Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified New Mexico attorney to discuss your specific situation.
Detailed Answer
When someone dies intestate (without a will) in New Mexico, the Uniform Probate Code (UPC) governs distribution of the estate. A minor heir cannot directly manage an inheritance. The law provides several layers of protection to ensure that a minor’s share of the estate is held securely until they reach majority age.
1. Intestate Succession and Appointment of Personal Representative
Under New Mexico law, a personal representative (also called an executor) is appointed to gather assets, pay debts, and distribute the remaining property. For intestate cases, distribution follows NMSA 1978, §45-2-802. If an heir is a minor, the personal representative must safeguard that minor’s share.
2. Court-Blocked Accounts or Government Bonds
New Mexico law requires a personal representative to deposit a minor’s share into a court-blocked account or purchase government bonds payable to the minor. These funds remain inaccessible until the minor turns 18 (the age of majority under NMSA 1978, §45-3-302). This ensures the money is safe from premature or improper use.
3. Guardianship of the Estate
If the minor’s inheritance is substantial, the court may appoint a guardian of the estate. Under NMSA 1978, §45-5-301, the guardian manages the minor’s assets, must post a bond, and file annual accountings with the court. This oversight prevents misuse and aligns spending with the minor’s best interests.
4. Uniform Transfers to Minors Act (UTMA) Custodial Accounts
For smaller inheritances or gifts, New Mexico’s UTMA (NMSA 1978, §46-6-101) allows a custodian to hold and manage up to $20,000 on behalf of a minor without a full guardianship. The custodian must invest prudently and turn over assets when the minor reaches age 18. This streamlined process avoids formal probate guardianship for modest sums.
5. Court Supervision and Reporting
Whether funds are in a blocked account, government bonds, or under a guardian or custodian, New Mexico courts require periodic reporting. Guardians of the estate file annual accountings (NMSA 1978, §45-5-401), and custodians under UTMA must provide account statements. Courts review these records to confirm proper management and protect the minor’s inheritance.
Helpful Hints
- Identify the personal representative early; they control asset protection.
- Ask the court clerk about blocked account procedures and required paperwork.
- Consider UTMA for smaller assets to avoid full guardianship costs.
- Ensure any guardian posts the required bond to guard against mismanagement.
- Keep detailed records and request periodic accountings from guardians or custodians.
- When the minor nears age 18, plan how the funds will be transferred or reinvested.