Frequently Asked Questions about Estate Planning

This is an agreement with three parties: the Settlors (Trust Makers), the Trustees (or Trust Managers), and the Trust Beneficiaries. For example, a husband and wife may name themselves all three parties to create their trust, manage all the assets transferred to the trust, and have full use and enjoyment of all the trust assets as beneficiaries. Later on, “back-up” managers can step in under the terms of the trust to manage the assets should the couple become incapacitated or die. Special provisions in the trust also control the management and distribution of assets to heirs in the event of the Settlor’s death. With proper planning, the couple also can avoid or eliminate death taxes on their estate. The Revocable Living Trust may allow them to accomplish all this outside of any court proceeding.

Whether you are young or old, rich or poor, married or single, if you own titled assets such as a house and want your loved ones to avoid court interference at your death or incapacity, consider a revocable living trust. A trust allows you to bring all of your assets together under one plan.

You may avoid probate on the transfer of some assets at your death through the use of beneficiary designations. Laws regarding what assets may be transferred without probate (non-probate transfer laws) vary from state to state. Some common examples include life insurance death benefits and bank accounts. New Mexico also offers the use of the Transfer on Death Deed for real property.

This is a document that allows you to appoint someone you know and trust to make your business and financial decisions even when you cannot. If you are incapacitated without these legal documents, then you and your family will be involved in a court proceeding known as a conservatorship. This is the court proceeding where a judge determines who should make these decisions for you under the ongoing supervision of the court.

It is also known as a Health Care-Power of Attorney or Medical Power of Attorney.  It usually includes access to information protected by the Health Insurance Portability and Accountability Act of 1996 (HIPAA).  It may or may not include a Living Will a/k/a Right to Die Directive, which informs medical professionals that the declarant does not want extraordinary medical measures taken, especially those that would cause pain or discomfort, if those measures would only prolong the dying process.  It is not the same as a Do Not Resuscitate Order (DNR), which is an order not to perform CPR if a patient’s breathing or heart stops beating.

This document is also known as an Affidavit of Claiming Successor. It can be used by an heir to take title to property after the property owner’s death if the property (1) is not covered by a beneficiary designation, (2) is equal to or less than $50,000.00 when calculated in combination with other property not covered by a beneficiary designation, and (3) is not real property. It can be used a second layer to Revocable Living Trust.

A Last Will and Testament, or Will, is a document executed with certain formalities (including two witnesses) that directs the disposition of a person’s probate estate at death if the probate estate is greater than $50,000.00 in value. It only takes effect upon the death of the Testator (creator of the Will), and it must be probated to be legally recognized. It can also be used as a third layer of protection to a Revocable Living Trust.

Probate is a public legal process through which a court grants a person the legal affairs of a person who has died.  It is often necessary when a person dies leaving property titled in his or her name only with no beneficiary designations and must last a minimum of six (6) months.