Financial Benefits for Seniors

Financial Benefits
Available to Seniors

Many senior citizens find themselves in
financial trouble as they grow older.
Oftentimes, financial planning was not done
or, if done, falls short of what is needed to
survive, leaving seniors struggling to get
by. There are many programs available that
may assist seniors in making ends meet;
however, these programs often go unused
because of lack of information about what
is available.

Federal Government

Social Security-
Retirement Benefits

Social Security benefits are probably the
most widely known of all the government
benefit programs. Social Security benefits
are based on the same principle as
insurance. You pay into the program in
the form of a payroll tax. When you retire,
you receive a monthly benefit based on
your earnings and continue to receive this
monthly benefit until you are deceased.
There is the potential for receiving much
more in benefits than what you paid into
the system, depending upon how long you
live. Your spouse and dependent children
may also be able to receive a monthly
benefit based on your earnings. (There
is also a disability benefit through Social
Security, which will be discussed at length
later in this chapter.)

To be eligible to receive Social Security
retirement benefits, you must work and pay
taxes into the Social Security system. To
qualify for benefits under Social Security,
you must have worked in a job (or jobs)
covered by Social Security (meaning you
paid Social Security payroll taxes), and
you must have accumulated enough Social
Security “credits” or “quarters.”
Nearly all work - full time, part time and
self employment - is covered by Social
Security. Typically, one must earn 40
credits or quarters to be eligible for Social
Security benefits. Forty credits is roughly
equivalent to about 10 years of work. The
amount of your Social Security benefit
depends largely upon the amount of your
lifetime earnings. The more you earn, the
higher your benefit will be.
Every year you should receive a Social
Security Statement from the Social Security
Administration (SSA). This statement
contains your earnings record and also
shows estimates of what your retirement
benefits (as well as disability and survivor’s
benefits, both discussed at length later in
this chapter) are now and what they will be
in the future.
If you work for someone, your employer is
responsible for reporting your earnings to

 - Financial Assistance for Seniors

Social Security. If you are self-employed, it
is your responsibility to report your earnings
to Social Security. It is recommended that
you check your Social Security statement
closely each year. It is your responsibility,
as well as your employer’s, to confirm that
all of your earnings are accurately reported
to ensure that you receive the maximum
benefit to which you are entitled.

The amount of your benefit is also affected,
to a lesser extent, by your age. Your monthly
benefit will be reduced if you choose to retire
before your full retirement age; however,
you will still receive the same amount of
Social Security benefits over your lifetime
because you will be receiving them over a
longer period of time.

Full retirement age for those born in 1937
and earlier is 65 years of age. For those
born in 1938 and later, the full retirement
age gradually begins to rise from 65 years
old to 67 years old. For example, if you
were born in 1938, your full retirement
age is 65 years, 2 months, for those born
in 1939, 65 years and 4 months, and so on.
Full retirement age is 67 years old for those
born in 1960 and after. No matter what
your full retirement age is, the earliest that
you may begin receiving Social Security
retirement benefits is 62 years old.

Some people choose to delay receiving
their Social Security benefit and continue
working beyond their full retirement age.
There are several advantages to doing this.
Each additional year you work beyond
your full retirement age increases your
lifetime earnings and thus the amount you
will receive when you do eventually retire.
A second advantage to delaying retirement
is that your benefit will be increased by
a certain percentage. For example, if you
were born in 1943 or later, your benefit
will be increased by 8 percent for each
year you delay signing up for Social
Security retirement benefits beyond your
full retirement age until you begin taking
your benefits or reach the age of 70.

Note: If you decide to delay receiving your
Social Security retirement benefit, don’t
delay in signing up for Medicare when you
turn 65 (SSA advises filing for Medicare
benefits approximately 3 months before
turning 65). In some cases, Medicare will
cost more if you delay applying for it.

You may also continue to work and receive
Social Security retirement benefits. If you
opt to begin receiving Social Security
benefits prior to your full retirement age and
continue to work as well, your benefits may
be reduced. Every year the Social Security
Administration fixes a limit on the amount
of earned income you can have without
incurring a reduction in benefits. For 2009,
that limit is $14,160. If your earned income
exceeds this limit, your benefits will be
reduced. Beginning with the month that
you reach full retirement age, you can earn
as much money as you like without any
reduction in your benefits.

Some people have to pay taxes on their
Social Security benefits. Only those who
have a substantial amount of income in
addition to their Social Security will have
to pay taxes. At the end of the year, you will
receive a statement showing the amount of
Social Security benefits you received for
that year. You can use the information on
this statement when you file your federal
income tax return to determine if you owe
taxes on your benefits.

It is not required that you have federal taxes
withheld from your Social Security benefits;
however, it may be easier than paying the
quarterly estimated tax payments. You may
fill out a Form W-4V, available through the
Social Security Administration, to have
federal taxes withheld from your Social
Security benefits.
Social Security-
Disability Benefits

In addition to retirement benefits, the
Social Security Administration also
administers disability benefits. The Social
Security Administration pays out disability
benefits under two programs: Social
Security Disability Insurance (SSDI) and
Supplemental Security Income (SSI).
When you apply under either one of these
programs, you must provide the Social
Security Administration with detailed
information about your medical, work and
education history to assist in determining
if you qualify for either program.

Social Security Disability Insurance, like
the Social Security retirement benefit, is
based on your work record. In order to
qualify, you must have worked in jobs
covered by Social Security, and you must
have accumulated the necessary number
of work credits. Generally, you need eight
and a half years of work, and you need to
have worked five years out of the ten-year
period ending in the month your disability
began. In addition to the work credit
requirement, you must also be found to be
disabled under Social Security guidelines.
How Social Security determines if you are
disabled is discussed in detail later in this

If you do not have enough work credits to
qualify for SSDI, you may qualify under
the Supplemental Security Income (SSI)
program. SSI is a need-based program
administered by the state on behalf of
the Social Security Administration for
the elderly, blind and disabled who meet
certain income and asset criteria. Unlike
SSDI, there is no work credit requirement;
however, an applicant must meet certain
income and asset eligibility requirements,
in addition to being determined disabled (if
you are under 65).

In order to be considered disabled under
the SSDI and SSI programs, you must be
unable to do the work you did previous
to your disability and unable to adjust to
any other kind of work because of your
disability. Additionally, your disability
must be expected to last at least one year or
to result in death. A disability determination
is made in five steps.

Step 1: Are you working? Each year the
Social Security Administration determines
a threshold amount, and, if your earnings
average more than this amount, you cannot
be considered disabled. In 2009, this
threshold amount is $980 per month. If you
are not working, or your income is equal to
or less than the threshold amount, move on
to step two.

Step 2: Is the condition upon which you
are basing your disability claim severe?
The condition upon which you base your
disability claim must be severe enough to
interfere with basic, work-related activities
for at least one year. If your condition
interferes with basic work-related activities,
move on to step three.

Step 3: Is your condition found on the
List of Impairments? The Social Security
Administration has compiled a detailed list
of medical conditions for each of the major
body systems. The conditions included
on these lists are so severe that you are
automatically considered disabled if you
have one. Cystic fibrosis, lupus and multiple
sclerosis are examples of these qualifying
conditions. If you have a condition that
is not on the list, it must be determined
that your condition is equal in severity to
a medical condition already on the list. If
your condition is on the list or is found to
be as severe as one on the list, you will be
found disabled. If not, the analysis moves
on to step four.

Step 4: Can you do the work you did
previously? If your condition is not one
of those listed and is not found to be as
equally severe as one on the list, then a
determination is made as to whether or not
your condition interferes with your ability
to do the work you did previously. If your
condition does not interfere with the work
you did previously, then the analysis stops
here, and your disability claim is denied. If
your condition is found to interfere with the
work you did previously, then you move on
to the fifth and final step.

Step 5: Can you do any other type of
work? If you are unable to do the work you
did previously, a determination is made as
to whether you are able to adjust to other
work. In making this determination, your
age, education, past work experience,
transferable job skills and medical condition
are all taken into consideration. If it is
determined that you are unable to adjust to
other work, your claim for disability will be
approved. If it is found that you can adjust
to other work, your claim will be denied.

Note: There are special rules for those who
are blind, recognizing the severe impact
blindness has on a person’s ability to work.
For more information, contact the Social
Security Administration.

If your claim for SSDI benefits is granted,
you will be eligible to receive Medicare
after 24 months. If your claim for SSI
benefits is granted, you will immediately
be covered under Medicaid.

When you turn 65 year of age, your SSDI
benefits automatically switch to Social
Security retirement benefits; however, the
amount you receive each month will remain
the same. If you receive SSI, your benefit
will be adjusted when you begin receiving
Social Security retirement benefits. If your
Social Security retirement benefit amount
(or any retirement benefit or pension for
that matter) exceeds the income eligibility
requirement for SSI (for 2009, this is $674
per month for an individual), you will
no longer receive a SSI payment or full
coverage under the Medicaid program.
You may still be entitled to assistance
under the QMB, SLIMB, or QI-1 programs
of Medicaid. See Chapter Two for more
information on these programs.

