Senate Bill text for SB0497

SENATE BILL 497

49th legislature - STATE OF NEW MEXICO - first session, 2009

INTRODUCED BY

Michael S. Sanchez

AN ACT

RELATING TO PROBATE; UPDATING AND MAKING TECHNICAL REVISIONS TO THE UNIFORM PROBATE CODE, THE UNIFORM TRUST CODE AND THE UNIFORM PRINCIPAL AND INCOME ACT; ENACTING THE UNIFORM ADULT GUARDIANSHIP AND PROTECTIVE PROCEEDINGS JURISDICTION ACT; AMENDING, REPEALING, ENACTING AND RECOMPILING SECTIONS OF THE NMSA 1978.

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

Section 1. Section 45-1-102 NMSA 1978 (being Laws 1975, Chapter 257, Section 1-102) is amended to read:

"45-1-102. RULE OF CONSTRUCTION--PURPOSES OF ACT.--

A. The Uniform Probate Code shall be liberally construed and applied to promote its underlying purposes and policies.

B. The underlying purposes and policies of the Uniform Probate Code are:

(1) to simplify, [and] clarify and modernize certain laws concerning the affairs of decedents, missing persons, protected persons, minors and incapacitated persons;

(2) to discover and make effective the intent of a decedent in distribution of [his] the decedent's property;

(3) to promote a speedy and efficient system for the settlement and distribution of the estate of the decedent; [and]

(4) to facilitate survivorship and related accounts and similar property interests in New Mexico;

(5) to provide a comprehensive system of methods of disclaiming interests in property;

[(4)] (6) to facilitate the use and enforcement of certain trusts and other governing instruments;

(7) to apportion taxes on estates; and

(8) to make uniform the law among the states."

Section 2. Section 45-1-104 NMSA 1978 (being Laws 1975, Chapter 257, Section 1-104) is amended to read:

"45-1-104. SEVERABILITY.--[If any part or application of the Probate Code is held invalid, the remainder or its application to other situations or persons shall not be affected.] If any provision of the Uniform Probate Code or its application to any person or circumstances is held invalid, the invalidity does not affect other provisions or applications of that code that can be given effect without the invalid provision or application, and to this end, the provisions of the code are severable."

Section 3. Section 45-1-110 NMSA 1978 (being Laws 1995, Chapter 210, Section 1) is amended to read:

"45-1-110. TIME OF TAKING EFFECT--PROVISIONS FOR TRANSITION.--Except as provided elsewhere in [this] the Uniform Probate Code, on the effective date of this code or of any amendment to this code:

A. the code or the amendment applies to governing instruments executed by decedents dying thereafter;

B. the code or the amendment applies to any proceedings in court then pending or thereafter commenced regardless of the time of the death of decedent except to the extent that in the opinion of the court the former procedure should be made applicable in a particular case in the interest of justice or because of infeasibility of application of the procedure of this code or the amendment;

C. every personal representative or other fiduciary holding an appointment under this code on that date continues to hold the appointment but has only the powers conferred by this code or the amendment and is subject to the duties imposed with respect to any act occurring or done thereafter;

D. an act done before the effective date in any proceeding and any accrued right is not impaired by this code or the amendment. If a right is acquired, extinguished or barred upon the expiration of a prescribed period of time [which] that has commenced to run by the provisions of any statute before the effective date, the provisions shall remain in force with respect to that right; and

E. any rule of construction or presumption provided in this code or the amendment applies to governing instruments executed before the effective date unless there is a clear indication of a contrary intent in the governing instrument."

Section 4. Section 45-1-201 NMSA 1978 (being Laws 1993, Chapter 174, Section 4, as amended) is amended to read:

"45-1-201. DEFINITIONS.--

A. As used in the Uniform Probate Code, except as provided in Subsection B of this section and unless the context otherwise requires:

(1) "agent" includes an attorney-in-fact under a durable or nondurable power of attorney, an individual authorized to make decisions concerning another's health care and an individual authorized to make decisions for another under a natural death act;

(2) "application" means a written request to [the probate] a court for an order of informal probate or appointment pursuant to [Sections 45-3-301 through 45-3-311] Chapter 45, Article 3 NMSA 1978;

(3) "beneficiary", as it relates to a trust beneficiary, includes a person who has any present or future interest, vested or contingent, and also includes the owner of an interest by assignment or other transfer; as it relates to a charitable trust, includes any person entitled to enforce the trust; as it relates to a "beneficiary of a beneficiary designation", refers to a beneficiary of an insurance or annuity policy, of an account with POD designation, of a security registered in beneficiary form (TOD) or of a pension, profit-sharing, retirement or similar benefit plan or other nonprobate transfer at death; and, as it relates to a "beneficiary designated in a governing instrument", includes a grantee of a deed, a devisee, a trust beneficiary, a beneficiary of a beneficiary designation, a donee, appointee or taker in default of a power of appointment or a person in whose favor a power of attorney or a power held in any individual, fiduciary or representative capacity is exercised;

(4) "beneficiary designation" refers to a governing instrument naming a beneficiary of an insurance or annuity policy, of an account with POD designation, of a security registered in beneficiary form (TOD) or of a pension, profit-sharing, retirement or similar benefit plan or other nonprobate transfer at death;

(5) "child" includes an individual entitled to take as a child pursuant to the Uniform Probate Code by intestate succession from the parent whose relationship is involved and excludes a person who is only a stepchild, a foster child, a grandchild or any more remote descendant;

(6) "claims", in respect to estates of decedents and protected persons, includes liabilities of the decedent or protected person, whether arising in contract, in tort or otherwise and liabilities of the estate that arise at or after the death of the decedent or after the appointment of a conservator, including funeral expenses and expenses of administration. "Claims" does not include estate or inheritance taxes or demands or disputes regarding title of a decedent [an incapacitated person or a minor ward] or of a protected person to specific assets alleged to be included in the estate;

(7) "conservator" [means a person who is appointed by a court to manage the property or financial affairs or both of an incapacitated person or a minor ward] has the same meaning as set forth in Section 45-5-101 NMSA 1978;

(8) "descendant" of an individual means all of [his] the individual's descendants of all generations, with the relationship of parent and child at each generation being determined by the definition of child and parent contained in the Uniform Probate Code;

(9) "devise", when used as a noun, means a testamentary disposition of real or personal property and, when used as a verb, means to dispose of real or personal property by will;

(10) "devisee" means a person designated in a will to receive a devise. For the purposes of Chapter 45, Article 3 NMSA 1978, in the case of a devise to an existing trust or trustee or to a trustee [on] or trust described by will, the trust or trustee is the devisee and the beneficiaries are not devisees;

(11) "distributee" means [any] a person who has received property of a decedent from [his] the decedent's personal representative other than as a creditor or purchaser. A testamentary trustee is a distributee only to the extent of distributed assets or increment thereto remaining in [his] the testamentary trustee's hands. A beneficiary of a testamentary trust to whom the trustee has distributed property received from a personal representative is a distributee of the personal representative. For the purposes of this paragraph, "testamentary trustee" includes a trustee to whom assets are transferred by will, to the extent of the devised assets;

(12) "electronic" means relating to technology having electronic, digital, magnetic, wireless, optical, electromagnetic or similar capabilities;

(13) "emancipated minor" means a person sixteen years of age or older who:

(a) has entered into a valid marriage, whether or not the marriage was terminated by dissolution;

(b) is on active duty with any of the armed forces of the United States; or

[(12)] (14) "estate" includes the property of the decedent, trust or other person whose affairs are subject to the Uniform Probate Code as the property was originally constituted and as it exists from time to time during administration;

[(13)] (15) "exempt property" means that property of a decedent's estate that is described in [Section]

Sections 45-2-402 and 45-2-403 NMSA 1978;

[(14)] (16) "fiduciary" includes a personal representative, guardian, guardian ad litem, conservator and trustee;

[(15)] (17) "foreign personal representative" means a personal representative appointed by another jurisdiction;

[(16)] (18) "formal proceedings" means proceedings conducted before a district judge with notice to interested persons;

[(17)] (19) "governing instrument" means a deed, will, trust, insurance or annuity policy, account with POD designation, security registered in beneficiary form (TOD), pension, profit-sharing, retirement or similar benefit plan, instrument creating or exercising a power of appointment or a power of attorney or a dispositive, appointive or nominative instrument of [any] a similar type;

[(18)] (20) "guardian" means a person who has qualified to provide for the care, custody or control of the person of a minor or incapacitated person pursuant to [testamentary] parental or court appointment [but excludes one who is merely]. "Guardian" includes a limited, emergency and temporary guardian but not a guardian ad litem;

[(19)] (21) "guardian ad litem" means a person appointed by the [district] court to represent and protect the interests of a minor or an incapacitated person in connection with litigation or any other court proceeding;

[(20)] (22) "heirs", except as controlled by Section 45-2-711 NMSA 1978, means persons, including the surviving spouse and the state, who are entitled under the statutes of intestate succession to the property of a decedent;

[(21)] (23) "incapacitated person" means an individual described in Section 45-5-101 NMSA 1978;

[(22)] (24) "informal proceedings" means those proceedings conducted without notice to interested persons before the [probate] court for probate of a will or appointment of a personal representative, except as provided for in Section 45-3-306 NMSA 1978;

[(23)] (25) "interested person" includes heirs, devisees, children, spouses, creditors, beneficiaries and any others having a property right in or claim against a trust estate or the estate of a decedent [a minor ward] or [an incapacitated] a protected person. "Interested person" also includes persons having priority for appointment as personal representative and other fiduciaries representing interested persons. The meaning as it relates to particular persons may vary from time to time and [must] shall be determined according to the particular purposes of, and matter involved in, [any] a proceeding ["Interested person" does not apply to the provisions of Chapter 45, Article 5 NMSA 1978];

[(24)] (26) "issue" of [a person] an individual means [all of his] the individual's descendants [of all generations, with the relationship of parent and child at each generation being determined by the definition of child and parent contained in the Uniform Probate Code];

[(25)] (27) "lease" includes an oil, gas or other mineral lease;

[(26)] (28) "letters" includes letters testamentary, letters of guardianship, letters of administration and letters of conservatorship;

[(27)] (29) "minor" means [a person] an unemancipated individual who has not reached eighteen years of age;

[(28)] (30) "mortgage" means any conveyance, agreement or arrangement in which property is encumbered or used as security;

[(29)] (31) "nonresident decedent" means a decedent who was domiciled in another jurisdiction at the time of [his] death;

[(30)] (32) "organization" means a corporation, business trust, limited liability company, estate, trust, partnership, joint venture, association, government or governmental subdivision or agency or any other legal or commercial entity;

[(31)] (33) "parent" includes any person entitled to take, or who would be entitled to take if the child died without a will, as a parent pursuant to the Uniform Probate Code by intestate succession from the child whose relationship is in question and excludes any person who is only a stepparent, foster parent or grandparent;

[(32)] (34) "payor" means a trustee, insurer, business entity, employer, government, governmental agency or subdivision or any other person authorized or obligated by law or a governing instrument to make payments;

[(33)] (35) "person" means an individual or an organization;

[(34)] (36) "personal representative" includes executor, administrator, successor personal representative, special administrator and persons who perform substantially the same function under the law governing their status. "General personal representative" excludes special administrator;

[(35)] (37) "petition" means a written motion or other request to [the probate] a court for an order after notice;

[(36)] (38) "proceeding" includes action at law and suit in equity;

[(37)] (39) "property" includes both real and personal property or any right or interest therein and means anything that may be the subject of ownership;

[(38)] (40) "protected person" [is as defined] has the same meaning as set forth in Section 45-5-101 NMSA 1978;

[(39)] (41) "protective proceeding" means a conservatorship proceeding [described in Section 45-5-101] pursuant to Section 45-5-401 NMSA 1978;

(42) "record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form;

[(40)] (43) "security" includes any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in an oil, gas or mining title or lease or in payments out of production under such a title or lease, collateral trust certificate, transferable share, voting trust certificate or, in general, any interest or instrument commonly known as a security or any certificate of interest or participation, any temporary or interim certificate, receipt or certificate of deposit for or any warrant or right to subscribe to or purchase any of the foregoing;

[(41)] (44) "settlement", in reference to a decedent's estate, includes the full process of administration, distribution and closing;

(45) "sign" means with present intent to authenticate or adopt a record other than a will:

(a) to execute or adopt a tangible symbol; or

(b) to attach to or logically associate with the record an electronic symbol, sound or process;

[(42)] (46) "special administrator" means a personal representative as described by Sections 45-3-614 through 45-3-618 NMSA 1978;

[(43)] (47) "state" means a state of the United States, the District of Columbia, the commonwealth of Puerto Rico or any territory or insular possession subject to the jurisdiction of the United States. "State" also includes any Indian nation, tribe, pueblo or band located within the United States and recognized by federal law or formally acknowledged by a state of the United States;

[(44)] (48) "successor personal representative" means a personal representative, other than a special administrator, who is appointed to succeed a previously appointed personal representative;

[(45)] (49) "successors" means persons, other than creditors, who are entitled to property of a decedent under [his] the decedent's will or the Uniform Probate Code;

[(46)] (50) "supervised administration" refers to the proceedings described in Article [III] 3, Part 5 of the Uniform Probate Code;

[(47)] (51) "survive" means that an individual has neither predeceased an event, including the death of another individual, nor is deemed to have predeceased an event pursuant to Section 45-2-104 or 45-2-702 NMSA 1978. "Survive" includes its derivatives, such as "survives", "survived", "survivor" and "surviving";

[(48)] (52) "testacy proceeding" means a proceeding to establish a will or determine intestacy;

[(49)] (53) "testator" includes an individual of either [sex] gender;

[(50)] (54) "trust" includes an express trust, private or charitable, with additions thereto, wherever and however created. "Trust" also includes a trust created or determined by judgment or decree under which the trust is to be administered in the manner of an express trust. "Trust" excludes other constructive trusts and excludes resulting trusts, [conservatorship] conservatorships, personal representatives, trust accounts as defined in Article [VI] 6 of the Uniform Probate Code, custodial arrangements, including those created under the Uniform Gifts to Minors Act or the Uniform Transfer to Minors Act, business trusts providing for certificates to be issued to beneficiaries, common trust funds, voting trusts, security arrangements, liquidation trusts, trusts for the primary purpose of paying debts, dividends, interest, salaries, wages, profits, pensions or employee benefits of any kind and any arrangement under which a person is nominee or escrowee for another;

[(51)] (55) "trustee" includes an original, additional or successor trustee, whether or not appointed or confirmed by court;

[(52)] (56) "ward" means a person for whom a guardian has been appointed; and

[(53)] (57) "will" includes a codicil and any testamentary instrument that merely appoints a personal representative, revokes or revises another will, nominates a guardian or expressly excludes or limits the right of an individual or class to succeed to property of the decedent passing by intestate succession. "Will" does not include a holographic will.

