WHEN THE ESTATE REACHES THE LAND OF ENCHANTMENT: Issues of Estate Planning and Probate Across State Lines

R. SHAUN RAINEY, Midland COTTON, BLEDSOE, TIGHE & DAWSON, PC

MIDLAND COLLEGE ESTATE PLANNING UPDATE 2019 Thursday, May 2, 2019

R. SHAUN RAINEY SHAREHOLDER COTTON, BLEDSOE, TIGHE & DAWSON, P.C. 500 West Illinois, Suite 300 Midland, Texas 79705 Telephone: (432) 684-5782 Facsimile: (432) 682-3672 www.cottonbledsoe.com

Education Texas Tech University School of Law, Lubbock, Texas Doctor of Jurisprudence, Cum Laude, May 2011 Rice University, Houston, Texas Bachelor of Arts in Political Science and History, May 2008

Bar Admissions State Bar of Texas, 2011 State Bar of New Mexico, 2012

Presentations and Academic Experience Co-Presenter Murder in the Heir: Application of the Slayers Rule in Texas; Webinar: TexasBarCLE, State Bar of Texas; December 6, 2018; Austin, Texas. Co-Presenter Murder in the Heir: Application of the Slayers Rule in Texas; Webinar: TexasBarCLE, State Bar of Texas; December 6, 2018; Austin, Texas. Presenter When the Estate Reaches the Land of Enchantment: Issues of Estate Planning and Probate Across State Lines; 2018 Estate Planning & Elder Law Seminar, Amarillo Area Bar Associate; September 14, 2018; Amarillo, Texas. Author When the Estate Reaches the Land of Enchantment: Issues of Estate Planning and Probate Across State Lines; Intermediate Estate Planning & Probate: Practical Applications, TexasBarCLE, State Bar of Texas; June 12, 2018; Dallas, Texas. Panelist Estate Planning & Probate Across State Lines; Intermediate Estate Planning & Probate: Practical Applications, TexasBarCLE, State Bar of Texas; June 12, 2018; Dallas, Texas. Co-Author, To Will or Not to Will and Newly Added To Trust or Not to Trust: What You Need to Know About Texas Probate Law, Wills, Trusts, and Incapacity Planning; Project of the Inaugural REPTL Leadership Academy 2016-2017, Real Estate, Probate, and Trust Law Section, State Bar of Texas. Co-Presenter, State Bar of Texas; TexasBarCLE Webinar: Care Giver Do’s and Don’t’s; May 10, 2017; Austin, Texas Presenter/Author, Paralegal Association of the Permian Basin; Help Me Help Your Client, How Your Practice Affects The Estate Planning and Probate Attorney; September 21, 2016; Midland, Texas Presenter/Co-Author, A West Texas Perspective on Estate Planning and Probate; June 10, 2016; Midland, Texas Presenter/Author, National Business Institute; The Probate Process From Start To Finish, Probate Disputes and Litigation: We’re Gonna Play the Sue Me, Sue You Blues; August 27, 2015; Midland, Texas Adjunct Professor, Paralegal Program, Midland College, Midland, Texas.

Associations and Memberships Midland County Young Lawyers Association, President 2014-2015 Midland/Odessa Business and Estates Council, President 2017-2018 Texas Bar College, State Bar of Texas Real Estate, Probate & Trust Law Section, State Bar of Texas Real Property, Trust & Estate Law Section, State Bar of New Mexico

Legal Awards and Honors Bob Black Bar Leaders Award, 2015, Presented by Texas Tech University, School of Law Judge Ken G. Spencer Award, 2011, Presented by Texas Tech University, School of Law REPTL Leadership Academy, Participant, 2016-2017 ISSUES OF ESTATE PLANNING AND the call of the Land of Enchantment and have PROBATE ACROSS STATE LINES taken advantage of the opportunity and proximity creating the need for legal counsel I. INTRODUCTION in New Mexico. As much as Texans love to say Texas is “like a whole other country,” it is true of our sister state 2. Clients living out of State neighbors as well at least from a legal stand point. with Property in Texas. Another opportunity The law of estate and probate in Arkansas, Louisiana, arises when the inverse is true, a client living New Mexico, and Oklahoma, as well as our more out of state but with property in Texas. distant neighbors, present potential pitfalls for the Whether it is interest in a family ranch or Texas practitioner when the business and personal mineral interest from generations long past, or dealings of a client fail to magically stop at the state new investment in the opportunity of the great line sign along the highway. Even a client domiciled Texas experiment, many individuals from in Texas may have issues involving family, business beyond Texas have interest to seek the dealings, or property elsewhere, and thereby implicate reward. the law of other jurisdictions. In our ever shrinking world, the historically local nature of the practice of 3. Clients with Relatives out of law is being continually pressed, particularly in areas Texas. Estate planning attorneys are also reserved to the states from the beginning of the often called upon to provide advice related to republic: family relations, property ownership, and family in other states. For instance, clients distribution upon death. may have children or parents in another jurisdiction and have questions about the A. Scope of Paper. While ethical effect a gift to or from those individuals might considerations in representing clients with legal affect the estate planning of each generation concerns which do not neatly end at the border of the or simply the process to deal with mom’s great state of Texas are analogous no matter the estate when she finally passed from this world “lesser” state at issue, the focus of this paper is the to the next. relationship in the law of estate planning and probate between Texas and New Mexico, both ethically and 4. Clients Moving out of Texas. practically. Part II of the paper discusses ethical Another example is the long term client who considerations related to assisting clients beyond has finally retired and is moving out of state Texas. Part III is intended as a primer for, and in no for the beauty of the mountains, the proximity way the definitive work on, estate planning in New of family, or some other reason presently Mexico such as to provide the Texas practitioner with unknown (and not remotely understood) to the tools to make informed discussion related to needs of author. Often the level of trust and a client in relation to New Mexico. Emphasis is given institutional knowledge developed by an to commonly received questions and issues in the attorney and client over many years of author’s practice as well as aspects of New Mexico representation will bring the client to request law which may differ from Texas. Part IV to continue to serve as counsel for estate implements the same parameters to provide planning needs of the client in spite of their information regarding probate in New Mexico, with move to another jurisdiction. specific emphasis on ancillary probate options. C. The Federal Aspects of Estate B. Opportunities for Cross Border Planning. Further, the practice of estate planning is Issues. There are several reasons why the Texas in some aspects a nationwide practice. To the extent estate planning and probate practitioner will come into any particular client may have need for planning to contact with issues outside of the great state of Texas. avoid or eliminate a federal estate burden or planning to ensure maximum benefit of the basis adjustment for 1. Clients with Property Outside purposes of capital gains taxes, the requisite Texas. Perhaps the most common example is knowledge is related to federal law as contained in the the client who is a resident of Texas with Internal Revenue Code, enforced by the Internal property located in another state. For the west Revenue Service, and interpreted by the Tax Court. Texas practitioner, this will often be the Therefore, most estate planning techniques are used Amarillo native with a mountain home in nationwide in strikingly similar structure. It is