New Mexico Mutual Will Lawyer

A mutual will is a special type of will arrangement where spouses (or other individuals with closely tied finances) both draft similar will documents and then link them with a signed agreement stating that the wills cannot be changed except by mutual consent.

Similar to a joint will or mirror wills, a mutual will can seem like a good option for households that confidently feel their estate plans won’t change. Unfortunately, it can be difficult to predict what the future may hold, so plans are very likely to change, especially as the couple ages or if a relationship with a beneficiary somehow is soured.

Creating a mutual will can also lead to other sorts of complications, such as a surviving spouse not being able to sell a home after their other spouse passes because it was promised to another beneficiary.

Reach out to a New Mexico mutual will lawyer to learn more about how these unique estate planning mechanisms work and whether it could be a good choice for your family. Schedule a no-obligation case review at New Mexico Financial & Family Law today when you call 505-503-1637 or contact us online.

What to Consider When Meeting With a New Mexico Mutual Will Attorney

Mutual wills are best suited for couples and other individuals who fit within a specific set of circumstances. A New Mexico mutual will attorney can go over the unique qualities of these wills and consider how they might align with your general goals for estate planning.

In most situations, a mutual will is only a good idea when the following circumstances are true:

• You and your spouse have a close relationship that is unlikely to be significantly altered in the future.
• You and your spouse’s estate would consist mostly of jointly owned community property, with very little separate property to distribute.
• You and your spouse completely and totally agree on 100% of the arrangements laid out in the will, and do not expect your feelings on the matter to change.
• You are confident that you would not want to remarry or adopt additional children in the event that your spouse passes before you.
• You are both certain that you will maintain good relationships with the beneficiaries you select.
• You are comfortable with making arrangements to limit the amount of specific bequests and devises (transfers of personal property and real estate, respectively) to reduce the risk of a physical asset being promised to a beneficiary that later needs to be sold, modified, transferred or otherwise disposed of.

As you can see from this list, many people would immediately have second thoughts about creating a mutual will simply because it asks you to be fairly certain that your circumstances and plans won’t ever change.

To make sure that you select the right option for your collective vision of the future, you can consult with a New Mexico mutual will lawyer. Your attorney will go over the major items in your estate portfolio and listen to your goals for estate planning.

After thoroughly reviewing the details and fielding any questions or concerns you may have, your attorney will recommend a range of options that best fit your goals and your unique situation.

How Does a Mutual Will Work in New Mexico?

A mutual will actually refers to two separate wills.

What typically happens is that both spouses in a couple draft identical (or nearly identical) wills. Then, both spouses will sign an addendum to their will, known as a codicil, which states that neither will can be changed without both parties’ consent.

Because of this arrangement, the wills effectively become unchangeable and irrevocable once the first spouse dies.

These wills often follow a simple structure for distributions. Usually, one spouse inherits all property from the spouse who dies first, and then their beneficiaries (typically their children) receive all property from the second spouse once they are also deceased.

While there is no rule requiring that both wills be nearly identical, spouses drafting mutual wills in New Mexico should take care to avoid any contradictions.

Both wills should also completely dispose of the estate — meaning distribute it in its entirety — since the wills cannot be altered in the future to reflect the acquisition of new assets or significant changes to assets they currently hold. A residuary clause can allow for this since it states that all remaining property in the estate will go to a specific beneficiary or a class of beneficiaries.

Properly Executing a Mirror Will in New Mexico

New Mexico law (NM Stat § 45-2-502) states that a will must satisfy the following conditions before it is considered properly executed and able to be entered into probate once the testator dies:

• The will must be written, meaning it is a physical document that is printed, typed, or handwritten
• The testator must sign the will or direct someone to sign it for them in their presence
• Two individuals must witness the testator signing the will (or on the testator’s behalf). These individuals must then sign the will themselves, in the presence of the testator and each other.

All parties must be at least 18 years old. In addition, the testator must have “testamentary intent,” which means that they understand that they’re making a will, and all parties must have “capacity,” which means the ability to mentally process and understand what they are doing.

When creating a mutual will, both spouses will follow the same process to properly execute their individual wills. Then, the spouses must sign an additional document together, known as a codicil.

As mentioned before, the codicil prevents the ability of either spouse to alter their own will without the other spouse’s intent. The signing of the codicil must be witnessed by two parties, who then sign the document themselves in an identical process to executing a will.

The individual wills and the codicil can all be executed on different dates. The only special requirement is that both spouses are present for the signing of the codicil so that the witnesses can observe their mutual consent to the legally binding addendum.

Difference Between Mutual Wills and a Joint Will

A joint will is a single document that covers the estates of both spouses. Similar to mutual wills, a joint will becomes unchangeable and irrevocable once the first spouse dies.

