What is probate?
Probate involves all the legal steps you need to take after a person dies to transfer their property to someone else. Some of the steps involved include:
- providing a will to the court or stating there was no will
- deciding what property and debts the deceased had
- determining the value of the property.
- pay the deceased's debts
- distribution to the heirs of any remaining property.
How does the probate process work?
New Mexico has a probate judge in every county, which greatly simplifies the procedure for uncomplicated probates. If there is a will, after a person dies, if they left a will, it is a relatively simple and inexpensive process ($30) to file in Probate Court. The judge will appoint the person named in the will as personal representative of the estate. If there is no will (an "intestate" probate), the person seeking to be named personal representative has to have anyone of equal or greater priority sign off on the Application. For example, if a parent dies, all the children have to sign off that one of the children can act as personal representative. Distribution of the assets goes according to statutory rules, the children and spouse being the primary beneficiaries, and other relatives farther down the list.
The Personal Representative must identify all of the assets of the estate, including real estate, vehicles, financial accounts, jewelry and other personal property. The representative must distribute these assets according to the terms of the will, after first paying the just debts of the estate. They have the power to deed over real estate or to change the names on financial accounts. They do not "own" all the assets. The representative has a legal obligation to make a fair distribution to the heirs.
Legal Fees: The fees to hire a lawyers vary greatly. A simple probate could cost as little as $1000, while in a more complex case, the attorney might take a percentage of the assets recovered.
The Benefits of a Will
If you don't create a will or trust, state law will determine what happens to your property when you die. Usually, it will go to your spouse and children otherwise to your other closest relatives. If there are no relatives, the property will pass to the state.
Also, if there is no will, the court will determine who will take custody of any minor children if the other parent is not in the picture.
Making a Will Legal
Wills are relatively inexpensive. There are only a few main requirements:
- There needs to be two witnesses, usually disinterested parties who don't inherit under the will.
- The will must be signed and dated.
The will doesn't have to be notarized. However, it is usually advised to avoid later challenges to the validity of the will.
Keep your will in a safe place like a desk drawer. Don't keep it in a safe deposit box. You probably want to make duplicate originals, giving your representative one of the original copies.
Naming a Guardian to Care For Minor Children
If both parents die, they can appoint a guardian to raise their minor child or children.
The same guardian can manage property that left to your minor children or you can choose someone else.
A living trust is an entity that holds all or some of your assets. A trustee is appointed who is in charge of the assets. If you were to die, the trustee, or a successor trustee, would be in charge of the assets.
The reason it is called a "living trust" is because you create the document while you are alive and can change it at any time. Typically, you appoint yourself as trustee, and a trusted friend or relative to take over when you die.
The main advantage of a living trust is that anything in the trust at the time of your death does not have to go through probate. You completely avoid the probate process for the assets in the trust.
This can mean a substantial savings in court costs, attorney fees, and emotional hassles.
Living Trusts are slightly more expensive than wills. A good attorney can assist you in "funding" the trust, that is, in transferring assets to the trust and out of your individual name.
Trusts can also be used for other purposes, such as creating a special needs trust to support a disabled child or to reduce estate taxes in some instances.