Taos, the family business operating in Las undoubtedly the case that a knowledgeable and Cruses and El Paso, or Midland geologist with experienced estate planner has the tools necessary to oil and gas interests in the Permian Basin of prepare the best plan for tax purposes, but it is southeast New Mexico. These clients, important to remember that each state can involve a whether for business or pleasure, have heard slightly different twist on the “traditional” recipe which presents the unwary practitioner the 2. Reasoning for Limitation. opportunity for unintended and unfortunate results. “Whatever the definition [of the practice of law], limiting the practice of law to members II. ETHICAL CONSIDERATIONS FOR CROSS of the bar protects the public against rendition BORDER ISSUES. of legal services by unqualified persons.” Cmt [2], Rule 16-505 NMRA. Given all of the scenarios in which a Texas practitioner may have opportunity to stretch their a. Competent license and mental muscle to provide assistance on the Representation. The primary purpose law of another jurisdiction for clients, it is paramount of unauthorized practice of law that any representation be undertaken with an statutes is to protect the public from understanding of the legality and potential issues in the loss or sever limitation of legal doing so. rights through the receipt of incompetent legal representation. A. Practice of Law by Non-Admitted While legal representation by persons Attorneys. New Mexico Rule Annotated 16-505 is who have not been trained in the law, the New Mexico codification, as amended, of ABA and are, therefore, presumably unable Model Rule 5.5. Specifically, Rule 16-505 states “a to recognize legal issues pertaining to lawyer shall not practice law in [New Mexico] in the client’s particular situation, can violation of the regulation of the legal profession in significantly limit the rights of an [New Mexico] or assist another in doing so.” Rule individual or entity, so too can action 16-505.A. Further, Comment [1] expounds that a taken by lawyers admitted in another “lawyer may practice law only in a jurisdiction in jurisdiction based not about their lack which the lawyer is authorized to practice.” However, of skill, but lack of knowledge of the Comment [2] notes that the definition of the practice unique aspects of legal practice in that of law is established by law and varies from jurisdiction. See Fox, IV, Charles D., jurisdiction to jurisdiction. “Is Crossing State Lines Ethically Challenging to Estate Planners?”, 1. Definition of the Practice of Thirty-Third Annual Philip E. Law. The New Mexico Supreme Court has Heckering Institute on Estate consistently declined to define what Planning, University of Miami, constitutes the practice of law because of the School of Law, Miami, Florida, “infinite number of fact situations which may (1999) ¶ 1501.1. Therefore, the be presented, each of which must be judged rendition of competent legal according to its own circumstances.” See representation, further discussed in Hard v. Bd. of Bar Exam’rs, 81 N.M. 116, Section I.C. below, requires a level of 464 P.2d 406 (1970). “We do not propose to knowledge and skill the baseline of submit a definition of the practice of law that which is subject to policing by the may be employed to fit all situations and state. activities.” Sparkman v. State Bd. of Bar Exam’rs, 77 N.M. 551, 554, 425 P.2d 313, b. Ethical 315 (1976). Nevertheless, the Court has Representation. Aside from the legal recognized some indicia of the practice of competence to handle any matter, law. See State ex rel. Norvell v. Credit there are also ethical considerations to Bureau of Albuquerque, Inc. 85 N.M. 521, limiting the practice of law to those 526, 14 P.2d 40, 45 (1973). These factors admitted in each jurisdiction. A include as it relates to court proceedings, (a) locally admitted lawyer has met all representation of parties before judicial or ethical standards to be admitted and administrative bodies, (b) preparation of has sworn to follow the constitution, pleadings and other papers incident to actions laws, and rules of the jurisdiction. Id. and special proceedings, (c) management of Further, knowledge of the local court such action and proceedings, and, as it relates or practice customs makes one a more to non-court activities, (d) giving legal advice ethical lawyer. What may be and counsel, (e) rendering a service that perfectly reasonable in New York requires the use of legal knowledge or skill, may not sit well in New Mexico and and, (f) preparing instruments and contract by Sante Fe is not San Francisco. which legal rights are secured. Id. 3. Reasoning as it Relates to Multi-Jurisdictional Practice. Several authors have expounded as to the advisability of when the lawyer reasonably expects to be limiting the practice of law by lawyers authorized to make an appearance under Rule admitted and in good standing in other 24-106. NMRA 16-505. Therefore, a lawyer jurisdictions. See id.; see also Wolfram, asked to assist or handle a probate or Charles W., “Sneaking Around in the Legal represent a client in estate litigation may Profession: Interjurisdictional Unauthorized provide related services in preparation of an Practice by Transactional Lawyers” (1995). appearance, provided the lawyer reasonably Cornell Law Faculty Publications. Paper expects to be admitted pro hac vice. “While 1314. While the advisability of these rules is this exception is available to allow the lawyer well beyond the scope of this paper, to investigate the matter before seeking fundamentally, Model Rule 5.5 is based on admission, the lawyer should not rely on the the premise that certain types of multi- exception except where necessary. Instead, jurisdictional practices are acceptable in the lawyer should seek and obtain admission limited amounts because there is no pro hac vice at the earliest opportunity.” The “unreasonable risk to the interests of [the ACTEC Commentaries on the Model Rules of lawyer’s] clients, the public or the courts.” Professional Conduct, Fifth Ed. 2016, pg 204. Com’t 5, MRPC 5.5. 2. Planning or Other B. Multi-Jurisdictional Practice of Transactional Representation. Further, Law and the Unauthorized Practice of Law. As it pursuant to Rule 16-505.F. a qualified out of specifically relates to the authorization of a lawyer state attorney may provide legal services in licensed to practice in another state to provide services New Mexico without admittance pursuant to in New Mexico, Rule 16-505 allows a lawyer Rule 24-106 in certain circumstances as well. “admitted in another United States Jurisdiction, and not disbarred or suspended from practice in any NOTE: In contrast to Subparagraph jurisdiction” to provide legal services within New E. discussed above, Subparagraph F. does not Mexico in two instances most relevant to estate include the “on a temporary basis” planning and probate. However, to avoid violating requirement. This is also a variance from the Rule 16-505, an out-of-state lawyer must refrain from text of Model Rule 5.5. While it appears from practicing law until he or she is clearly authorized to the plain reading of Rule 16-505, that a non- do so. In Matter of Convisser, 148 N.M. 732, 242 admitted lawyer may use the safe harbor of P.3d 299, certiorari denied, 562 U.S. 840 (2010). Subparagraph F. with greater frequency or more recurring basis without violating Rule 1. Admittance for Court 16-505 so long as the purpose of the services Appearances. Pursuant to Rule 16-505.E., a arise out of or are reasonably related to the qualified out of state attorney may seek lawyer’s Texas practice, Comment [5] to Rule temporary admittance pro hac vice pursuant 16-505 states that both Subparagraphs E. and to Rule 24-106, when the representation is F. identify circumstance where a non- “undertaken in association with a lawyer admitted lawyer may “provide legal services admitted to practice in [New Mexico] and on a temporary basis.” Cmt. [5], NMRA 16- who actively participates in the matter,” and 505. However, it is useful to remember the are in or reasonably related to a proceeding comments are not binding, and any lawyer before a court. NMRA 16-505.E. who intends to rely on this analysis should consider seeking an opinion of the non- Comment [6] to Rule 16-505 explains admitted jurisdiction’s bar association. See that there is no single test to determine ACTEC Commentary, pg 205. whether a lawyer’s services are “temporary.” However, the text continues that the services a. Related to Out of “may be ‘temporary’ even though the lawyer State Practice. Subparagraph F.