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					Beneficiary Designations                        Transfer on Death Deed                           pay the child’s debt. It is generally safest
                                                                                                 for single people to hold property solely in
        Most people are familiar with life             As of June 2001, you can execute a        their names, and to provide the property pass
insurance policies, which allow you to          deed which provides who will own your real       after death through a beneficiary designation
designate who will receive the proceeds of      property after your death without the need       (bank accounts, mutual funds, and stocks) or
the policy upon your death. You can now         for probate. A state law allows real property    a transfer on death deed (real property).
make the same kind of beneficiary               owners to execute a transfer on death deed
designation most places you keep money.         during their lifetime. The transfer on death     Durable Power of Attorney
For example, New Mexico bank accounts           deed does not change title during the
allow a “Pay on Death” or POD designation.      owner’s life, but when the owner dies, the               A durable power of attorney is a
This means that during your life, you own       beneficiary named in the deed becomes the        document which allows you to nominate
and control the account. However, after you     owner without probate.           For more        someone to handle your health care and
die, the bank reads the POD provisions and      information, see Senior Citizens’ Law            financial decisions if you are no longer able
pays whatever is in the account to the person   Office brochure, “Transfer on Death Deeds.”      to make them yourself. The power of
or people you named. Similarly, most                                                             attorney gives you a voice in how these
mutual and money market funds allow you         Joint Ownership                                  important decisions are handled and allows
to name a beneficiary. Further, many stocks                                                      you to select the best person, whether a
now allow you to name a “Transfer on                    Married people are familiar with joint   friend or relative, as your spokesperson.
Death” or TOD beneficiary.                      ownership. Likely their home, car and bank       The power of attorney should avoid a costly
        Money paid to your beneficiary          accounts are held jointly with a right of        and time consuming conservatorship or
passes outside of probate and apart from        survivorship. This means that if one joint       guardianship if        you ever become
your will. You should be sure to name the       owner dies, the surviving joint owner gets       incapacitated and will allow the orderly
person or people you would like to              the asset without the need for probate or        management of your estate. A durable
eventually receive the proceeds of your         other legal action. This is why probate is       power of attorney is effective only while you
account. Do not name one child based upon       highly unusual when one spouse dies.             are living. After death, your plan for joint
that child’s oral promise to share the money            Sometimes people ask if you can          ownership, beneficiary designations and
with someone else. Although the child           hold a house or a car jointly with a child.      your will direct how your estate is to be
might have a moral obligation to distribute     The answer is yes, although joint ownership      distributed.
the money, the money would legally belong       with a non-spouse is generally not advisable.
only to that child. Do not tempt your child             When you put a child’s name on your      Probate May Be Avoided
to do something wrong; clearly name all         house, you make a current gift of that asset
the beneficiaries who should receive your       to the child. The child will own it. This               Tools      such      as    beneficiary
money upon your death.                          comes with risks. First, you lose control of     designations and transfer on death deeds
        It is a good idea to have beneficiary   your home. If you want to sell or mortgage       allow many to develop a simple estate plan
designations for all your money accounts.       it, you need the child’s consent. If the child   that avoids probate.
Then the money passes quickly to the            has bad debts or is involved in a traffic               A typical simple estate includes a
intended beneficiary without probate.           accident and is unable to pay the damages,       house, furniture, car, and money in the bank.
                                                the creditors could seek to use your home to     The house can pass without probate to
beneficiaries named in a transfer on death
deed, the bank account through a beneficiary
designation, and the Motor Vehicle Division
will transfer the car to the person named in a
will or entitled to inherit through intestate
succession. The furniture in the house can
be divided according to a list of tangible
personal property left with a will, or
according to the shares provided to relatives
by intestate succession. By using the five
                                                              IT TAKES MORE
elements of a simple estate plan, it is
possible to put your affairs in order for
                                                                   THAN
minimal cost and to save your loved ones
the time and expense of probate.
                                                                  A WILL
                                                              TO PLAN YOUR
        Senior Citizens’ Law Office, Inc.
                                                                  ESTATE
         4317 Lead Avenue SE, Suite A
           Albuquerque, NM 87108
                (505) 265-2300
                www.sclonm.org

The Senior Citizens’ Law Office is funded in part by the
City of Albuquerque Area Agency on Aging, Bernalillo
County grant, State of New Mexico’s the Civil Legal                Some people think that when they
Services Commission (CLS), State Bar Pro Hac Vice
grant, McCune Charitable Foundation, and United Way        have executed a will, their estate planning is
of Central New Mexico.                                     complete. However, a will is only one
                                                           component of a good estate plan. There are
10/09
                                                           at least five fingers to planning the simple
                                                           estate:

                                                                 Will
                                                                 Beneficiary Designations
                                                                 Transfer on Death Deed
                                                                 Joint Ownership
                                                                 Durable Power of Attorney

				
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posted:6/7/2012
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