B. The definitions in Subsection A of this section are made subject to additional definitions contained in subsequent articles that are applicable to specific articles, parts or sections."

Section 5. Section 45-1-301 NMSA 1978 (being Laws 1975, Chapter 257, Section 1-301) is amended to read:

"45-1-301. APPLICATION.--Except as otherwise provided in the Uniform Probate Code, the code applies to:

A. the affairs and estates of decedents, missing persons and protected persons domiciled in New Mexico;

B. the property of nonresidents located in New Mexico or property coming into the control of a fiduciary who is subject to the laws of New Mexico;

C. incapacitated persons, [and] minors and protected persons in New Mexico;

D. survivorship and related accounts and similar property interests in New Mexico; [and

E. trusts subject to administration in New Mexico;]

E. the disclaimer of property interests by persons in New Mexico;

F. certain kinds of trusts and other governing instruments that are governed by the laws of New Mexico; and

G. the apportionment of taxes on estates subject to tax by New Mexico."

Section 6. Section 45-1-302 NMSA 1978 (being Laws 1975, Chapter 257, Section 1-302, as amended) is amended to read:

"45-1-302. SUBJECT MATTER JURISDICTION OF DISTRICT AND PROBATE COURTS.--

A. The district court has exclusive original jurisdiction over all subject matter relating to:

(1) formal proceedings with respect to the estates of decedents, including determinations of testacy, appointment of personal representatives, constructions of wills, administration and expenditure of funds of estates, determination of heirs and successors of decedents and distribution and closing of estates;

(2) estates of missing and protected persons;

(3) protection of incapacitated persons and minors; [and]

(4) survivorship and related accounts and similar property interests;

(5) disclaimer of interests in property;

(6) apportionment of taxes on estates; and

[(4)] (7) trusts and other governing instruments except wills.

B. The district court in formal proceedings shall have jurisdiction to determine title to and value of real or personal property as between the estate and any interested person, including strangers to the estate claiming adversely thereto. The district court has full power to make orders, judgments and decrees and to take all other action necessary and proper to administer justice in matters [which] that come before it.

C. The probate court and the district court have original jurisdiction over informal proceedings for probate of a will or appointment of a personal representative."

Section 7. Section 45-1-303 NMSA 1978 (being Laws 1975, Chapter 257, Section 1-303) is amended to read:

"45-1-303. VENUE--MULTIPLE PROCEEDINGS--TRANSFER.--

A. Subject to the provisions of [Section 3-201 where] Sections 45-1-302 and 45-3-201 NMSA 1978, if a proceeding under the Uniform Probate Code could be maintained in more than one place in New Mexico, the court in which the proceeding is first commenced has the exclusive right to proceed.

B. If proceedings concerning the same estate, protected person [ward] or trust are commenced in more than one court of New Mexico, the court in which the proceeding was first commenced shall continue to hear the matter, and the other courts shall hold the matter in abeyance until the question of venue is decided [and]. If the ruling court determines that venue is properly in another court, it shall transfer the proceeding to the other court.

C. If a court finds that in the interest of justice a proceeding or a file should be located in another court of New Mexico, the court making the finding may transfer the proceeding or file to the other court."

Section 8. Section 45-1-403 NMSA 1978 (being Laws 1975, Chapter 257, Section 1-403) is amended to read:

"45-1-403. PLEADINGS--WHEN PARTIES BOUND BY OTHERS--NOTICE.--In judicial proceedings involving trusts, or estates of decedents, minors, protected persons or incapacitated persons, and in judicially supervised settlements, the following rules apply:

A. interests to be affected shall be described in pleadings [which] that give reasonable information to owners by name or class, by reference to the instrument creating the interests or in [other] another appropriate manner;

B. [persons are] a person is bound by [orders] an order binding [others] another in the following cases:

(1) [orders] an order binding the sole holder or all co-holders of a power of revocation or a presently exercisable general power of appointment, including one in the form of a power of amendment, bind other persons to the extent their interests as objects, takers in default or otherwise are subject to the power;

(2) to the extent there is no conflict of interest between them or among persons represented:

(a) [orders] an order binding a conservator [bind] binds the person whose estate [he] the conservator controls;

(b) [orders] an order binding a guardian [bind] binds the ward if no conservator of [his] the ward's estate has been appointed;

(c) [orders] an order binding a trustee [bind] binds beneficiaries of the trust in proceedings to probate a will establishing or adding to a trust, to review the acts or accounts of a [prior] former fiduciary and in proceedings involving creditors or other third parties; [and]

(d) [orders] an order binding a personal representative [bind] binds persons interested in the undistributed assets of a decedent's estate in actions or proceedings by or against the estate [If there is no conflict of interest and no conservator or guardian has been appointed, a parent may represent his minor child]; and

(e) an order binding the sole holder or all co-holders of a general testamentary power of appointment binds other persons to the extent their interests as objects, takers in default or otherwise are subject to the power; and

(3) [an] unless otherwise represented, a minor or an incapacitated, unborn or unascertained person [who is not otherwise represented] is bound by an order to the extent [his] the minor's or the incapacitated, unborn or unascertained person's interest is adequately represented by another party having a substantially identical interest in the proceeding;

C. if no conservator or guardian has been appointed, a parent may represent a minor child;

[C.] D. notice is required as follows:

(1) the notice [as] prescribed by Section

[1-401 of the Probate Code] 45-1-401 NMSA 1978 shall be given to [any] every person having an interest in the subject of the hearing or to one who can bind [such] an interested person as described in Paragraph (1) or (2) of Subsection B of this section. Notice may be given both to [a] an interested person and to another who may bind [him] that person; and

(2) notice is given to unborn or unascertained persons who are not represented under Paragraph (1) or (2) of Subsection B of this section by giving notice to all known persons whose interests in the proceedings are substantially identical to those of the unborn or unascertained persons; and

[D.] E. at any point in a proceeding, the [district] court shall appoint a guardian ad litem to represent the interest of a minor; an incapacitated, unborn or unascertained person; or a person whose identity or address is unknown, if the [district] court determines that representation of the interest would otherwise be inadequate. If not precluded by conflict of interests, a guardian ad litem may be appointed to represent several persons or interests. The [district] court shall [set out] state its reasons for appointing a guardian ad litem as a part of the record of the proceeding."

Section 9. Section 45-2-501 NMSA 1978 (being Laws 1993, Chapter 174, Section 25) is amended to read:

"45-2-501. WHO MAY MAKE WILL.--An individual eighteen or more years of age who is of sound mind or an emancipated minor who is of sound mind may make a will."

Section 10. Section 45-2-507 NMSA 1978 (being Laws 1993, Chapter 174, Section 30) is amended to read:

"45-2-507. REVOCATION BY WRITING OR BY ACT.--

A. A will or any part thereof is revoked:

(1) by executing a subsequent will that revokes the previous will or part expressly or by inconsistency; [or]

(2) by executing another subsequent document in the manner provided for in Section 45-2-502 or 45-2-504 NMSA 1978, or both, that expressly revokes the previous will or part thereof; or

[(2)] (3) by performing a revocatory act on the will if the testator performed the act with the intent and for the purpose of revoking the will or part or if another individual performed the act in the testator's conscious presence and by the testator's direction. For purposes of this paragraph, "revocatory act on the will" includes burning, tearing, canceling, obliterating or destroying the will or any part of it. A burning, tearing or canceling is a "revocatory act on the will", whether or not the burn, tear or cancellation touched any of the words on the will.

B. If a subsequent will does not expressly revoke a previous will, the execution of the subsequent will wholly revokes the previous will by inconsistency if the testator intended the subsequent will to replace rather than supplement the previous will.

C. The testator is presumed to have intended a subsequent will to replace rather than supplement a previous will if the subsequent will makes a complete disposition of the testator's estate. If this presumption arises and is not rebutted by clear and convincing evidence, the previous will is revoked; only the subsequent will is operative on the testator's death.

D. The testator is presumed to have intended a subsequent will to supplement rather than replace a previous will if the subsequent will does not make a complete disposition of the testator's estate. If this presumption arises and is not rebutted by clear and convincing evidence, the subsequent will revokes the previous will only to the extent that the subsequent will is inconsistent with the previous will; each will is fully operative on the testator's death to the extent [they] that the wills are not inconsistent."

Section 11. Section 45-2-603 NMSA 1978 (being Laws 1993, Chapter 174, Section 42, as amended) is amended to read:

"45-2-603. ANTILAPSE--DECEASED DEVISEE--CLASS GIFTS.--

A. As used in this section:

(1) "alternative devise" means a devise that is expressly created by the will and, under the terms of the will, can take effect instead of another devise on the happening of one or more events, including survival of the testator or failure to survive the testator, whether an event is expressed in condition-precedent, condition-subsequent or any other form. A residuary clause constitutes an alternative devise with respect to a nonresiduary devise only if the will specifically provides that, upon lapse or failure, the nonresiduary devise, or nonresiduary devises in general, pass under the residuary clause;

(2) "class member" includes an individual who fails to survive the testator but who would have taken under a devise in the form of a class gift had [he] the class member survived the testator;

(3) "descendant of a grandparent", as used in Subsection B of this section, means an individual who qualifies as a descendant of a grandparent of the testator or of the donor of a power of appointment pursuant to:

(a) rules of construction applicable to a class gift created in the testator's will if the devise or exercise of the power is in the form of a class gift; or

(b) rules for intestate succession if the devise or exercise of the power is not in the form of a class gift;

(4) "descendants", as used in the phrase "surviving descendants" of a deceased devisee or class member in Paragraphs (1) and (2) of Subsection B of this section, means the descendants of a deceased devisee or class member who would take under a class gift created in the testator's will;

[(3)] (5) "devise" includes an alternative devise, a devise in the form of a class gift and an exercise of a power of appointment;

[(4)] (6) "devisee" includes:

(a) a class member if the devise is in the form of a class gift;

(b) an individual or class member who was deceased at the time the testator executed [his] the testator's will as well as an individual or class member who was then living but who failed to survive the testator; and

[(5)] (7) "stepchild" means a child of the surviving, deceased or former spouse of the testator or of the donor of a power of appointment and not of the testator or donor;

[(6) "surviving devisee" or "surviving descendant"]

(8) "surviving", as used in the phrase "surviving devisees" or "surviving descendants", means [a devisee] devisees or [a descendant] descendants who neither predeceased the testator nor [is] are deemed to have predeceased the testator pursuant to the provisions of Section 45-2-702 NMSA 1978; and

[(7)] (9) "testator" includes the donee of a power of appointment if the power is exercised in the testator's will.

B. If a devisee fails to survive the testator and is a grandparent, a descendant of a grandparent or a stepchild of either the testator or the donor of a power of appointment exercised by the testator's will, the following apply:

(1) except as provided in Paragraph (4) of this subsection, if the devise is not in the form of a class gift and the deceased devisee leaves surviving descendants, a substitute gift is created in the devisee's surviving descendants. They take by representation the property to which the devisee would have been entitled had the devisee survived the testator;

(2) except as provided in Paragraph (4) of this subsection, if the devise is in the form of a class gift, other than a devise to "issue", "descendants", "heirs of the body", "heirs", "next of kin", "relatives" or "family" or a class described by language of similar import, a substitute gift is created in the surviving descendants of any deceased devisee. The property to which the devisees would have been entitled had all of them survived the testator passes to the surviving devisees and the surviving descendants of the deceased devisees. Each surviving devisee takes the share to which [he] the surviving devisee would have been entitled had the deceased devisees survived the testator. Each deceased devisee's surviving descendants who are substituted for the deceased devisee take by representation the share to which the deceased devisee would have been entitled had the deceased devisee survived the testator. For the purposes of this paragraph, "deceased devisee" means a class member who failed to survive the testator and left one or more surviving descendants;

(3) for the purposes of Section 45-2-601 NMSA 1978, words of survivorship, such as in a devise to an individual "if [he] the individual survives me" or in a devise to "my surviving children" are not, in the absence of additional evidence, a sufficient indication of an intent contrary to the application of this section;

(4) if the will creates an alternative devise with respect to a devise for which a substitute gift is created by Paragraph (1) or (2) of this subsection, the substitute gift is superseded by the alternative devise [only] if [an expressly designated devisee of the alternative devise is entitled to take under the will]:

(a) the alternative devise is in the form of a class gift and one or more members of the class is entitled to take under the will; or

(b) the alternative devise is not in the form of a class gift and the expressly designated devisee of the alternative devise is entitled to take under the will; and

(5) unless the language creating a power of appointment expressly excludes the substitution of the descendants of an appointee for the appointee, a surviving descendant of a deceased appointee of a power of appointment can be substituted for the appointee pursuant to the provisions of this section whether or not the descendant is an object of the power.

C. If, pursuant to the provisions of Subsection B of this section, substitute gifts are created and not superseded with respect to more than one devise and the devises are alternative devises, one to the other, the determination of which of the substitute gifts takes effect is resolved as follows:

(1) except as provided in Paragraph (2) of this subsection, the devised property passes under the primary substitute gift; [and]

(2) if there is a younger-generation devise, the devised property passes under the younger-generation substitute gift and not under the primary substitute gift; and

[D.] (3) as used in [Subsections C and D of] this [section] subsection:

[(1)] (a) "primary devise" means the devise that would have taken effect had all the deceased devisees of the alternative devises who left surviving descendants survived the testator;

[(2)] (b) "primary substitute gift" means the substitute gift created with respect to the primary devise;

[(3)] (c) "younger-generation devise" means a devise that: [(a)] 1) is to a descendant of a devisee of the primary devise; [(b)] 2) is an alternative devise with respect to the primary devise; [(c)] 3) is a devise for which a substitute gift is created; and [(d)] 4) would have taken effect had all the deceased devisees who left surviving descendants survived the testator except the deceased devisee or devisees of the primary devise; and

[(4)] (d) "younger-generation substitute gift" means the substitute gift created with respect to the younger-generation devise."