If your claim for SSDI or SSI benefits
is denied, what are your rights? If you
do not agree with the Social Security
Administration’s decision, you have
the right to have your claim reviewed.
There are four levels of review or
appeal: reconsideration, hearing before
an Administrative Law Judge, Appeals
Council review, and Federal Court review.
The levels of appeal are progressive,
meaning if you are not satisfied with the
decision at one level, you may appeal to the
next level. You may not skip any levels; in
other words, you may not go from an initial
denial of your application for benefits to
review in Federal court.

If you receive an adverse decision from the
Social Security Administration regarding a
claim for SSDI or SSI and decide to appeal,
it is important to read and understand
the directions for pursuing your appeal.
These directions will be included with the
decision. There are time limitations for
requesting review at each stage or level of
appeal that must be adhered to, or you may
lose your right to appeal.

Following is a general overview of the
appeals process for SSDI and SSI disability
claims. To protect your right to appeal, it is
imperative you carefully read, understand
and follow the instructions included with the
notice of decision on your claim. As noted
above, failure to follow the instructions for
review of a decision on a disability claim
may result in loss of rights with respect to
that claim.

Reconsideration. Reconsideration is
a complete review of your claim by
someone who had no part in making the
first decision. The person conducting the
review will look at all the evidence used in
making the original decision, plus any new
evidence you have to submit. After the
review of your claim has been completed
and a decision has been made, a notice will
be sent to you explaining the decision.

Hearing before an Administrative Law
Judge. If after reconsideration you are still
not satisfied with the decision, you may
request a hearing before an Administrative
Law Judge (ALJ). Prior to the hearing,
you may review your file and submit new
evidence. You may bring witnesses to the
hearing to testify on your behalf. The ALJ
may ask witnesses (a doctor, for example)
to come to the hearing and testify. You may
ask the ALJ to order witnesses to come to
the hearing. During the hearing, the ALJ
may question you and your witnesses. You
may also question the witnesses.

As noted above, you may appear before the
ALJ in person and present your case, or you
may ask the ALJ to make a decision based
on the evidence in your file. If you are able,
you should attend the hearing. This will
give you the opportunity to provide the
ALJ with information that may not be in
your file.

If you request a hearing but find that you are
unable to attend, it is very important that
you notify the ALJ as soon as possible and
explain why you will be unable to attend.
The ALJ may be able to accommodate
you by changing the time or place of the
hearing. If you fail to attend your scheduled
hearing, you could lose your appeal rights.

The ALJ will send you a copy of the hearing

Appeals Council review. If you disagree
with the decision of the ALJ, you may
request review of your claim by the
Appeals Council. You may submit new
evidence to be considered. Unlike the two
preceding levels of appeal (reconsideration
and hearing before an ALJ) review at this
level is not automatically granted. The
Appeals Council will consider all requests
for review but may decline to review your
claim if it believes that the decision of the
ALJ was correct. If the Appeals Council
decides not to hear your claim, it will
send you a written notice explaining the

If the Appeals Council accepts your case for
review, it will either decide the case or send
it back to the ALJ for further action. You
will be notified of the Appeals Council’s
decision by mail.

Federal Court review. If after going
through reconsideration, a hearing before

an ALJ and Appeals Council review, you
are still dissatisfied with the decision
on your claim, the final level of appeal
available to you is to file a lawsuit in the
U.S. District Court in your area. The court
will review the evidence and the earlier
decisions but will not hold a hearing. It is
advisable to have an attorney represent you
at this phase.

Note: It is vitally important that you
carefully read and follow the instructions
for appealing a decision on your disability
claim for each and every level of appeal.
The instructions for appealing the decision
are always included in the letter or notice
of decision. The instructions will explain
how to appeal, where to appeal and, most
importantly, how long you have to appeal.
If you fail to appeal within the time allotted
to do so, you may lose your right to appeal

Right to have representation. At all levels
or stages of review, you are permitted to
be assisted or represented by someone
of your own choosing. Unlike most legal
proceedings, the person representing you
does not have to be a licensed attorney. Your
representative should, however, be familiar
with you and your disabling condition(s), as
well as have an understanding of how the
Social Security program you are applying
for works. Social Security will work with
whomever you choose to assist you, in the
same manner as it would work with you.

The person you choose to assist or represent
you may not charge or collect a fee from
you without first obtaining written approval
from Social Security.

Payment of benefits. Those receiving
benefits from Social Security Administration
are encouraged to have their benefits
directly deposited into their bank, savings
and loan or credit union account. Using
direct deposit virtually eliminates the
chance that your benefits will be lost or

When you use direct deposit, your benefits
are electronically deposited into your bank,
savings and loan or credit union account.
With direct deposit, you have immediate
access to your benefits. You no longer have
to wait by the mailbox for your check to be
delivered and then make a trip to the bank
to deposit the check.

You may sign up for direct deposit
by contacting the Social Security
Administration or by contacting your bank,
savings and loan or credit union. Simply
fill out the direct deposit sign-up form and
take it to either your local Social Security
office or the bank, savings and loan or credit
union where you have your account.

Another option for receiving your benefits
is the Direct Express® card. Your monthly
benefit is deposited directly onto this card.
You do not need a bank account. You
can use the card anywhere that accepts
MasterCard®, and you can also use the card
to withdraw cash. To sign up for the card,
call the Direct Express® hotline at (877)
212-9991, go to www.USDirectExpress.
com, or contact the Social Security

Representative Payee. A representative
payee is a person, agency or institution who
receives and manages the benefits on behalf
of a beneficiary who is unable to do so.
The beneficiary may need a representative
payee because of age or mental or physical

A representative payee must always act in
the best interests of the beneficiary. The
benefits are the property of the beneficiary
and not of the representative payee and, as
such, should only be used for the benefit
of the beneficiary. An annual accounting is

Benefits for Family
Members, Spouses, Widows,
Children, and Divorced

In addition to providing disability and
retirement benefits for the wage earner,
benefits under the Social Security program
may be available to the wage earner’s
family members, specifically the spouse,
widow, children and divorced spouse (and
in limited circumstances, grandchildren).

Spouse’s benefits. As a spouse, you
can receive up to one-half of the retired
worker’s full benefit if you begin
collecting at full retirement age. If you
opt to begin collecting the spousal benefit
prior to reaching full retirement age, your
benefit will be permanently reduced by a
percentage based on the number of months
you have until full retirement age.

If you were also a wage earner and are
entitled to retirement benefits based on
your own work record, you will be paid
your own benefit first. If the amount of your
benefit is less than what you would have
received if you collected on your spouse’s
benefit, you will receive a combination
of the two benefits, your own and your
spouse’s, in an amount equal to the higher
spouse’s benefit. For example, you have a
retirement benefit of $400 per month based
on your own work, and the spouse’s benefit
you would receive is $700. If you wait until
full retirement age, you will receive your
full benefit of $400, plus $300 from your
spouse’s benefit, totaling $700.

Widow’s benefits. These benefits are
known as survivor’s benefits as they are
intended to help those left behind when a
wage earner dies. Widows or widowers can
begin receiving full benefits at age 65 (the
full retirement age will gradually increase
to age 67 for those born after 1939) or
reduced benefits at the age of 60. A disabled
widow(er) can begin receiving benefits
as early as age 50. If you are eligible for
benefits on your own work record, and
those benefits would be higher than what
you are receiving as a widow(er), you can
switch to your own benefits as early as age

A widow(er) can get benefits at any age if he
or she is taking care of the deceased’s child
who is under the age of 16 or is disabled.

Children’s benefits. These benefits are
also known as survivor’s benefits. Children
under the age of 18 (or up to age 19 if the
child is attending elementary or secondary
school full time) may receive benefits.
Adopted children and dependent step-
children are eligible for the same benefits
as biological children. Children who are
disabled before the age of 22 and remain
disabled may get these benefits at any age.
Under certain circumstances, grandchildren
may also be eligible for benefits. Check
with your local SSA office for eligibility
information. (See “Resources” at the end
of this chapter)

Dependent parents. In some cases, the
parents may receive survivor’s benefits
based on the earnings of their deceased
adult child. The parents have to meet
several requirements, including proving
that the child provided at least 50 percent
of the financial support for the parents.

Divorced spouses. Divorced spouses may
be entitled to benefits on their ex-spouse’s
work record, whether that spouse is living
or deceased. In order to qualify for these
benefits, your marriage must have lasted
at least 10 years (the “length-of-marriage”
rule), you must be presently unmarried,
you must be at least 62 years of age (if
your ex-spouse is deceased, you may begin
collecting benefits at age 60 or age 50 if
you become disabled), and you are not
entitled to an increased benefit based on
your own record which exceeds one half
of your ex-spouse’s unreduced benefit rate
(you cannot get more than a married spouse
can receive).

If your ex-spouse is still living, he or she
must also be eligible to receive benefits
in order for you to receive benefits. For
example, you are eligible for benefits on
your ex-spouse’s work record if he or she
has turned 62 and is eligible for benefits.
However, if he or she has not applied for
benefits, you can only receive benefits if
you have been divorced at least two years.

