FastCounsel

Short answer

After an estate’s taxes, creditor claims, administrative expenses, and court costs are paid, the personal representative (sometimes called the executor or administrator) asks the probate court to approve a final accounting and an order of distribution. Once the court signs the distribution order, remaining cash or sale proceeds are paid to the heirs or beneficiaries named in the will. If there is no valid will, New Mexico’s intestacy rules and community‑property law determine how funds are divided among a surviving spouse and the decedent’s children.

Detailed answer — step‑by‑step process under New Mexico practice

1) Identify beneficiaries and collect estate assets

The personal representative locates the will (if any), the decedent’s bank accounts, investments, real estate, and other assets. They also gather information about heirs and beneficiaries (names, addresses, ages). If a will exists, it generally controls who receives what. If no will exists, distribution follows New Mexico intestacy rules and community‑property rules — see the courts and legislature resources below.

2) Pay administrative expenses and file required notices

The personal representative pays the costs of administering the estate: courthouse filing fees, attorney and accountant fees, appraisal and sale costs, and funeral expenses if applicable. They must give notice to known creditors and follow the required creditor notice procedures. For general guidance from the New Mexico courts on probate steps and forms, see the New Mexico Courts probate pages: https://nmcourts.gov/self-help/probate/.

3) Evaluate and pay creditor claims

Creditors must be given an opportunity to present claims. Valid claims are paid from estate assets before distributions to beneficiaries. The representative should follow New Mexico procedures for admitting and resolving claims and keep records of payments and denials.

4) File required tax returns and get tax clearances

The estate may need to file the decedent’s final federal and state income tax returns and, if the estate meets federal filing thresholds, a federal estate tax return (Form 706). New Mexico does not administer a separate state estate tax return the same way some states do, but you should check state tax filing requirements and any estate or inheritance matters with the New Mexico Taxation and Revenue Department: https://www.tax.newmexico.gov/. For federal estate tax information see the IRS: https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax.

5) Prepare and file a final accounting and petition for distribution

When claims and taxes are resolved, the personal representative prepares a final accounting that shows all receipts, disbursements, claims paid, fees, and the remaining balance available for distribution. The representative files a petition (or a motion) asking the court to approve the accounting and enter an order authorizing distribution to the beneficiaries or heirs. The court may require notice of the petition to heirs, beneficiaries and creditors.

6) Court review and order of distribution

The probate court reviews the accounting and any objections. If the court approves, it signs an order of distribution that directs the personal representative how to pay out the remaining funds. This order protects the personal representative from later claims if the distribution follows the court’s directions.

7) Distribute funds and obtain receipts/releases

After the court order, the representative pays beneficiaries. If a beneficiary is a minor, the court may require a guardian or alternative mechanism (for example, a custodial account under applicable custodial statutes) before funds are paid. The personal representative should obtain signed receipts or releases from each beneficiary and keep detailed records of every payment.

8) Close the estate

Once distributions are made and the court is satisfied, the representative files a petition to close the estate and any required closing documents. The court then issues an order closing probate.

Special legal rules and common scenarios

• If there is a valid will, follow the will’s directions unless those directions violate law or the will is successfully challenged.
• If there is no will (intestacy), New Mexico’s intestacy and family property laws determine distribution among a surviving spouse and the children. Because New Mexico is a community‑property state, assets acquired during marriage may be community property and affect the spouse’s share. For general statute resources, see the New Mexico Legislature homepage at https://www.nmlegis.gov/ and consult the New Mexico Courts probate information: https://nmcourts.gov/self-help/probate/.
• Predeceased children: if a child dies before the decedent but leaves children (the decedent’s grandchildren), distribution may be governed by substitution or per‑stirpes rules — typically the decedent’s grandchildren can inherit the deceased child’s share if state law or the will provides for that.
• Minor beneficiaries: funds payable to minors often require a guardian, a conservatorship, or transfer under the Uniform Transfers to Minors Act (UTMA) or similar device to avoid paying cash directly to a minor.

Common documentation the personal representative will prepare or file

• Inventory of estate assets and appraisals
• Creditor notices and records of claim payments or denials
• Final accounting/cash flow statement for the estate
• Petition for distribution and proposed order of distribution
• Receipts and releases from beneficiaries
• Petition to close the estate and order closing probate

Hypothetical example

Suppose a decedent in New Mexico leaves $150,000 in the estate after funeral expenses and $20,000 in valid creditor claims. The personal representative pays the creditor claims and any administrative costs, files final tax returns, and produces a final accounting showing $110,000 left. If the decedent’s will leaves the estate equally to three adult children, the representative files a petition asking the court to approve the accounting and distribute $36,666.67 to each child (subject to fractional rounding and any specific provisions in the will). After the court signs the order of distribution, the representative pays each child and files receipts with the court, then petitions to close the estate.

Helpful hints

• Keep detailed records: accurate receipts, canceled checks, and bank statements make the accounting process straightforward and defendable in court.
• Communicate with heirs: clear, written updates reduce the chance of disputes and objections.
• Get tax help when needed: estate and final income tax filings can be complex; consult a tax professional for returns and filing deadlines.
• Understand community property issues: because New Mexico is a community‑property state, ask a probate attorney how community property rules affect the spouse’s and children’s shares.
• If a beneficiary is a minor or incapacitated, plan for a guardian or custodial transfer — the court often requires protection for minor heirs before outright payments.
• Obtain releases from beneficiaries after distribution: this reduces the risk of post‑distribution claims against the personal representative.
• Use court forms and instructions: the New Mexico courts provide probate forms and self‑help materials that guide filings and required notices — see https://nmcourts.gov/self-help/probate/forms/.