A contingent will is a will that the creator (called a testator) intends to come into effect only when certain conditions are met. For example, the will may be effective only under the condition that the testator is unable to sell their sole proprietor business prior to their death.
In some cases, contingent wills can be confusing and hard to enforce by the courts. Often, they may instead interpret the contingency clause as a form of explaining why the will was created, which is called an inducement.
Even in the event that the court determines that the will was intended to only activate under certain conditions, there still may be confusion regarding what should happen to the estate if the status of the condition is unclear. There may also be complications involved in interpreting whether the condition was met if a condition is only partially true — such as if the testator transferred ownership of their business to a known party rather than through a traditional sale.
Individuals wanting to create a contingent will may be better served by including contingent bequests or contingent beneficiaries or by creating a contingent trust rather than making their entire will contingent on certain conditions. They can refer to a New Mexico contingent will attorney to learn the best path forward for their estate plans, given the scenarios they want to address.
Schedule a no-obligation consultation and estate plan review with New Mexico Financial & Family Law today when you call us at 505-503-1637 or contact us online.
Engaging with a lawyer to discuss your will is always advisable, but a New Mexico contingent will lawyer becomes even more helpful when you have complicated conditions in mind for distributing your estate.
Consider the complications or confusion that a contingent will can create when it comes time to handle your estate. There is a high likelihood that the court may honor the text of the will in its entirety if it is the most recent version of the will, regardless of whether the contingency condition is met.
On the other hand, a court may feel forced to rule in favor of a single beneficiary’s interpretation of the will in some situations, even if it is unclear whether the condition stated in the will was truly met.
At worst, the contingent will could be rejected outright. Without an earlier version of the will that has been properly attested and executed — and not revoked — the entire estate may become intestate.
Refer to a New Mexico contingent will attorney to reduce the risk of undesirable outcomes. They can help you choose precise language to ensure that your contingency preferences are crystal clear and that your will is likely to be enforced as intended.
They can also walk you through several options to consider if you want to keep a contingency clause in your will but don’t want the entire will’s validity to hinge on that one scenario.
A contingent will is supposed to activate only when a specific condition described in the will is true.
Common examples of will contingencies include a will that is only effective if:
If the testator dies but the condition is not true, then the will is supposed to remain inactive.
A contingent will must be properly executed, as with any other will. Execution consists of the testator signing the will in the presence of two witnesses.
The witnesses must then sign the will in one another’s presence and in the presence of the testator (see NM Stat § 45-2-502).
A contingent will is typically made as a backup to other wills that have already been properly executed. If the testator’s intentions are well-understood, then the contingent will only activates when the conditions they lay out are true.
Otherwise, the most recent valid copy of the will activates instead.
However, the courts may end up being confused about the intentions of the testator, including whether they meant for the contingent will to actually serve as the most recent copy. They may also be unsure as to whether the contingency condition was met.
Accordingly, anyone creating a contingent will should take great care to be extremely specific about the conditions they set forth. They should also consider ways to phrase the condition so that there is little ambiguity as to whether it has or has not been met.
Alternatively, the testator may want to consider other options than creating an entirely separate, contingent will. A New Mexico contingent will lawyer can review these options with you and help you decide on the ones that best align with your intended estate plan.
Instead of drafting an entirely separate contingent will, you and your attorney can consider the following options:
A bequest is an instruction to give personal property to a beneficiary. A devise does the same thing, but for real property.
Drafting a contingent bequest or devise creates an “if… then…” statement in your will. You can state the condition that applies and how it affects who gets what property.
As an example, a testator may state that they wish for their jewelry collection to go to her sister unless all of her nieces have reached age 18, in which case the jewelry should go to them instead.
Similarly, a contingent devise might gift a home to a family member if they still do not own a house and are paying rent for their primary living situation at the time of the testator’s death.
If you wish to include a contingency clause similar to these two examples, make sure to state the condition clearly and reiterate what should happen if the condition is not met.
A contingent beneficiary is similar to a contingent bequest, except it acts more as a “backup plan” for an inheritance if the original beneficiary dies, cannot be located, or refuses their inheritance.
In these cases, the conditions are less complicated to lay out since the property in question is still being transferred no matter what — it just depends on who is available to receive it.
