“Estate planning” can easily be summed up as “getting your affairs in order.” The idea is that our day-to-day plans can’t prepare us for the most serious disruptions to our lives — including their eventual end.
If we take the time to go through estate planning with an experienced attorney, however, we can have everything ready, even if the worst were to happen.
Your “estate” is a way to describe everything you owned, earned, and were given throughout your life. It includes your assets and debts, as well as things that are difficult to precisely quantify, such as our ability to support our loved ones.
If we don’t want to take our estates for granted, we need to make plans that can safeguard them. That means making a will, and it can also mean forming a trust, reducing estate taxes, or planning for your possible incapacitation.
Ultimately, it’s about protecting what you built in life, no matter what might come your way. Every person’s situation and goals are different, too. Accordingly, they can work with an experienced estate planning lawyer in New Mexico: someone who can help them create a one-of-a-kind strategy.
Get started crafting your personalized estate plan during a no-obligation consultation with New Mexico Financial Law. Call (505) 503-1637 or contact us online to schedule your confidential appointment today.
Your estate includes all of the following:
Your estate’s contents may include other assets and liabilities, as well.
It should also account for important arrangements, such as those that may be passed on to your heirs or could otherwise affect your estate after you pass. For example, if you have been designated as a beneficiary, trustee, or donee of trust property, you should relay that information to the person in charge of handling your final estate.
You can draft up a preliminary inventory of your estate contents before you meet with a New Mexico estate planning lawyer. They can then help you thoroughly investigate, reviewing for common types of overlooked assets and debts before incorporating everything into your comprehensive estate plan.
There are aspects of an estate that go beyond the purely material concerns listed above. These inevitably come into play when forming estate plans.
For example, when you go through the process of creating a will or other arrangements like a trust, your relationship with your family and other loved ones should guide you. After all, your decisions on inheritances and other supportive arrangements carry an emotional weight, not just a financial one.
Put another way, the peace of mind that comes from estate planning usually doesn’t stem from the thought that some financial investment can continue to pay off after you are gone. For many people, we actually couldn’t care less what happens to our estate property when we die, from a financial standpoint — it’s the fact that this property can support the people, causes, and concepts you loved in life that matters.
In line with the concepts above, when you think about the “estate” part of estate planning, think of it as protecting the things you care about most in your life.
We need to make plans to protect our ability to support ourselves and have the right care decisions made for us during our incapacitation, for example. We also don’t want our loved ones to be burdened by an overly complicated — or financially draining — probate process. And when it comes to our legacy, we want the confidence of knowing that what we did in life mattered because it can continue to provide for the people and causes we cared about most.
So approach estate planning from this mindset: you want plans put in place so that, no matter what, you could be ok with the outcome. That ability to forge ahead fearlessly into the unknown is really what estate planning is all about.
The documents and strategies you include in your estate plan will vary, depending on your goals, concerns, and unique situation. Your options include:
The exact documents and legal strategies you use in your estate plan should be custom-fit to help you account for your specific estate portfolio and your unique goals.
Talk to an attorney from an experienced New Mexico estate planning law firm to describe your objectives in detail. They can help you craft a personalized estate plan, along with creating the documents you’ll need to achieve your goals.
While all estate planning documents are technically optional — there’s no law requiring you to create any of them — a will is highly recommended by most professional bodies. Per guidance issued to New Mexico State University employees: “You are highly encouraged to have one to ensure that the property you leave behind upon your death will be distributed according to your wishes.”
The main issue is that, without a will, asset distribution is entirely determined by state laws. Dying without a will makes your estate “intestate.” At that point, nothing you did in life gives you control over who is selected as your estate’s personal representative or who inherits your assets.
Instead, New Mexico statutes (NM Stat §§ 45-2-102 to 45-2-103) state that your spouse, children, or other next-of-kin must split your estate in its entirety. Often, this requirement pressures your personal representative to liquidate your estate to ensure that all parties obtain an equal inheritance. Otherwise, a relative could potentially sue the estate for unfair and unequal treatment.
If you would rather have control over who inherits your property — as most people would — then make sure to take the time to create a will while you still can. This preparation allows you to make specific gifts to loved ones, increasing the chances that your prized property or possessions are transferred intact.