The “length-of-marriage” rule discussed
above does not apply to surviving divorced
spouses who are caring for a child who is
under 16 years old or disabled and who is
already receiving benefits on the deceaseds
spouse’s work record. The child must be
your former deceased spouse’s natural or
legally adopted child.

You may collect benefits on your ex-
spouse’s work record even if your ex-
spouse has remarried. However, as noted
above, you may not collect on our ex-
spouse’s work record if you have remarried
before age 60, unless your later marriage
ends. If you remarry after age 60 (age 50 if
disabled), you may still collect benefits on
your ex-spouse’s record.

Maximum family benefits. There is a
limit to the total amount of money that can
be paid to a family on an individual’s work
record. The limit varies. If the sum of the
benefits (either retirement or disability)
payable on your work record exceeds this
limit, the benefits to your family members
will be reduced proportionately. Your
benefit will not be affected. Contact the
Social Security Administration for more
information about the maximum family
benefit, and how it affects you.

Special one-time death benefit. A special
one-time death benefit may be available
to your widow(er) or minor children after
your death. This benefit is available only to
those who have accrued enough credits.

Federal, state and local
government employment

If you were employed by the federal, state
or local government, you may or may not
be covered by Social Security.

Federal government employment. Prior
to 1984, federal government employees
were covered under the Civil Service
Retirement System (CSRS). If you were
covered under the CSRS, you did not pay
Social Security taxes on your earnings,
and, as such, those earnings will not be
accounted for on your Social Security
record. Your retirement benefits will be
paid out under the CSRS.

In 1984, the Federal Employees Retirement
System (FERS) came into being. If you
were employed by the federal government
from 1984 forward, you are covered by
FERS. Work under FERS is covered by
Social Security. Some federal employees
who were covered by CSRS chose to switch
to FERS. If you paid into both the CSRS
and FERS, your Social Security benefits
may be affected by your CSRS pension.
If you are covered by both the CSRS and
FERS, you may contact the Social Security
Administration for more information about
how your benefits will be affected.

Note: Whether you are covered under
CSRS or FERS, you still paid Medicare
taxes on your earnings and, as such, are
covered under the Medicare program.

State and local government employment.
If you work for a state or local government
agency, you may or may not be covered
under the Social Security system. State
and local government employment may
cover a broad range of employment
situations, including, but not limited to:
teachers, firefighters, police officers,
university employees, health care workers
and sanitation workers. If you are covered
only by a state or local pension plan, you
do not pay Social Security taxes, and your
earnings from the state or local government
employer will not appear on your Social
Security record.

In some cases, state and local government
employees are covered by both the Social
Security and the state or local government
pension plan. In this case you will receive
both a retirement benefit from Social
Security and from the state or local
government pension. As noted above in the
section on federal government employment,
if you are covered under Social Security as
well as a state or local government pension,
the amount of your Social Security benefit
may be affected by your state or local
government pension. If you are covered by
both a state or local government pension
and Social Security, you may contact the
Social Security Administration for more
information about how your benefits will
be affected.

Supplemental Security
Income (SSI)

Supplemental Security Income (SSI) is
a federally-funded, state-administered
program for the low-income elderly, blind
and disabled. SSI is a need-based program,
meaning you must meet certain income and
asset eligibility criteria. In addition to the
income and asset eligibility requirement,
if you are under 65 years of age, you
must also be determined to be disabled.
(How a SSI disability determination is
made is discussed at length, above.) SSI
benefits include a monthly cash benefit and
Medicaid health insurance.

SSI is a benefit program for individuals
with low incomes and very few assets.
“Income” is money from employment,
other benefit programs (such as Social
Security retirement benefits or Veterans
Affairs benefits), and private pensions.
Also taken into consideration are “non-
cash” items, such as living in someone
else’s home at no cost, or having someone
else provide your food at no cost to you.

“Assets” are things you own, such as
real estate, bank accounts and cash. Only
certain assets are considered or counted
when applying for SSI. Assets that are
not counted are your home, many of your
personal belongings (such as your clothing
and furniture), and, in most cases, your car.

You may be able to qualify for SSI if the
countable assets you own are worth less
than $2,000 for a single person and $3,000
for a couple.

Note: The income and asset eligibility figures
provided in this handbook are current as of
the date of publication, August 2009. As
with most public assistance programs, the
income and asset eligibility requirements
are subject to change at least once yearly
to reflect inflation and changes in federal
and state budgetary priorities. Contact the
Social Security Administration for the most
current eligibility information.

Overpayment of Benefits

An overpayment of SSDI or SSI benefits
occurs when the amount of benefits
received in a certain period exceeds
those which are due for that period. An
overpayment can occur for any number of
reasons and may or may not be the fault
of the person receiving the benefits. The
reason for the overpayment will determine
if and how the overpayment will be repaid
to the Social Security Administration.

Many overpayments occur because the
benefit recipient failed to notify Social
Security of a change in his or her status,
such as when there is an improvement in
your disabling condition and you are able
to work. If you receive SSI, the change in
status could also be a change in income or
assets, the death of a spouse or a change in
living arrangements.

There are many other reasons why an
overpayment may occur. To lessen the
chance of an overpayment, it is very
important to keep in touch with the Social
Security Administration. Always advise
them of any changes in your circumstances.
If you receive any mail from Social Security,
open it immediately and read it carefully.
If you do not understand what the letter or
notice says, seek assistance from family,
a friend or an advocate for the disabled.
Never simply ignore the Social Security
Administration. They will not go away.

If you are involved in an overpayment
situation, the Social Security Administration
is required to notify you of the overpayment
and include the following information:

• The reason for the overpayment.

• The amount of the overpayment.

• The time period covered by the

• Your right to request a
reconsideration of the overpayment

• The time limit in which you must
file an appeal.

• The amount of the proposed
monthly payment.

• The availability of a lower monthly
repayment amount.

• The availability of forms to request a
reconsideration of the overpayment
determination or waiver of the
overpayment amount and the
availability of assistance from the
Social Security Administration in
filling out the forms.

If you are notified of an overpayment of
your SSDI or SSI benefits, there are two
ways you can appeal. You may do either one
or both. The first is to ask for a waiver of
the overpayment. This means that you are
asking to be excused from paying back the
amount overpaid. A waiver of overpayment
does not challenge the existence of the
overpayment or the amount. In order to be
eligible for a waiver of the overpayment,
the overpayment must not be your fault,

and recovery of the overpayment by Social
Security would either defeat the purposes of
the law that created the benefits programs
(the “hardship test”) or be against equity
and good conscience.

If you are unsuccessful in your request for
waiver of overpayment, you may request
reconsideration of that decision. If your
request for reconsideration is denied, the
appeals process is similar to that of applying
for disability benefits: the next level is an
administrative hearing before an ALJ, after
which you may request Appeals Council
review, and, finally, you may file a lawsuit
in Federal District Court.

The second avenue of appeal is a request for
reconsideration of the alleged overpayment.
Reconsideration disputes the existence and
the amount of the overpayment. If you are
unsuccessful at this level, you may seek
further review by an ALJ, the Appeals
Council, and, finally, in Federal District

Both of these actions are time sensitive.
Read the notice you receive regarding the
overpayment determination very carefully.
It will explain how to appeal and how long
you have to do so.

Note: If you receive a notice that you have
been overpaid SSDI or SSI benefits, it is
advisable to seek the advice of an individual
or organization that advocates on behalf of
SSDI or SSI recipients to assist you in either
challenging the overpayment or seeking a
waiver. (See Resources)

If you are unsuccessful in the appeals process
pertaining to an overpayment of SSDI or
SSI, you can expect the SSA to attempt to
recover the overpaid amounts. The SSA
has many avenues available to recover the
overpaid amounts, and the process can be
quite complex. It is imperative that you
seek assistance in working with the SSA to
find a solution that you can live with. (See

Privacy Concerns

Your privacy and Social Security.
The Social Security Administration
has access to the personal information
(e.g., address, date of birth, Social Security
number) of millions of people living in this
country. Because of the sensitive and very
personal nature of this information, the
Social Security Administration will discuss
this information only with you unless you
give your permission for someone else
to communicate with the Social Security

Other Federal
Government Benefits

According to the Social Security
Administration, Social Security
benefits are not intended to meet all of your
financial needs when you hit retirement
age. Social Security is intended simply
to form the foundation of your retirement
income which should be supplemented
with savings or pension income. However,
for many seniors this is not the case. There
are many senior citizens who live only on
their Social Security income. This section
will cover other benefits available from the
Federal government, who may be eligible,
and how to apply.

Veteran’s Benefits

The United States Deparment of Veterans
Affairs (VA) offers a wide range of
benefits to persons (and their dependents
and survivors) who have served in the
U.S. armed forces, the national reserves
or the National Guard. To be eligible, you
must have received a discharge other than
dishonorable. Although some benefits are
available to all veterans, other benefits are
available only to those veterans who have
served during specific periods.

