Some married individuals do not get around to creating an estate plan for the passing of their legacy because they presume that New Mexico community property law will automatically result in their community and separate property passing to their spouse. Because this assumption is not always true, parties need a will or trust even if their intention is to leave all of their assets to a spouse if they pass away. The key in determining which assets and how much of the value of your estate will pass to your spouse will depend to a significant degree on the way assets are characterized under New Mexico law.
Under New Mexico law, all property of a married couple is either considered separate property or community property. Any assets acquired prior to the marriage are considered separate property provided there is no commingling of community and separate property funds. If you have an investment account that was created prior to marriage but proceed to invest a portion of your income during marriage into the account, for example, the asset will no longer be entirely a separate property asset. When property is acquired during marriage, the property generally will be presumed to be separate property unless it is a gift or inheritance.
When someone dies in New Mexico without a will, living trust or testamentary trust that specifies the manner in which an estate is to be distributed, the assets of the decedent are distributed based on the New Mexico intestate succession law. The distinction between separate and community property becomes critical under the law of intestate succession. Because it can sometimes be difficult to characterize an asset as separate or community property or to determine the separate property and community property interests in an asset that has a “mixed characterization” like the investment account, it is important to work with a knowledgeable estate planning attorney who can help you devise a plan so that the financial legacy that you leave your spouse is not compromised.
If you die intestate (i.e. without a will or trust document), the amount of your estate inherited by your spouse will depend on what other living relatives you have when you die. A spouse generally inherits all community property when a marital partner dies, but separate property is more complicated. If you have no living children, parents or siblings, your spouse will inherit all of your community and separate property. If this is not the case, your spouse will only inherit a quarter of your separate property through intestate succession which may be inadequate to provide for your spouse’s needs.
How Estate Planning Can Provide Valuable Asset Protection?
The above information is designed solely to illustrate general principles of law, and does not constitute a specific legal opinion on individual cases. We suggest that you contact experienced legal counsel for a specific opinion tailored to your individual circumstances.
If you have estate planning questions or concerns, the experienced New Mexico Estate Planning Lawyers at Jay Goodman & Associates, PC offers free consultations in our centrally located offices in Santa Fe and Albuquerque so that we can discuss your options. Call us today to schedule your free consultation at (505) 989-8117 to learn about your rights and options.
Comments are closed