat. Ann. § 45-3-1201. Instead, the person who is entitled to the property must simply complete the Affidavit and present it to the person holding the property. Once the property is turned over, the person’s obligation to the estate is released. N.M. Stat. Ann. § 45-3-1202. To qualify for this procedure the estate must have a value of $50,000 or less.
In addition, a surviving spouse may also be eligible to take advantage of the affidavit option to effect a transfer of the decedent’s interest in the homestead. To be eligible, the couple must have owned their homestead as community property and the property must be worth $500,000 or less. N.M. Stat. Ann. § 45-3-1205.
When someone dies without a will or where their will is declared invalid in a will contest, New Mexico’s law of intestate succession applies. N.M. Stat. Ann. § 45-2-101 et seq. Instead of the will directing how assets are to be distributed, the assets would go to the decedent’s next of kin as defined by New Mexico law. Estate property will go to the spouse or children. If there is neither, the statute explains which blood relatives would be entitled to inherit. If there are questions related to relatedness, a kinship hearing may be required to prove consanguinity and right to inherit.
Note that under intestate succession rules, estate property will only go to the surviving spouse or blood relatives. It will not go to in-laws, friends, or institutions. If there is no next of kin, the property would eventually escheat to the State of New Mexico.