To apply for VA benefits or request
information, contact the VA regional office
nearest you or contact the New Mexico
Department of Veteran’s Services, a state
agency with field offices whose specific
purpose is to assist veterans in obtaining
benefits and services. (See Resources)
The following is a brief summary of the
major federal benefits. You should contact
the New Mexico Department of Veteran’s
Services to determine if you are eligible
for any state assistance as a veteran.

Disability Compensation. If you have a
disability as a result of an injury or disease
that began or was aggravated during
your military service, you are entitled to
compensation benefits. Disabilities are
rated according to type and severity which
determines the amount you will receive.

Pensions. Pensions are also available
to veterans who have 90 days or more
active military service (at least one day of
which was during a period of war) whose
incomes are within certain limits and who
are totally and permanently disabled. The
disability does not have to be service-
connected. The amount of pension depends
on your income, disability and number of
dependents. Veterans of a period of war
who are 65 or older, and meet the service
and income requirements listed above, are
eligible to receive a pension regardless of
current physical condition.

Dependents. If your disability rating is
at least 30% (see to explain
the ratings system), you may receive
an additional monthly sum if you have
a spouse, children or parents who are

Other VA Benefits. A number of other
benefits are available to veterans. For
example, some veterans are eligible for
nursing home care. To find out what
benefits may be available to you, contact
the Veterans Affairs regional office nearest
you or visit the VA on the Internet at www.

Appeals. If you have been denied VA
benefits, a notice of your right to appeal
will be included with the denial notice. This
notice will advise you how to proceed with
your appeal, including any deadlines that
may apply. Your first step in the process is
to file a Notice of Disagreement with your
local VA office. Your local office will then
send you a Statement of the Case (SOC),
explaining how they came to their decision
regarding your case. Along with the SOC,
the office will send you a form that allows
you to appeal to the Board of Veteran’s
Appeals (BVA). At that point, you may
request a hearing with the BVA.

If your claim is allowed or denied, the
BVA’s decision is final. If your case is
“remanded,” it means that the BVA is
requesting more information and has not
made a final decision in your case yet. If
your claim is ultimately denied by the BVA,
you will have several options, including
appealing your case to the U.S. Court of

Appeals For Veterans Claims. Each step of
the above appeal process has an important
filing deadline which you must follow, or
your rights may be lost.

Railroad Workers

The railroad retirement system covers
nearly all types of railroad employment
in the United States. If certain vesting
and work record requirements are met,
the spouses and dependent survivors of
these workers also may receive benefits.
The Railroad Retirement Board (RRB) is
the agency responsible for determination
and payment of benefits, which includes
pension, disability, spousal and survivors’

Certain retired railroad workers are also
eligible for Social Security benefits
(because of other non-railroad work),
as are their spouses, former spouses and
survivors. The RRB is also responsible for
payment of the Social Security benefits
for these retirees, combining the benefit
payment with the railroad benefits and
issuing one check. However, the Social
Security Administration still handles all
claims regarding Social Security benefits,
as well as making all determinations
including eligibility and benefit amount.

Application and Appeals. An application
for benefits may be made to any RRB
office. The process and documentation for
applying and proving eligibility is similar to
Social Security. You will receive a written
notice of the decision.

To appeal a decision you must file a
written request for reconsideration. Most
reconsiderations are written reviews,
but a hearing may be requested in some
cases. If on reconsideration you receive
an unfavorable decision, you may appeal
to the Bureau of Hearings and Appeals. An
appeal of the bureau’s decision is made to
the three-member Board which heads the
RRB. In all of the above cases, information
as to how to request reconsideration or
appeal of an unfavorable decision, including
any important deadlines, will be included
with the decision. If you are still unhappy
with the RRB’s decision, you may file an
appeal with the U.S. Court of Appeals.

For more information, contact your local
Railroad Retirement Board office, or visit
their website at

State Financial Assistance

The Income Support Division (ISD)
of the New Mexico Human Services
Department (HSD) administers a number
of state financial assistance programs.
Detailed information and applications
for financial assistance are available at
your county ISD office. To be eligible
for financial assistance you must show
need, have a Social Security number,
be a resident of New Mexico, show you
have not transferred real property without
receiving a reasonable return within the
last two years, and not be receiving other
financial assistance payments.

Application. Applications for any
assistance program administered by the
state (food stamps, cash assistance or
Medicaid) must be made at your local ISD
office. Every application is followed by an
interview. You will be asked about your
household, including the Social Security
numbers of all household members, and to
provide proof of the information you give.
A caseworker may also visit your home to

confirm eligibility but must schedule the
visit in advance.

If you are eligible for assistance, you will
be able to get benefits only for a specified
period of time. You must re-apply to assess
continued eligibility for additional periods.
You must also report all changes in your
situation that may affect eligibility to your
caseworker within 10 calendar days of
the occurrence of the event. Such events
include income changes, buying or selling
a vehicle, changes in resources, changes
in residence, changes in shelter costs,
and when anyone moves in or out of the

Cash Assistance. The Temporary
Assistance for Needy Families (TANF)
program provides cash assistance to eligible
persons with limited income and resources.
In New Mexico, this program is known
as NMWorks. In general, the program is
time limited and the recipient must work
at least part time. However, persons age
60 and over are exempted from the work
requirement. Cash assistance may also be
available under the General Assistance
Program. This program is for dependent
needy children and disabled adults who do
not qualify for SSI or NMWorks

Food Stamps. The food stamp program is
federally funded but managed by the state.
It provides an Electronic Benefits (EBT)
card for the purchase of food. An EBT card
is used like a bank debit card. Every month
your food stamp allotment will be deposited
into your EBT account. You then use the
card to purchase food items at participating
grocery stores. You do not have to be
receiving any other type of assistance to be
eligible for food stamps. Food stamps may
by used to purchase products intended for
human consumption (excluding tobacco
and alcohol) and, subsequently, may not be
used to purchase pet food, soap, or paper

Any household may qualify for food
stamps if its income and resources are low
enough and its members are U.S. citizens
or legal residents. The exact amount in
food stamps you can receive depends upon
household income. You will be considered
a household and only your income and
assets will be considered if you live alone,
or live with others but purchase your own
food and prepare your meals separately.
Otherwise, the entire household income
and resources will be taken into account.

Right to Appeal. If your application for
assistance is denied or you think you were
issued an incorrect amount of food stamps,
you have the right to a fair hearing. You
may request a hearing in person, in writing
or by telephone. You may also have a
friend, family member or attorney help
you with your appeal.

You have the right to examine, prior to
the hearing, your case record and any
documents used in the determination of
your benefits.

Fraud Penalties. Any person who
knowingly gives false, incorrect, or
incomplete information in order to apply, to
receive or help someone else receive food
stamp benefits or cash assistance is subject
to prosecution for fraud. If found guilty of
fraud, a person can be fined, imprisoned,
and/or barred from receiving benefits for a
period of time.


Federal Employees. The retirement
system for federal employees is
much too complex to cover adequately
in this publication. If you were or are an
employee of the federal government and
need information regarding your retirement
benefits, how to apply, or how to appeal
an unfavorable decision, contact the
personnel office of the agency for which
you worked. You may also contact the
Office of Personnel Management’s office
in Washington, D.C. or visit their website,

New Mexico Public Employees (PERA)
and New Mexico Educational Employees
(ERA). The Public Employees Retirement
Association of New Mexico (PERA)
administers more than 600 different pension
plans for state and local government units.
Given the size and the complexity of the
program, it is not possible to adequately
summarize your benefits here. For
information about your account, benefits,
and options, you should contact PERA. A
retirement kit is available from PERA with
instructions and an application for benefits.
You can reach PERA at (800) 342-3422, or
you may visit them on the Internet at www.

The retirement fund for New Mexico’s
educators is managed and administered
by the State of New Mexico Educational
Retirement Board (ERA). Members range
from bus drivers to university professors.
You may contact ERA by telephone (505)
827-8030 or on the Internet at www.nmerb.

Private Pension Plans

ERISA. The Employee Retirement
Income Security Act of 1974 (ERISA)
was enacted to provide increased protections
for employees who are covered by private
employee benefit plans. The law sets
minimum standards for most voluntarily
established pension and health plans in
private industry. Examples of such plans
include pension plans, profit sharing plans,
401(k) retirement plans and employee
stock ownership plans.

Your Right to Information. A plan
administrator usually handles the operation
of employee benefit plans. ERISA requires
that all plan rules be in writing and that
the plan administrator disclose to you in
writing all important facts and rules you
need to know about your employee benefit
plan. ERISA does not require any particular
benefits, only that the plan rules established
by the employer are available to employees,
and that the plan is administered according
to those rules.

By having access to the plan rules, your
employment records, and a statement of
the credit you have earned to date, you can
determine when you will be eligible for
benefits and the approximate amount of
your benefits. You may request copies of
the plan from the plan administrator. You
should also receive a periodic summary
plan description that outlines your rights.

Consult your plan rules or plan administrator
for questions regarding eligibility for
benefits, payment of pension benefits and
how to appeal unfavorable decisions.