(2) provides services in the jurisdiction on a allows a non-admitted lawyer to regular basis, or for an extended period of provide legal services which “arise time, as when the lawyer is representing a out of or are reasonably related to the client in a single lengthy negotiation or lawyer’s practice in a jurisdiction in litigation.” Id. which the lawyer is admitted to practice.” Comment [14] elaborates, So long as it is on a temporary basis, it is required “that the services arise Subparagraph E. allows a non-admitted out of or be reasonably related to the lawyer to represent a client before a tribunal lawyer’s practice in a jurisdiction in subject to admittance pro hac vice, but also which the lawyer is admitted.” Comment [14] continues that a the lawyer’s expertise.” ACTEC variety of factors can be used to Commentary, pg 205. establish the requisite connection between a lawyer’s practice in a However, in all “transactions jurisdiction where he or she is involving issues specific to New admitted and the services requested Mexico law, the lawyer shall elsewhere: associate counsel admitted to practice in New Mexico.” NMRA 16- (i) The client may have been previously 505.F.(2); see also Cmt [13], NMRA represented by the lawyer; 16-505. “Lawyers providing estate (ii) The client may be a resident in or counseling services in a non-admitted have substantial contacts with the jurisdiction would meet this second jurisdiction where the lawyer is requirement by associating local admitted; counsel for such matters as deed (iii) The matter, although involving other preparation, will execution jurisdictions, may have a significant formalities, and similar services.” connection with the jurisdiction ACTEC Commentary, pg 204. where the lawyer is admitted; Additionally, when New Mexico (iv) The work, or significant aspects lawyers associate with non-admitted thereof, might be conducted in the lawyers, New Mexico attorneys have jurisdiction where the lawyer is an independent duty to the New admitted, or may significantly involve Mexico judiciary to obey New the law of that jurisdiction; or, Mexico’s ethical and procedural rules, (v) The services may draw on the regardless of the opinion of the non- lawyer’s recognized expertise admitted attorneys. See In re developed through the regular Estrada, 140 N.M. 492, 143 P.3d 731 practice of law on behalf of clients in (2006). matters involving a particular body of federal or nationally uniform law. b. Authorized by Federal Law. Of course, a lawyer While the list is merely illustrative, it providing legal services regarding provides further clarification of Rule estate planning and probate 16-505. Most notably for estate administration often represents clients planning attorneys, Comment [14] in disputes with the Internal Revenue recognizes the extent to which many Service. A lawyer “may practice areas of the law are based upon before the Internal Revenue Service federal law. Therefore, services by filing with the Internal Revenue rendered by a qualified Texas Service a written declaration that he practitioner on issue of federal estate or she is currently qualified as an and gift tax planning provides the attorney and is authorized to represent lawyer opportunity to counsel on the party or parties on whose behalf these issues when estate planning for he or she acts.” 31 CFR §10.3; see the client with New Mexico property. generally 31 CFR Part 10, §10.0 et “In addition, since this exception is seq. (published as a pamphlet as based on ‘recognized expertise,’ a Treasury Department Circular No. lawyer who chooses to rely on this 230). In addition, a lawyer may exception should take steps to insure practice before the United States Tax that the lawyer is recognized as an Court by complying with its expert. These steps could include: requirements for admission (Tax obtaining certification as a specialist Court Rule 24). “Pursuant to in those jurisdictions offering such paragraph (d)(2) of MRPC 5.5, a programs; participating actively in bar lawyer who is authorized to practice sections related to the lawyer’s before the IRS or the Tax Court expertise; participating in national would be able to practice in any non- associations of lawyers related to the admitted jurisdiction adopting MRPC lawyer’s expertise; writing scholarly 5.5(d)(2).” ACTEC Commentary, pg. articles; teaching; participating in 205. Moreover, unlike MRPC 5.5(c), seminars and panel discussions; or there is no requirement that the any other activity that demonstrates practice in the non-admitted jurisdiction be on a “temporary A lawyer, in determining whether he or she is basis.” Id. While the text of MRPC capable of providing competent representation as it 5.5(d)(2) appears expressly to permit relates to legal knowledge and skill for a matter, may multijurisdictional practice in these look to the following relevant factors: (i) the relative circumstances, given the ease with complexity and specialized nature of the matter; (ii) which a lawyer can qualify to practice the lawyer’s general experience; (iii) the lawyer’s before the Tax Court or the IRS, the training and experience in the field in question; (iv) lawyer should consider seeking an the preparation and study the lawyer is able to give the opinion of the non-admitted matter; and, (v) whether it is feasible to refer the jurisdiction’s bar counsel. ACTEC matter to, or associate or consult with, a lawyer of Commentary, pg. 205. establish competence in the field in question. Cmt. [1], NMRA 16-101. C. Duty to Disclose. Comment [20] to Rule 16-505 notes that in some circumstances a E. Subject to Disciplinary Authority of lawyer practicing law in New Mexico may have to New Mexico. A lawyer who has not been admitted inform the client that the lawyer is not licensed to into practice in New Mexico nevertheless becomes practice law in New Mexico. “For example, it may be subject to discipline in New Mexico when the lawyer required when the representation occurs primarily in “provides or offers to provide any legal services” in [New Mexico] and requires knowledge of the law of New Mexico. NMRA 16-805. This includes lawyers New Mexico.” Cmt. [20], Rule 16-505 NMRA. representing clients within the safe harbor of Reference is therein made to Rule 16-104 wherein a Subsections E. and F. of Rule 16-505. See Cmt [19], lawyer is obligated to “explain a matter to the extent NMRA 16-505. In addition to disciplinary action in reasonably necessary to permit the client to make New Mexico, a lawyer may be subject to discipline in informed decisions regarding the representation.” Texas for the same action. NMRA 16-805. This Cmt. [20], NMRA 16-505 citing 16-104. “Under affirms the long-standing principle that a lawyer MRPC 5.5, a lawyer engaged in a