Ask the Probate Judge—Inheritances & Transfer on Death Deeds
Rudd, appeared April 15, 2004, Albuquerque Journal, Business Outlook
Reprinted with permission
Editor's note: This column may not be quoted or reproduced in whole or part without express written permission of the author.
Q: I recently lost the last of my wonderful parents. My sisters and I were left money from my dad's saving account. Does this money left to me by my parents have to be split with my spouse or split if a divorce occurs? Anonymous, Rio Rancho
I am sorry for your loss, but I am pleased to answer your excellent question. New Mexico law states that an inheritance is the separate property of the spouse who receives the inheritance. The same is true for gifts.
Separate property belongs solely to the owner, during marriage and upon divorce or death. As long as one keeps an inheritance separate from marital assets, any increase in value of separate property is also separate property.
To keep an inheritance as separate property, put it in a separate account in your name only. Do not put any other money, earned during your marriage by either you or your spouse, into the account. Upon your death, you can leave your separate property to whomever you designate on a beneficiary form or in your will or trust.
Some spouses may choose to mix separate property, such as an inheritance or gift, with community property. They may put the inheritance into an account with both spouses' names. This is a personal choice, as is keeping an inheritance separate.
Q: We read your article about Transfer On Death Deeds. Where can we obtain forms, instructions on filling out the forms, and the procedure for filing the forms with the proper authorities? The local county offices do not have anything to do with the preparation of these documents. M.H.H., Alamogordo
On the Transfer On Death Deed, can the deed name more than one person as a transferee? R.M., Belen
I have discussed Transfer on Death Deeds (TODDs) in previous columns as a way to avoid probating a house. You sign a TODD, designating beneficiaries, and record the deed during your lifetime in the county clerk's office in the county where the house is located. Upon your death, the house passes automatically to the named beneficiaries without a court probate proceeding.
You can name more than one person as a transferee. County offices are prohibited from giving legal advice, so they should not help anyone prepare a TODD. A copy of the TODD form appears in New Mexico Statutes Annotated, Section 45-6-401, and a deed form may be available at various office supply stores around the state.
However, I strongly recommend that people hire a competent attorney to prepare a TODD. The cost is around $100, and given that your house is worth far more, it seems like a good investment.
If you send a self-addressed, stamped envelope to the Senior Citizens Law Office, 4317 Lead Ave. SE, Albuquerque NM 87108, they will send you a free brochure on TODDs. They will also recommend that you hire an attorney to properly prepare TODDs.
© 2004, Merri Rudd & Albuquerque Journal, All Rights Reserved