Estate Planning for Unmarried Couples in New Mexico

Quick Summary: Estate Planning for Unmarried Couples in New Mexico

• Unmarried couples need estate planning to secure inheritance rights that would be offered to a spouse by default.
• A will is highly recommended to prevent intestate property from going directly to children, a parent, or a sibling, rather than a long-term partner.
• Unmarried couples can also use beneficiary designations and/or a trust to transfer property after a death.
• Creating a financial power of attorney and advance health care directive is also recommended so you can designate an unmarried partner as your agent, giving them the authority to handle finances and/or make care decisions when you have become incapacitated.

Need immediate help? Contact New Mexico Financial & Estate Planning Attorneys.

There’s no wrong way to build a life together. Whether because of personal preferences, deep-seated values, or a simple desire to avoid formality, there are many valid reasons to remain unmarried. While some couples are keen to enter a marriage, others have their own reasons for staying out of a legally recognized union. 

At the same time, unmarried couples should understand that they will not have the default estate planning protections that apply to married spouses. As such, each partner should make sure to complete a will, keep account beneficiary designations up to date, and complete the other recommended steps of estate planning.

New Mexico Financial & Estate Planning Attorneys can help you ensure that your beloved partner can be included in your plans and taken care of just as an officially designated spouse would be. Find out how to prepare for a wide range of situations and solidify unmarried partner inheritance rights in New Mexico when you call (505) 503-1637 or contact us online to schedule a confidential, no-obligation consultation.

Why Unmarried Couples Need a NM Estate Plan

Traditional marriages have long been given a special place in legal codes. When someone enters a legal union, they automatically confer certain rights to their spouse. In New Mexico, these spousal rights can include the right to:

• Have all property acquired during the marriage be considered as community property
• Inherit at least 50% of the community property after the death of a spouse
• Inherit 100% of community property and at least ¼ of separate property if a spouse dies intestate, which means they died without a valid will (NM Stat § 45-2-102)
• Have top priority for being selected as the administrator of a deceased spouse’s estate
• Review privileged health information
• Have top priority for being selected as their partner’s healthcare surrogate in the event they are incapacitated (although long-term partners receive a similar level of priority)
• Claim a family allowance and personal property allowance during probate
• Claim surviving spouse benefits for Social Security, military retirement, and other retirement pay programs
• Receive estate property with an unlimited exemption from estate taxes

Fortunately, a comprehensive estate plan can confer similar inheritance rights to an unmarried partner in New Mexico. Each partner should be sure to review every component of their plan thoroughly and update it often. This due diligence reduces the risk that a document could be out of sync with what you would want after your death or incapacitation. 

Creating a Will to Leave Property to an Unmarried Partner

A will legally conveys property to a chosen heir after its creator’s death.

Without a will, everything a person owns becomes part of what’s known as an “intestate” estate when they pass. An intestate estate, by law, must go to the decedent’s most direct surviving category of relative.

Normally, a spouse assumes the majority share of an intestate estate. However, without a will, there are no automatic rights to property ownership for unmarried couples in New Mexico. Instead, the decedent’s property may go to surviving children, parents, siblings, or other next-of-kin. Their property may even go to the children of an ex-spouse if no other relative is available to inherit it (NM Stat § 45-2-103). To avoid this situation, ensure that you have a will, keep it up to date, and clearly describe the property you wish for your unmarried partner to inherit.

You can also include provisions in your will to act as a “backup” to other methods for transferring property after your death. A residuary clause, for example, can be used to confer all estate property not specifically described in the will to an unmarried partner.

An attorney can review your situation and your specific goals to make recommendations. In every case, they are likely to suggest creating a will in addition to other forms of domestic partnership estate planning in New Mexico.

Naming Your Unmarried Partner as an Account Beneficiary

One of the simplest ways to leave valuable accounts and benefits to your partner is to name that partner as a survivor beneficiary.

Survivor beneficiaries can be listed on many types of accounts, including:

• IRAs (ROTH or traditional), 401(k)s, pension plans, and other retirement programs
• Transfer-on-death (TOD) or payable-on-death (POD) banking, savings, and finance accounts
• Life insurance policies

A beneficiary designation for unmarried couples in New Mexico is a straightforward but powerful way to confer survivorship rights to the person you care about the most.