multi-jurisdiction licensed in a jurisdiction is subject to the disciplinary practice necessarily offers limited services in authority of that jurisdiction no matter where the jurisdictions in which the lawyer is not admitted to lawyer’s conduct occurred. Thus, if a lawyer engages practice law. Thus, if a lawyer intends to render or attempts to engage in unauthorized practice in a services in or concerning a jurisdiction in which the jurisdiction where he or she is not admitted, the lawyer is not admitted to practice law, the lawyer jurisdiction where the lawyer is admitted will be able should consider the need to obtain the client’s to initiate disciplinary proceedings against the lawyer informed consent to do so.” ACTEC Commentary, pg. under MRPC 5.5 (unauthorized practice) and 8.4(a) 204. (violating or attempting to violate a rule oneself or assisting or inducing another to do so). ACTEC D. Duty of Competence. After a Commentary, pg 203. decision is made by a Texas lawyer to provide any legal advice or service related to New Mexico law, the F. Penalties for Unauthorized Practice of non-admitted lawyer subjects themselves to the rules Law. In addition to the imposition of a potential of New Mexico. “Even though authorized by MRPC penalties by the New Mexico Disciplinary Board, a 5.5 to provide services in a non-admitted jurisdiction, fine of not less than two hundred fifty dollars ($250) the lawyer remains subject to all other ethical and not more than one thousand dollars ($1,000) for provisions” of the Rules. ACTEC Commentary, pg each incident shall be imposed. Moreover, a lawyer 204. In particular, “the lawyer must provide guilty of the unauthorized practice of law in a non- competent representation regarding the laws and rules admitted jurisdiction is subject to having the lawyer’s applicable in the non-admitted jurisdiction.” Id. A legal services contract held void and unenforceable. lawyer who initially lacks the skill or knowledge See ACTEC Commentary, pg 203. required to meet the needs of a particular client may overcome that lack through additional research and III. PRIMER FOR NEW MEXICO ESTATE PLANNING study. The fundamental bed rock of the unauthorized practice of law is to prevent representation of the The purpose of this section is to provide legal public by unqualified individuals. “A lawyer shall reference related to several aspects of New Mexico provide component representation to a client.” Rule law which can have varying effect upon wills written 16-101 NMRA. “Competent representation requires by Texas practitioners either for the client with the legal knowledge, skill, thoroughness, and property located in New Mexico or the New Mexico preparation reasonably necessary for the domiciliary with significant contacts to Texas. representation. Id. A. Uniform Probate Code. New Mexico is one of 19 jurisdictions to have enacted legislation substantially similar to the Uniform property if the spouse who acquired the Probate Code (the “UPC”) promulgated by the property had been domiciled in New Mexico Uniform Law Commission. New Mexico first at the inception of title. NMSA § 40-3-8(C). adopted the UPC in 1975, to be effective July 1, 1976. However, the statute expressly states that Since that time the New Mexico Legislature has quasi-community property shall be treated as amended the UPC several times, including most its if it were community only for the purpose of most extensive work in 2011, effective January 1, division of property incident to dissolution of 2012. As every state must make deviations from the marriage. NMSA § 40-3-8(D); see also uniform law necessary for the structure of the court Blackwell v. Lurie, 134 N.M. 1, 3, 71 P.3d system and idiosyncrasies of practice in the state, New 509, 511 (2003). Although well beyond the Mexico’s deviations from the UPC can properly be scope of this paper, it appears unsettled as to described as limited. See Davis, R. Glenn, “A Stroll how a New Mexico court might determine the Through the Uniform Probate Code” 20th Annual status of property which might be considered Estate Planning Institute, Community Foundation of akin to quasi-community property for the Southern New Mexico, Las Cruces, New Mexico purpose of probate. (2012), pg 1. Many of the more substantive revisions are connected to the fact that New Mexico is a C. New Mexico Intestate Succession. community property jurisdiction. (Of the 19 An important consideration in consulting a client and jurisdictions to have enacted the UPC, only three are informed decision making for the drafting of an estate also community property jurisdictions: Arizona, plan is the distribution of an estate absent a will. Idaho, and New Mexico.) Intestate succession in New Mexico differs substantially from Texas and special attention to these B. New Mexico Marital Property. differences should be given by the non-admitted Thankfully for the Texas practitioner, New Mexico is lawyer. also a community property state whose structure follows an approach very similar to Texas. 1. Intestate Share to Surviving Spouse. The surviving spouse of an intestate 1. Separate Property. By decedent receives as to separate property: (1) statute, separate property is defined as “(1) if there is no surviving issue of the decedent, property acquired by either spouse before the entire intestate estate; or (2) if there is marriage or after entry of a decree of surviving issue of the decedent, one-fourth of dissolution of marriage; (2) property acquired the intestate estate. NMSA § 45-2-102. As to after entry of a decree entered pursuant to community property, the surviving spouse Section 40-4-3, unless the decree provides receives the one-half of the community otherwise; (3) property designated as separate property as to which the decedent could have property by a judgment or decree of any court exercised the power of testamentary having jurisdiction; (4) property acquired by disposition. Id. either spouse by gift, bequest, devise or descent; and, (5) property designated as 2. Share to Other Heirs. Any separate property by a written agreement part of the intestate estate not passing to a between the spouses, including a deed or decedent's surviving spouse pursuant other written agreement concerning property to Section 45-2-102, or the entire intestate held by the spouses as joint tenants or tenants estate if there is no surviving spouse, passes in in common in which the property is the following order to the individuals who designated as separate property.” NMSA § survive the decedent: (a) to the decedent's 40-3-8. descendants by representation; (b) if there is no surviving descendant, to the decedent's 2. Community Property. Like parents equally if both survive, or to the Texas, New Mexico defines community surviving parent if only one survives; (c) if property as “property acquired by either or there is no surviving descendant or parent, to both spouses during the marriage which is not the descendants of the decedent's parents or separate property.” Id. either of them by representation. NMSA § 45-2-102. 3. Issues of Quasi-Community Property. New Mexico also statutorily B. New Mexico Will Considerations. defines quasi-community property. Quasi- What follows are aspects of New Mexico law relevant community property is that property which is to the drafting and execution of wills in New Mexico acquired by either spouse while domiciled and the validity of wills executed in other jurisdictions elsewhere which would have been community for the purpose of counseling clients on their present either at the time of the execution or the time planning and potential need for revisions. of death of the testator. NMSA § 45-2-506.