Section 12. Section 45-2-606 NMSA 1978 (being Laws 1993, Chapter 174, Section 45) is amended to read:

"45-2-606. NONADEMPTION OF SPECIFIC DEVISES--UNPAID PROCEEDS OF SALE, CONDEMNATION OR INSURANCE--SALE BY CONSERVATOR OR AGENT.--

A. A specific devisee has a right to [the] specifically devised property in the testator's estate at the testator's death and:

(1) any balance of the purchase price, together with any security agreement, [owing from] owed by a purchaser [to] at the [testator at] testator's death by reason of sale of the property;

(2) any amount of a condemnation award for the taking of the property unpaid at death;

(3) any proceeds unpaid at death on fire or casualty insurance on or other recovery for injury to the property;

(4) any property owned by the testator at death and acquired as a result of foreclosure or obtained in lieu of foreclosure of the security interest for specifically devised obligation; [and]

(5) any real property or tangible personal property owned by the testator at death that the testator acquired as a replacement for specifically devised real property or tangible personal property; and

(6) if not covered by Paragraphs (1) through (5) of this subsection, a pecuniary devise equal to the value as of its date of disposition of other specifically devised property disposed of during the testator's lifetime but only to the extent it is established that ademption would be inconsistent with the testator's manifested plan of distribution or that at the time the will was made, the date of disposition or otherwise, the testator did not intend ademption of the devise.

B. If specifically devised property is sold or mortgaged by a conservator or by an agent acting within the authority of a durable power of attorney for an incapacitated [principal] person or if a condemnation award, insurance proceeds or recovery for injury to the property [are] is paid to a conservator or to an agent acting within the authority of a durable power of attorney for an incapacitated [principal] person, the specific devisee has the right to a general pecuniary devise equal to the net sale price, the amount of the unpaid loan, the condemnation award, the insurance proceeds or the recovery.

C. The right of a specific devisee pursuant to Subsection B of this section is reduced by any right the devisee has pursuant to Subsection A of this section.

D. For the purposes of the references in Subsection B of this section to a conservator, Subsection B of this section does not apply if, after the sale, mortgage, condemnation, casualty or recovery, it was adjudicated that the testator's incapacity ceased and the testator survived the adjudication [by] for at least one year.

E. For the purposes of the references in Subsection B of this section to an agent acting within the authority of a durable power of attorney for an incapacitated [principal] person:

[(1) "incapacitated principal" means a principal who is an incapacitated person;

(2)] (1) no adjudication of incapacity before death is necessary; and

[(3)] (2) the acts of an agent within the authority of a durable power of attorney are presumed to be for [an] the incapacitated [principal] person."

Section 13. Section 45-2-706 NMSA 1978 (being Laws 1993, Chapter 174, Section 54, as amended) is amended to read:

"45-2-706. LIFE INSURANCE--RETIREMENT PLAN--ACCOUNT WITH POD DESIGNATION--TRANSFER-ON-DEATH REGISTRATION--DECEASED BENEFICIARY.--

A. As used in this section:

(1) "alternative beneficiary designation" means a beneficiary designation that is expressly created by the governing instrument and, under the terms of the governing instrument, can take effect instead of another beneficiary designation on the happening of one or more events, including a person's survival of the decedent or failure to survive the decedent, whether an event is expressed in condition-precedent, condition-subsequent or any other form;

(2) "beneficiary" means the beneficiary of a beneficiary designation under which the beneficiary must survive the decedent and includes:

(a) a class member if the beneficiary designation is in the form of a class gift; and

(b) an individual or class member who was deceased at the time the beneficiary designation was executed as well as an individual or class member who was then living but who failed to survive the decedent, but excludes a joint tenant of a joint tenancy with the right of survivorship and a party to a joint and survivorship account;

(3) "beneficiary designation" includes an alternative beneficiary designation and a beneficiary designation in the form of a class gift;

(4) "class member" includes an individual who fails to survive the decedent but who would have taken under a beneficiary designation in the form of a class gift had [he] the individual survived the decedent;

(5) "descendant of a grandparent", as used in Subsection B of this section, means an individual who qualifies as a descendant of a grandparent of the decedent pursuant to:

(a) rules of construction applicable to a class gift created in the decedent's beneficiary designation if the beneficiary designation is in the form of a class gift; or

(b) rules for intestate succession if the beneficiary designation is not in the form of a class gift;

(6) "descendants", as used in the phrase "surviving descendants" of a deceased beneficiary or class member in Paragraphs (1) and (2) of Subsection B of this section, means the descendants of a deceased beneficiary or class member who would take under a class gift created in the beneficiary designation;

[(5)] (7) "stepchild" means a child of the decedent's surviving, deceased or former spouse and not of the decedent; and

[(6) "surviving beneficiary" or "surviving descendant"]

(8) "surviving", as used in the phrase "surviving beneficiaries" or "surviving descendants", means [a beneficiary] beneficiaries or [a descendant] descendants who neither predeceased the decedent nor [is] are deemed to have predeceased the decedent pursuant to the provisions of Section 45-2-702 NMSA 1978.

B. If a beneficiary fails to survive the decedent and is a grandparent, a descendant of a grandparent or a stepchild of the decedent, the following apply:

(1) except as provided in Paragraph (4) of this subsection, if the beneficiary designation is not in the form of a class gift and the deceased beneficiary leaves surviving descendants, a substitute gift is created in the beneficiary's surviving descendants. They take by representation the property to which the beneficiary would have been entitled had the beneficiary survived the decedent;

(2) except as provided in Paragraph (4) of this subsection, if the beneficiary designation is in the form of a class gift, other than a beneficiary designation to "issue", "descendants", "heirs of the body", "heirs", "next of kin", "relatives" or "family" or a class described by language of similar import, a substitute gift is created in the surviving descendants of any deceased beneficiary. The property to which the beneficiaries would have been entitled had all of them survived the decedent passes to the surviving beneficiaries and the surviving descendants of the deceased beneficiaries. Each surviving beneficiary takes the share to which [he] the surviving beneficiary would have been entitled had the deceased beneficiaries survived the decedent. Each deceased beneficiary's surviving descendants who are substituted for the deceased beneficiary take by representation the share to which the deceased beneficiary would have been entitled had the deceased beneficiary survived the decedent. For the purposes of this paragraph, "deceased beneficiary" means a class member who failed to survive the decedent and left one or more surviving descendants;

(3) for the purposes of Section 45-2-701 NMSA 1978, words of survivorship, such as in a beneficiary designation to an individual "if [he] the individual survives me" or in a beneficiary designation to "my surviving children", are not, in the absence of additional evidence, a sufficient indication of an intent contrary to the application of this section; and

(4) if a governing instrument creates an alternative beneficiary designation with respect to a beneficiary designation for which a substitute gift is created by Paragraph (1) or (2) of this subsection, the substitute gift is superseded by the alternative beneficiary designation [only] if [an expressly designated beneficiary of the alternative beneficiary designation is entitled to take]:

(a) the alternative beneficiary designation is in the form of a class gift and one or more members of the class is entitled to take; or

(b) the alternative beneficiary designation is not in the form of a class gift and the expressly designated beneficiary of the alternative beneficiary designation is entitled to take.

C. If, pursuant to the provisions of Subsection B of this section, substitute gifts are created and not superseded with respect to more than one beneficiary designation and the beneficiary designations are alternative beneficiary designations, one to the other, the determination of which of the substitute gifts takes effect is resolved as follows:

(1) except as provided in Paragraph (2) of this subsection, the property passes under the primary substitute gift; [and]

(2) if there is a younger-generation beneficiary designation, the property passes under the younger-generation substitute gift and not under the primary substitute gift; and

[D.] (3) as used in [Subsections C and D of] this [section] subsection:

[(1)] (a) "primary beneficiary designation" means the beneficiary designation that would have taken effect had all the deceased beneficiaries of the alternative beneficiary designations who left surviving descendants survived the decedent;

[(2)] (b) "primary substitute gift" means the substitute gift created with respect to the primary beneficiary designation;

[(3)] (c) "younger-generation beneficiary designation" means as a beneficiary designation that: [(a)] 1) is to a descendant of a beneficiary of the primary beneficiary designation; [(b)] 2) is an alternative beneficiary designation with respect to the primary beneficiary designation; [(c)] 3) is a beneficiary designation for which a substitute gift is created; and [(d)] 4) would have taken effect had all the deceased beneficiaries who left surviving descendants survived the decedent except the deceased beneficiary or beneficiaries of the primary beneficiary designation; and

[(4)] (d) "younger-generation substitute gift" means the substitute gift created with respect to the younger- generation beneficiary designation.

[E.] D. A payor is protected from liability in making payments under the terms of the beneficiary designation until the payor has received written notice of a claim to a substitute gift under this section. Payment made before the receipt of written notice of a claim to a substitute gift under this section discharges the payor, but not the recipient, from all claims for the amounts paid. A payor is liable for a payment made after the payor has received written notice of the claim. A recipient is liable for a payment received whether or not written notice of the claim is given.

The written notice of the claim [must] shall be mailed to the payor's main office or home by registered or certified mail, return receipt requested, or served upon the payor in the same manner as a summons in a civil action. Upon receipt of written notice of the claim, a payor may pay any amount owed by it to the court having jurisdiction of the probate proceedings relating to the decedent's estate or, if no proceedings have been commenced, to the court having jurisdiction of probate proceedings relating to decedents' estates located in the county of the decedent's residence. The court shall hold the funds and, upon its determination under this section, shall order disbursement in accordance with the determination. Payment made to the court discharges the payor from all claims for the amounts paid.

[F.] E. A person who purchases property for value and without notice or who receives a payment or other item of property in partial or full satisfaction of a legally enforceable obligation is neither obligated pursuant to the provisions of this section to return the payment, item of property or benefit nor [is] liable pursuant to the provisions of this section for the amount of the payment or the value of the item of property or benefit. But a person who, not for value, receives a payment, item of property or any other benefit to which the person is not entitled pursuant to the provisions of this section is obligated to return the payment, item of property or benefit or is personally liable for the amount of the payment or the value of the item of property or benefit to the person who is entitled to it pursuant to the provisions of this section.

[G.] F. If this section or any part of this section is preempted by federal law with respect to a payment, an item of property or any other benefit covered by this section, a person who, not for value, receives the payment, item of property or any other benefit to which the person is not entitled pursuant to the provisions of this section is obligated to return the payment, item of property or benefit or is personally liable for the amount of the payment or the value of the item of property or benefit to the person who would have been entitled to it were this section or part of this section not preempted."

Section 14. Section 45-2-707 NMSA 1978 (being Laws 1993, Chapter 174, Section 55, as amended) is amended to read:

"45-2-707. SURVIVORSHIP WITH RESPECT TO FUTURE INTERESTS UNDER TERMS OF TRUST--SUBSTITUTE TAKERS.--

A. As used in this section:

(1) "alternative future interest" means an expressly created future interest that can take effect in possession or enjoyment instead of another future interest on the happening of one or more events, including survival of an event or failure to survive an event, whether an event is expressed in condition-precedent, condition-subsequent or any other form. A residuary clause in a will does not create an alternative future interest with respect to a future interest created in a nonresiduary devise in the will, whether or not the will specifically provides that lapsed or failed devises are to pass under the residuary clause;

(2) "beneficiary" means the beneficiary of a future interest and includes a class member if the future interest is in the form of a class gift;

(3) "class member" includes an individual who fails to survive the distribution date but who would have taken under a future interest in the form of a class gift had [he] the individual survived the distribution date;

(4) "descendants", as used in the phrase "surviving descendants" of a deceased beneficiary or class member in Paragraphs (1) and (2) of Subsection B of this section, means the descendants of a deceased beneficiary or class member who would take under a class gift created in the trust;

[(4)] (5) "distribution date", with respect to a future interest, means the time when the future interest is to take effect in possession or enjoyment. The distribution date need not occur at the beginning or end of a calendar day, but can occur at a time during the course of a day;

[(5)] (6) "future interest" includes an alternative future interest and a future interest in the form of a class gift;

[(6)] (7) "future interest under the terms of a trust" means a future interest that was created by a transfer creating a trust or to an existing trust or by an exercise of a power of appointment to an existing trust, directing the continuance of an existing trust, designating a beneficiary of an existing trust or creating a trust; and

[(7) "surviving beneficiary" or "surviving descendant"]

(8) "surviving", as used in the phrase "surviving beneficiaries" or "surviving descendants", means [a beneficiary] beneficiaries or [a descendant] descendants who neither predeceased the distribution date nor [is] are deemed to have predeceased the distribution date pursuant to the provisions of Section 45-2-702 NMSA 1978.

B. A future interest under the terms of a trust is contingent on the beneficiary's surviving the distribution date. If a beneficiary of a future interest under the terms of a trust fails to survive the distribution date, the following apply:

(1) except as provided in Paragraph (4) of this subsection, if the future interest is not in the form of a class gift and the deceased beneficiary leaves surviving descendants, a substitute gift is created in the beneficiary's surviving descendants. They take by representation the property to which the beneficiary would have been entitled had the beneficiary survived the distribution date;

(2) except as provided in Paragraph (4) of this subsection, if the future interest is in the form of a class gift, other than a future interest to "issue", "descendants", "heirs of the body", "heirs", "next of kin", "relatives" or "family" or a class described by language of similar import, a substitute gift is created in the surviving descendants of any deceased beneficiary. The property to which the beneficiaries would have been entitled had all of them survived the distribution date passes to the surviving beneficiaries and the surviving descendants of the deceased beneficiaries. Each surviving beneficiary takes the share to which [he] the surviving beneficiary would have been entitled had the deceased beneficiaries survived the distribution date. Each deceased beneficiary's surviving descendants who are substituted for the [ceased] deceased beneficiary take by representation the share to which the deceased beneficiary would have been entitled had the deceased beneficiary survived the distribution date. For the purposes of this paragraph, "deceased beneficiary" means a class member who failed to survive the distribution date and left one or more surviving descendants;

(3) for the purposes of Section 45-2-701 NMSA 1978, words of survivorship attached to a future interest are not, in the absence of additional evidence, a sufficient indication of an intent contrary to the application of this section. Words of survivorship include words of survivorship that relate to the distribution date or to an earlier or an unspecified time, whether those words of survivorship are expressed in condition-precedent, condition-subsequent or any other form; and

(4) if a governing instrument creates an alternative future interest with respect to a future interest for which a substitute gift is created by Paragraph (1) or (2) of this subsection, the substitute gift is superseded by the alternative future interest [only] if [an expressly designated beneficiary of the alternative future interest is entitled to take in possession or enjoyment]:

(a) the alternative future interest is in the form of a class gift and one or more members of the class is entitled to take in possession or enjoyment; or

(b) the alternative future interest is not in the form of a class gift and the expressly designated beneficiary of the alternative future interest is entitled to take in possession or enjoyment.

