What property does not pass under a will in New Mexico?
When it comes to estate planning in New Mexico, it's crucial to understand which assets may not pass under a will. Certain types of property are exempt from probate and will be distributed according to specific rules, regardless of what is stated in a will. In this article, we will delve into the various forms of property that do not pass under a will in New Mexico, including joint property, life insurance policies, and trusts.
Joint Property
One type of property that does not pass under a will in New Mexico is joint property. When property is held jointly with rights of survivorship, it means that when one owner passes away, the surviving owner automatically inherits the deceased owner's share of the property. This transfer of ownership occurs independently of the deceased owner's will, as joint property supersedes the probate process.
Life Insurance Policies
Life insurance policies are another form of property that bypasses a will in New Mexico. The proceeds from a life insurance policy are paid directly to the named beneficiaries upon the policyholder's death. These funds are not considered part of the deceased individual's estate and are not subject to probate. It's essential to keep life insurance policies up to date with accurate beneficiary designations to ensure a smooth transfer of assets.
Trusts
Assets held in a trust are also exempt from passing under a will in New Mexico. A trust is a legal entity that holds assets on behalf of a beneficiary. When assets are placed in a trust, they are no longer considered part of the individual's probate estate. The trust document dictates how the assets are to be distributed, bypassing the need for probate court involvement.
Legal Code Reference
In New Mexico, the laws governing probate and estate planning can be found in the New Mexico Statutes Annotated, specifically in Title 45 - Uniform Probate Code. It is essential to consult the relevant legal code sections to ensure compliance with state laws when creating an estate plan and determining which assets pass under a will.
Final Considerations on Property Distribution
Understanding which types of property do not pass under a will in New Mexico is crucial for effective estate planning. By being aware of how joint property, life insurance policies, and trusts operate outside of the probate process, individuals can ensure that their assets are distributed according to their wishes. Consulting with a qualified estate planning attorney can provide further guidance on navigating the complexities of property distribution and probate avoidance.
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