There are few other practical differences between the two types of wills. Both can be very challenging to alter, once written, even while spouses live, since any changes could cause unintended consequences and make the wills more challenging to carry out as intended.

For example, a change to a mutual will could cause contradictions between the two wills. Alterations to one would likely require alterations to the other unless both wills were originally set aside separately for property at the discretion of each respective spouse.

Difference Between a Mutual Will and a Mirror Will

A mirror will employs a similar strategy to mutual wills, essentially favoring a simple “spouse inherits first” arrangement in most cases. Both wills are supposed to be as identical to one another as possible, except for possible changes to the names and pronouns used to reflect the respective identity of each spouse.

The key difference between a mirror will and a mutual will is that mirror wills do not employ a mutually signed codicil to “lock in” the documents. Accordingly, one spouse doesn’t need the consent of the other to make changes to their own will.

Also, when one spouse dies, the surviving spouse can still change their mirror will at any time, unlike a mutual will.

Mirror wills can be a much more flexible option than a mutual will or a joint will because of these qualities.

What Are the Drawbacks to Creating a Mutual Will?

The legally binding nature of the mutual will codicil — which makes mutual wills impossible to revise or revoke without both spouses’ consent — can cause major issues if plans change after the wills are created.

As an example, a couple may own undeveloped land as an investment property. While creating a mutual will, they agree that all of that property is going to be inherited by the surviving spouse upon the first spouse’s death.

Then, after the second spouse dies, the land goes to the oldest son, with the intention that he could build a house on it and raise a family.

Now, let’s say that a spouse passes, and the surviving spouse now owns the undeveloped land. Because the wills can no longer be altered, the surviving spouse may be unable to allow investors to build a development on the land since it could run contrary to the intentions set forth in the mutual will.

Worse, if the surviving spouse falls on hard times or is otherwise motivated to free up cash for other investments, they can no longer sell or transfer the land since it is designated to go to their oldest son.

To make matters even more complicated, the surviving spouse may remarry and have more children. At this point, all of the property owned from the previous marriage is still reserved for the child (or children) from the first marriage.

As you can see, creating a mutual will effectively tie the hands of the surviving spouse, especially when some of the inheritances involve real estate or items of significant value.

Couples that do decide to proceed with a mutual will should consider describing their estate in broad valuation terms rather than individual items. For example, the mutual wills could state that 50% of the property would go to the oldest child and 50% to the younger child.

This arrangement would force the personal representative of the estate (New Mexico’s name for the executor) to liquidate all property, but it’s better than creating awkward or uncomfortable situations involving property that can’t be sold, transferred, or altered.

Mutual Wills and Estranged Beneficiaries

A mutual will could also create problems if a surviving spouse has a falling out with a beneficiary after the other spouse’s death. At this point, they are unable to change the will to disinherit the beneficiary, so the beneficiary is able to get their portion of the estate even if the surviving spouse wishes they could give that portion to someone else.

How Does Divorce Affect a Mutual Will?

New Mexico law (NM Stat § 45-2-804) automatically revokes the rights of a spouse to any inheritance described in a will after a divorce. Speak to a New Mexico mutual will attorney if you are in the process of getting divorced or have gotten divorced and had a mutual will agreement drawn up.

Can a Payable on Death or Transfer on Death Designation Override a Mutual Will?

No. Mutual wills have the power to override any subsequent attempts transfer property after the first spouse dies.

The Supreme Court of New Mexico case Foulds v. First Nat. Bank tested this power in 1984. After a couple created a mutual will in 1975, the husband then transferred the bulk of the couple’s shared assets into Certificates of Deposit (CD) accounts.

These accounts had a different payable on death (POD) beneficiary listed than the beneficiaries named in the will.

When the husband died, the beneficiaries of the CD account sued the bank that held them, seeking an order for payment. The district court and state Supreme Court both held that the beneficiaries of the CD accounts could not receive the money because the arrangements made in the mutual will had to be honored.

This case illustrates why it is important to think carefully and critically before creating and executing a mutual will.

Get Guidance From an Experienced New Mexico Mutual Will Law Firm

New Mexico Financial & Family Law can help you select the perfect option for your family and the future you want to leave behind.

Depending on your situation, we may recommend a mutual will or another arrangement, like a joint trust. These trusts automatically separate property designated to beneficiaries when the first spouse dies while potentially paying income to the surviving spouse for the remainder of their life.

With this arrangement, a spouse’s wishes can be honored, even in death, without the complications that can come from a joint or mutual will.

Find out more about all your available options and the best way to leave behind a legacy that you can be proud of. Call our New Mexico mutual will law firm today at 505-503-1637 or contact us online to schedule a no-obligation consultation and estate plan review.