C. If, pursuant to the provisions of Subsection B of this section, substitute gifts are created and not superseded with respect to more than one future interest and the future interests are alternative future interests, one to the other, the determination of which of the substitute gifts takes effect is resolved as follows:

(1) except as provided in Paragraph (2) of this subsection, the property passes under the primary substitute gift; [and]

(2) if there is a younger-generation future interest, the property passes under the younger-generation substitute gift and not under the primary substitute gift; and

(3) as used in this subsection:

[(1)] (a) "primary future interest" means the future interest that would have taken effect had all the deceased beneficiaries of the alternative future interests who left surviving descendants survived the distribution date;

[(2)] (b) "primary substitute gift" means the substitute gift created with respect to the primary future interest;

[(3)] (c) "younger-generation future interest" means a future interest that: [(a)] 1) is to a descendant of a beneficiary of the primary future interest; [(b)] 2) is an alternative future interest with respect to the primary future interest; [(c)] 3) is a future interest for which a substitute gift is created; and [(d)] 4) would have taken effect had all the deceased beneficiaries who left surviving descendants survived the distribution date except the deceased beneficiary or beneficiaries of the primary future interest; and

[(4)] (d) "younger-generation substitute gift" means the substitute gift created with respect to the younger-generation future interest.

D. Except as provided in Subsection E of this section, if after the application of Subsections B and C of this section there is no surviving taker, the property passes in the following order:

(1) if the trust was created in a nonresiduary devise in the transferor's will or in codicil to the transferor's will, the property passes under the residuary clause in the transferor's will; for purposes of this section, the residuary clause is treated as creating a future interest under the terms of a trust; and

(2) if no taker is produced by the application of Paragraph (1) of this subsection, the property passes to the transferor's heirs pursuant to the provisions of Section 45-2-711 NMSA 1978.

E. If, after the application of Subsections B and C of this section, there is no surviving taker and if the future interest was created by the exercise of a power of appointment:

(1) the property passes under the donor's gift-in-default clause, if any, which clause is treated as creating a future interest under the terms of a trust; and

(2) if no taker is produced by the application of Paragraph (1) of this subsection, the property passes as provided in Subsection [E] D of this section. For purposes of Subsection [E] D of this section, "transferor" means the donor if the power was a nongeneral power and means the donee if the power was a general power."

Section 15. Section 45-2-709 NMSA 1978 (being Laws 1993, Chapter 174, Section 57, as amended) is amended to read:

"45-2-709. REPRESENTATION--PER CAPITA AT EACH

GENERATION--PER STIRPES.--

A. As used in this section:

(1) "deceased child" or "deceased descendant" means a child or a descendant who either predeceased the distribution date or is deemed to have predeceased the distribution date pursuant to the provisions of Section 45-2-702 NMSA 1978;

(2) "distribution date", with respect to an interest, means the time when the interest is to take effect in possession or enjoyment. The distribution date need not occur at the beginning or end of a calendar day, but can occur at a time during the course of a day; and

(3) "surviving ancestor", "surviving child" or "surviving descendant" means an ancestor, a child or a descendant who neither predeceased the distribution date nor is deemed to have predeceased the distribution date pursuant to the provisions of Section 45-2-702 NMSA 1978.

B. If an applicable statute or a governing instrument calls for property to be distributed "by representation" or "per capita at each generation", the property is divided into as many equal shares as there are:

(1) surviving descendants in the generation nearest to the designated ancestor that contains one or more surviving descendants; and

(2) deceased descendants in the same generation who left surviving descendants, if any.

Each surviving descendant in the nearest generation is allocated one share. The remaining shares, if any, are combined and then divided in the same manner among the surviving descendants of the deceased descendants as if the surviving descendants who were allocated a share and their surviving descendants had predeceased the distribution date.

C. If a governing instrument calls for property to be distributed "per stirpes", the property is divided into as many equal shares as there are:

(1) surviving children of the designated ancestor; and

(2) deceased children who left surviving descendants.

Each surviving child, if any, is allocated one share. The share of each deceased child [if any] with surviving descendants is divided in the same manner, with subdivision repeating at each succeeding generation until the property is fully allocated among surviving descendants.

D. For the purposes of Subsections B and C of this section, an individual who is deceased and left no surviving descendant is disregarded and an individual who leaves a surviving ancestor who is a descendant of the designated ancestor is not entitled to a share."

Section 16. Section 45-2-803 NMSA 1978 (being Laws 1993, Chapter 174, Section 62, as amended) is amended to read:

"45-2-803. EFFECT OF HOMICIDE ON INTESTATE SUCCESSION, WILLS, TRUSTS, JOINT ASSETS, LIFE INSURANCE AND BENEFICIARY DESIGNATIONS.--

A. As used in this section:

(1) "disposition or appointment of property" includes a transfer of an item of property or any other benefit to a beneficiary designated in a governing instrument; and

(2) "revocable", with respect to a disposition, appointment, provision or nomination, means one under which the decedent, at the time of or immediately before death, was alone empowered, by law or under the governing instrument, to cancel the designation, in favor of the killer, whether or not the decedent was then empowered to designate [himself] the decedent's own self in place of [his] the decedent's killer and the decedent then had capacity to exercise the power.

B. An individual who feloniously and intentionally kills the decedent forfeits all benefits pursuant to the provisions of Chapter 45, Article 2 NMSA 1978 with respect to the decedent's estate, including an intestate share, an omitted spouse's or child's share, a family allowance and a personal property allowance. If the decedent died intestate, the decedent's intestate estate passes as if the killer disclaimed [his] the killer's intestate share.

C. The felonious and intentional killing of the decedent:

(1) revokes any revocable:

(a) disposition or appointment of property made by the decedent to the killer in a governing instrument;

(b) provision in a governing instrument executed by the decedent conferring a general or nongeneral power of appointment on the killer; and

(c) nomination of the killer in a governing instrument executed by the decedent, nominating or appointing the killer to serve in any fiduciary or representative capacity, including a personal representative, executor, trustee or agent; and

(2) severs the interests of the decedent and killer in property held by them at the time of the killing as joint tenants with the right of survivorship, transforming the interests of the decedent and killer into equal tenancies in common.

D. A severance pursuant to the provisions of Paragraph (2) of Subsection C of this section does not affect any third-party interest in property acquired for value and in good-faith reliance on an apparent title by survivorship in the killer unless a writing declaring the severance has been noted, registered, filed or recorded in records appropriate to the kind and location of the property that are relied upon in the ordinary course of transactions involving such property as evidence of ownership.

E. Provisions of a governing instrument executed by the decedent are given effect as if the killer disclaimed all provisions revoked by this section or, in the case of a revoked nomination in a fiduciary or representative capacity, as if the killer predeceased the decedent.

F. An acquisition of property or interest by a killer not covered by this section [must] shall be treated in accordance with the principle that a killer cannot profit from [his] the killer's wrong.

G. After all right to appeal has been exhausted, a judgment of conviction establishing criminal accountability for the felonious and intentional killing of the decedent conclusively establishes the convicted individual as the decedent's killer for purposes of this section. In the absence of a conviction, the court upon the petition of an interested person [must] shall determine whether under the preponderance of evidence standard the individual would be found criminally accountable for the felonious and intentional killing of the decedent. If the court determines that under that standard the individual would be found criminally accountable for the felonious and intentional killing of the decedent, the determination conclusively establishes that individual as the decedent's killer for purposes of this section.

H. 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 instrument executed by the decedent affected by an intentional and felonious killing or for having taken any other action in good-faith reliance on the validity of the governing instrument executed by the decedent upon request and satisfactory proof of the decedent's death before the payor or other third party received written notice of a claimed forfeiture or revocation under this section. A payor or other third party is liable for a payment made or other action taken after the payor or other third party received written notice of a claimed forfeiture or revocation under this section.

Written notice of a claimed forfeiture or revocation pursuant to the provisions of this section [must] 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 written notice of a claimed forfeiture or revocation pursuant to the provisions of this section, 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. The court shall hold the funds or item of property and, upon its determination pursuant to the provisions of this section, shall order disbursement in accordance with the determination. Payments, transfers or deposits made to or with the court discharge the payor or other third party from all claims for the value of amounts paid to or items of property transferred to or deposited with the court.

I. A person who purchases property for value and without notice or who receives a payment or other item of property in partial or full satisfaction of a legally enforceable obligation is neither obligated pursuant to the provisions of this section to return the payment, item of property or benefit nor [is] liable pursuant to the provisions of this section for the amount of the payment or the value of the item of property or benefit. But a person who, not for value, receives a payment, item of property or any other benefit to which the person is not entitled pursuant to the provisions of this section is obligated to return the payment, item of property or benefit or is personally liable for the amount of the payment or the value of the item of property or benefit to the person who is entitled to it pursuant to the provisions of this section.

J. If this section or any part of this section is preempted by federal law with respect to a payment, an item of property or any other benefit covered by this section, a person who, not for value, receives the payment, item of property or any other benefit to which the person is not entitled pursuant to the provisions of this section is obligated to return the payment, item of property or benefit or is personally liable for the amount of the payment or the value of the item of property or benefit to the person who would have been entitled to it were this section or part of this section not preempted."

Section 17. Section 45-2-804 NMSA 1978 (being Laws 1993, Chapter 174, Section 63, as amended) is amended to read:

"45-2-804. REVOCATION OF PROBATE AND NONPROBATE TRANSFERS BY DIVORCE--NO REVOCATION BY OTHER CHANGES OF CIRCUMSTANCES.--

A. As used in this section:

(1) "disposition or appointment of property" includes a transfer of an item of property or any other benefit to a beneficiary designated in a governing instrument;

(2) "divorce or annulment" means [any] a divorce or annulment or [any] a 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. A decree of separation that does not terminate the status of husband and wife is not a divorce for purposes of this section;

(3) "divorced individual" includes an individual whose marriage has been annulled;

(4) "governing instrument" means a governing instrument executed by the divorced individual before the divorce or annulment of [his] the divorced individual's marriage to [his] the former spouse;

(5) "relative of the divorced individual's 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 divorce or annulment, was alone empowered by law or under the governing instrument to cancel the designation in favor of [his] the former spouse or former spouse's relative whether or not the divorced individual was then empowered to designate [himself] the divorced individual's own self in place of [his] the former spouse or in place of [his] the former spouse's relative and whether or not the divorced individual then had the capacity to exercise the power.

B. Except as provided by the express terms of a governing instrument, a court order or a contract relating to the division of the marital estate made between the divorced individuals before or after the marriage, divorce or annulment, the divorce or annulment of a marriage:

(1) revokes any revocable:

(a) disposition or appointment of property made by a divorced individual to [his] the former spouse in a governing instrument and any disposition or appointment created by law or in a governing instrument to a relative of the divorced individual's former spouse;

(b) provision in a governing instrument conferring a general or nongeneral power of appointment on the divorced individual's former spouse or on a relative of the divorced individual's former spouse; and

(c) nomination in a governing instrument, nominating a divorced individual's former spouse 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; and

(2) severs the interests of the former spouses in property held by them at the time of the divorce or annulment as joint tenants with the right of survivorship, transforming the interests of the former spouses into equal tenancies in common.

C. A severance pursuant to the provisions of Paragraph (2) of Subsection B of this section does not affect any third-party interest in property acquired for value and in good faith reliance on an apparent title by survivorship in the survivor of the former spouses unless a writing declaring the severance has been noted, registered, filed or recorded in records appropriate to the kind and location of the property that are relied upon in the ordinary course of transactions involving such property as evidence of ownership.

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 divorce or annulment.

E. Provisions revoked solely by this section are revived by the divorced individual's remarriage to the former spouse or by a nullification of the divorce or annulment.

F. No change of circumstances other than as described in this section and in Section 45-2-803 NMSA 1978 effects a revocation.

G. 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 instrument affected by a divorce, annulment or remarriage or for having taken any other action in good faith reliance on the validity of the governing instrument before the payor or other third-party received written notice of the divorce, annulment or remarriage. A payor or other third-party is liable for a payment made or other action taken after the payor or other third-party received written notice of a claimed forfeiture or revocation pursuant to the provisions of this section.

Written notice of the divorce, annulment or remarriage pursuant to the provisions of this section [must] 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 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. The court shall hold the funds or item of property and, upon its determination pursuant to the provisions of this section, shall order disbursement or transfer in accordance with the determination. Payments, transfers or deposits made to or with the court discharge the payor or other third-party from all claims for the value of amounts paid to or items of property transferred to or deposited with the court.

H. A person who purchases property from a former spouse, relative of a former spouse or any other person for

value and without notice or who receives from a former spouse,

relative of a former spouse or any other person a payment or other item of property in partial or full satisfaction of a legally enforceable obligation is neither obligated pursuant to the provisions of this section to return the payment, item of property or benefit nor is liable pursuant to the provisions of this section for the amount of the payment or the value of the item of property or benefit. But a former spouse, relative of a former spouse or other person who, not for value, received a payment, item of property or any other benefit to which that person is not entitled pursuant to the provisions of this section is obligated to return the payment, item of property or benefit or is personally liable for the amount of the payment or the value of the item of property or benefit to the person who is entitled to it pursuant to the provisions of this section.

I. If this section or any part of this section is preempted by federal law with respect to a payment, an item of property or any other benefit covered by this section, a former spouse, relative of the former spouse or any other person who, not for value, received a payment, item of property or any other benefit to which that person is not entitled pursuant to the provisions of this section is obligated to return that payment, item of property or benefit or is personally liable for the amount of the payment or the value of the item of property or benefit to the person who would have been entitled to it were this section or part of this section not preempted."

Section 18. A new section of the Uniform Probate Code, Section 45-2-805 NMSA 1978, is enacted to read:

"45-2-805. [NEW MATERIAL] REFORMATION TO CORRECT MISTAKES.--The court may reform the terms of a governing instrument, even if unambiguous, to conform the terms to the transferor's intention if it is proved by clear and convincing evidence that the transferor's intent and the terms of the governing instrument were affected by a mistake of fact or law, whether in expression or inducement."

Section 19. A new section of the Uniform Probate Code, Section 45-2-806 NMSA 1978, is enacted to read:

"45-2-806. [NEW MATERIAL] MODIFICATION TO ACHIEVE TRANSFEROR'S TAX OBJECTIVES.--To achieve the transferor's tax objectives, the court may modify the terms of a governing instrument in a manner that is not contrary to the transferor's probable intention. The court may provide that the modification has retroactive effect."

