Ask the Probate Judge—Wills and Trusts
Rudd, appeared April 29, 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 have been hearing and reading about wills and revocable living trusts. What is the difference between the two? C.A.
Basically, wills are legal documents that take effect after you die. Wills provide instructions about who should serve as your personal representative (called an executor in other states) and who should receive your assets. Wills also can name a guardian for a minor child; make arrangements for the care of a disabled child or adult; and establish a trust for children, grandchildren; or a pet.
A will may or may not need to be probated in court after death, depending on how a decedent's assets are titled. A person can title his or her assets to avoid probate, such as transferring one's assets into a living trust.
Revocable living trusts are legal documents that take effect during your lifetime. Once a trustor creates a trust, the trustor must transfer all assets into the name of the trustee of the trust. The trustee manages the assets during the trustor's lifetime. When the trustor dies, assets held by the trust should pass automatically to the beneficiaries named in the trust without a court proceeding.
Another method, outlined in prior columns, is to title your assets so that they pass automatically to named beneficiaries. By creating and recording a "transfer on death" (TOD) deed, you should avoid a probate on your house. "Payable on death" (POD) designations pass bank accounts, certificates of deposit, and U.S. savings bonds automatically to named beneficiaries, assuming those beneficiaries survive you. "Transfer on death" designations pass stocks, bonds, and other investment securities automatically to named beneficiaries, assuming those beneficiaries survive you. "Joint tenancy" assets pass automatically to the surviving joint tenant. If all assets are held in joint tenancy or have proper beneficiary designations, you can avoid probate without creating a living trust.
Living trusts are not appropriate for everyone. Reputable professionals should outline all of your estate planning options, including trusts, and help you decide what is best for you.
Having a valid will or trust helps ensure that your wishes will be known and honored after death. You must decide which choice best suits your needs.
Q: Your previous article stated the requirement for a valid will in New Mexico to be in writing, etc. Is a typewritten will acceptable if signed by the maker and two witnesses in each other's presence? J.T.M., Belen
Typewritten, handwritten, preprinted forms, and computer-generated wills are all acceptable in New Mexico. You are correct that a written will must be properly signed by the maker and two witnesses, all of whom are in each other's presence. Oral wills and wills on audiotape, videotape, and other non-written mediums are not valid in New Mexico.
© 2004, Merri Rudd & Albuquerque Journal, All Rights Reserved