1. New Mexico Will Execution 3. No Contest Clause. A no Requirements. An individual eighteen or contest, or in terrorem, clause or any older, or an emancipated minor, who is of provision purporting to penalize an interested sound mind may make a will in New Mexico. person for contesting a will or other governing NMSA § 45-2-501. A will must be: (a) in instrument, is unenforceable if probable cause writing; (b) signed by the testator or in the exists for instituting proceedings. NMSA § testator’s name by some other individual in 45-2-517. the testator’s conscious presence and by the testator’s direction; and, (c) signed by at least 4. Effect of Divorce Upon two individuals, each of whom signed in the Terms of a Will. A divorce revokes (i) any presence of the testator and of each other after disposition or appointment of property, (ii) each witnessed the signing of the will as any power of appointment, and (iii) any described in (b). NMSA § 45-2-503. nomination to serve as a fiduciary, by the Witnesses need only be competent to serve, testator in favor of their former spouse and and an interested individual may serve as a any relative of their former spouse, who is not witness without any effect on the validity of also a relative of the testator. NMSA § 45-2- any portion of the will. NMSA § 45-2-505. 804. However, provisions of a will revoked by law are revived by the remarriage of the a. Self-Proving testator and former spouse. Id. Affidavits. In New Mexico, a self- proving affidavit may be prepared and 5. Premarital Wills and Spouses executed simultaneous with the Share. If a testator's surviving spouse got execution of the will or at any time married to the testator after execution of the after the execution of the will. testator’s will, the surviving spouse is entitled NMSA § 45-2-504. to receive no less than the value of the share of the estate she would have received if the b. Written testator had died intestate, unless: Memorandum for Distribution of Tangible Personal Property. New (a) it appears from the Mexico has expressly authorized the will or other evidence that the will written memorandum for distribution was made in contemplation of the of tangible personal property. NMSA testator's marriage to the surviving § 45-2-513. Specifically, a will may spouse; refer to a written statement or list to (b) the will expresses the dispose of items of tangible personal intention that it is to be effective property not otherwise specifically notwithstanding any subsequent disposed of by will, so long as the marriage; or, writing is signed by the testator and (c) the testator provided describe the items and devisees with for the spouse by transfer outside the reasonable certainty. Id. The writing will and the intent that the transfer be expressly may be referred to as one to in lieu of a testamentary provision is be in existence at the time of the shown by the testator's statements or testator’s death, prepared before after is reasonably inferred from the the execution of the will, altered by amount of the transfer or other the testator after its preparation, or evidence. have no significance apart from its effect on the disposition made by will. NMSA § 45-2-301. In calculating the Id. surviving spouses share, only that portion of the testator's estate, if any, that neither is 2. Wills Executed Out of State. devised to a child of the testator who was born A written will is valid in New Mexico if its before the testator married the surviving execution is in compliance with the spouse and who is not a child of the surviving requirements in Section III.C.1. above, or if spouse. Id., see also Matter of Estate of its execution complies with the law of (i) the Coleman, 104 N.M. 192, 193, 718 P.2d 702, place where the will is executed at the time of 703 (1986). execution or (ii) the domicile of the testator 6. Omitted Children. If a existent, and therefore, there is no presently testator fails to provide in his will for any of inheritance tax in New Mexico. Id. his children born or adopted after the execution of the will, the omitted after-born or IV. PRIMER FOR NEW MEXICO PROBATE after-adopted child is generally entitled to receive a share in the estate, the intestate share A Texas practitioner looking to advise client the child would have received in the absence related to New Mexico is likely to face a myriad of of a testamentary gift to other non-after born questions related to the probate of the estate of a children of the testator, or an equal share of decedent. Whether the client is a fiduciary, testamentary gifts to non-after-born children. beneficiary, or creditor of an estate, the New Mexico NMSA § 45-2-302. Probate Code contains a very different structure the failure of which to navigate properly can severely 7. Abatement and limit the legal rights of a client. Apportionment. If concerns of the solvency of an estate exist, it is important for any A. Choosing the Court. Whether filing drafting attorney to organize and categorize an ancillary or original probate, it is important to testamentary gifts so as to protect against determine the property venue for any administration. abatement. In New Mexico, the statutory default for abatement is: (a) property not 1. Venue. The appropriate disposed of by will; (2) residuary devises, (c) application initiating administration of an general devises, and, (d) specific devises. estate should be filed in: (1) the county where NMSA § 45-3-902. Unlike Texas, there is no the decedent was domiciled at the time of differentiation between devises of real or death; or (2), if the decedent was domiciled personal property in the abatement process. outside of New Mexico, then any county See Tex. Estates Code § 355.109. where the decedent owned property at the time of death. NMSA § 45-3-201(A). While However, these rules are adjusted if domicile is not defined in the New Mexico the decedent was married and the estate Probate Code, it is generally the location consists of community property. Debts and where the person held residence with the expenses of administration, including funeral intent to do indefinitely. See generally expenses, and separate debt of the decedent NMSA § 40-4-5 (defining domicile for the shall be apportioned and charged first to the purposes of a suit for dissolution of marriage). decedent’s separate property and then to Of course, this definition leaves flexibility for decedent’s one-half (1/2) community property the individual who died in a nursing home interest, if any. Id.; NMSA § 45-2-807(B). with full intent to return to their home and similar circumstances unique to each Note: these provisions do not apply to decedent. payment of estate or other transfer taxes. Generally, and as a baseline rule subject to 2. Jurisdiction. New Mexico adjust in the will: estate taxes are to be has both district and probate courts. Unlike apportioned ratably to each individual that has the statutory probate courts of Texas, the an interest in the apportionable estate while jurisdiction of New Mexico probate courts is generation-skipping transfer taxes are not exclusive and, in fact, is rather limited. apportioned to the skip-person receiving the See NMSA § 45-1-302. New Mexico probate direct skip. NMSA § 45-3-923. courts have jurisdiction over informal proceedings for the probate of will and/or the 8. Beneficiary Indebtedness. If appointment of a personal representative. Id. a beneficiary is indebted to the estate, a District courts have exclusive original personal representative is required to offset jurisdiction over formal probate proceedings the beneficiary’s indebted ness against their and concurrent original jurisdiction with distribution. NMSA § 45-3-903. probate courts over informal probate proceedings. See In re Estate of Harrington, E. New Mexico Inheritance Tax. Like 129 N.M. 266, 270, 5 P.3d 1070, 1074 (2000). many states, New Mexico’s inheritance tax was written to take advantage of any available credit Typically, the author chooses to file against the federal estate tax, if any, and is only all probate proceedings, whether formal or imposed to the extent that a decedent’s estate has any informal, in district court. This is primarily available credit. See NMSA 7-7-1, et seq. Under because there is no need to transfer the current federal law, the relevant tax credit is non- proceeding should any estate require a ruling by the court which would be outside the representative’s appointment, and