Estate planning means getting all of your most important affairs in order. With a valid will in place, you can simplify the probate process while ensuring that your loved ones get the exact property you want them to have. Creating a durable financial power of attorney and an advance healthcare directive gives people the authority and information they need to ensure you are taken care of if you fall unconscious or slip into mental decline.
By working with a Sunland Park estate planning lawyer, you can get insights into the best strategies to use to accomplish all of your biggest priorities. At New Mexico Financial Law, we’ll strive to help you understand all of your options and account for the unique qualities of your estate while creating a one-of-a-kind estate plan.
Call our firm today at (505) 503-1637 or contact us online to schedule a no-obligation consultation and estate plan review.
A will is an all-but-essential component of every estate plan. Regardless of your income or assets, a will can be beneficial. That’s because it is the only official way to transfer assets to loved ones after your death, according to your wishes.
Anyone who dies without a will leaves an “intestate” estate. In the absence of legally recognized instructions from the person who died (i.e., the decedent), the courts have to decide who to appoint as the estate’s personal representative. State laws then dictate who receives the estate’s property.
There are two primary laws to be aware of that affect intestate estates in New Mexico:
Determining who should inherit can be complicated for the appointed estate administrator. They may need to consult with a lawyer who has experience providing probate services to determine the legally compliant party who should receive the estate’s property.
The only way to avoid this situation is for the decedent to make a will while they still have the capacity to do so. Avoiding intestacy is one of the main reasons to proactively make preparations with the help of a Sunland Park estate planning attorney.
Some documents you can create as part of your estate plan include:
Every estate plan looks different, but they should all include a will. A Sunland Park estate planning lawyer is also likely to recommend that you consider your options for incapacity planning. A complete incapacity plan includes a living will, powers of attorney for finances and healthcare, and other possible preparations.
The other forms of planning you use are entirely up to your preferences, your goals, and the unique factors of your estate. Review the sections below for more details on wills and trusts and other estate planning documents. You can then seek guidance from a licensed attorney to build the best possible estate plan for your specific goals.
“Incapacitation” means that someone has reached a mental state where they are unable to handle their own affairs. They could be in a coma, too weak to communicate, suffering from a condition that causes confusion, or impacted by a neurodegenerative disease like Alzheimer’s.
When someone is incapacitated, they are vulnerable to financial mismanagement, scams, and delinquency. They are also unable to communicate their preferences for medical treatment.
If the individual did not take the time to carry out some form of incapacity planning, then their loved ones would be forced to seek guardianship and conservatorship appointments from a court. This is a very long and expensive process. It is likely to lead to delays and other negative consequences while the incapacitated person lingers in their state.
The best option to prevent this scenario is to create durable powers of attorney while you still have the capacity to do so. These documents appoint someone as your agent, giving them the authority to handle your affairs and make key decisions on your behalf.
There are two main types of durable power of attorney to consider:
With both types of power of attorney, your agent is limited by the scope of authority you give them. In other words, they only have control over the things you permit them to handle. They are also bound by any rules, guidelines, or other instructions you provide.
An advance care directive documents all your medical instructions for care providers and your healthcare agent. These are formally called your “instructions for care” — sometimes called a “living will.”
Completing your directive means your agent has all of the information they need to know which types of care you would want when you are incapacitated.
Your directive also allows you to name your primary physician, who must be consulted to determine if you are incapacitated before the rest of your directive activates.
Make an appointment with an estate planning law firm in New Mexico to go over all of your options. They can help you create an incapacity plan that records your wishes, leaving you and your loved ones prepared for nearly any scenario.
A trust is a special legal arrangement that makes someone else (called a trustee) responsible for property. Once this property is transferred to the care of the trustee, the trust itself becomes the owner of it.
If a trust creator (called a grantor, settlor, or trustor) transfers property to a trust before they die, this is called a “living trust.” The trust property can then avoid probate.
Living trusts can be relatively straightforward arrangements. They can transfer property after the grantor’s death, like a will. However, unlike a will, this transfer can occur as soon as the grantor’s death is confirmed.
A grantor can also set other rules for their living trust. They could, for example, arrange for the trust to pay out all of its assets to recipients (called beneficiaries) before the grantor’s death. Or, the trust could keep hold of its property after the grantor’s death, which gives the assets the chance to continue producing income from its investments.
With these arrangements, a living trust can provide convenience and benefits — both during the grantor’s life and after their death. There are many different types of living trusts, too, including ones designed for a specific purpose, such as holding a life insurance policy.
Talk to a Sunland Park estate planning lawyer to go through your options and decide if a living trust offers the right benefits for you.
A testamentary trust isn’t formed until the grantor dies. With this arrangement, the assets used to fund the trust must still go through probate.
The estate’s personal representative must follow instructions in the grantor’s will to create the trust. In some cases, the testamentary trust may only be created under certain conditions — referred to as a “contingency trust.”
A common example of a contingency trust is one created for heirs who are minors. Suppose that a child or another party is still under the age of 18 when they are supposed to receive an inheritance. To prepare for these cases, the grantor can leave instructions in their will stating that a testamentary trust should be created to hold onto the money for the minor, instead.
Other testamentary trusts can be created for specific purposes. An asset protection trust can ensure that inheritances are not immediately claimed by an heir’s creditors, for example. A charitable trust can delay or reduce taxes while supporting a cause the grantor believed in.
One important type of testamentary trust to be aware of is a bypass trust (sometimes called a credit shelter trust). These trusts hold onto property meant for the decedent’s children and other heirs.
The decedent’s spouse can still receive income from the trust’s investments, and they may be able to access the principal funds in a specific type of emergency. However, the trust’s property is promised wholly to the intended heirs. This arrangement prevents a situation where a spouse remarries and promises their former partner’s property to new family members — cutting the old family out of their will.
Testamentary trusts are usually more complicated to arrange for than a living trust. There is also more room for error. Since the grantor passes before the trust is formed, it is often very difficult to alter them in time to correct any issues — unless these issues are discovered before the grantor’s death.
To ensure that you make the right arrangements, given your unique goals and needs, you can refer to an experienced estate planning attorney in Sunland Park.
Many people put off making their will and forming other estate plans. The truth is that you are never too young to get started. However, it may sometimes be too late. The last thing you want is to leave your loved ones without instructions regarding your wishes — or the legal ability to carry out those wishes because of a lack of official documentation.
By taking the time to go through estate planning with an experienced lawyer, you can be prepared for nearly any scenario that life sends your way. Call our Sunland Park law firm at (505) 503-1637 to discuss estate planning today during a confidential, no-obligation consultation.
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