Probate for Small NM Estates

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Courthouse for estate probate

In New Mexico, small estates can bypass probate via small estate affidavit and homestead transfer, or simplify it via summary administration.

Small Estate Affidavit

If a New Mexico estate has a gross value <$50,000, you can use the small estate process to settle the estate (other than any real estate) with no court involvement.

Requirements

To use the small estate process, the following conditions must be true:

  • The entire probate estate has a gross value <$50K
  • At least 30 days have passed since the death
  • No petition has already been made to the court to officially appoint a personal representative

In determining the gross value of the estate, you should value assets as of the date of death, and ignore any unsecured debts (but do subtract things like liens and mortgages). Do not include any assets that would not normally go through probate, such as community property with rights of survivorship, assets with named beneficiaries (e.g., 401Ks, life insurance policies), and other standard probate exclusions.

Process

To use the small estate process:

  1. Prepare a Small Estate Affidavit
  2. It can be helpful to attach a copy of the death certificate and the will (if one exists)
  3. Obtain possession of estate assets by presenting the affidavit to current custodians (cannot be used to collect real estate)
  4. Settle the estate in the normal way (pay debts, distribute remaining assets)
  5. If you are transferring a vehicle, submit Form MVD-10013 to the DMV
  6. If everything goes smoothly, no court involvement will ever be required

Estate Settlement Considerations

Before paying any debts or making any distributions, be sure to account for any NM Family Entitlements, which typically have priority over everything except expenses of the last illness, funeral charges, and any estate administrations expenses.

Estate debts have priority over most distributions in turn, so you should arrange to have all debts resolved before distributing assets. Unpaid estate creditors have the right to sue heirs for the value of any distributions received using the approaches described on this page.

If estate solvency is uncertain, an executor should consider going through official probate for the increased creditor protection it offers. Alternately, such uncertainty can sometimes persuade creditors to forgive a portion of debts, since they will want to avoid legal expenses as well, and may prefer to get something rather than nothing.

See also Making Distributions.

See NM Stat § 45-3-1201.

Homestead Transfer

Since a small estate affidavit can only handle personal property, NM provides a mechanism to separately transferring ownership of the family homestead with an assessed value of <$500K to a surviving spouse.

Requirements

To use the homestead transfer process, the following conditions must be true:

  • The spouses owned the homestead together as community property
  • If there is a will, it leaves the homestead to the surviving spouse
  • At least 6 months have passed since the death
  • All debts have been paid
  • The property is assessed at <$500,000 for taxation purposes
  • No petition has already been made to the court to officially appoint a personal representative

Process

To transfer the homestead to the surviving spouses, submit to the county clerk an Affidavit of Surviving Spouse.
(This form is from Sandoval County: either insert the property's actual county, or check with the local clerk to see if they have a preferred form)

See NM Stat § 45-3-1205.

Summary Administration

Summary Administration (also known as simplified probate) can be used if you want court involvement so that enforcement and protection are a bit more formalized.

Requirements

You can use summary administration if the estate is worth less than the sum of:

  1. Any family and personal property allowances
  2. Estate administration expenses
  3. Reasonable and necessary medical and hospital expenses of the last illness
  4. Reasonable funeral expenses

In determining the value of the estate, you should value assets as of the date of death, and subtract any secured debts such as liens or mortgages (but ignore unsecured debt such as credit card debt). Do not include any assets that would not normally go through probate, such as community property with rights of survivorship, assets with named beneficiaries (e.g., 401Ks, life insurance policies), and other standard probate exclusions.

Process

To settle an estate via summary administration:

  1. Submit to the court an Application for Probate of Will and Informal Appointment (Form 4B-302) or, if there is no will, an Application for Informal Appointment (Form 4B-301)
  2. Upon approval, the court will issue you Letters of Administration
  3. At the same time, or later when you are ready, request a summary administration from the court, submitting an Estate Inventory (Form 4B-601) to the court (consider attaching the EstateExec Inventory Report), showing that the requirements have been met
  4. Use your "Letters" to collect estate assets, distribute them according to the requirements list
  5. Prepare a Final Accounting (Form 4B-602) (consider using the EstateExec Accounting Report)
  6. Send a copy of a Closing Statement (Form 4B-702) to all unpaid creditors and to all distributees, including the Final Accounting for any distributee whose interest was affected
  7. Submit the Closing Statement to the court

See NM Stat § 45-3-1203.

Court

In New Mexico, the local District Court handles the more complex estate cases, while the local the County Probate Judge handles uncontested wills and informal estate probate. If you are using EstateExec and you enter the decedent's county of legal residence on the Decedent tab, you will see a direct link to the Probate Judge here.

See also General Probate.

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