Ask the Probate Judge—Avoiding Probate
By Merri Rudd, appeared September 20, 2001 Albuquerque Journal, Business Outlook
Reprinted with permission
Q: An out-of-state acquaintance has an elderly aunt in a New Mexico nursing home. He is the sole beneficiary under her will and advises that everything she owns is in joint tenancy with rights of survivorship to him. The estate is well under $600,000. His question is whether he can avoid probate when she passes on and what, if anything, needs to be done under New Mexico law. E.L., Albuquerque
Your question raises several interesting issues. Whether someone can avoid probate or not depends on how the property in the estate is titled. If an estate contains assets worth over $30,000 that are held in the sole name of the decedent or titled as "tenants in common," the estate would need a court probate proceeding.
Not all assets of a deceased person require a probate. For example, assets held in joint tenancy, payable on death accounts, transfer on death accounts, life insurance policies and individual retirement accounts with named beneficiaries, and trust property pass automatically to the surviving joint tenant or surviving named beneficiary and do NOT pass through a probate proceeding. A will does not affect these types of property since they pass "outside" of the will.
The value of the decedent’s assets does not determine whether a probate is necessary. Instead the value of the decedent’s assets is used to calculate the estate tax liability, if any, of the estate. In 2001 estates valued at $675,000 or less should not owe estate tax.
Adding a joint tenant to your property can pose some problems. There are also possible nursing home and gifting issues too complex to discuss in this limited space.
Depending on what kind of assets the aunt owns, at her death, her nephew would present the aunt’s death certificate and ask to have the assets transferred into his sole name. If real property were involved, he would record her death certificate at the county clerk’s office in the county where the real property was located.
To summarize, having a will does not determine whether there is a probate. The value of the estate does not determine whether a probate is needed. The title on the decedent’s property is the key to whether a probate is necessary. If indeed the nephew is named as a joint tenant on all of his aunt’s assets and he survives his aunt, no probate should be necessary.
[Re: my 9/6/01 column about deeds and married couples, UNM law professor Sherry Wolf asked me to clarify that in intestate succession, a deceased spouse’s separate property passes ¼ to the surviving spouse, ¾ to the deceased spouse’s children.]
© 2001, Merri Rudd & Albuquerque Journal, All Rights Reserved