Remember: Always notify the plan
administrator of a change of address.

Lost Pensions

If you think you or your deceased spouse
might be owed a pension but are not
sure how to locate the plan, try contacting
the Pension Benefit Guaranty Corporation
(PBGC). PBGC is a government agency
that maintains a pension search directory
with a list of people who are entitled to
a pension yet cannot be found by the
companies funding the pensions. You can
check PBGC’s website at or
call (800) 326-LOST.

Tax Relief

Federal income tax. Generally, even
though you owe no tax, you must file a
tax return if your gross income is at least as
much as the published minimums for your
filing status and age. (However, there are a
number of circumstances when you must
file a tax return even if your income is less
than the minimum.)

Every taxpayer, regardless of age, is
entitled to a basic standard deduction if not
itemizing deductions. Taxpayers who are
at least 65 years old or blind are entitled
to an additional deduction. If you itemize
deductions, your interest on your home
mortgage and charitable contributions,
among other things, can be deducted.
Medical and dental expenses may be
deducted as well, to the extent the amount
meets or exceeds a certain percentage of
your adjusted gross income.

Credits. There are special tax credits that
apply to seniors and the disabled. Payments
made for dependent care may be claimed
as a tax credit. In the case of an elderly
dependent, the taxpayer with whom the
dependent lives may claim expenses for
care in a licensed adult daycare center.
There is also a tax credit for income-
eligible individuals who are at least age 65,
or under 65 and retired on a permanent and
total disability. However, benefits received
through Social Security, Veterans Affairs or
railroad retirement may reduce this credit.

Assistance. Through the Tax Counseling
for the Elderly (TCE) program, IRS-trained
volunteers assist people age 60 or older with
their tax returns at neighborhood locations
in many areas. In addition, certain volunteer
income tax assistance (VITA) aides have
been trained to help seniors with their
tax returns. To find the VITA or TCE site
nearest you, call your local IRS office. The
American Association of Retired Persons
(AARP) also provides Tax-Aide at various
sites. To find a site near you, contact the

If you have attempted to deal with an IRS
problem unsuccessfully, you should contact
the Taxpayer Advocate Service within the
IRS. This service provides advocates who
independently represent the interests and
concerns of taxpayers by protecting taxpayer
rights and resolving problems that have not
been sorted out through normal channels.
To contact your taxpayer advocate, call the
Taxpayer Advocate Service at (877)777-
4778 or locally at (505) 837-5505.

The IRS also has a telephone service that
provides recorded tax information on a
variety of subjects. TeleTax is available
24-hours a day, seven days a week from
a touch-tone phone by calling (800) 829-
4477. Live assistance is also available
24-hours a day, seven days a week during
tax season, by calling the IRS toll-free
number, (800) 829-1040.


There are also a number of free IRS
publications to help answer your tax
questions. They are available by calling
the IRS, going online to the IRS website
( or visiting your local post
office or library. Large print tax return
forms are also available.

State Tax Relief

Depending on income level, New
Mexico taxpayers who are 65 or older
may be eligible for a deduction from taxable
income of up to $8,000 per person.

New Mexico also provides for a low-
income comprehensive tax rebate for
resident taxpayers whose adjusted gross
income is $22,000 or less and who also
meet other qualifications.

Medical Care Deductions. Any New
Mexico taxpayer may claim an income tax
deduction for certain qualified medical care
expenses. Generally, only out-of-pocket,
non-reimbursed and uncompensated
medical expenses not already itemized
on your federal income tax return may be
claimed. Additionally, if you are at least 65
years of age and have at least $28,000 of
uncompensated or unreimbursed medical
expenses, you may qualify for an additional
exemption and credit.

There are limitations and exclusions to these
deductions. If you have questions about
whether these deductions apply to your
particular situation, contact the Taxation
and Revenue Department by phone at
(505) 827-0700 or visit the department’s

Property Tax Benefits. There are several
property tax benefits available to seniors
who are residents of New Mexico. Seniors
who are at least 65 and meet several other
criteria may claim a property tax rebate.

Additionally, property owners who are at
least 65 and income eligible, may apply to
have the valuation of their single-family,
owner-occupied residence frozen at the
valuation for the year they first apply. The
owner must re-apply for this benefit each
year. For 2009, the owner’s modified gross
annual income cannot exceed $32,000 (this
amount may change yearly; please contact
the Taxation and Revenue Department for
more information).

Finally, qualified veterans in New Mexico
(and their surviving spouses) may be
allowed a $4,000 reduction off the assessed
value of real property for county taxation
purposes. Some disabled veterans may be
eligible for a complete property tax waiver
on their primary residence.

For further information about these property
tax benefits and how they may apply to
you, contact the Taxation and Revenue
Department by phone (505) 827-0700 or
visit their website,

Utility Assistance

Utility costs can quickly deplete limited
resources, particularly during winter
months. Lack of telephone service is also a
safety concern for someone with health or
disability concerns. Programs are available
to provide this much-needed assistance.

The Low-Income Home Energy Assistance
Program (LIHEAP) provides vouchers for
assistance with heating, gas, electric, propane
and wood in winter months, and, funding
permitted, cooling in summer months.

Eligibility is based on a points system that
considers: household income, household
size, vulnerability of household members
(including children under 6, adults over 60,
and the disabled), as well as the regional
energy costs. Applications are available at
your local Income Support Division office or
on the Human Services Department website,

If you receive Medicaid or LIHEAP
assistance, you may also qualify for a Low-
Income Telephone Assistance Program
(LITAP) through your telephone service
provider. This program provides a small
subsidy for basic telephone service and
reduced installation charges. For more
information about the LITAP program,
contact your telephone service provider
for an application. You may need to obtain
proof of eligibility from your local Income
Support Division office to provide to your
telephone company.


The Aging and Long-Term Services
Department provides training
opportunities to low-income workers who
are 55 and older. The Senior Employment
Program helps older persons find
temporary, part-time training assignments
in senior centers, private nonprofit
organizations and government offices.
Training assignments are for 20 hours a
week and pay $7.50 an hour.

You may qualify if you are:

• 55 or older.

• Not making it on Social Security or
other retirement income.

• Interested in updating your job

• In need of developing new skills.

This program does have income
requirements: an individual may not have
a gross income greater than $13,537 per
year. Some benefits may be subtracted
from your income to determine eligibility.
For more information, contact the New
Mexico Aging and Long-Term Services
Department’s Senior Employment Program
at (866) 451-2901 or (505) 476-4799 in
Santa Fe.

Reverse Mortgages

In the last decade, reverse mortgages have
become quite popular in the United States.
A reverse mortgage (RM) is a special type
of loan that allows a homeowner to turn
some of the equity in his or her home into
cash. The equity you have built up in your
home over the years is paid back to you.
Many seniors use this type of mortgage to
supplement their Social Security income.


A reverse mortgage differs from a
traditional mortgage or a home equity
loan in that you are not required to make
monthly payments; in fact, as noted above,
payments are made to you. To qualify for
a RM you must own your home. For many
reverse mortgages, the home must be your
primary residence, and you must be at
least 62 years of age. The amount you may
borrow is based on your age, the amount
of equity in your home and the interest rate
the lender is charging, among other factors.
You may receive the money in a lump sum,
monthly advances, through a line of credit,
or in a combination of the three. Because
you still retain the title to the home, you
are responsible for maintenance, taxes,
insurance and repairs.

You do not need to repay the loan as long
as you live in the house and keep the taxes

and insurance current. If you outlive the
loan, meaning you are still living when the
payments under the loan have stopped, the
lender cannot take your home away from
you, nor do you have to begin repayment.
The lender is paid back when the home is
no longer your primary residence, when the
house is sold or from the proceeds of your

Whether or not to get a RM is an important
decision and should be made only after careful
consideration. For many people, their home
is their largest single asset and source of
wealth. You should consider a RM only after
considering all other options. Remember, a
RM uses some or all of the equity in your
home. This means that there will be fewer
assets for you and your heirs in the future.

If, after careful consideration you determine
that a RM is the right thing for you, shop
around for the best type for you, as there are
several types (fixed interest rate, adjustable
interest rate, etc.). Beware of people or
services that charge a fee for a referral to
a lender. You can obtain information about
RMs and lists of lenders, free of charge.

For more information about reverse
mortgages and a free list of lenders who
offer reverse mortgages, contact the United
States Department of Housing and Urban
Development (HUD) or AARP. (See

Other Resources
For Seniors

There are a number of other resources
and programs to assist senior citizens.
Not all programs are available in all areas.
Contact your local senior citizen’s center
or Office of Senior Affairs for information
about programs your community offers.

Senior Citizen’s Centers

Senior citizen’s centers provide meals,
activities, and information for seniors.
Many senior centers have volunteer
opportunities for seniors. Senior centers
are good places to make new friends and
keep active, both physically and mentally.

Meal Delivery Service

If you are elderly and homebound, you
may qualify for meal delivery service.
Check with your local senior center or in
the telephone directory in the county or
city government pages under “Seniors” for
information about meal services in your

If you are elderly and/or disabled, there
may be special transportation services
provided in your area to take you to doctor’s
appointments and to do your marketing.
Check with your local senior center or
in the telephone directory in the county
or city government pages under “Senior
Transportation” or “Transportation” for
information about transportation services
in your area.


