SB 503 — UNIFORM PROBATE CODE CHANGES

SENATE BILL 503 54 TH LEGISLATURE- STATE OF NEW MEXICO - FIRST SESSIO, 2019 INTRODUCED BY Peter Wirth 6 8 10 AN ACT RELATING TO PROPERTY;

156 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

A new section of the Uniform Probate Code, e t 17 Section 45-2-608 NMSA 1978, is enacted to read:

w l n d 18 "45-2-608.

[NEW MATERIAL ] EXERCISE OF POWER OF = = 19 APPOINTMENT.--In the absence of a requirement that a power of a l i a e r 20 appointment be exercised by a reference or by an express or a t m m 21 specific reference to the power, a general residuary clause in d r e 22 a will or a will making general disposition of all of the c e s k 23 testator's property expresses an intention to exercise a power e a n b 24 of appointment held by the testator only if:

u [ A.

the power is a general power exercisable in .210891.3 favor of the powerholder's estate and the creating instrument does not contain an effective gift if the power is not exercised;

[NEW MATERIAL ] POWER OF APPOINTMENT--APPOINTMENT--COMPLIANCE COMPLIANCE WITH SB 503 SPECIFIC REFERENCE REQUIREMENT.--A powerholder's substantial Page 1 compliance with a formal requirement of appointment imposed in a governing instrument by the donor, including a requirement that the instrument exercising the power of appointment make reference or specific reference to the power, is sufficient if:

and e e 17 B.

the powerholder's manner of attempted exercise e e n d 18 does not impair a material purpose of the donor in imposing the = = l ] 19 requirement." a l r i 20 SECTION 3.

Section 45-2-802 NMSA 1978 (being Laws 1993, t e a t Chapter 174, Section 61, as amended) is amended to read:

m m 21 e d r e 22 "45-2-802.

EFFECT OF DIVORCE, ANNULMENT AND DECREE OF c e r c 23 SEPARATION.-- e a n b 24 A.

An individual who is divorced from the decedent u [ or whose marriage to the decedent has been annulled is not a .210891.3 - 2 - surviving spouse unless, by virtue of a subsequent marriage, [he] the individual is married to the decedent at the time of death.

A decree of separation that does not terminate the status of [husband and wife ] spouse is not a divorce for purposes of this section.

(1) an individual who obtains or consents to SB 503 Page 2 a final decree or judgment of divorce from the decedent or an annulment of their marriage, which decree or judgment is not recognized as valid in this state, unless subsequently they participate in a marriage ceremony purporting to marry each to the other or live together as [husband and wife ] spouses;

(2) an individual who, following an invalid decree or judgment of divorce or annulment obtained by the e e 17 decedent, participates in a marriage ceremony with a third e e n d 18 individual;

or = = l ] 19 (3) an individual who was a party to a valid a l r i 20 proceeding concluded by an order purporting to terminate all t e a t marital property rights, including a property division judgment m m 21 e d r e 22 entered pursuant to the provisions of Section 40-4-20 NMSA c e r c 23 1978." e a n b 24 SECTION 4.

Section 45-2-804 NMSA 1978 (being Laws 1993, u [ Chapter 174, Section 63, as amended) is amended to read:

.210891.3 - 3 - "45-2-804.

(1) "disposition or appointment of property" ] other includes a transfer of an item of property or [anyother benefit to a beneficiary designated in a [revocablerevocable trust or other]other governing instrument;

(2) "divorce or annulment" means a divorce, [or]SB annulment503 [a]Page 3 annulment or dissolution or declaration of invalidity of a marriage that would exclude the spouse as a surviving spouse within the meaning of Section 45-2-802 NMSA 1978 or the commencement of a valid proceeding concluded either before or after an individual's death by an order purporting to terminate all marital property rights, including a property division judgment entered pursuant to the provisions of Section 40-4-20 NMSA 1978.

