Death & Divorce Part 1 – Dying Without a Will or Trust
As if getting a divorce weren’t difficult enough, what happens when one spouse dies before the divorce becomes final? Part 1 of this series of articles addresses what happens when the deceased spouse dies without a Will or Trust. Part 2 covers situations in which there was a Will and Trust. Part 3 covers how to handle lump-sum spousal support (alimony) and attorney’s fees pertaining the divorce after one spouse dies.
Unlike most states that abate or stop the case if a spouse dies during divorce, New Mexico law says the divorce continues as though the spouse had not died, substituting the Personal Representative of the estate of the deceased spouse as the party in the divorce litigation.
In 2009, the New Mexico Court of Appeals weighed in on the issue in Karpien v. Karpien. In that case, Husband filed for divorce in 2005. Before the divorce was finalized, Wife, who was suffering from cancer, died overseas on a trip with her mother. Wife’s parents paid her final medical, funeral, and repatriation expenses. As personal representatives of Wife’s estate, her parents were substituted for Wife in the divorce suit. In the Final Decree of Dissolution of Marriage entered in June 2007, the court allocated the couple’s community property, determined and divided the community debt, and ordered the marital residence be sold to satisfy the community debt.
Husband appealed the trial court’s decision, and presented a question of first impression, specifically, what is the effect of the death of one spouse on a pending divorce proceeding? The Court of Appeals concluded that Section 40-4-20 NMSA 1978 is controlling –
- that marital property and debt covered by Section 40-4-10 is divided and distributed according to New Mexico domestic relations law,
- that debt incurred after the death of the decedent spouse is separate debt to be dealt with through probate, and
- that Husband is not considered the surviving spouse for purposes of probate.
In the Karpien case, the Court of Appeals affirmed that, if a party to a divorce action dies during the pendency of the case but before the final divorce decree is entered, then the proceedings for the determination, division and distribution of marital property rights and debts, and determination of spousal and child support shall not abate (stop), and the court shall conclude the divorce as if both parties had survived. The Court of Appeals acknowledged that the domestic relations statutory laws of New Mexico differ from the vast majority of other states that continue to follow the common law rule of abatement that finds the marriage ends upon the death of one spouse and the divorce case cannot go forward.
Turning back to the two specific issues raised by Husband in the Karpien appeal, the court looked at the Uniform Probate Code for the definition of “surviving spouse” for purposes of distributing Wife’s estate, and noted that the definition specifically excludes an individual who is a party to a valid proceeding concluded by an order to terminate all marital property rights, including a property division judgment entered pursuant to the divorce laws. Thus, Husband was precluded from being considered the “surviving spouse” for inheritance purposes under probate law. Husband lost the first argument on appeal, and he could not be awarded Wife’s half of the community assets.
Turning to Husband’s second argument on appeal about the sale of the marital residence, the Court had to determine, as a preliminary matter, whether Wife’s final medical expenses and the costs of her funeral and repatriation were her separate or community debts. The Probate Code directs that the deceased spouse’s separate debts and funeral expenses are to be paid first from his or her separate property, and if there are insufficient separate assets to pay such debts, then look to the deceased spouse’s undivided one-half interest in community property. The Court of Appeals found that Wife’s final medical expenses were community debt, but her funeral and repatriation expenses were her separate debt because they arose after she died. By removing the funeral and repatriations costs from the list of community debts to be paid by selling the family home, the Court of Appeals remanded the case back to the trial court to calculate a revised amount of community versus separate debt to see if it was necessary to sell the house to pay all the community debt.
In conclusion, the death of one spouse during a divorce does not stop the case. Lawyers and judges faced with such situations must analyze both domestic relations and probate laws to determine who gets what in the divorce before ascertaining what property and debts constitute the estate of the deceased spouse available for passing on to the heirs.