Ask the Probate Judge—Community Property & Property Review
Rudd, appeared September 2, 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 interested in knowing if New Mexico is a 50/50 state for husband & wife. Are prenuptial agreements honored in New Mexico? What constitutes a common law marriage in New Mexico? Thanks. B.A.W.
New Mexico is a community property state. This means that any property acquired during the marriage belongs equally to both spouses, regardless of who earned or acquired the property. This rule applies to property acquired during the marriage except for gifts, inheritances, and property agreed in writing by both spouses to be separate.
Prenuptial agreements are generally honored and enforced in New Mexico if: (1) they are in writing; (2) they are fairly negotiated and created; and, (3) each party has legal counsel so as not to have an unfair advantage over the other. To avoid the appearance of undue pressure, premarital agreements should not be negotiated just before the wedding date.
New Mexico laws do not create common law marriages within the state. No matter how long a couple lives together in New Mexico, they are not legally married under our state law. One exception in New Mexico: UNM School of Law Professor Antoinette Sedillo-Lopez has advised me that the Navajo Nation Tribal code authorizes common law marriage. Although state law does not create common law marriages, New Mexico will recognize marriages created on the Navajo reservation and recognized under Navajo law.
If a couple had a common law marriage in another state that recognized common law marriages, then New Mexico would usually honor that marriage if it were valid in the state where it occurred. Only a few states allow common law marriages.
Q: I have joint tenancy on some of my property. I read your column that said there are drawbacks on this system. Could you tell me of other, safer ways to avoid probate? F.M., Rio Rancho
Let's review what I have discussed in other columns. Following are some (not all) safer ways to title property and also to avoid property.
Bank accounts, CDs, U.S. savings bonds-add a "payable on death" (POD) beneficiary designation. At your death these assets will pass directly to the named beneficiary or beneficiaries.
Stocks, bonds, mutual funds, and other investment securities- add a "transfer on death" (TOD) beneficiary designation. At your death these assets will pass directly to the named beneficiary or beneficiaries.
Insurance policies, annuities, IRAs-list a beneficiary or beneficiaries, including alternates. At your death these assets will pass directly to the named beneficiary or beneficiaries.
Real property-use a "transfer on death deed" (TODD), which names a beneficiary or beneficiaries to receive the real property upon your death. To be valid, this deed must be recorded at the county clerk's office during your lifetime. At your death the real property passes directly to the TODD beneficiary or beneficiaries.
Assuming the above beneficiaries outlive you and assuming you have named an individual and not your estate as a beneficiary, all of these assets should pass without a court probate proceeding.
Properly drafted and funded revocable living trusts also avoid probate.
© 2004, Merri Rudd & Albuquerque Journal, All Rights Reserved