Section 20. Section 45-3-108 NMSA 1978 (being Laws 1975, Chapter 257, Section 3-108, as amended) is amended to read:

"45-3-108. PROBATE, TESTACY AND APPOINTMENT PROCEEDINGS--ULTIMATE TIME LIMIT.--

A. No informal probate or appointment proceeding or formal testacy or appointment proceeding, other than a proceeding to probate a will previously probated at the testator's domicile or appointment proceedings relating to an estate in which there has been a prior appointment, may be commenced more than three years after the decedent's death, except:

(1) if a previous proceeding was dismissed because of doubt about the fact of the decedent's death, then appropriate probate, appointment or testacy proceedings may be maintained at any time thereafter upon a finding that the decedent's death occurred [prior to] before the initiation of the previous proceeding and the applicant or petitioner has not delayed unduly in initiating the subsequent proceeding;

(2) appropriate probate, appointment or testacy proceedings may be maintained in relation to the estate of an absent, disappeared or missing person for whose estate a conservator has been appointed at any time within three years after the conservator becomes able to establish the death of the protected person;

(3) a proceeding to contest an informally probated will and to secure appointment of the person with legal priority for appointment in the event the contest is successful may be commenced within the later of twelve months from the informal probate or three years from the decedent's death;

(4) an informal appointment or a formal testacy or appointment proceeding may be commenced thereafter if no proceedings concerning the succession or estate administration has occurred within the three-year period after the decedent's death, but the personal representative has no right to possess estate assets as provided in Section 45-3-709 NMSA 1978 beyond that necessary to confirm title thereto in the successors to the estate and claims other than expenses of administration may not be presented against the estate; and

(5) a formal testacy proceeding may be commenced at any time after three years from the decedent's death for the purpose of establishing an instrument to direct or control the ownership of property passing or distributable after the decedent's death from one other than the decedent when the property is to be appointed by the terms of the decedent's will or is to pass or be distributed as a part of the decedent's estate or its transfer is otherwise to be controlled by the terms of the decedent's will.

B. The limitations set out in Subsection A of this section do not apply to proceedings to construe probated wills or determine heirs of an intestate.

C. In cases pursuant to the provisions of Paragraph (1) or (2) of Subsection A of this section, the date on which a testacy or appointment proceeding is properly commenced shall be deemed to be the date of the decedent's death for purposes of other limitation provisions of the Uniform Probate Code that relate to the date of death."

Section 21. Section 46-3A-101 NMSA 1978 (being Laws 2001, Chapter 113, Section 101) is amended to read:

"46-3A-101. SHORT TITLE.--[This act] Chapter 46, Article 3A NMSA 1978 may be cited as the "Uniform Principal and Income Act"."

Section 22. Section 46-3A-409 NMSA 1978 (being Laws 2001, Chapter 113, Section 409) is amended to read:

"46-3A-409. DEFERRED COMPENSATION, ANNUITIES AND SIMILAR PAYMENTS.--

(a) As used in this section:

(1) "payment" means a payment that a trustee may receive over a fixed number of years or during the life of one or more individuals because of services rendered or property transferred to the payer in exchange for future payments. The term includes a payment made in money or property from the payer's general assets or from a separate fund created by the payer. [including] For purposes of Subsections (d), (e), (f) and (g) of this section, "payment" also includes any payment from any separate fund, regardless of the reason for the payment; and

(2) "separate fund" includes a private or commercial annuity, an individual retirement account and a pension, profit-sharing, stock-bonus or stock-ownership plan.

(b) To the extent that a payment is characterized as interest or a dividend or a payment made in lieu of interest or a dividend, a trustee shall allocate [it] the payment to income. The trustee shall allocate to principal the balance of the payment and any other payment received in the same accounting period that is not characterized as interest, a dividend or an equivalent payment.

(c) If no part of a payment is characterized as interest, a dividend or an equivalent payment, and all or part of the payment is required to be made, a trustee shall allocate to income ten percent of the part that is required to be made during the accounting period and the balance to principal. If no part of a payment is required to be made or the payment received is the entire amount to which the trustee is entitled, the trustee shall allocate the entire payment to principal. For purposes of this subsection, a payment is not "required to be made" to the extent that it is made because the trustee exercises a right of withdrawal.

(d) [If, to obtain an estate tax marital deduction for a trust, a trustee must allocate more of a payment to income than provided for by this section, the trustee shall allocate to income the additional amount necessary to obtain the marital deduction.] Except as otherwise provided in Subsection (e) of this section, Subsections (f) and (g) of this section apply and Subsections (b) and (c) of this section do not apply in determining the allocation of a payment made from a separate fund to:

(1) a trust to which an election to qualify for a marital deduction pursuant to Section 2056(b)(7) of the Internal Revenue Code of 1986, as amended, has been made; or

(2) a trust that qualifies for the marital deduction pursuant to Section 2056(b)(5) of the Internal Revenue Code of 1986, as amended.

(e) Subsections (d), (f) and (g) of this section do not apply if, and to the extent that, the series of payments would, without the application of Subsection (d) of this section, qualify for the marital deduction pursuant to Section 2056(b)(7)(C) of the Internal Revenue Code of 1986, as amended.

(f) A trustee shall determine the internal income of each separate fund for the accounting period as if the separate fund were a trust subject to the Uniform Principal and Income Act. Upon request of the surviving spouse, the trustee shall demand that the person administering the separate fund distribute the internal income to the trust. The trustee shall allocate a payment from the separate fund to income to the extent of the internal income of the separate fund and distribute that amount to the surviving spouse. The trustee shall allocate the balance of the payment to principal. Upon request of the surviving spouse, the trustee shall allocate principal to income to the extent the internal income of the separate fund exceeds payments made from the separate fund to the trust during the accounting period.

(g) If a trustee cannot determine the internal income of a separate fund but can determine the value of the separate fund, the internal income of the separate fund is deemed to equal four percent of the fund's value according to the most recent statement of value preceding the beginning of the accounting period. If the trustee can determine neither the internal income of the separate fund nor the fund's value, the internal income of the fund is deemed to equal the product of the interest rate and the present value of the expected future payments as determined pursuant to Section 7520 of the Internal Revenue Code of 1986, as amended, for the month preceding the accounting period for which the computation is made.

[(e)] (h) This section does not apply to [payments] a payment to which Section [410] 46-3A-410 NMSA 1978 applies."

Section 23. Section 46-3A-505 NMSA 1978 (being Laws 2001, Chapter 113, Section 505) is amended to read:

"46-3A-505. INCOME TAXES.--

(a) A tax required to be paid by a trustee based on receipts allocated to income must be paid from income.

(b) A tax required to be paid by a trustee based on receipts allocated to principal must be paid from principal, even if the tax is called an income tax by the taxing authority.

(c) A tax required to be paid by a trustee on the trust's share of an entity's taxable income must be paid [proportionately]:

(1) from income to the extent that receipts from the entity are allocated only to income; [and]

(2) from principal to the extent that [(A)] receipts from the entity are allocated only to principal; [and

(B) the trust's share of the entity's taxable income exceeds the total receipts described in Paragraphs (1) and (2)(A)]

(3) proportionately from principal and income to the extent that receipts from the entity are allocated to both income and principal; and

(4) from principal to the extent that the tax exceeds the total receipts from the entity.

(d) [For purposes of this section, receipts allocated to principal or income must be reduced by the amount distributed to a beneficiary from principal or income for which the trust receives a deduction in calculating the tax.] After applying Subsections (a) through (c) of this section, the trustee shall adjust income or principal receipts to the extent that the trust's taxes are reduced because the trust receives a deduction for payments made to a beneficiary."

Section 24. Section 46-10-1 NMSA 1978 (being Laws 2001, Chapter 290, Section 1) is recompiled as Section 45-2-1101 NMSA 1978 and is amended to read:

"45-2-1101. SHORT TITLE.--[This act] Chapter 45, Article 2, Part 11 NMSA 1978 may be cited as the "Uniform Disclaimer of Property Interests Act"."

Section 25. Section 46-10-2 NMSA 1978 (being Laws 2001, Chapter 290, Section 2) is recompiled as Section 45-2-1102 NMSA 1978 and is amended to read:

"45-2-1102. DEFINITIONS.--As used in the Uniform Disclaimer of Property Interests Act:

A. "disclaimant" means the person to whom a disclaimed interest or power would have passed had the disclaimer not been made;

B. "disclaimed interest" means the interest that would have passed to the disclaimant had the disclaimer not been made;

C. "disclaimer" means the refusal to accept an interest in or power over property;

D. "fiduciary" means a personal representative, trustee, agent acting under a power of attorney or other person authorized to act as a fiduciary with respect to the property of another person;

E. "jointly held property" means property held in the name of two or more persons under an arrangement in which all holders have concurrent interests and under which the last surviving holder is entitled to the whole of the property; and

[F. "person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government governmental subdivision, agency or instrumentality, public corporation or any other legal or commercial entity;

G. "state" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands or any territory or insular possession subject to the jurisdiction of the United States. The term includes an Indian tribe, an Indian band or an Alaskan native village recognized by federal law or formally acknowledged by a state; and

H.] F. "trust" means:

(1) an express trust, charitable or noncharitable, with additions thereto, whenever and however created; and

(2) a trust created pursuant to a statute, judgment or decree [which] that requires the trust to be administered in the manner of an express trust."

Section 26. Section 46-10-6 NMSA 1978 (being Laws 2001, Chapter 290, Section 6) is recompiled as Section 45-2-1106 NMSA 1978 and is amended to read:

"45-2-1106. DISCLAIMER OF INTEREST IN PROPERTY.--

A. As used in this section:

[(1) "time of distribution" means the time when a disclaimed interest would have taken effect in possession or enjoyment; and

(2)] (1) "future interest" means an interest that takes effect in possession or enjoyment, if at all, later than the time of its creation; and

(2) "time of distribution" means the time when a disclaimed interest would have taken effect in possession or enjoyment.

B. Except for a disclaimer governed by Section [7 or 8 of the Uniform Disclaimer of Property Interests Act] 45-2-1107 or 45-2-1108 NMSA 1978, the following rules apply to a disclaimer of an interest in property:

(1) The disclaimer takes effect as of the time the instrument creating the interest becomes irrevocable, or, if the interest arose under the law of intestate succession, as of the time of the intestate's death.

(2) The disclaimed interest passes according to any provision in the instrument creating the interest providing for the disposition of the interest, should it be disclaimed, or of disclaimed interests in general.

(3) If the instrument does not contain a provision described in Paragraph (2) of this subsection, the following rules apply:

[(a) If the disclaimant is an individual, the disclaimed interest passes as if the disclaimant had died immediately before the time of distribution. However, if, by law or under the instrument, the descendants of the disclaimant would share in the disclaimed interest by any method of representation had the disclaimant died before the time of distribution, the disclaimed interest passes only to the descendants of the disclaimant who survive the time of distribution.

(b) If the disclaimant is not an individual, the disclaimed interest passes as if the disclaimant did not exist.]

(a) If the disclaimant is not an individual, the disclaimed interest passes as if the disclaimant did not exist.

(b) If the disclaimant is an individual, except as otherwise provided in Subparagraphs (c) and (d) of this paragraph, the disclaimed interest passes as if the disclaimant had died immediately before the time of distribution.

(c) If, by law or under the instrument, the descendants of the disclaimant would share in the disclaimed interest by any method of representation had the disclaimant died before the time of distribution, the disclaimed interest passes only to the descendants of the disclaimant who survive the time of distribution.

(d) If the disclaimed interest would pass to the disclaimant's estate had the disclaimant died before the time of distribution, the disclaimed interest instead passes by representation to the descendants of the disclaimant who survive the time of distribution. If no descendant of the disclaimant survives the time of distribution, the disclaimed interest passes to those persons, including the state but excluding the disclaimant, and in such shares as would succeed to the transferor's intestate estate under the intestate succession law of the transferor's domicile had the transferor died at the time of distribution. However, if the transferor's surviving spouse is living but is remarried at the time of distribution, the transferor is deemed to have died unmarried at the time of distribution.

(4) Upon the disclaimer of a preceding interest, a future interest held by a person other than the disclaimant takes effect as if the disclaimant had died or ceased to exist immediately before the time of distribution, but a future interest held by the disclaimant is not accelerated in possession or enjoyment."

Section 27. Section 45-3-101 NMSA 1978 (being Laws 1975, Chapter 257, Section 3-101) is amended to read:

"45-3-101. DEVOLUTION OF ESTATE AT DEATH--ADMINISTRATION ON DEATHS OF HUSBAND AND WIFE.--

A. The power of a person to leave property by will and the rights of creditors, devisees and heirs to [his] the person's property are subject to the restrictions and limitations contained in [Sections 3-101 through 3-1204] Chapter 45, Article 3 NMSA 1978 to facilitate the prompt settlement of estates.

B. Upon the death of a person, [his] the person's separate property and [his] the person's share of community property devolves:

(1) to the persons to whom the property is devised by [his] the person's last will;

(2) to those indicated as substitutes for them in cases involving revocation, lapse, [renunciation] disclaimer or other circumstances pursuant to [Sections 2-508 and 2-601 through 2-803] Chapter 45, Article 2 NMSA 1978 and the Uniform Disclaimer of Property Interests Act affecting the devolution of testate estates; or

(3) in the absence of testamentary disposition, to [his] the person's heirs or to those indicated as substitutes for them in cases involving [renunciation] revocation, lapse, disclaimer or other circumstances pursuant to [Sections 2-301 through 2-405] Chapter 45, Article 2, Parts 3, 4 and 10 NMSA 1978 affecting the devolution of intestate estates.

C. The devolution of separate property and the decedent's share of community property is subject to rights to the family allowance and personal property allowance, to rights of creditors and to administration as provided in [Sections 3-101 through 3-1204] Chapter 45, Article 3 NMSA 1978. The surviving spouse's share of the community property is subject to administration until the time for presentation of claims has expired, and thereafter only to the extent necessary to pay community claims."

Section 28. Section 45-3-309 NMSA 1978 (being Laws 1975, Chapter 257, Section 3-309, as amended) is amended to read:

"45-3-309. INFORMAL APPOINTMENT PROCEEDINGS--COURT NOT SATISFIED.--The probate or the district court may decline an application for informal appointment of a personal representative for any reason. A declination of informal appointment is not an adjudication and does not preclude appointment in formal proceedings."

Section 29. Section 45-3-703 NMSA 1978 (being Laws 1975, Chapter 257, Section 3-703) is amended to read:

"45-3-703. GENERAL DUTIES--RELATION AND LIABILITY TO PERSONS INTERESTED IN ESTATE--STANDING TO SUE.--

A. A personal representative is under a duty to settle and distribute the estate of a decedent in accordance with the terms of any probated and effective will and the Uniform Probate Code and as expeditiously and efficiently as is consistent with the best interests of the estate. [He] The personal representative shall use the authority conferred upon [him] the personal representative by the Uniform Probate Code, the terms of the will, if any, and any order in proceedings to which [he] the personal representative is party for the best interests of successors to the estate.