bond, if jurisdiction of the probate court. However, any, together with a statement of the several individuals do note that the probate domiciliary foreign personal representative’s court judges tend to have a very streamlined address. NMSA § 45-4-204. A copy of the docket and filing fees are less expensive. See Proof of Authority and Statement of Davis,“A Stroll Through the Uniform Probate Domiciliary Foreign Personal Representative Code,” pg 6. form, together with the proposed order, used by the author in practice is attached hereto as B. Ancillary Probate. It seems like the Appendix B. Upon completion of the filing most common issue in the author’s New Mexico and receipt of an order, the domiciliary practice is ancillary probate work for a domiciliary of foreign personal representative may exercise Texas who died owning real property, often mineral all powers of a local personal representative in interests, in New Mexico. The New Mexico Probate New Mexico as to all assets in New Mexico Code provides three differing options as to how a and may maintain actions and proceedings. domiciliary foreign personal representative may NMSA § 45-4-205. Note: this procedure is proceed. sufficient for the domiciliary foreign personal representative to transfer title to real property. 1. Affidavit for Delivery of Personal Property. A domiciliary foreign 3. Full Ancillary Proceeding. personal representative has the power to Lastly, a domiciliary foreign personal receive payment of debts owed to the representative may initiate a formal decedent or to accept delivery of personal proceeding in New Mexico. While property belonging to the decedent. NMSA § significantly more time consuming and costly 45-4-201. At any time after the expiration of than either of the preceding ancillary options, sixty days from the death of a non-resident it may be preferable to have a formal ancillary decedent, the domiciliary foreign personal proceeding in certain files, particularly those representative may prepare an affidavit with significant debts or where family stating: (a) the date of the death of the dynamics or other concerns have already nonresident decedent; (b) that no local arisen and may follow the estate into New administration or application is pending in Mexico. For information related to a formal New Mexico; and, (c) the domiciliary foreign proceeding see below. personal representative is entitled to payment or delivery. Id. A copy of the affidavit form 4. Other Ancillary Concerns. In used by the author in practice is attached addition to the choice of ancillary work hereto as Appendix A. Payment or delivery necessary for the domiciliary foreign personal made in good faith on the basis of the representative of an estate, there are additional affidavit releases the debtor or personal considerations as to the powers and liabilities having possession of the personal property of of a domiciliary foreign personal his obligation as if payment or delivery had representative in New Mexico ancillary been made to a locally appointed personal probate. representative. NMSA § 45-4-202. However, payment or delivery pursuant to the affidavit a. Property Located may not be made if a resident creditor of the Outside County of Probate Filing. If nonresident decedent has notified the debtor a decedent owns real property in any or person in possession of property belonging counties outside the county in which to the decedent that the debt should not be administration is pending, the paid nor the property delivered to the domiciliary foreign personal domiciliary foreign personal representative. representative should file a Notice of NMSA § 45-4-203. Note: this procedure is Filing of Proof of Authority and insufficient to transfer title to real property. Statement of Domiciliary Foreign Personal Representative in each 2. Proof of Authority of county where relevant. NMSA § 45- Domiciliary Foreign Personal Representative. 1-404(A). The Notice should by If no local administration or application is recording with the county clerk and pending in New Mexico, a domiciliary foreign include: (1) the name of the decedent; personal representative may file, with the (2) the title, court and docket number court in any county where the nonresident of the pending estate; (3) a decedent owned property, authenticated description of the type of copies of the domiciliary foreign personal administration; (4) the name, address and title of the domiciliary foreign of or against any personal personal representative; and, (5) a representative of an estate is binding complete description of the real on the local personal representative as property situate in the county of if he or she were a party to the recording. Id. A copy of the Notice adjudication. NMSA § 45-4-401. of Filing of Proof of Authority and Statement of Domiciliary Foreign C. Domiciliary Probate. Personal Representative form used by the author in practice is attached 1. Formal or Informal hereto as Appendix C. The recorded Proceedings. New Mexico provides for the notice constitutes full and complete administration of an estate to be through notice of all proceedings and it shall either formal or informal proceedings. not be necessary to file or record in Informal proceedings are an efficient manner the county where real property is of administration assuming that they are located any other instruments or available and court intervention is not recordings related to the anticipated; however, they are not available in administration of the estate. § 45-4- all circumstances. Informal proceedings are 404(B). However, it is often not available for the following: advisable to prepare domiciliary  To determine heirs in an intestacy; foreign personal representative  To probate a copy of a lost will; distribution deeds to fully evidence  To probate a will after the third transfer, particularly in estates in anniversary of the decedent’s death; which the terms of the will leave  To appoint personal representative to unclear the final distribution such as the exclusion of another person with formula gifts, etc. equal priority;  To appoint a personal representative b. Jurisdiction Over without priority; Domiciliary Foreign Personal  To contest the appointment of another Representative. A domiciliary personal representative; foreign personal representative  To seek removal of a personal submits to personal jurisdiction of the representative; or courts of New Mexico in any  To contest a will. proceeding related to the estate of the decedent. NMSA § 45-4-302. If an informal proceeding is available However, if the affidavit procedure and the personal representative does not described in Section IV.B.1. above is anticipate challenges or the need to sale real used, the domiciliary foreign personal property from the estate to a third party, there representative is only subject to is no legal basis for choosing a formal over an jurisdiction up to the amount of the informal proceeding. See Davis article. money or value of personal property collected. Id. Note: Generally, A. Informal absent exceptional circumstances, the Proceedings. An informal proceeding personal representative of an estate is a finding that the submitted cannot be sued in an action at law in a application is complete and the state other than that of his original, duly executed and apparently appointment, unless ancillary letters unrevoked will is in the possession of of administration have issued. See the court. See NMSA § 45-3- State ex rel. Scott v. Zinn, 74 N.M. 303(A)(listing the required findings 224, 225–26, 392 P.2d 417, 418 for informal probate of a will), and (1964). The mere presence of the NMSA § 45-3-308(A)(listing the individual personal representative, required findings for the informal even if domiciled in New Mexico, is appointment of a personal insufficient to create jurisdiction in representative). No hearing is his representative capacity as executor required to obtain a ruling on an of estate opened in Texas. Id. informal application and the order

may be obtained without prior notice c. Effect of to the interested parties. However, Adjudication. An adjudication the informally appointed personal rendered in any jurisdiction in favor representative is required to provide notice within ten (10) days of their requires bond; or, (3) an interest appointment to the beneficiaries person demands bond pursuant to under the will. NMSA § 45-3- Section 45-3-605. NMSA § 45-3- 705(A). 603(A).

