New Mexico
To the best of our knowledge, the information provided below is current and accurate. Always be sure to consult with a jurisdictional authority before using this information to educate or counsel your clients.
State Estate or Inheritance Taxes
New Mexico has no state estate or inheritance tax.
Small Estate Probate
Every state offers a fast track or shortcut for the probate of "small estates." Some assert that probate court is the proper forum for passing a small estate to the heirs, the idea being that if an estate is not valued over a certain minimum threshold, it is too small for serious estate planning.
To be sure, when a state's small estate probate threshold is extremely low, using this shortcut to settle an estate that qualifies may be the obvious choice. However, the small estate probate threshold in some states is substantial, in which case serious issues should be considered before you allow a client to go to the default system of the state court. When small estate probate is appropriate and what the client desires, refer to the following information.
New Mexico offers some probate shortcuts for "small estates." These procedures make it easier for survivors to transfer property left by a person who has died. You may be able to transfer a large amount of property using simplified probate procedures or without any probate court proceedings at all -- by using an affidavit. And that saves time, money, and hassle.
Here are the ways you can skip or speed up probate. (If the affidavit procedure is used, there's no need to use the simplified probate procedure.)
Claiming Property With a Simple (Small Estate) Affidavit
New Mexico has a procedure that allows inheritors to skip probate altogether when the value of all the assets left behind is less than a certain amount. All an inheritor has to do is prepare a short document, stating that he or she is entitled to a certain asset. This document, signed under oath, is called an affidavit. When the person or institution holding the property -- for example, a bank where the deceased person had an account -- gets the affidavit and a copy of the death certificate, it releases the asset.
The out-of-court affidavit procedure is available in New Mexico if:
The value of the entire estate, wherever located, less liens and encumbrances, is $50,000 or less. There is a 30-day waiting period. N.M. Stat. Ann. § 45-3-1201, or
A married couple owns their principal residence, valued for property tax purposes at $500,000 or less, as community property. The surviving spouse may file an affidavit with county clerk if no other assets require probate. There is a six-month waiting period. N.M. Stat. Ann. § 45-3-1205.
For this second option, the surviving spouse records an affidavit with the clerk of the county where the principal residence is located. The affidavit should state that:
the couple was married at the time of death
at least six months have passed since the deceased spouse's death
all funeral and burial expenses have been paid
all expense of last illness and unsecured debts have been paid
the estate does not owe federal or estate taxes
the surviving spouse is entitled to the homestead by will or intestate succession
nobody else has a right to the property, and
the value of the home is less than $500,000.
The surviving spouse attaches a copy of the home's deed to the affidavit.
Simplified Probate Procedures
New Mexico has a simplified probate process for small estates. To use it, an executor files a written request with the local probate court asking to use the simplified procedure. The court may authorize the executor to distribute the assets without having to jump through the hoops of regular probate.
You can use the simplified small estate process in New Mexico if the value of the entire estate, less liens and encumbrances, doesn't exceed personal property allowance, family allowance, costs of administration, reasonable funeral expenses, and medical expenses of the last illness. The executor can immediately distribute the remaining assets to the inheritors after filing a closing statement without giving notice to creditors. N.M. Stat. Ann. § 45-3-1203.
The closing statement must say that the value of the estate was less than the amounts described above and that the executor distributed the assets to the inheritors. The executor sends a copy of the statement to the inheritors and known creditors. He or she must also give a full accounting to the inheritors. N.M. Stat. Ann. § 45-3-1204.