B. A personal representative [shall] may not be surcharged for acts of administration or distribution if the conduct in question was authorized at the time. Subject to other obligations of administration, an informally probated will [is authority] authorizes a personal representative to administer and distribute the estate according to its terms.

C. An order of appointment of a personal representative, whether issued in informal or formal proceedings, [is authority] authorizes a personal representative to distribute apparently intestate assets to the heirs of the decedent if, at the time of distribution, the personal representative is not aware of:

(1) a pending testacy proceeding;

(2) a proceeding to vacate an order entered in an earlier testacy proceeding;

(3) a formal proceeding questioning [his] the personal representative's appointment or fitness to continue; or

(4) a supervised administration proceeding.

D. [Nothing in] This section [affects] does not affect the duty of the personal representative to administer and distribute the estate in accordance with the rights of claimants whose claims have been allowed, the surviving spouse, any minor and dependent children and any pretermitted child of the decedent.

E. Except as to proceedings [which] that do not survive the death of the decedent, a personal representative of a decedent domiciled in New Mexico at [his] the decedent's death has the same standing to sue and be sued in the courts of New Mexico and the courts of any other jurisdiction as [his] the decedent had immediately prior to death."

Section 30. Section 45-3-803 NMSA 1978 (being Laws 1975, Chapter 257, Section 3-803, as amended) is amended to read:

"45-3-803. LIMITATIONS ON PRESENTATION OF CLAIMS.--

A. All claims against a decedent's estate that arose before the death of the decedent, including claims of the state and any political subdivision of the state, whether due or to become due, absolute or contingent, liquidated or unliquidated or founded on contract, tort or other legal basis, if not barred earlier by another statute of limitations or nonclaim statute, are barred against the estate, the personal representative and the heirs, [and] devisees and nonprobate transferees of the decedent unless presented within the earlier of the following:

(1) one year after the decedent's death; or

(2) the time provided by Subsection A of Section 45-3-801 NMSA 1978 for creditors who are given actual notice and the time provided in Subsection B of Section 45-3-801 NMSA 1978 for all creditors barred by publication.

B. A claim described in Subsection A of this section that is barred by the nonclaim statute of the decedent's domicile before the giving of notice to creditors in this state is barred in this state.

C. All claims against a decedent's estate that arise at or after the death of the decedent, including claims of the state and any political subdivision of the state, whether due or to become due, absolute or contingent, liquidated or unliquidated or founded on contract, tort or other legal basis, are barred against the estate, the personal representative and the heirs and devisees of the decedent unless presented as follows:

(1) a claim based on a contract with the personal representative within four months after performance by the personal representative is due; or

(2) any other claim within the later of four months after it arises or the time specified in Paragraph (1) of this subsection.

D. Nothing in this section affects or prevents:

(1) any proceeding to enforce any mortgage, pledge or other lien upon property of the estate;

(2) to the limits of the insurance protection only, [any] a proceeding to establish liability of the decedent or the personal representative for which [he] the decedent or personal representative is protected by liability insurance; or

(3) collection of compensation for services rendered and reimbursement for expenses advanced by the personal representative or by the attorney or accountant for the personal representative of the estate."

Section 31. Section 45-3-913 NMSA 1978 (being Laws 1975, Chapter 257, Section 3-913, as amended) is amended to read:

"45-3-913. DISTRIBUTIONS TO TRUSTEE.--

A. Before distributing to a trustee, the personal representative may require that the trust be registered if the state in which it is to be administered provides for registration and that the trustee inform the beneficiaries as provided in [Section 45-7-303 NMSA 1978] the Uniform Trust Code or other law governing the trust.

B. If the trust instrument does not excuse the trustee from giving bond, the personal representative may petition the appropriate court to require that the trustee post bond if [he] the personal representative apprehends that distribution might jeopardize the interests of persons who are not able to protect themselves, and [he] the personal representative may withhold distribution until the court has acted.

C. No inference of negligence on the part of the personal representative shall be drawn from [his] the personal representative's failure to exercise the authority conferred by Subsections A and B of this section."

Section 32. Section 45-3-915 NMSA 1978 (being Laws 1975, Chapter 257, Section 3-915, as amended) is amended to read:

"45-3-915. DISTRIBUTION TO PERSON UNDER DISABILITY.--

A. A personal representative may discharge [his] an obligation to distribute to [any] a minor or person under other disability by distributing in a manner expressly provided in the will or other governing instrument.

B. Unless contrary to an express provision in the will or other governing instrument, the personal representative may discharge [his] an obligation to distribute to a minor or person under other disability as authorized by Section [45-5-101] 45-5-103 NMSA 1978 or any other statute. If the personal representative knows that a conservator has been appointed or that a proceeding for appointment of a conservator is pending, the personal representative is authorized to distribute only to the conservator.

C. If the heir or devisee is under disability other than minority, the personal representative is authorized to distribute to:

(1) an [attorney in fact] agent who has authority under a power of attorney to receive property for that person; or

(2) the spouse, parent or other close relative with whom the person under disability resides if the distribution is of amounts not exceeding ten thousand dollars ($10,000) a year or property not exceeding ten thousand dollars ($10,000) in value unless the court authorizes a larger amount or greater value.

D. Persons receiving money or property for the disabled person are obligated to apply the money or property to the support of the disabled person. Persons may not pay themselves except by way of reimbursement for out-of-pocket expenses for goods and services necessary for the support of the disabled person. Excess sums must be preserved for future support of the disabled person. The personal representative is not responsible for the proper application of money or property distributed pursuant to this subsection."

Section 33. Section 45-3-1201 NMSA 1978 (being Laws 1975, Chapter 257, Section 3-1201, as amended) is amended to read:

"45-3-1201. COLLECTION OF PERSONAL PROPERTY BY AFFIDAVIT.--

A. Thirty days after the death of a decedent, any person indebted to the decedent or having possession of tangible personal property or an instrument evidencing a debt, obligation, stock or chose in action belonging to the decedent shall make payment of the indebtedness or deliver the tangible personal property or an instrument evidencing a debt, obligation, stock or chose in action to a person claiming to be the successor of the decedent upon being presented an affidavit made by or on behalf of the successor stating that:

(1) the value of the entire estate, wherever located, less liens and encumbrances, does not exceed [thirty thousand dollars ($30,000)] fifty thousand dollars ($50,000);

(2) thirty days have elapsed since the death of the decedent;

(3) no application or petition for the appointment of a personal representative is pending or has been granted in any jurisdiction; and

(4) the claiming successor is entitled to payment or delivery of the property.

B. A transfer agent of any security shall change the registered ownership on the books of a corporation from the decedent to the successor or successors upon the presentation of an affidavit as provided in Subsection A of this section.

C. The affidavit made pursuant to this section may not be used to perfect title to real estate."

Section 34. Section 45-3-1205 NMSA 1978 (being Laws 1985, Chapter 12, Section 1) is amended to read:

"45-3-1205. [SMALL ESTATES] TRANSFER OF TITLE TO HOMESTEAD TO SURVIVING SPOUSE BY AFFIDAVIT.--

A. Where a husband and wife own a homestead as community property and when either the husband or wife dies intestate or dies testate and by [their] the husband's or wife's will [devise their] devises the husband's or wife's interest in the homestead to the surviving spouse, the homestead passes to the survivor and no probate or administration is necessary.

B. Six months after the death of a decedent, the surviving spouse may record with the county clerk in the county in which the homestead is located an affidavit describing the real property and stating that:

(1) six months have elapsed since the death of the decedent as shown in a certified copy of the death certificate attached to the affidavit;

(2) the affiant and the decedent were at the time of the death of the decedent married and owned the homestead as community property;

(3) a copy of the deed with a legal description of the homestead is attached to the affidavit;

(4) but for the homestead, the decedent's estate need not be subject to any judicial probate proceeding either in district court or probate court;

(5) no application or petition for appointment of a personal representative or for admittance of a will to probate is pending or has been granted in any jurisdiction;

(6) funeral expenses, expenses of last illness and all unsecured debts of the decedent have been paid;

(7) the affiant is the surviving spouse of the decedent and is entitled to title to the homestead by intestate succession as provided in Section 45-2-102 NMSA 1978 or by devise under a valid last will of the decedent, the original of which is attached to the affidavit;

(8) no other person has a right to the interest of the decedent in the described property;

(9) no federal or state tax is due on the decedent's estate; and

(10) the affiant affirms that all statements in the affidavit are true and correct and further acknowledges that any false statement may subject the person to penalties relating to perjury and subornation of perjury.

C. As used in this section, "homestead" means the principal place of residence of the decedent or surviving spouse or the last principal place of residence if neither the decedent nor the surviving spouse is residing in that residence because of illness or incapacitation and [which] that consists of one or more dwellings together with appurtenant structures, the land underlying both the dwellings and the appurtenant structures and a quantity of land reasonably necessary for parking and other uses that facilitates the use of the dwellings and appurtenant structures, and provided the full value of this property as assessed for property taxation purposes does not exceed [one hundred thousand dollars ($100,000)] five hundred thousand dollars ($500,000)."

Section 35. Section 45-5-101 NMSA 1978 (being Laws 1975, Chapter 257, Section 5-101, as amended) is amended to read:

"45-5-101. DEFINITIONS AND USE OF TERMS.--Unless otherwise apparent from the context or unless otherwise specifically defined in other sections that are applicable to specific articles, parts of sections of the Uniform Probate Code, as used in Chapter 45, Article 5 NMSA 1978:

A. "conservator" [is as defined in Section 45-1-201 NMSA 1978] means a person who is appointed by a court to manage the property or financial affairs or both of a protected person;

B. "court" means the district court or the children's or family division of the district court where such jurisdiction is conferred by the Children's Code;

C. "functional impairment" means an impairment that is measured by a person's inability to manage the person's personal care or the person's inability to manage the person's estate or financial affairs or both;

D. "guardian" [is as defined] has the same meaning as set forth in Section 45-1-201 NMSA 1978;

E. "guardian ad litem" [is as defined] has the same meaning as set forth in Section 45-1-201 NMSA 1978;

F. "incapacitated person" means any person who demonstrates over time either partial or complete functional impairment by reason of mental illness, mental deficiency, physical illness or disability, chronic use of drugs, chronic intoxication or other cause, except minority, to the extent that the person is unable to manage the person's personal affairs or the person is unable to manage the person's estate or financial affairs or both;

G. "inability to manage the person's personal care" means the inability, as evidenced by recent behavior, to meet one's needs for medical care, nutrition, clothing, shelter, hygiene or safety so that physical injury, illness or disease has occurred or is likely to occur in the near future;

H. "inability to manage the person's estate or financial affairs or both" means gross mismanagement, as evidenced by recent behavior, of one's income and resources or medical inability to manage one's income and resources that has led or is likely in the near future to lead to financial vulnerability;

I. "interested person" means any person who has an interest in the welfare of the person to be protected [under this article] pursuant to Chapter 45, Article 5 NMSA 1978;

J. "least restrictive form of intervention" means that the guardianship or conservatorship imposed on the incapacitated person or minor ward represents only those limitations necessary to provide the needed care and rehabilitative services and that the incapacitated person or minor ward shall enjoy the greatest amount of personal freedom and civil liberties;

K. "letters" [is as defined] has the same meaning as set forth in Section 45-1-201 NMSA 1978;

L. "limited conservator" means any person who is qualified to manage the estate and financial affairs of an incapacitated person pursuant to a court appointment in a limited conservatorship;

M. "limited conservatorship" means that an incapacitated person is subject to a conservator's exercise of some but not all of the powers enumerated in Sections 45-5-424 and 45-5-425 NMSA 1978;

N. "limited guardian" means any person who is qualified to manage the care, custody and control of an incapacitated person pursuant to a court appointment of a limited guardianship;

O. "limited guardianship" means that an incapacitated person is subject to a guardian's exercise of some but not all of the powers enumerated in Section 45-5-312 NMSA 1978;

P. "minor" [is as defined] has the same meaning as set forth in Section 45-1-201 NMSA 1978; Q. "minor ward" means a minor for whom a guardian or conservator has been appointed solely because of minority;

R. "parent" means a parent whose parental rights have not been terminated;

[R.] S. "protective proceeding" means a conservatorship proceeding under Section 45-5-401 NMSA 1978;

[S.] T. "protected person" means a minor or other person for whom a conservator has been appointed or other protective order has been made;

[T.] U. "qualified health care professional" means a physician, psychologist, physician assistant, nurse practitioner or other health care practitioner whose training and expertise aid in the assessment of functional impairment;

[U.] V. "ward" means a person for whom a guardian has been appointed; and

[V.] W. "visitor" means a person who is an appointee of the court, who has no personal interest in the proceeding and who has been trained or has the expertise to evaluate appropriately [evaluate] the needs of the person who is allegedly incapacitated. A "visitor" may include, but is not limited to, a psychologist, a social worker, a developmental incapacity professional, a physical and occupational therapist, an educator and a rehabilitation worker."

Section 36. Section 45-5-103 NMSA 1978 (being Laws 1975, Chapter 257, Section 5-103) is amended to read:

"45-5-103. FACILITY OF PAYMENT OR DELIVERY.--

A. [Any] A person under a duty to pay or deliver money or personal property to a minor may perform this duty, in amounts not exceeding five thousand dollars ($5,000) per [annum] year, by paying or delivering the money or property to:

(1) the minor, if [he] the minor is married;

(2) [any] a person having the care and custody of the minor and with whom the minor resides;

(3) a guardian of the minor; [or]

(4) a financial institution for deposit in a federally insured savings account in the sole name of the minor and giving notice of the deposit to the minor; or

(5) a custodian for the minor pursuant to the Uniform Transfers to Minors Act. B. This section does not apply if the person making payment or delivery has actual knowledge that a conservator has been appointed or proceedings for appointment of a conservator of the estate of the minor are pending. The persons, other than the minor or any financial institution under Paragraph (4) of Subsection A of this section, receiving money or property for a minor are obligated to apply the money to the support and education of the minor but [may] shall not pay themselves except by way of reimbursement for out-of-pocket expenses for goods and services necessary for the minor's support. Any excess sums shall be preserved for future support of the minor, and any balance not so used and any property received for the minor [must] shall be turned over to the minor when [he attains majority] the minor ceases to be a minor. Persons who pay or deliver in accordance with provisions of this section are not responsible for the proper application of such payments."

Section 37. Section 45-5-208 NMSA 1978 (being Laws 1975, Chapter 257, Section 5-208) is amended to read:

"45-5-208. CONSENT TO SERVICE BY ACCEPTANCE OF APPOINTMENT--NOTICE.--By accepting a [testamentary] parental or court appointment as guardian, a guardian submits personally to the jurisdiction of the court in any proceeding relating to the guardianship that may be instituted by any interested person. Notice of [any] a proceeding shall be delivered to the guardian or mailed to [him] the guardian at [his] the address [as] listed in the court records and to [his] the address [as] then known to the petitioner. Letters of guardianship [must] shall indicate whether the guardian was appointed by [will] parental appointment or by court order."