The court may decline an In the context of the formal application for informal appointment proceeding, the court may order bond of a personal representative for any sua sponte, unless the will reason. A declination of informal specifically relieves the personal appointment is not an adjudication representative of obtaining a bond. and does not preclude appointment in NMSA § 45-3-603(B). Further an formal proceedings. NMSA § 45-3- interested person may request bond 309 pursuant to Section 45-3-605, but to order bond is within the discretion of B. Formal Proceedings. the court. Id. Additionally, the An interested person may bring a district court may relieve the personal formal proceeding regardless of the representative of the obligation of existence or status of informal bond, or lower the amount, even proceedings. See NMSA § 45-3- when bond is required in the will. 401(B) and 45-3-414(B). The filing NMSA § 45-3-603(B) and 45-3- of a formal proceeding automatically 604(C). stops the informal proceedings, and requires that the informally appointed 2. Supervised or Unsupervised personal representative refrain from Administration. The vast majority of New exercising any power except that Mexico administrations are unsupervised. which is necessary to preserve the The default administration is unsupervised. estate. NMSA § 45-3-401(C) and NMSA § 45-3-502(B). A district court has (D). Further, the mere filing of an the authority to order a supervised issue matter which requires formal administration (1) if the decedent's will directs proceedings automating transforms supervised administration, unless the district the informal probate to a formal one. court finds that circumstances have changed See In re Estate of Duncan, 132 N.M. since the execution of the will and that there is 426, 429–30, 50 P.3d 175, 178– no necessity for supervised administration; (2) 79, rev'd sub nom. Estate of Duncan if the decedent's will directs unsupervised v. Kinsolving, 133 N.M. 821, 70 P.3d administration, only upon a finding that 1260 (reversed on other supervised administration is necessary for grounds)(2003). A contest to an protection of persons interested in the estate; informally probated will may be filed or (3) in other cases if the district court finds within one year of the informal that supervised administration is necessary probate. NMSA § 45-3-108(A)(3). under the circumstances. NMSA § 45-3-502. Note: the New Mexico probate code places Formal proceedings are the burden of seeking an order of supervised considered separate proceedings and administration upon the person who desires an order disposing of the issues raised the supervised administration. See NMSA § by the petition is final and appealable 45-3-502(A). order, in spite of the ongoing nature of the administration. See In re In an unsupervised administration, the Estate of Duran,141 N.M. 793, 161 personal representative has the authority to act P.3d 290 (2007). Hearings on formal within the scope of their authority under the proceedings must on fourteen (14) New Mexico Probate Code and the will days notice to interested parties. without the necessity of approval for each NMSA § 45-4-401(A). action by the court. See NMSA § 45-3-704 and § 45-3-710. C. Bonds. In an informal proceeding, an appointed 3. Appointment and Issuance of personal representative is not required Letters. The personal representative is to provide bond, unless: (1) the without power and the administration of an person is appointed as a special estate is not commenced until letters are administrator; (2) the will specifically issued. NMSA § 45-3-103. Prior to the issuance of letters, the appointed personal representative must accept the appointment by 5. Powers and Duties of the filing any ordered bond and a statement of Personal Representative. A personal acceptance of the duties of the office. Id.; representative has broad powers to administer NMSA § 45-3-601. While the personal the estate. NMSA § 45-3-710. To the extent, representatives powers and tuties commence that a personal representative has power over upon appointment, they may related back in estate property “that an absolute owner would time to give legal effect to action of the have, subject only to his trust to use and apply appointed personal representative which the property for the benefit of creditors and occurred prior to the appointment. NMSA § others interested in the estate.” Id. Unless a 45-3-701. The form of the Letters, which is personal representative is operating in a defined in Section 45-1-201(A)(29), are found supervised administration, they may exercise in the New Mexico Rules Annotated 4B-106 their powers “without notice, hearing or order (Letters of Administration) and 4B-107 of court.” Id. (Letters Testamentary). Broadly speaking, the personal 4. Notices to Heirs and representative has the specific duty to settle Devisees. As previously noted, the and distribute the estate in accordance with appointment of a personal representative the will. NMSA § 45-3-703. The personal through informal proceedings may be representative is to make distribution “as achieved without prior notice, unless notice is expeditiously and efficiently as is consistent demanded pursuant to Section 45-3-204. with the best interests of the estate.” Id. NMSA §§ 45-3-306 and 45-3-310. Notice of Generally, the personal representative also is appointment as personal representative must subject to the same standards of care as a be provided to beneficiaries of the will within trustee. NMSA § 45-3-703(A). These ten (10) days of the appointment. NMSA §§ standards of care include the duties of loyalty 45-3-310 and 45-3-705. However, notice of and impartiality to the estate beneficiaries. See the informal probate is only required within id.; see also NMSA §§ 45-7-606 (loyalty as it thirty (30) days. NMSA § 45-3-306. In relates to investments), 45-7-607 (impartiality practice, it is preferable to send both notices as it relates to investments), 46-3A-103(b) simultaneously. (impartiality as it relates to principal and income allocations), 46A-8- 802 (loyalty Formal proceedings may not proceed specific to trusts) and 46A-8-803 (impartiality without formal notice. NMSA § 45-3-403(A). specific to trusts). The duty of loyalty requires Notice must be sent to the following: a personal representative to act “solely in the interest of the beneficiaries”. NMSA § 46A-  The surviving spouse; 8-802. The duty of impartiality requires a  The decedent’s children and other heirs; personal representative to act impartially as  The devisees under the will, if any; between the several beneficiaries giving due  A previously appointed personal regard to the beneficiaries’ respective representative, if any; and, interests. NMSA § 46A-8-803.  