What happens to your property depends on what arrangements you have made, in writing, prior to your death.
Those who want the most certainty about how their property gets transferred following their death should have an attorney prepare a trust. There are several different types of trusts. A trust may be established to take legal possession of your assets while you’re alive after you lose capacity, or after your death. A trust would be directed by the person you name as trustee. You may serve as the trustee, or you can designate a spouse or other person to serve as trustee.
A trust allows you to name intended beneficiaries, ensuring that property transfers can avoid probate, creditor claims (for irrevocable trusts), and most forms of legal contests. Consult an attorney with regard to different consequences as to who will be the trustee.
If you have a last will and testament properly prepared by an attorney, otherwise known as a “will,” then most of your property gets distributed to your beneficiaries according to your instructions. If you do not have a will, your property may get distributed through intestate procedures.
In New Mexico, for any deceased person whose total assets (their estate) exceed a value of $50,000, their will or estate (even without a will) may need to go through probate. Probate is a procedure through the Court where the details of the will are verified, and individuals like creditors and contesting parties can raise objections to the execution of the will as written.
If the Will is uncontested, a petition may be filed to open probate through a county probate court. However, if the Will is contested, if there is uncertainty as to the validity of the will, or other legal issues arise, the petition must be filed in district court to probate the will.
The Court appoints a personal representative to oversee how property gets distributed to your beneficiaries. Probate generally tries to name a representative in accordance with the language of your will, unless the validity of the will is contested or there is another valid legal reason for not doing so.
If all known wills are declared invalid or the decedent died without drafting a valid testamentary instrument, then the Court orders distribution of property according to the laws of intestate succession (see 2006 New Mexico Statutes 45-2-101 through 45-2-114). Generally, intestate laws will award the property to the surviving spouse and children of the decedent. If the decedent had neither, then other, more-distant relatives might inherit, such as parents, siblings, or even aunts and uncles.
There are some forms of property/assets that do not need to go through probate in order to be transferred upon your death. These include bank accounts, property put in a living trust, life insurance benefits, funds for retirement accounts like IRA or 401(k), property owned in joint tenancy, and any property or funds designated by a transfer-on-death or payable on death document. These holdings/assets will instead go to the named beneficiaries.