You can also make other specific arrangements, such as instructing your estate representative to give any remaining assets to your surviving spouse. With the right provisions, you can put everything in place and leave nothing up in the air when it comes time to dispose of your final estate.
Picking your personal representative has a huge effect on the administration of your estate. You want to choose someone who is competent, able to make sound decisions, and can be relied upon to consult with the right professionals when the time comes.
If you did not select a personal representative — or you neglected to execute a will — then the court will choose one for you. Courts prefer picking your surviving spouse or someone designated to inherit part of your estate, but a creditor or other interested party can also come forward and be selected after 45 days.
Another special quality of a will is that it bypasses many of the requirements for selecting a guardian of a minor child or adult dependent.
Normally, the party seeking to be selected would have to provide compelling reasons as to why they are the best-qualified choice for guardian. With a minor, the child may have to stay with someone for at least 120 days before they would be eligible to serve as a guardian.
Nominating someone in your will immediately makes them qualified (unless there are reasonable objections), speeding up the process of appointing final guardianship in nearly every case.
Trusts can be key to the success of some estate plans, but they aren’t always necessary.
A trust is a legal arrangement where someone (called the grantor) transfers ownership of their property to the trust. Another person (called the trustee) becomes responsible for the property’s management. This property will eventually be transferred to the trust’s beneficiaries, who are named by the grantor.
Trusts allow for all sorts of specialized structures and flexible arrangements. Examples of common types of trusts used in estate planning include:
Even the simplest trust costs money to create, and they naturally generate expenses and other forms of overhead. Nevertheless, these costs can be worth the tradeoff if the trust produces substantial benefits for the estate plan.
Living trusts, for example, can be used to speed up asset transfers after the grantor’s death.
A testamentary trust can be created for a minor to prevent their inheritance from falling under the control of a court-appointed custodian.
A marital or bypass trust may be useful if someone wants to avoid a situation where their spouse inherits everything and then leaves nothing to their children.
Having someone serve as your trustee can also provide benefits for business succession or incapacity planning. If you happen to become incapacitated or otherwise unable to manage property on your own, a successor trustee or co-trustee can step in to ensure that assets are handled properly.
Incapacitation can be a more serious outcome than death, in some cases. While that may sound morbid, the truth is that hospitalization is expensive, costing on average more than $14,000 in 2019 for a typical inpatient stay.
If you are hospitalized or otherwise incapacitated, you need someone who can access your finances, sign forms, and keep up with all of your expenses. These expenses include not only the uncovered costs of your care, but also utility bills, family maintenance, and obligations like a mortgage or business overhead.
Creating a durable financial power of attorney allows you to nominate someone to take over your financial affairs while you are incapacitated. This agent can be a spouse, a trusted family member, or a professional services provider.
You can also nominate someone to serve as your healthcare agent. This person separately reviews your medical files, confers with your care teams, and consents to diagnostic or treatment options.
Your agent selects the appropriate treatment plan based on the instructions you leave them. They can also be given instructions on what types of care you would want versus those you would refuse when you have a terminal or severely debilitating condition.
Your advance healthcare directive should specifically cover decisions like when to use a feeding tube, whether to resuscitate you if you stop breathing, or whether you would prefer care in your own home as opposed to a hospital setting after a terminal diagnosis.
In your advance healthcare directive, you can include instructions for these matters — or you can leave certain decisions up to your agent’s discretion. This information takes the burden and uncertainty off your loved ones in a challenging time.
The attorneys at New Mexico Financial Law have collectively practiced estate law, will creation, trust formation, and probate administration for decades. We can provide you with an experienced attorney you can trust. They’ll help you make some of the most consequential decisions of your lifetime, ensuring that your wishes are known and that all needed preparations are made.
Once you have estate planning taken care of, you can rest easier. You can also revisit your plan and revise it with less effort, reducing the stress and time required to maintain a strategy that’s perfectly fit to your needs.
Find out more about estate planning strategies you can use during a no-obligation case review. Call (505) 503-1637 to schedule your consultation with an experienced lawyer in your area today.
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