Section 38. Section 45-5-210 NMSA 1978 (being Laws 1975, Chapter 257, Section 5-210) is amended to read:

"45-5-210. TERMINATION OF APPOINTMENT OF GUARDIAN--GENERAL.--A guardian's authority and responsibility terminate upon the death, resignation or removal of the guardian or upon the minor's death, adoption, emancipation, marriage or attainment of majority, but termination does not affect [his] the guardian's liability for prior acts nor [his] the guardian's obligation to account for money and property of [his ward] the protected person. Resignation of a guardian does not terminate the guardianship until it has been approved by the court. A testamentary appointment under an informally probated will terminates if the will is later denied probate in a formal proceeding."

Section 39. Section 45-5-417 NMSA 1978 (being Laws 1975, Chapter 257, Section 5-417) is amended to read:

"45-5-417. GENERAL DUTY OF CONSERVATOR.--In the exercise of [his] a conservator's powers, a conservator shall act as a fiduciary and shall observe the standards of care applicable to trustees as described by [Section 7-302] Sections 46A-8-801 through 46A-8-807 NMSA 1978."

Section 40. A new Section 45-5-506 NMSA 1978 is enacted to read:

"45-5-506. [NEW MATERIAL] SHORT TITLE.--Sections 45-5-506 through 45-5-528 NMSA 1978 may be cited as the "Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act"."

Section 41. A new Section 45-5-507 NMSA 1978 is enacted to read:

"45-5-507. [NEW MATERIAL] DEFINITIONS.--As used in the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act:

A. "adult" means an individual who has attained eighteen years of age;

B. "conservator" means a person appointed by the court to administer the property of an adult, including a person appointed pursuant to Section 45-5-401 NMSA 1978;

C. "court" means the district court;

D. "guardian" means a person appointed by the court to make decisions regarding the person of an adult, including a person appointed pursuant to Section 45-5-301 NMSA 1978;

E. "guardianship order" means an order appointing a guardian;

F. "guardianship proceeding" means a judicial proceeding in which an order for the appointment of a guardian is sought or has been issued;

G. "incapacitated person" means an adult for whom a guardian has been appointed;

H. "party" means the respondent, petitioner, guardian, conservator or any other person allowed by the court to participate in a guardianship or protective proceeding;

I. "person", except in the term "incapacitated person" or "protected person", means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government or governmental subdivision, agency or instrumentality, or any other legal or commercial entity;

J. "protected person" means an adult for whom a protective order has been issued;

K. "protective order" means an order appointing a conservator or other order related to management of an adult's property;

L. "protective proceeding" means a judicial proceeding in which a protective order is sought or has been issued; and

M. "respondent" means an adult for whom a protective order or the appointment of a guardian is sought."

Section 42. A new Section 45-5-508 NMSA 1978 is enacted to read:

"45-5-508. [NEW MATERIAL] INTERNATIONAL APPLICATION OF THE UNIFORM ADULT GUARDIANSHIP AND PROTECTIVE PROCEEDINGS JURISDICTION ACT.--A New Mexico court may treat a foreign country as if it were a state for the purpose of applying Subparts 1, 2, 3 and 5 of the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act."

Section 43. A new Section 45-5-509 NMSA 1978 is enacted to read:

"45-5-509. [NEW MATERIAL] COMMUNICATION BETWEEN COURTS.--

A. A New Mexico court may communicate with a court in another state concerning a proceeding arising pursuant to the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act. The court may allow the parties to participate in the communication. Except as otherwise provided in Subsection B of this section and except as otherwise provided by rules adopted by the New Mexico supreme court, the court shall make a record of the communication. The record may be limited to the fact that the communication occurred.

B. Except as otherwise provided by rules adopted by the New Mexico supreme court, courts may communicate concerning schedules, calendars, court records and other administrative matters without making a record."

Section 44. A new Section 45-5-510 NMSA 1978 is enacted to read:

"45-5-510. [NEW MATERIAL] COOPERATION BETWEEN COURTS.--

A. Except as otherwise provided by rules adopted by the New Mexico supreme court, in a guardianship or protective proceeding in New Mexico, a New Mexico court may request the appropriate court of another state to do any of the following:

(1) hold an evidentiary hearing;

(2) order a person in that state to produce evidence or give testimony pursuant to procedures of that state;

(3) order that an evaluation or assessment be made of the respondent;

(4) order any appropriate investigation of a person involved in a proceeding;

(5) forward to the New Mexico court a certified copy of the transcript or other record of a hearing pursuant to Paragraph (1) of this subsection or any other proceeding, any evidence otherwise produced pursuant to Paragraph (2) of this subsection and any evaluation or assessment prepared in compliance with an order pursuant to Paragraph (3) or (4) of this subsection;

(6) issue any order necessary to assure the appearance in the proceeding of a person whose presence is necessary for the court to make a determination, including the respondent or the incapacitated or protected person; and

(7) issue an order authorizing the release of medical, financial, criminal or other relevant information in that state, including protected health information as defined in 45 C.F.R. Section 164.504, as amended.

B. If a court of another state in which a guardianship or protective proceeding is pending requests assistance of the kind provided in Subsection A of this section, a New Mexico court has jurisdiction for the limited purpose of granting the request or making reasonable efforts to comply with the request."

Section 45. A new Section 45-5-511 NMSA 1978 is enacted to read:

"45-5-511. [NEW MATERIAL] TAKING TESTIMONY IN ANOTHER STATE.--

A. In a guardianship or protective proceeding, in addition to other procedures that may be available, testimony of a witness who is located in another state may be offered by deposition or other means allowable in New Mexico for testimony taken in another state. The court on its own motion may order that the testimony of a witness be taken in another state and may prescribe the manner in which, and the terms upon which, the testimony is to be taken.

B. In a guardianship or protective proceeding, a New Mexico court may permit a witness located in another state to be deposed or to testify by telephone or audiovisual or other electronic means. A New Mexico court shall cooperate with the court of the other state in designating an appropriate location for the deposition or testimony.

C. Except as otherwise provided by rules adopted by the New Mexico supreme court, documentary evidence transmitted from another state to a New Mexico court by technological means that do not produce an original writing shall not be excluded from evidence on an objection based on the best evidence rule."

Section 46. A new Section 45-5-512 NMSA 1978 is enacted to read:

"45-5-512. [NEW MATERIAL] DEFINITIONS--SIGNIFICANT-CONNECTION FACTORS.--

A. As used in Subpart 2 of the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act:

(1) "emergency" means a circumstance that likely will result in substantial harm to a respondent's health, safety or welfare and for which the appointment of a guardian is necessary because no other person has authority and is willing to act on the respondent's behalf;

(2) "home state" means the state in which the respondent was physically present, including any period of temporary absence, for at least six consecutive months immediately before the filing of a petition for a protective order or the appointment of a guardian; or, if none, the state in which the respondent was physically present, including any period of temporary absence, for at least six consecutive months ending within the six months prior to the filing of the petition; and

(3) "significant-connection state" means a state, other than the home state, with which a respondent has a significant connection other than mere physical presence and in which substantial evidence concerning the respondent is available.

B. In determining pursuant to Section 45-5-514 and Subsection E of Section 45-5-521 NMSA 1978 whether a respondent has a significant connection with a particular state, the court shall consider:

(1) the location of the respondent's family and other persons required to be notified of the guardianship or protective proceeding;

(2) the length of time the respondent at any time was physically present in the state and the duration of any absence;

(3) the location of the respondent's property; and

(4) the extent to which the respondent has ties to the state, such as voting registration, state or local tax return filing, vehicle registration, driver's license, social relationship and receipt of services."

Section 47. A new Section 45-5-513 NMSA 1978 is enacted to read:

"45-5-513. [NEW MATERIAL] EXCLUSIVE BASIS.--Subpart 2 of the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act provides the exclusive jurisdictional basis for a New Mexico court to appoint a guardian or issue a protective order for an adult."

Section 48. A new Section 45-5-514 NMSA 1978 is enacted to read:

"45-5-514. [NEW MATERIAL] JURISDICTION.--A New Mexico court has jurisdiction to appoint a guardian or issue a protective order for a respondent if:

A. New Mexico is the respondent's home state;

B. on the date the petition is filed, New Mexico is a significant-connection state and:

(1) the respondent does not have a home state or a court of the respondent's home state has declined to exercise jurisdiction because New Mexico is a more appropriate forum; or

(2) the respondent has a home state, a petition for an appointment or order is not pending in a court of that state or another significant-connection state and, before the court makes the appointment or issues the order:

(a) a petition for an appointment or order is not filed in the respondent's home state;

(b) an objection to the court's jurisdiction is not filed by a person required to be notified of the proceeding; and

(c) the court in New Mexico concludes that it is an appropriate forum pursuant to the factors set forth in Section 45-5-517 NMSA 1978;

C. New Mexico does not have jurisdiction pursuant either to Subsection A or B of this section, the respondent's home state and all significant-connection states have declined to exercise jurisdiction because New Mexico is the more appropriate forum and jurisdiction in New Mexico is consistent with the constitutions of New Mexico and the United States; or

D. the requirements for special jurisdiction pursuant to Section 45-5-515 NMSA 1978 are met."

Section 49. A new Section 45-5-515 NMSA 1978 is enacted to read:

"45-5-515. [NEW MATERIAL] SPECIAL JURISDICTION.--

A. A New Mexico court lacking jurisdiction pursuant to Section 45-5-514 NMSA 1978 has special jurisdiction to do any of the following:

(1) appoint a guardian in an emergency for a term not exceeding ninety days for a respondent who is physically present in New Mexico;

(2) issue a protective order with respect to real or tangible personal property located in New Mexico; and

(3) appoint a guardian or conservator for an incapacitated or protected person for whom a provisional order to transfer the proceeding from another state has been issued pursuant to procedures similar to Section 45-5-521 NMSA 1978.

B. If a petition for the appointment of a guardian in an emergency is brought in New Mexico and New Mexico was not the respondent's home state on the date the petition was filed, the court shall dismiss the proceeding at the request of the court of the home state, if any, whether dismissal is requested before or after the emergency appointment."

Section 50. A new Section 45-5-516 NMSA 1978 is enacted to read:

"45-5-516. [NEW MATERIAL] EXCLUSIVE AND CONTINUING JURISDICTION.--Except as otherwise provided in Section

45-5-515 NMSA 1978, a court that has appointed a guardian or issued a protective order consistent with the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act has exclusive and continuing jurisdiction over the proceeding until it is terminated by the court or the appointment or order expires by its own terms."

Section 51. A new Section 45-5-517 NMSA 1978 is enacted to read:

"45-5-517. [NEW MATERIAL] APPROPRIATE FORUM.--

A. A New Mexico court having jurisdiction pursuant to Section 45-5-514 NMSA 1978 to appoint a guardian or issue a protective order may decline to exercise its jurisdiction if it determines at any time that a court of another state is a more appropriate forum.

B. If a New Mexico court declines to exercise its jurisdiction pursuant to Subsection A of this section, it shall either dismiss or stay the proceeding. The court may impose any condition the court considers just and proper, including the condition that a petition for the appointment of a guardian or issuance of a protective order be filed promptly in another state.

C. In determining whether it is an appropriate forum, the court shall consider all relevant factors, including:

(1) any expressed preference of the respondent;

(2) whether abuse, neglect or exploitation of the respondent has occurred or is likely to occur and which state could best protect the respondent from the abuse, neglect or exploitation;

(3) the length of time the respondent was physically present in or was a legal resident of New Mexico or another state;

(4) the distance of the respondent from the court in each state;

(5) the financial circumstances of the respondent's estate;

(6) the nature and location of the evidence;

(7) the ability of the court in each state to decide the issue expeditiously and the procedures necessary to present evidence;

(8) the familiarity of the court of each state with the facts and issues in the proceeding; and

(9) if an appointment of a guardian or conservator were to be made, the court's ability to monitor the conduct of the guardian or conservator."

Section 52. A new Section 45-5-518 NMSA 1978 is enacted to read:

"45-5-518. [NEW MATERIAL] JURISDICTION DECLINED BY REASON OF CONDUCT.--

A. If at any time a New Mexico court determines that it acquired jurisdiction to appoint a guardian or issue a protective order because of unjustifiable conduct, the court may:

(1) decline to exercise jurisdiction;

(2) exercise jurisdiction for the limited purpose of fashioning an appropriate remedy to:

(a) ensure the health, safety and welfare of the respondent or the protection of the respondent's property; or

(b) prevent a repetition of the unjustifiable conduct, including staying the proceeding until a petition for the appointment of a guardian or issuance of a protective order is filed in a court of another state having jurisdiction; or

(3) continue to exercise jurisdiction after considering:

(a) the extent to which the respondent and all persons required to be notified of the proceedings have acquiesced in the exercise of the court's jurisdiction;

(b) whether it is a more appropriate forum than the court of any other state pursuant to the factors set forth in Subsection C of Section 45-5-517 NMSA 1978; and

(c) whether the court of any other state would have jurisdiction under factual circumstances in substantial conformity with the jurisdictional standards of Section 45-5-514 NMSA 1978.

B. If a New Mexico court determines that it acquired jurisdiction to appoint a guardian or to issue a protective order because a party seeking to invoke its jurisdiction engaged in unjustifiable conduct, it may assess against that party necessary and reasonable expenses, including attorney fees, investigative fees, court costs, communication expenses, witness fees and expenses and travel expenses. The court shall not assess fees, costs or expenses of any kind against New Mexico or a governmental subdivision, agency or instrumentality of New Mexico unless authorized by law other than the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act."

Section 53. A new Section 45-5-519 NMSA 1978 is enacted to read:

"45-5-519. [NEW MATERIAL] NOTICE OF PROCEEDING.--If a petition for the appointment of a guardian or issuance of a protective order is brought in New Mexico and New Mexico was not the respondent's home state on the date the petition was filed, in addition to complying with the notice requirements of New Mexico, notice of the petition shall be given to those persons who would be entitled to notice of the petition if a proceeding were brought in the respondent's home state. The notice shall be given in the same manner as notice is required to be given in New Mexico."