Your local Senior Center or Senior
Affairs Department. If your city
has either of these they will be listed in
the telephone directory city or county
government pages “Seniors.”

Access America for Seniors

Entry site for seniors to locate U.S.
Government web sites.

Administration on Aging

Provides links to government and non-
government sites for information relevant
to seniors.

Human Services Department

(information and referral)

(800) 609-4833 or (505) 827-9454

Income Support Division

Local office is listed in the telephone
directory government pages under State –
Human Services Dept. – Income Support

Internal Revenue Service

Local offices are listed in telephone
directory government pages under United
States – Internal Revenue Service.

(800) 829-3676 Publications

(800) 829-1040 Live assistance

(800) 829-4477 Tele-Tax tapes

LIHEAP (utility assistance)

Your local Income Support Division
office is listed in the telephone directory
government pages under State-Human
Services Division.

LITAP (telephone assistance)

Your local Income Support Division
office listed in the telephone directory
government pages under State-Human
Services Division.

(800) 244-1111 (Qwest)

(800) 564-1211 (Spanish)

New Mexico Taxation & Revenue

(505) 827-0700

(505) 827-0822 Personal Income Tax

(505) 827-0870 Property Tax

Public Employees Retirement Assoc.

(505) 827-4700

(800) 342-3422

Railroad Retirement Board

(877) 772-5772

(312) 751-4701 (TTY)

Social Security Administration

Local office is listed in the telephone
directory government pages under United
States – Social Security Administration.

(800) 772-1213

New Mexico Aging and Long-
Term Services Department Benefits
Counseling Program

Provides free, unbiased information
about health care options and other

(800) 432-2080

Veterans Affairs

(800) 827-1000

N. M. Department of Veteran’s Services

Statewide community service program
that assists with obtaining benefits.

(505) 827-6300

(866) 433-8387

New Mexico Senior Legal Handbook Chapter 2 - Medicare, Medicaid and Long Term Care - 21

Chapter Two

Medicare, Medicaid and
Other Long Term Care Benefits

Most people have heard of Medicare
and Medicaid but do not know exactly
what each of these programs do or what the
differences between them are. This chapter
will explain the differences between the
programs, the benefits each program
provides, your rights and protections under
these programs, and where you can obtain
more information about each of these


Medicare is a federally-funded
benefit for medical insurance that
is administered by the Social Security
Administration. Generally, you qualify for
benefits if you are 65 years old and have
worked and paid into Social Security or
railroad retirement long enough. If you are
under age 65, you may qualify for benefits
if: 1) you have been eligible to receive
disability benefits for 24 months; 2) if
you receive a disability pension from the
railroad retirement board and meet certain
requirements; 3) you have Lou Gehrig’s
Disease; or 4) you have end-stage renal
disease (permanent kidney failure requiring
dialysis or a transplant).

Medicare works just like private health
insurance. If you are already receiving
benefits from Social Security or the Railroad
Retirement Board, your Medicare card
will be mailed to you about three months
before your entitlement date. If you are not
yet receiving benefits, you should contact
Medicare a couple of months before your
65th birthday.

If you do not qualify for Medicare because
you did not pay enough into the Social
Security Administration, you may still
receive Medicare but will pay higher
premiums. If you are considered low-
income and have limited resources or assets,
you may also qualify for help through the
Medicaid program. Medicaid is discussed
later in this chapter.

Medicare programs. Medicare is divided
into what are referred to as “Parts.” In this
chapter, Parts A, B and D will be discussed.
Each Part provides a different type of

Medicare Part A. If you are receiving Social
Security benefits or a railroad retirement
benefit, you are automatically enrolled in
Medicare Part A when you turn 65 years old.
If you are not receiving benefits, you should
contact Medicare about three months before
your 65th birthday to enroll. Most people do
not have to pay for Part A because they paid
Medicare taxes while working. If you (or
your spouse) did not pay Medicare taxes
while you worked, or you did pay into the
system but do not have enough quarters,
and you are age 65 or older, you still may
be able to buy Part A.

Medicare Part A works much like private
hospital insurance. Part A pays for
inpatient services, critical access hospitals
(small facilities that give limited outpatient
and inpatient services to people in rural
areas), skilled nursing facilities, hospice
care, Religious Nonmedical Health Care
Institutions and some home health care.

22 - Chapter 2 - Medicare, Medicaid and Long Term Care New Mexico Senior Legal Handbook

For more information about what services
are covered by Part A, contact Medicare
at (800) 633-4227, or visit the Medicare
website at

Most people do not have to pay Medicare
Part A premiums, but there may be
deductibles and coinsurance that you will
be responsible for paying. The deductibles
and coinsurance are tied to what Medicare
refers to as “benefit periods.” A benefit
period begins the day you go to a hospital
(or under special circumstances, a skilled
nursing facility). In 2009, a deductible of
$1068 is required for the first 60-days stay
in a hospital. Days 61-90 require a $267
per day coinsurance. Lifetime reserve days
give you an extra one-time-only 60 days
at a $534 per day coinsurance. The benefit
period ends when you have not received
hospital or skilled nursing care for 60
days in a row. If you go into the hospital
after one benefit period has ended, a new
benefit period begins. There is no limit
to the number of benefit periods you can
have. Additionally, the deductible and
coinsurance amounts change every year to
reflect inflation.

When you go to a skilled nursing facility
for rehabilitation services after a hospital
stay of three or more days, you get the
first 20 days for free and days 21-100 at
a cost of $133.50 coinsurance per day
(rate in 2009). Beyond day 100, you pay
100% of the cost. For more information
about benefit periods, deductibles and
coinsurance, you may contact Medicare
at (800) 633-4227 or visit the Medicare
website at You may
also contact the Aging and Long-Term
Services Department at (800) 432-2080.

Medicare Part B is similar to private
supplemental insurance and covers services
that Part A does not. Part B pays for doctor
visits, outpatient hospital care, and other
services such as physical and occupational
therapy. Part B will only cover services if
they are medically necessary.

Part B requires you to pay a monthly
premium. This premium changes every
year to reflect inflation. There are programs
that assist seniors in paying this premium
if you can qualify by meeting income
and resource eligibility guidelines. These
programs are called Medicare Savings
Programs (MSP) and will be discussed in
detail in the section on “Medicaid,” later in
this chapter.

Enrollment in Medicare Part B is optional.
You can sign up anytime in a seven-month
period beginning three months before your
65th birthday, including your birthday
month, and extending three months after
your birthday. However, if you do not
sign up for Part B during this seven month
period, and later decide that you would
like that coverage, the cost to you for this
benefit will increase by 10 percent for every
year that you were not enrolled in those
first seven months. You will have to pay
this increased cost for the rest of your life.
There is an exception to this enrollment rule
if you are 65 or older, and you are covered
under a group health plan from your (or
your spouse’s) current employment.

Your Part B payments will automatically be
deducted from your Social Security, railroad
retirement or civil service retirement
check. If your income is not from one of
these sources, you can choose to have it
electronically deducted, or Medicare will
bill you each month.

Medicare plan choices. Medicare
recipients have options when choosing

a health care plan. Based on what your
individual needs are, you can choose the
plan that works best for you within the
Medicare program.

Original Medicare Plan. One option is
the Original Medicare Plan. This is simply
the basic plan that is administered through
Medicare which includes Parts A and B. It
is sometimes referred to as a fee-for-service
plan. Services are provided through any
provider that accepts Medicare payments.
The Original Medicare Plan is available
throughout New Mexico. Supplemental
plans to cover the deductibles, coinsurances
and other costs not covered by Medicare,
also known as “Medigap” policies, will be
discussed in detail later in this chapter.

Medicare Advantage Plans (Part C).
Private companies also contract with the
Medicare program to offer plans in addition
to the Original Medicare Plan. These are
called Medicare Advantage Plans and
include Parts A and B (and may also include
drug plans). There are two different types
of private plans offered in New Mexico:
Medicare managed plans and private fee-
for-services plans. Medicare Advantage
Plans offer a wider range of services
than the Original Medicare Plan does.
Some plans will charge beyond the Part B
premium, and some will not. Some plans
offer discounts on prescription drugs (not
the same as the prescription drug program
Medicare Part D, which is discussed at
length, below) and coordinate care among
providers, which may lower your out-
of-pocket expenses. Not all Medicare
Advantage Plans are offered in all parts of
New Mexico. You should contact Medicare
at (800) 633-4227/(877) 486-2048 (TTY/
TDD) or visit their website, www.medicare.
org; or contact the Aging and Long-Term
Services Department at (800) 432-2080
or, for more
information about the Medicare Advantage
Plans available in your area.

