Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney in New Mexico for guidance on your specific situation.
Detailed Answer
Under New Mexico law, life insurance proceeds normally pass directly to a named beneficiary and avoid probate. However, if the insured failed to designate any beneficiary or all named beneficiaries died before the insured, the policy proceeds become payable to the insured’s probate estate. New Mexico Statutes Annotated (NMSA) 1978, Section 45-3-311 provides that when no beneficiary survives or the designation is invalid, “the proceeds shall be payable to the estate of the insured.” (NMSA 45-3-311).
Once proceeds vest in the estate, the personal representative (also called executor or administrator) must distribute them under New Mexico’s Probate Code. First, you must open a probate case in district court by filing a petition and obtaining Letters Testamentary (if there’s a will) or Letters of Administration (if intestate). The court will appoint you as personal representative after providing notice to heirs and creditors (NMSA 45-3-202).
Next, file a motion or request that the court issue an order directing the insurer to pay the proceeds to the estate. Under NMSA 45-3-302, any holder of property subject to probate must deliver it to the personal representative upon court order (NMSA 45-3-302). Provide the insurer with a certified copy of Letters and the court’s order. Once the insurer remits the funds, deposit them in the estate account.
Finally, distribute the proceeds according to the decedent’s will or, if there is no valid will, under New Mexico’s intestate succession rules at NMSA 45-2-102 (NMSA 45-2-102). Intestate distribution generally gives the estate first to a surviving spouse and children. If none exist, assets pass to parents, siblings, or more distant relatives in a prescribed order.
Helpful Hints
- Locate the original life insurance policy or a certified copy in the decedent’s records.
- Verify the beneficiary page and check for any handwritten changes or beneficiary designation forms.
- Confirm that no contingent beneficiary is named before concluding there’s no beneficiary.
- File your probate petition promptly; New Mexico requires administration within four years of death for real and personal property (NMSA 45-2-104).
- Serve notice on all interested persons, including heirs and creditors, to avoid later challenges.
- Keep detailed records of communications with the insurer and copies of all court filings.