When listing contingent beneficiaries, consider adding a more generic descriptor rather than naming an individual as the last in line to receive an inheritance. For example, a will could state, “if none of the preceding beneficiaries are able or willing to receive the bequest, then the entirety of the bequest reverts to my next of kin.”
A contingent trust is a type of testamentary trust that is only created if certain conditions are met.
One common example is a trust that is created for the benefit of all heirs who would be minors at the time of the testator’s death. The testamentary trust would then hold onto the parts of the estate designated for these individuals until they reach the age of majority.
Multiple contingent trusts can be created, but a single trust can often accomplish multiple goals since the trustee will be given explicit instructions on what assets go to which heir. The trust can retain the property, possibly even earning income on it, until each condition is satisfied and the trust’s contents are distributed in response.
A contingent trust could last just a few years or several decades, depending on what the testator hopes to achieve. The trust dissolves when all of the assets used to fund it are distributed to the designated beneficiaries.
Distributions from wills are supposed to be carried out immediately after the remaining steps in probate have concluded. The personal representative of the estate is unable to hold onto the property for any extended period of time, so it must either go to a stated beneficiary or pass to next-of-kin in an intestate manner.
A living trust, on the other hand, can hold onto property for an indefinite period. As their name implies, these trusts are created during the testator’s lifetime.
The testator (called a grantor, in the context of trust creation) funds the trust with property and designates a trustee to manage it.
Trustees have wider discretion to interpret the rules (called standards) for distributing property to beneficiaries compared to an estate’s personal representative. This added control reduces the risk of challenges to a will related to a misunderstanding of a contingency clause or similar bequest because a trustee has more power to interpret the rules of the trust compared to a will.
Creating a living trust with contingency rules eliminates the one difficulty with all the other options mentioned above: they still rely on an interpretation of your will that correctly guesses your wishes and holds all of your stipulations to be valid.
Unfortunately, even a clear and unambiguous will might be challenged in court. Trusts have more legal standing to enforce their language while giving them the luxury of time to sort out who should inherit what property.
The case New Mexico Boys Ranch, Inc. v. Hanvey provides a distinct example of why it may be best to place assets in a trust if you want certain people to inherit them under certain conditions.
It concerned a wealthy landowner named Mary E. Martin, who stated that she would leave the entirety of her property to her mother. Ms. Martin included a contingency clause, though, saying that if her mother died around the same time as her, then the entire estate should go to the New Mexico Boys Ranch, Inc.
However, Martin’s mother died more than six years before she did. During this time, Martin started to create a living trust, placing the bulk of her estate within it and listing the New Mexico Boys Ranch as the sole beneficiary. However, reading a prior opinion of the case, this trust was never finalized by her attorney at the time of her death.
Martin did not, however, take the time to produce a new and updated copy of her will.
When Martin died, her sole surviving next-of-kin — a first cousin named Rosa Hanvey — argued that the text of the will was not honored as written. Even though Ms. Martin had already taken steps to place her estate into a trust, Hanvey argued that the action should have been reversed, and the entirety of the estate should have been considered intestate, leaving it all to her.
After a trial court ruled against Hanvey, a New Mexico Court of Appeals decision ruled in her favor. The case then went to the New Mexico Supreme Court, which overturned the appeals court decision, again ruling in favor of the New Mexico Boys Ranch.
The Supreme Court opinion cited several aspects of the case that clearly demonstrated Martin’s intent for the estate to either go to her mother or the New Mexico Boys Ranch:
The Supreme Court used Martin’s attempt to create a trust to assist in interpreting the will. If the trust had been completed, there would have been nothing to fight over. Even if a will exists, if all property was properly removed and placed in the trust, there would have been nothing for the probate court to do.
As you can see, there are many options available to customize your will or create a trust — all with the goal of ensuring that your wishes can be flexible given the unpredictable nature of the world.
Whether by using a contingent will, a contingent bequest/devise clause, listing contingent beneficiaries, or creating a living trust with contingent standards of distribution, New Mexico FInancial & Family Law can help you maximize the chances of your wishes being well-understood and carried out.
Find out more about your options and how to protect your estate from undesirable outcomes when you call our New Mexico contingent will law firm at 505-503-1637 or contact us online.
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