Making the best choice for you. There
are many factors that you should consider
when choosing a Medicare plan, such
as cost, extra benefits, doctor choice,
convenience, and quality of care. These
are all important factors, but some may
be more important to you than others. You
need to look at what plans are available
in your area and what each plan offers in
order to make the best choice for you. Also,
individuals under the age of 65 may have
trouble finding a Medigap plan that will
be affordable and provide enough benefits
under original Medicare. They may find
Medicare Advantage Plans a fairer and
more comprehensive plan for themselves,
and the Medicare Advantage Plan cannot
discriminate against Medicare beneficiaries
under the age of 65.

Some questions you should ask when
considering the plans available in your

Cost. What will my out-of-pocket costs be?

Benefits. Do I need extra benefits and
services, such as prescription drugs, eye
exams, hearing aids or routine physical

Doctor choice. Can I see the doctor(s) I
want to see, or only those who are members
of the plan? Do I need a referral to see a

Convenience. Where are the doctors’
offices, and what are their hours? Is there
paperwork? Do I have to file claims myself?
Is there a telephone hotline for medical
advice from a nurse or other medical staff?

When may I join a Medicare Advantage
Plan? Generally, you may join a Medicare
Advantage Plan at any time. However,
some Medicare Advantage Plans limit the
number of members in their plans. These
plans may not accept new members when
they reach their limit. A plan can tell you if
it is signing up new members.

When may I leave a Medicare Advantage
Plan? You may leave your plan at anytime,
for any reason. This will not disqualify you
from Medicare; it will simply remove you
from that plan.

If you are going to be on Medicare in
the near future, you should check with
your medical provider to make sure that
they do accept “Medicare assignment” if
you are planning to choose the Original
Medicare Plan. Medicare assignment is
direct and full payment from Medicare
to your health care provider. (You are
still responsible for any deductibles or
co-pays.) If you are going to choose a
Medicare Advantage Plan, make sure
your medical provider(s) participates in
that particular plan.

How to File a Claim. You should not need
to file a claim for the services you receive
from your health care providers, no matter
what Medicare insurance plan you choose
(except as a last alternative; see below). If
you choose the Original Medicare Plan,
it is important to make sure that your
health care providers (for example, your
physician and hospital) accept “Medicare
assignment,” which is direct payment from
Medicare. When a health care provider
agrees to accept Medicare assignment, they
are agreeing to accept as full payment what
Medicare pays. (Even if your health care
provider accepts Medicare assignment,
you are still responsible for any co-pays or
deductibles.) If your health care providers
do not accept Medicare assignment, you will
be required to pay for the services rendered
up front, and Medicare will reimburse you
for the covered amounts, which may be
less than the amount you paid.

Medicare cannot pay your health care
providers until a claim is filed. If your
health care provider does not file a claim
for services provided, the first thing you
should do is contact the health care provider
and request a claim be filed. If, after
requesting a claim be filed, the provider
still has not filed the claim, the next step is
to contact your local Medicare carrier (see
the “Resources” section at the end of this
chapter for contact information). Your local
Medicare carrier will contact the health
care provider on your behalf to inform
them of their duty to file Medicare claims
in a timely manner. It is also important to
ask your Medicare carrier about the exact
time limit for filing your particular claim.
Medicare claims must be filed within one
full calendar year following the year in
which the services were provided. For
example, if you see your physician on
April 15, 2009, the Medicare claim for that
visit must be filed by December 31, 2010.
If after contacting the health care provider
and your Medicare carrier, your claim still
has not been filed, you should file the claim
yourself. You can get the necessary forms
by contacting your Medicare carrier. (See

Important: There is a time limit for filing
a Medicare claim. If a claim is not filed
within the time allowed, Medicare will not
pay any amount of the bill.

Remember: If the medical services that
you need are not covered by Medicare, you
will be responsible for the entire bill for any

services, drugs, or supplies purchased. Your
physician or supplier must agree to accept
Medicare assignment in order for the costs
of services and/or supplies associated with
your health care to be paid by Medicare

If you are enrolled in a managed care plan
or a private fee-for-service plan (Medicare
Advantage Plan), Medicare claims are not
filed. Medicare pays these private insurance
companies a set fee each month, eliminating
the need to file Medicare claims.

Privacy and Medicare. By law Medicare
is required to protect the privacy of your
personal medical information. Medicare
is also required to give you notice to tell
you how Medicare may use and give
out (“disclose”) your personal medical
information held by Medicare. For more
information on Medicare’s privacy policy,
contact Medicare at (800) 633-4227 or
(877) 486-2048 (TTY) and ask to speak
to a customer service representative about
Medicare’s privacy notice. You can also
find information about Medicare’s privacy
policy on the Medicare website, www.

Buying (joining) Medigap plans.
Medigap is insurance that covers the cost
difference between what your Medicare
plan covers and the services that you need.
Generally, you must be enrolled in
Medicare Parts A and B to be able to enroll
in a Medigap plan. Medigap policies are
identified by the letters A through L. The
best time to buy a Medigap plan is during
your Medigap open enrollment period.
Your Medigap open enrollment period lasts
for 6 months and starts on the first day of
the month in which you are both:

• Age 65 or older, and

• Enrolled in Medicare Part B.

In some situations, you have the right to
buy a Medigap policy outside of your
Medigap open enrollment period. These
rights are called “Medigap Protections”
or “Guaranteed Issue Rights.” Guaranteed
Issue Rights generally allow you to
purchase a Medigap policy outside your
open enrollment period when you find
yourself without health coverage through
no fault of your own. The following are
examples of when your Guaranteed Issue
Rights may apply:

• Your health coverage ends because
you move out of the plan’s service
area, or your health coverage
provider stops providing coverage
in your area.

• You join a Medicare Advantage
Plan or PACE plan (PACE plan is
discussed later in this chapter) at
age 65 and, within the first year,
you decide you want to leave.

• You leave a Medigap plan to join
a Medicare Advantage or PACE
program for the first time and
decide within the first year that you
want to leave.

Individuals Under 65

Individuals who are under 65 and
enrolled in Medicare Part B do not have
guaranteed Medigap plans. The plans
for these individuals are called Medigap
Disability Plans, and the premiums are
usually higher. The insurance companies
do not have to insure individuals under 65
who apply.

You may not need a Medigap plan. Before
you purchase a plan, make sure you are not
covered by another policy. Often, former
employers provide Medigap plans to pay
for costs that the Original Medicare Plan
doesn’t cover. Also, if you have a Medicare
Advantage Plan, you may not need Medigap

To find a list of plans available in your area,
look at the Medicare Personal Plan Finder
on the Medicare website, www.medicare.
gov, or call (800) 633-4227/(877) 486-2048
(TTY/TDD) to receive free publications
and other information discussing Medicare
and Medigap plans. You may also contact
the New Mexico Aging and Long-Term
Services Department at (800) 432-2080 or

Medicare Part D

Medicare Part D, or Medicare
Prescription Drug Coverage, helps
cover the cost of prescription drugs. It is an
optional benefit, much like Part B, and you
must “opt-in.” There is a 1 percent premium
penalty for each month you delay enrolling.
This penalty amount may increase every
year. Part D is open to anyone entitled
to Part A, or enrolled in Part B. There is
special assistance for those who have
low incomes and few assets. If you are a
dual eligible (a person who receives both
Medicare and Medicaid) you will receive
your prescription coverage under Part D,
instead of Medicaid.

You may choose between Original
Medicare (fee-for-service), with access to
prescription drug plans, or you may choose
a Medicare Advantage Plan that offers
both medical benefits and prescription
drug coverage. You have the option of
changing plans once a year during the open
enrollment period, Nov. 15 through Dec.
31 (except for dual eligibles). In an effort
to give all Medicare beneficiaries a choice,
there should be at least two prescription
drug plans, or one prescription drug plan
and a Medicare Advantage Plan to choose

Only drugs on the plan’s preferred drug
list will be counted as a cost, both to meet
the deductible and doughnut hole (second
deductible period or “coverage gap”) and to
qualify as a drug for which Medicare will
pay a portion of the cost. It is important
when selecting a plan that you search the
plan’s covered drug list to make sure your
drugs are covered.

Part D Low-Income
Subsidies – “Extra Help”

For low-income individuals with little
resources, drug cost savings can
be significant. Medicare’s program for
financial assistance for Part D for low-
income individuals is called “Extra Help.”
There are a number of subsidy tiers of
assistance, each with its own income and
resource limits.

Full Low-Income Subsidy. This includes
people who are dual eligible (have both
Medicare and full Medicaid), those on SSI
but not Medicaid, those with income up to
135% of federal poverty level (FPL), and
enrollees of the Medicare Savings Plan
(discussed below).

• Resources of $8100 for single;
$12,910 for couple.

• $0 premium, $0 deductible.

• “Doughnut hole” coverage

• Full benefit, dual eligibles with
income below 100% of FPL

initially pay no more than $1.10
generic/$3.20 brandname per

• All other full subsidy beneficiaries
initially pay $2.40 generic/$6.00
brandname per prescription.

Partial Low-Income Subsidy.

• Incomes at or below 150% of FPL.

• Resources of $12,510 for a single
person; $25,010 for a couple.

• Premiums based on a sliding scale.

• Deductible of $60.

