Death & Divorce in New Mexico

Please be sure that you have updated your Will, Revocable Trust, Powers of Attorney, beneficiary designations of life insurance policies, retirement benefits, and other financial accounts, and titles or deeds to property shortly after your Final Decree of Dissolution of Marriage.

By law in New Mexico, a divorce terminates the right of a former spouse:

• To inherit under the Will
• To serve as an executor or trustee under the Will
• To receive property by devise or bequest under the Will

Life Insurance

However, you still need to change the beneficiary of your life insurance and certain other investment accounts if you don’t want your ex-spouse to get the proceeds. For example, John worked for the federal government and had a life insurance policy as part of his employee benefits package. He named his first wife, Mary, as the beneficiary of that life insurance policy. John and Mary get divorced, and five years later John dies. Mary gets the life insurance proceeds if John did not change the beneficiary after the divorce, even if John had re-married.

Also, do NOT name minor children as the beneficiaries of your life insurance or other investment accounts. You have to name a trust as the beneficiary because minors cannot inherit directly. That means you have to create a trust – either in your Will or separate from your Will – for the benefit of the children.

Changing Beneficiary Designations

Certain kinds of personal property have designations of who gets it when you die. Promptly after your divorce, change the beneficiary designations of the following:

• Retirement plans (401k, 403b, IRA, pensions)
• Life insurance
• Long-term care insurance
• Transfer on Death (TOD) and Payable on Death (POD) accounts
• Investment accounts
• Stock options
• Real property

If you owned real property (house or land) as husband and wife (joint tenants with right of survivorship), then the ownership status changes to tenants-in-common once the divorce is finished. That means if one spouse dies before changing the deed to show only one spouse owns the property, then the deceased ex-spouse's share automatically passes to his / her heirs rather than to the former spouse. For example, John and Mary owned a house while married, and they got divorced in May. Mary was awarded the house in the divorce decree but the deed to the house was not changed. In August, John gets married to Betty and he dies on his honeymoon before making a new Will. Betty is now John’s heir. This means Mary and Betty both own the house as tenants-in-common. This isn’t what John and Mary intended in their divorce. If you think the divorce case was ugly between John and Mary, wait to see how ugly the probate fight between Mary and Betty will become.