All unknown interested persons. New Mexico also imposes a fiduciary NMSA § 45-3-403(B). Notice is to be duty upon a personal representative duty to effected upon those persons with a known administer the estate for the benefit of both address pursuant to NMSA 45-1-401. The creditors and beneficiaries. See NMSA § 45- simplest method of effecting service under 3-711 (a personal representative has full that section is to send notice via first class power over estate property, “subject to his mail to the person’s last known address at trust to use and apply the property for the least 14 days in advance of any hearing. benefit of creditors and others interested in NMSA § 45-1-401. However, notice to the estate” (emphasis added)). unknown persons and to known persons with unknown addresses is by publication. NMSA 6. Inventory. A personal § 45-3-403(B). Notice by publication is representative has an obligation to prepare an effected by publishing the notice at least once inventory of the decedent’s date of death a week for two consecutive weeks in a property within three months of their newspaper published and having a general appointment. NMSA § 45-3-706(A). The circulation in the relevant county. Id., NMSA inventory must list each piece of property, and § 45-1-401(A)(3). its estimated value on the date of death, with reasonable detail. Id. Unlike Texas, the New 8. Creditor Claims and Mexico inventory should indicate any Limitations. encumbrances associated with a particular piece of property. Id. A personal a. Presenting a Claim. representative is not required to file the A creditor may present a claim in inventory with the court and generally should three different methods. NMSA § 45- not for the preservation of confidentiality in 3-804(A). With respect to the first most cases. NMSA § 45-3-706(B). However, two methods of presentment below, a personal representative must provide a copy the statement must include: the of the inventory to interested persons upon creditor’s name and address; the request. Id. amount claimed; the basis of the claim; if the claim is not yet due, the 7. Notice to Creditors. The New date on which the claim is due; if the Mexico Probate Code provides for two types claim is contingent or unliquidated, of notices to creditors: required and the nature of the uncertainty; and, if permissive the claim is secured, a description of the security. A. Required Notice. A personal representative has an duty to (1) The creditor may mail or give written notice to any known otherwise deliver the claim to creditor or any creditor who is a personal representative. Id. reasonably ascertainable by mail or other delivery. NMSA § 45-3- (2) The creditor may file the 801(A). The notice to known claim with the court where creditors must be provided within the matter is pending. Id. three months of appointment. Id. Presentment is effective upon The notice shall (a) instruct the receipt by the PR or filing creditor to present its claim within with the court. Id. two months of the later of (i) the mailing of the notice, or (ii) the (3) The creditor may simply sue publication of a general notice to in an appropriate court with creditors, if made, and (b) inform the jurisdiction over a personal creditor that failure to present the representative. Id. claim within the stated time periods bars the claim. Id. b. Limitations. All claims must be presented within one B. Permissive Notice. A year of the decedent’s death, whether personal representative may publish or not an administration of the notice to other creditors. NMSA § decedent’s estate has commenced and 45-3-801(B). The publication must whether or not the creditor knew appear once a week for two about the decedent’s death. NMSA § successive weeks in a newspaper of 45-3-803(A)(1). There is no tolling general circulation in the relevant period for claims against a decedent. county. Id. The publication must: (1) Id. However, the notices discussed announce the appointment, (2) list the in Section IV.B.7. above shorten the address of the personal representative, one-year statute of limitations to (3) provide the name of the decedent within two months of the notice. and, (4) notify the estate’s creditors to NMSA § 45-3-803(A)(2). present their claims within two months after the date of the first c. Dealing with the publication of the notice or be forever Personal Representative. Third barred. Id. It is the practice and parties who deal with the personal recommendation of the author that all representative in good faith are personal representatives publish the protected from liability that might notice pursuant to Section 45-3- arise from the personal 801(B) even if there are believed to representative’s own breaches of be no creditors in order to bar any fiduciary duty or some defect in the potential claimants as noted below. judicial process that provided the personal representative with authority beyond what might have been proper. e. Proposal of NMSA § 45-3-714. Distribution. A personal representative may mail or deliver a 9. Distribution. A personal proposal for distribution to all persons representative’s most fundamental duty is to who have a right to object to the distribute the estate in accordance with the proposed distribution. NMSA § 45-3- decedent’s will “as expeditiously and 906. Distributees lose their right to efficiently as is consistent with the best object to the distribution on the basis interests of the estate”. NMSA § 45-3- of the kind to be distributed or the 703(A). Unless personal representative is value of the assets to be received if under a supervised administration, they may they fail to object, in writing, within proceed without court order. Id., NMSA § 30 days of receiving the proposal. Id. 45-3-704. However if a personal A personal representative may also representative needs guidance, they may recover an asset improperly invoke the jurisdiction of a district court to distributed to a beneficiary. NMSA resolve any question regarding the estate or its §§ 45-3-908 and 45-3-909. distribution. Id. Absent language in the will, the New Mexico Probate Code contains the 10 Closing. Unlike Texas, New following logistical structure as to Mexico requires a personal representative distributions. close the estate. A personal representative may choose between a formal proceeding or a. In-Kind Distribution. filing a sworn statement with the court. A personal representative is to Generally, the choice between these two distribute estate property in kind options will be predicated upon the absent some necessity in cooperativeness of the beneficiaries administration dictating otherwise. throughout the process of administration. NMSA § 45-3-906. a. Formal Proceedings. b. Attributable Income. A personal representative has the New Mexico has adopted the Uniform right, at any time, to petition the court Principal and Income Act (NMSA §§ for an order of complete settlement of 46-3A-01 through 46-3A-603). the estate. NMSA §§ 45-3-1001(A) Generally, net income attributable to (requiring notice to all interested property which is the subject of a persons, including heirs and specific bequest is to be distributed to devisees), 45-3-1002(A) (in the the recipient of that property; context of an informal probate, where otherwise, net income is to be heirs might be omitted). The petition distributed among all the may request the court, among other beneficiaries, but excluding those that things, to consider and to approve a received outright pecuniary bequests, personal representatives final account based on the beneficiary’s and distribution of the estate, and to proportionate share of the estate. adjudicate the final settlement and NMSA §§ 46-3A-201 and 46-3A-202. distribution of the estate. Id. and NMSA § 45-3-1001. The court’s c. Interest. Recipients order may include a discharge of a of pecuniary gifts are entitled to personal representative “from further receive interest at a rate of 5.0% per claim or demand of any interested annum, beginning one year after the person.” NMSA § 45-3-1004(C). date of appointment. NMSA §§ 45-3- 904 (providing for 5% interest) and b. Sworn Statement. A 46-3A-201(3) (recipients are to personal representative also may receive interest required by close the estate by filing a sworn “applicable law”). statement with the court. NMSA § 45-3-1003. The sworn statement may d. Residue. A personal not be filed any earlier than three representative may distribute the months after the date the PR was first residuary estate in “any equitable appointed. Id. Unlike formal closing manner.” NMSA § 45-3-906. proceedings, the closing statement does not discharge a personal representative. In fact, a personal against a personal representative. Id.; representative continues to have NMSA § 45-3-1005. authority to administer the estate for a one year period after filing the closing c. Reopening the Estate. statement. Id. Potential claimants An estate may be reopened if property also have six months after the date of is discovered after the estate is closed. filing of the closing statement to bring NMSA § 45-3-1008. breach of fiduciary duty claims