Ask the Probate Judge—Beneficiary & Codicil Questions
Rudd, appeared August 5, 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 am a payable on death (POD) beneficiary on a Certificate of Deposit (CD) as well as co-owner of another. If the other co-owner passes, what are the probate issues that I may encounter? Will I have to cash out the CD as part of an estate settlement or will the total convert to me as the survivor? B.P.
I assume that "co-owner" means joint tenants. If this is true, when one co-owner dies, the surviving co-owner owns the entire CD. The CD should pass automatically to the surviving co-owner without a court probate proceeding. The bank may want to see the deceased co-owner's death certificate.
The CD is considered a non-probate asset, which is not affected by either of your wills. If the two of you also named a POD beneficiary on the CD, when both co-owners die, then, and only then, will the POD beneficiary be entitled to cash in the CD.
A creditor might be able to reach the decedent's portion of the CDs if the probate assets of the decedent's estate were insufficient to cover decedent's debts or to pay the family and personal property allowances.
Q: Our attorney made up our will, but he said that we could add a codicil for our personal possessions. I don't know how to prepare one, and I would appreciate any aid that you could supply. H.H., Albuquerque
I wonder if you mean a list of tangible personal property, which is not the same as a codicil?
New Mexico law allows you to make a written statement or list of tangible personal property, not otherwise specifically disposed of by your will, to give personal possessions, such as china, silver, musical instruments, furniture, or jewelry, to certain people. You may not pass money on the list, but may pass tangible personal property, including cars and mobile homes.
Wills prepared by New Mexico attorneys usually contain language that refer to this list, which cannot pass intangible personal property such as stocks or bank accounts. The language in the will may also say that if no list can be found within 30 days, presume that no list exists.
To be valid, the list must be signed by you but does not need to be notarized. The list should describe each item and recipient "with reasonable certainty." Keep any list you create with your will, so beneficiaries do not have to search for it later.
You can change this list whenever you want, without having to change your will and without the help of an attorney. Just be sure to sign and date each new list you make, because your personal representative or the court will look at the most recent list if a dispute arises.
I can believe that your attorney left the making of a list of personal possessions up to you. But I would be surprised if your attorney advised you to create your own codicil.
A codicil is a more formal amendment to a will. A codicil: (1) identifies the will that is being amended, including the date the will was signed; (2) states your name and domicile; (3) specifies in detail what changes are being made; and (4) states which sections of the will remain in effect.
A codicil must be executed in the same manner as a will. You must sign and date a codicil in the presence of two witnesses who also sign the codicil. New Mexico law does not require the codicil to be notarized, but attorneys (or their staff) usually notarize wills and codicils that they prepare.
© 2004, Merri Rudd & Albuquerque Journal, All Rights Reserved