Section 54. A new Section 45-5-520 NMSA 1978 is enacted to read:

"45-5-520. [NEW MATERIAL] PROCEEDINGS IN MORE THAN ONE STATE.--Except for a petition for the appointment of a guardian in an emergency or issuance of a protective order limited to property located in New Mexico pursuant to Paragraph (1) or (2) of Subsection A of Section 45-5-515 NMSA 1978, if a petition for the appointment of a guardian or issuance of a protective order is filed in New Mexico and in another state and neither petition has been dismissed or withdrawn, the following rules apply:

A. if the New Mexico court has jurisdiction pursuant to Section 45-5-514 NMSA 1978, it may proceed with the case unless a court in another state acquires jurisdiction pursuant to provisions similar to Section 45-5-514 NMSA 1978 before the appointment of the guardian or issuance of the protective order; and

B. if the New Mexico court does not have jurisdiction pursuant to Section 45-5-514 NMSA 1978, whether at the time the petition is filed or at any time before the appointment of the guardian or issuance of the protective order, the court shall stay the proceeding and communicate with the court in the other state. If the court in the other state has jurisdiction, the New Mexico court shall dismiss the petition unless the court in the other state determines that the New Mexico court is a more appropriate forum."

Section 55. A new Section 45-5-521 NMSA 1978 is enacted to read:

"45-5-521. [NEW MATERIAL] TRANSFER OF GUARDIANSHIP OR CONSERVATORSHIP TO ANOTHER STATE.--

A. A guardian or conservator appointed in New Mexico may petition the court to transfer the guardianship or conservatorship to another state.

B. Notice of a petition pursuant to Subsection A of this section shall be given to the persons that would be entitled to notice of a petition in New Mexico for the appointment of a guardian or conservator.

C. On the court's own motion, or on request of the guardian or conservator, the incapacitated or protected person or other person required to be notified of the petition, the court shall hold a hearing on a petition filed pursuant to Subsection A of this section.

D. The court shall issue an order provisionally granting a petition to transfer a guardianship and shall direct the guardian to petition for guardianship in the other state if the court is satisfied that the guardianship will be accepted by the court in the other state and the court finds that:

(1) the incapacitated person is physically present in or is reasonably expected to move permanently to the other state;

(2) an objection to the transfer has not been made or, if an objection has been made, the objector has not established that the transfer would be contrary to the interests of the incapacitated person; and

(3) plans for care and services for the incapacitated person in the other state are reasonable and sufficient.

E. The court shall issue a provisional order granting a petition to transfer a conservatorship and shall direct the conservator to petition for conservatorship in the other state if the court is satisfied that the conservatorship will be accepted by the court of the other state and the court finds that:

(1) the protected person is physically present in or is reasonably expected to move permanently to the other state, or the protected person has a significant connection to the other state considering the factors set forth in Subsection B of Section 45-5-512 NMSA 1978;

(2) an objection to the transfer has not been made or, if an objection has been made, the objector has not established that the transfer would be contrary to the interests of the protected person; and

(3) adequate arrangements will be made for management of the protected person's property.

F. The court shall issue a final order confirming the transfer and terminating the guardianship or conservatorship upon its receipt of:

(1) a provisional order accepting the proceeding from the court to which the proceeding is to be transferred that is issued pursuant to provisions similar to those set forth in Section 45-5-522 NMSA 1978; and

(2) the documents required to terminate a guardianship or conservatorship in New Mexico."

Section 56. A new Section 45-5-522 NMSA 1978 is enacted to read:

"45-5-522. [NEW MATERIAL] ACCEPTING GUARDIANSHIP OR CONSERVATORSHIP TRANSFERRED FROM ANOTHER STATE.--

A. To confirm transfer of a guardianship or conservatorship transferred to New Mexico pursuant to provisions similar to Section 45-5-521 NMSA 1978, the guardian or conservator shall petition the New Mexico court to accept the guardianship or conservatorship. The petition shall include a certified copy of the other state's provisional order of transfer.

B. Notice of a petition pursuant to Subsection A of this section shall be given to those persons that would be entitled to notice if the petition were a petition for the appointment of a guardian or issuance of a protective order in both the transferring state and New Mexico. The notice shall be given in the same manner as notice is required to be given in New Mexico.

C. On the court's own motion, or on request of the guardian or conservator, the incapacitated or protected person or other person required to be notified of the proceeding, the court shall hold a hearing on a petition filed pursuant to Subsection A of this section.

D. The court shall issue an order provisionally granting a petition filed pursuant to Subsection A of this section unless:

(1) an objection is made and the objector establishes that transfer of the proceeding would be contrary to the interests of the incapacitated or protected person; or

(2) the guardian or conservator is ineligible for appointment in New Mexico.

E. The court shall issue a final order accepting the proceeding and appointing the guardian or conservator as guardian or conservator in New Mexico upon its receipt from the court from which the proceeding is being transferred of a final order issued pursuant to provisions similar to Section

45-5-521 NMSA 1978 transferring the proceeding to New Mexico.

F. Not later than ninety days after issuance of a final order accepting transfer of a guardianship or conservatorship, the court shall determine whether the guardianship or conservatorship needs to be modified to conform to the laws of New Mexico.

G. In granting a petition pursuant to this section, the court shall recognize a guardianship or conservatorship order from the other state, including the determination of the incapacitated or protected person's incapacity and the appointment of the guardian or conservator.

H. The denial by a New Mexico court of a petition to accept a guardianship or conservatorship transferred from another state does not affect the ability of the guardian or conservator to seek appointment as guardian or conservator in New Mexico pursuant to Sections 45-5-301 and 45-5-401 NMSA 1978 if the court has jurisdiction to make an appointment other than by reason of the provisional order of transfer."

Section 57. A new Section 45-5-523 NMSA 1978 is enacted to read:

"45-5-523. [NEW MATERIAL] REGISTRATION OF GUARDIANSHIP ORDERS.--If a guardian has been appointed in another state and a petition for the appointment of a guardian is not pending in New Mexico, the guardian appointed in the other state, after giving notice to the appointing court of an intent to register, may register the guardianship order in New Mexico by filing as a foreign judgment in a court, in any appropriate county of New Mexico, certified copies of the order and letters of office."

Section 58. A new Section 45-5-524 NMSA 1978 is enacted to read:

"45-5-524. [NEW MATERIAL] REGISTRATION OF PROTECTIVE ORDERS.--If a conservator has been appointed in another state and a petition for a protective order is not pending in New Mexico, the conservator appointed in the other state, after giving notice to the appointing court of an intent to register, may register the protective order in New Mexico by filing as a foreign judgment in a New Mexico court, in any county in which property belonging to the protected person is located, certified copies of the order and letters of office and of any bond."

Section 59. A new Section 45-5-525 NMSA 1978 is enacted to read:

"45-5-525. [NEW MATERIAL] EFFECT OF REGISTRATION.--

A. Upon registration of a guardianship or protective order from another state, the guardian or conservator may exercise in New Mexico all powers authorized in the order of appointment except as prohibited pursuant to the laws of New Mexico, including maintaining actions and proceedings in New Mexico and, if the guardian or conservator is not a resident of New Mexico, subject to any conditions imposed upon nonresident parties.

B. A New Mexico court may grant any relief available pursuant to the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act and other law of New Mexico to enforce a registered order."

Section 60. A new Section 45-5-527 NMSA 1978 is enacted to read:

"45-5-527. [NEW MATERIAL] RELATION TO ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT.--The Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act modifies, limits and supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. Section 7001, et seq., but does not modify, limit or supersede Section 101(c) of that act, 15 U.S.C. Section 7001(c), or authorize electronic delivery of any of the notices described in Section 103(b) of that act, 15 U.S.C. Section 7003(b)."

Section 61. A new Section 45-5-528 NMSA 1978 is enacted to read:

"45-5-528. [NEW MATERIAL] TRANSITIONAL PROVISION.--

A. Subparts 1, 3 and 4 of the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act and Sections 45-5-526 and 45-5-527 NMSA 1978 apply to proceedings begun before July 1, 2009, regardless of whether a guardianship or protective order has been issued and to proceedings begun on or after that date.

B. The remainder of the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act applies to guardianship and protective proceedings begun on or after July 1, 2009."

Section 62. Section 45-6-205 NMSA 1978 (being Laws 1992, Chapter 66, Section 22) is amended to read:

"45-6-205. DESIGNATION OF AGENT.--

A. By a writing signed by all parties, the parties may designate as agent of all parties on an account a person other than a party.

B. Unless the terms of an agency designation provide that the authority of the agent terminates on disability or incapacity of a party, the agent's authority survives disability and incapacity. The agent may act for a disabled or incapacitated party until the authority of the agent is terminated.

C. Death of the sole party or last surviving party terminates the authority of an agent."

Section 63. Section 45-6-216 NMSA 1978 (being Laws 1992, Chapter 66, Section 29, as amended) is amended to read:

"45-6-216. COMMUNITY PROPERTY.--

A. A deposit of community property in an account does not alter the community character of the property or community rights in the property, if any, but a right of survivorship between parties married to each other arising from the express terms of the account or Section 45-6-212 NMSA 1978 may not be altered by will or other governing instrument.

B. This section does not affect or limit the right of a financial institution to make payments pursuant to Sections 45-6-211 through 45-6-227 NMSA 1978 and the deposit agreement."

Section 64. Section 46A-1-107 NMSA 1978 (being Laws 2003, Chapter 122, Section 1-107, as amended) is amended to read:

"46A-1-107. GOVERNING LAW.--The meaning and effect of the terms of a trust are determined by:

[A. the law of the state designated in the terms;

B.] A. the law of the jurisdiction designated in the terms [which jurisdiction is not a state] unless the designation of that jurisdiction's law is contrary to a strong public policy of [this state or] the [state] jurisdiction having the most significant relationship to the matter at issue; or

[C.] B. in the absence of a controlling designation in the terms of the trust, the law of the jurisdiction having the most significant relationship to the matter at issue."

Section 65. Section 46A-11-1104 NMSA 1978 (being Laws 2003, Chapter 122, Section 11-1104) is amended to read:

"46A-11-1104. APPLICATION TO EXISTING RELATIONSHIPS.--

A. Except as otherwise provided in the Uniform Trust Code, on the effective date of the Uniform Trust Code or of any amendment to that code:

(1) the Uniform Trust Code or the amendment applies to all trusts created before, on or after its effective date;

(2) the Uniform Trust Code or the amendment applies to all judicial proceedings concerning trusts commenced on or after its effective date;

(3) the Uniform Trust Code or the amendment applies to judicial proceedings concerning trusts commenced before its effective date, unless the court finds that application of a particular provision of the Uniform Trust Code or the amendment would substantially interfere with the effective conduct of the judicial proceedings or prejudice the rights of the parties, in which case the particular provision of the Uniform Trust Code or the amendment does not apply and the superseded law applies;

(4) any rule of construction or presumption provided in the Uniform Trust Code or the amendment applies to trust instruments executed before the effective date of the Uniform Trust Code or the amendment unless there is a clear indication of a contrary intent in the terms of the trust; and

(5) an act done before the effective date of the Uniform Trust Code or the amendment is not affected by the Uniform Trust Code or the amendment.

B. If a right is acquired, extinguished or barred upon the expiration of a prescribed period that has commenced to run under any other statute before the effective date of the Uniform Trust Code or the amendment, that statute continues to apply to the right even if it has been repealed or superseded.

C. The Uniform Trust Code or the amendment does not apply to the trust created by the Enabling Act for New Mexico of June 20, 1910, 36 Stat. 557, Ch. 310."

Section 66. REPEAL.--Sections 45-5-301.2, 45-5-432, 45-9A-12, 45-9A-13 and 46-10-17 NMSA 1978 (being Laws 1993, Chapter 301, Section 24, Laws 1975, Chapter 257, Section 5-432, Laws 2005, Chapter 143, Sections 16 and 17 and Laws 2001, Chapter 290, Section 17) are repealed.

Section 67. TEMPORARY PROVISION--RECOMPILATION.--

A. Sections 45-2-805 and 45-2-806 NMSA 1978 (being Laws 1975, Chapter 257, Section 2-804 and Laws 1973, Chapter 276, Section 8, as amended) are recompiled as Sections 45-2-807 and 45-2-808 NMSA 1978.

B. Sections 45-9A-1 through 45-9A-11 NMSA 1978 (being Laws 2005, Chapter 143, Sections 5 through 15) are recompiled as Sections 45-3-920 through 45-3-931 NMSA 1978 and shall be compiled as part 9A, the Uniform Estate Tax Apportionment Act, of Article 3, Probate of Wills and Administration, of the Uniform Probate Code.

Section 68. TEMPORARY PROVISION--COMPILATION INSTRUCTIONS.--

A. Sections 40 through 61 of this act shall be compiled as Part 5A, the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act, of Article 5, Protection of Persons Under Disability and Their Property, of the Uniform Probate Code.

B. Sections 40 through 45 of this act shall be compiled as Subpart 1, General Provisions, of Part 5A, the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act, of Article 5, Protection of Persons Under Disability and Their Property, of the Uniform Probate Code.

C. Sections 46 through 54 of this act shall be compiled as Subpart 2, Jurisdiction, of Part 5A, the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act, of Article 5, Protection of Persons Under Disability and Their Property, of the Uniform Probate Code.

D. Sections 55 and 56 of this act shall be compiled as Subpart 3, Transfer of Guardianship or Conservatorship, of Part 5A, the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act, of Article 5, Protection of Persons Under Disability and Their Property, of the Uniform Probate Code.

E. Sections 57 through 59 of this act shall be compiled as Subpart 4, Registration and Recognition of Orders from Other States, of Part 5A, the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act, of Article 5, Protection of Persons Under Disability and Their Property, of the Uniform Probate Code.

F. Sections 60 and 61 of this act shall be compiled as Subpart 5, Miscellaneous Provisions, of Part 5A, the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act, of Article 5, Protection of Persons Under Disability and Their Property, of the Uniform Probate Code.

Section 69. TEMPORARY PROVISION--RECOMPILATION.--Sections 46-10-3 through 46-10-5 NMSA 1978 (being Laws 2001, Chapter 290, Sections 3 through 5) are recompiled as Sections 45-2-1103 through 45-2-1105 NMSA 1978. Sections 46-10-7 through 46-10-16 NMSA 1978 (being Laws 2001, Chapter 290, Sections 7 through 16) are recompiled as Sections 45-2-1107 through 45-2-1116 NMSA 1978.

Section 70. APPLICABILITY.--The provisions of Section 22 of this act apply to a trust described in Subsection (d) of Section 46-3A-409 NMSA 1978 on and after the following dates:

A. if the trust is not funded as of July 1, 2009, the date of the decedent's death;

B. if the trust is initially funded in the calendar year beginning January 1, 2009, the date of the decedent's death; or

C. if the trust is not described in Subsection A or B of this section, January 1, 2009.

Section 71. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2009.

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