New Mexico § 45-6-102 - Liability of nonprobate transferees for creditor claims and statutory allowances

§ 45-6-102. Liability of nonprobate transferees for creditor claims and statutory allowances

A. In this section, “ nonprobate transfer ” means a valid transfer effective at death, other than a transfer of a survivorship

interest in a joint tenancy of real estate, by a transferor whose last domicile was

in this state to the extent that the transferor immediately before death had power,

acting alone, to prevent the transfer by revocation or withdrawal and instead to use

the property for the benefit of the transferor or apply it to discharge claims against

the transferor's probate estate. B. Except as otherwise provided by statute, a transferee of a nonprobate transfer

is subject to liability to any probate estate of the decedent for allowed claims against

the decedent's probate estate and statutory allowances to the decedent's spouse and

children to the extent the estate is insufficient to satisfy those claims and allowances. The liability of a nonprobate transferee may not exceed the value of nonprobate

transfers received or controlled by that transferee. C. Nonprobate transferees are liable for the insufficiency described in Subsection

B of this section in the following order of priority: (1) a transferee designated in the decedent's will or any other governing instrument,

as provided in the instrument; (2) the trustee of a trust serving as the principal nonprobate instrument in the decedent's

estate plan as shown by its designation as devisee of the decedent's residuary estate

or by other facts or circumstances, to the extent of the value of the nonprobate transfer

received or controlled; and (3) other nonprobate transferees, in proportion to the values received. D. Unless otherwise provided by the trust instrument, interests of beneficiaries in

all trusts incurring liabilities under this section abate as necessary to satisfy

the liability, as if all of the trust instruments were a single will and the interests

were devises under it. E. A provision made in one instrument may direct the apportionment of the liability

among the nonprobate transferees taking under that or any other governing instrument. If a provision in one instrument conflicts with a provision in another, the later

one prevails. F. Upon due notice to a nonprobate transferee, the liability imposed by this section

is enforceable in proceedings in this state, whether or not the transferee is located

in this state. G. A proceeding under this section may not be commenced unless the personal representative

of the decedent's estate has received a written demand for the proceeding from the

surviving spouse or a child, to the extent that statutory allowances are affected,

or a creditor. If the personal representative declines or fails to commence a proceeding after

demand, a person making demand may commence the proceeding in the name of the decedent's

estate, at the expense of the person making the demand and not of the estate. A personal representative who declines in good faith to commence a requested proceeding

incurs no personal liability for declining. H. A proceeding under this section must be commenced within one year after the decedent's

death, but a proceeding on behalf of a creditor whose claim was allowed after proceedings

challenging disallowance of the claim may be commenced within sixty days after final

allowance of the claim. I. Unless a written notice asserting that a decedent's probate estate is nonexistent

or insufficient to pay allowed claims and statutory allowances has been received from

the decedent's personal representative, the following rules apply: (1) payment or delivery of assets by a financial institution, registrar or other obligor

to a nonprobate transferee in accordance with the terms of the governing instrument

controlling the transfer releases the obligor from all claims for amounts paid or

assets delivered; and (2) a trustee receiving or controlling a nonprobate transfer is released from liability

under this section with respect to any assets distributed to the trust's beneficiaries. Each beneficiary to the extent of the distribution received becomes liable for the

amount of the trustee's liability attributable to assets received by the beneficiary.