A decree of separation that does not terminate the e e 17 status of [husband and wife ] spouse is not a divorce for e e n d 18 purposes of this section;

= = l ] 19 (3) "divorced individual" includes an a l r i 20 individual whose marriage has been annulled;

t e a t (4) "governing instrument" means a governing m m 21 e d r e 22 instrument executed by the divorced individual before the c e r c 23 divorce or annulment of the divorced individual's marriage to e a n b 24 the former spouse;

u [ (5) "relative of the divorced individual's .210891.3 - 4 - former spouse" means an individual who is related to the divorced individual's former spouse by blood, adoption or affinity and who, after the divorce or annulment, is not related to the divorced individual by blood, adoption or affinity;

and (6) "revocable", with respect to a disposition, appointment, provision or nomination, means one under which the divorced individual, at the time of the SB 503 Page 4 divorce or annulment, was alone empowered by law or under the governing instrument to cancel the designation in favor of the former spouse or former spouse's relative whether or not the divorced individual was then empowered to designate the divorced individual's own self in place of the former spouse or in place of the former spouse's relative and whether or not the divorced individual then had the capacity to exercise the power.

Except as provided by the express terms of a e e 17 governing instrument, a court order or a contract relating to e e n d 18 the division of the marital estate made between the divorced = = l ] 19 individuals before or after the marriage, divorce or annulment, a l r i 20 the divorce or annulment of a marriage:

t e a t (1) revokes any revocable:

m m 21 e d r e 22 (a) disposition or appointment of c e r c 23 property made by a divorced individual to the former spouse in e a n b 24 a governing instrument and any disposition or appointment u [ created by law or in a governing instrument to a relative of .210891.3 - 5 - the divorced individual's former spouse;

and (c) nomination in a governing instrument, nominating a divorced individual's former spouse SB 503 Page 5 or a relative of the divorced individual's former spouse to serve in any fiduciary or representative capacity, including a personal representative, executor, trustee, conservator, agent or guardian;

e e 17 C.

A severance pursuant to the provisions of e e n d 18 Paragraph (2) of Subsection B of this section does not affect = = l ] 19 any third-party interest in property acquired for value and in a l r i 20 good faith reliance on an apparent title by survivorship in the t e a t survivor of the former spouses unless a writing declaring the m m 21 e d r e 22 severance has been noted, registered, filed or recorded in c e r c 23 records appropriate to the kind and location of the property e a n b 24 that are relied upon in the ordinary course of transactions u [ involving such property as evidence of ownership.

.210891.3 - 6 - D.

Provisions of a governing instrument are given effect as if the former spouse and relatives of the former spouse disclaimed all provisions revoked by this section or, in the case of a revoked nomination in a fiduciary or representative capacity, as if the former spouse and relatives of the former spouse died immediately before the SB 503 Page 6 divorce or annulment.

A payor or other third party is not liable for having made a payment or transferred an item of property or any other benefit to a beneficiary designated in a governing e e 17 instrument affected by a divorce, annulment or remarriage or e e n d 18 for having taken any other action in good faith reliance on the = = l ] 19 validity of the governing instrument before the payor or other a l r i 20 third party received written notice of the divorce, annulment t e a t or remarriage.

A payor or other third party is liable for a m m 21 e d r e 22 payment made or other action taken after the payor or other c e r c 23 third party received written notice of a claimed forfeiture or e a n b 24 revocation pursuant to the provisions of this section.

u [ Written notice of the divorce, annulment or remarriage .210891.3 - 7 - pursuant to the provisions of this section shall be mailed to the payor's or other third party's main office or home by registered or certified mail, return receipt requested, or served upon the payor or other third party in the same manner as a summons in a civil action.

Upon receipt of the written SB 503 Page 7 notice of the divorce, annulment or remarriage, a payor or other third party may pay any amount owed or transfer or deposit any item of property held by it to or with the court having jurisdiction of the probate proceedings relating to the decedent's estate or, if no proceedings have been commenced, to or with the court having jurisdiction of probate proceedings relating to decedents' estates located in the county of the decedent's residence.

Payments, e e 17 transfers or deposits made to or with the court discharge the e e n d 18 payor or other third party from all claims for the value of = = l ] 19 amounts paid to or items of property transferred to or a l r i 20 deposited with the court.