Power of Attorney and Advance Directives for Unmarried Couples

A financial power of attorney authorizes a specific person, known as your “agent”, to handle bills, finances, and other important business in your place under specific circumstances. Often, these documents are “durable,” meaning they remain active even after you have become incapacitated.

Naming your partner as an agent with financial power of attorney in New Mexico allows them to access key accounts. They can then keep your household bills paid and operate your finances the way you would want. If you permit them to, they can even take over the management of a business you own.

A medical power of attorney operates similarly to a financial one, except it designates a healthcare agent who can make care decisions on your behalf when you are incapacitated. This agent could request a specific care provider, consent to plans of treatment, and ensure that your wishes for medical care are understood in times when you can’t communicate those wishes yourself.

It is essential to designate a healthcare proxy for unmarried partners in New Mexico. Otherwise, family members with closer legal ties may try to block a partner when they try to select a course of treatment. These situations tend to emerge particularly often when someone has instructed their surrogate to withhold life-prolonging care.

Without a medical power of attorney and clearly written instructions for care, another family member may be able to obtain surrogate status over an unmarried partner or even receive guardianship over the incapacitated person. This status could give the family member the ability to make their own care decisions, which could contradict what the incapacitated person would have wanted.

Fights over care or guardianship can take considerable time and expense while leading to strife between loved ones. Creating an advance directive with a medical power of attorney and instructions for care can avoid this undesirable situation.

Including an Unmarried Partner on a Property Title

Property ownership for unmarried couples in New Mexico can be simplified through the use of joint tenancy or transfer-on-death deeds.

A joint tenancy with right of survivorship (JTWROS) title gives every person on the title exclusive rights to inherit a deceased co-owner’s share. Under this arrangement, a surviving partner can automatically inherit their deceased partner’s share of ownership.

A transfer-on-death deed (TODD) can transfer the decedent’s share of interest to their partner without giving that partner joint tenant status during their lifetime.

Both transfer-on-death deeds and joint tenancy with rights of survivorship titles in New Mexico have their merits. Choosing the right one will depend on your situation and whether you want your partner to be included on your title during your lifetime.

Can My Unmarried Partner’s Children Be Included in My Estate Plan?

If you are the parent of the children, they have automatic rights to inherit under intestate succession laws in New Mexico. However, if you die intestate, the rights of your “surviving issue” supersede the rights of an unmarried partner. In this scenario, your children (and other direct descendants, potentially including grandchildren) would be the only ones to inherit, skipping your partner.

Stepchildren are not included in intestate succession rights, either. You would need a will or some form of non-probate transfer to provide them with a share of your estate when you pass.

Refer to an attorney to discuss the best strategies to use, which include the option to create a living trust in New Mexico and list children (including stepchildren) as beneficiaries.

Other Useful NM Estate Planning Documents for Unmarried Couples

Cohabitation agreements in New Mexico act similarly to a prenuptial agreement: guaranteeing rights to some property while excluding rights to others. They can help couples avoid legal conflict while establishing clear-cut boundaries at the onset of the relationship.

Guardianship plans can be included in a will, but you may want to incorporate other forms of documentation to ensure that a surviving partner is indicated as the preferred person to raise children in the event of your death. 

Assigning guardianship of your children to an unmarried partner is particularly important, as there is a risk in some cases that a direct relative may be able to petition a court to receive preference.

Finally, creating instructions for your partner to carry out your estate plan after your death reduces the risk of confusion. These instructions can describe the location of your will, clarify how trusts should operate, and also provide information on how you would like digital assets managed. Unlike a will, this information is kept private and out of the public record, so you can securely describe the location of things like deeds and safe deposit boxes.

Talk to an Attorney About Domestic Partnership Estate Planning in New Mexico

The person you trust to spend your life with deserves to be included in your estate plans. With the proper planning, you can ensure that they inherit your assets and can take care of you when you are incapacitated.

New Mexico Financial & Estate Planning Attorneys is ready to help you in any way we can. Reach out to schedule an appointment with an experienced property rights and estate planning lawyer when you call our firm at (505) 503-1637 or contact us online.