• 15% co-insurance (non-subsidy
individuals pay 25%.)

• Coverage during “doughnut hole”
and after all out-of-pocket expenses
have been met.

• Copay of $2.40/$6.00 per
prescription after all out-of-pocket
expenses have been met.

For more information about Medicare Part
D, contact Medicare at (800) 633-4227 or
go to their website at,
or contact the New Mexico Aging and
Long-Term Services Department at (800)
432-2080 or

If you do not qualify for

Individuals 65 years and older, who are
not otherwise eligible for premium-free
Medicare Part A and have 39 or fewer
quarters of Medicare-covered employment,
can buy into the Medicare program. The
amount of the premium you will be required
to pay for the coverage will vary depending
on how many quarters of Medicare-covered
employment you have.

Other health insurance. You may also
have or qualify for:

• Employer or union health

• Railroad Retirement.

• Veteran’s benefits.

• Tricare for Life (for military retirees
and their spouses and survivors).

• Medicaid (more on this in the
Medicaid section).

• Prescription drug and MedBank

• PACE (program of all-inclusive
care for the elderly – currently only
available in Albuquerque will be
discussed later in this chapter).

• Other insurance, for example, long-
term care insurance.


Medicaid is a state-run program that
provides health insurance to low-
income individuals. The State of New
Mexico and the federal government jointly
fund Medicaid. Medicaid is a need-based
program, meaning it is available only to
those who meet certain income, asset and,
in some cases, disability criteria.

Medicaid can be divided into two categories,
non-institutional and institutional. Non-
institutional Medicaid is for applicants who
do not require institutionalization (nursing
home care). Institutional Medicaid is for
those applicants whose physical and/or
mental health require placement outside
their home. Institutional Medicaid is
discussed in detail below.

There are several different state-run
programs that provide Medicaid to eligible
New Mexico senior citizens. Which
program you may qualify for depends on
several factors: your income level, the
assets you own, if you are under 65, and
whether or not you are considered disabled
by the Social Security Administration.

Supplemental Security Income (SSI).
SSI provides cash assistance and medical
insurance (Medicaid) to the elderly,
disabled and blind. It is a need-based
program, meaning an applicant must meet
certain income and asset requirements.
If you are under 65, you must also be
found to be disabled under Social Security
Administration guidelines. Generally
speaking, only those seniors with the
lowest incomes will qualify for SSI (for
2009, the maximum benefit an individual
on SSI can receive is $674/month and
$1,011/month per couple). In addition to
income, an applicant must meet certain
asset requirements. As of the publication
of this handbook in 2009, a single person
is allowed only $2,000 in assets or
resources, and a couple is allowed $3,000
(the applicant’s residence is not counted
as long as he/she is living in it). If you do
not qualify for SSI, there are several other
Medicaid programs for which you may
qualify (discussed below).

Note: If you were receiving SSI as a
supplement to a Social Security benefit and
you lose your SSI due to a Social Security
cost of living increase, you may be able to
extend your Medicaid benefits after SSI
ends under what is known as the “Pickle”
Amendment. If you fall into this category,
you should contact the Aging and Long-
Term Services Department at (800) 432-
2080 or the Lawyer Referral for the Elderly
Program at (800) 876-6657.

Medicare Savings Programs

Medicare Savings Programs are
helpful in defraying costs associated
with Medicare. There are three programs,
each based on income and resource
eligibility. They are the Qualified Medicare
Beneficiary Program (QMB), the Specified
Low-Income Beneficiary Program
(SLIMB), and the Qualified Individuals
Program (QI-1).

Qualified Medicare Beneficiary (QMB).
The QMB program, like SSI, is a need-
based program available to those whose
income and assets meet certain eligibility
criteria. The monthly income limit is fixed
at 100 percent of the federal poverty level
guidelines (in 2009, $903 for a single person
and $1215 for a couple). There are asset or
resource limits as well (in 2009, $4,000 for
a single person and $6,000 for a couple). As
with SSI, the income and asset limits may
change yearly to reflect inflation. In addition
to the income and asset criteria, you must
be enrolled in Medicare Part A. Under the
QMB program, Medicaid will pay for your
Medicare Part B deductibles, coinsurance
and monthly premiums. Participants in this
program are required to recertify (prove
that you are still eligible) for the program
at least every 12 months. QMB participants
receive a Medicaid card.

Specified Low-income Medicare
Beneficiary (SLIMB). The SLIMB program
is also a need-based program. The income
threshold is slightly higher than the QMB
program, making those whose monthly
incomes fall between 100 and 120 percent
of the federal poverty level guidelines (in
2009, $903-1083 for a single person and
$1215-1457 for a couple) eligible for this
program. The asset limits are the same as
the QMB program, discussed above. As

with other Medicaid programs, the income
and asset limits are subject to change on a
yearly basis to reflect inflation. In addition
to the income and asset limitations, you
must also be enrolled in Medicare Part A.
Under the SLIMB program, Medicaid will
pay for your Medicare Part B premiums,
but you will not receive a Medicaid card.

Qualified Individuals (QI-1). The QI-
1 program is an expansion of the SLIMB
program and offers the same benefits. To
qualify, you must have Medicare Part A
and meet certain income and asset criteria,
as QI-1 is a need-based program. To be
eligible, your monthly income must fall
between 120 and 135 percent of the federal
poverty level guidelines (in 2009, $1083-
1219 for a single person and $1457-1640
for a couple). The asset or resource limits
are the same as for the QMB and SLIMB
programs. These amounts change on a
yearly basis to reflect inflation. You will
not receive a Medicaid card. This program
is renewed on a yearly basis by Congress.

As noted above, the income and asset
limitations with all Medicaid programs
are subject to change on a yearly basis to
reflect inflation. Contact your local Income
Support Division office, Lawyer Referral
for the Elderly Program or the Senior
Citizen’s Law Office (in Albuquerque)
for current eligibility information. (See

Drug Benefits

Everyday, breakthroughs in medicine
allow people to live longer and
improved lives. Often this means that
people need to be on various prescription
drugs in order to maintain a good quality
of life. Many prescription drugs are quite
expensive, and the cost of being on many,
or even one or two different drugs, can add
up quickly. Congress has made changes to
Medicare to provide for some prescription
drug costs (see Part D Medicare earlier
in the chapter). Other prescription drug
assistance programs are discussed below.


MedBank is an Internet-based program
that assists uninsured or underinsured
New Mexico residents of any age obtain
free prescription drugs. You may use
MedBank if you do not have prescription
drug insurance (and you are not eligible for
Medicaid benefits that include prescription
drug coverage), or you have reached
the limits of your coverage.You must
meet the financial qualifications of the
particular drug company that carries the
drugs you need. MedBank simplifies the
process of applying for free prescription
drugs from drug companies. Only brand
name prescription medications can be
obtained through the drug companies’
assistance programs, but not all brand
name medications are available. Call NM
MedBank to see if the medicine you take is
covered. It may take anywhere from two to
eight weeks for you to get your first supply
of medication. To assist applicants while
they wait, an emergency fund is available
to provide one-time vouchers that provide
up to $300 for the purchase of prescription
drugs. To be eligible for a voucher, you
must meet the following requirements:

• Be a New Mexico resident.

• Have no prescription drug insurance.
(Applicants who have insurance but
have reached their benefit cap are not
eligible for this emergency fund.)

• Be ineligible for full Medicaid or
have been denied full Medicaid.

• Have income of less than $18,000
for an individual and $24,000 for a

• Have submitted a MedBank
application with all required
information including prescriber
information and proof of income
for entire household.

• Need one or more prescription
drugs currently available through

Patient assistance programs do not assist
with generic medications, injectable drugs
(except insulin), test strips, needles, nicotine
patches, some narcotics, or vitamins.
However, the prescription drug program
may be able to help you find other sources
to help you pay for these medications.

For more information about or assistance
using the MedBank program, contact
the New Mexico Aging and Long-Term
Services Department at (800) 432-2080 or

Partnership for Prescription

The Partnership for Prescription
Assistance program is composed of
American pharmaceutical companies,
doctors, patient advocacy groups and civic
groups. The program assists low-income,
uninsured patients get free or nearly free
prescription medications.

The program’s website,,
is a single point of access to more than
475 public and private patient assistance
programs, including more than 200
offered by pharmaceutical companies. The
application process is quite simple. You
provide information about yourself and the
prescription drugs you take, and, based on
this information, you will be provided with
the names and applications for programs
through which you may be able to get your
prescription medications free or nearly

Each manufacturer participating in the
program has its own set of eligibility
criteria and application procedures. Not
all manufacturers participate, and not
all medications are available under this

New Mexico Discount
Prescription Drug Program

This program is administered through
the New Mexico Retiree Health Care
Authority and is a state-sponsored program
available to all New Mexico residents,
regardless of whether or not they have
insurance. You may review a list of covered
drugs at When
you enroll, you receive a card and a list of
over 300 pharmacies that participate in the
program. Contact the website or call (866)
244-0882 for more details.

Nursing Facilities

Medicare, in specific circumstances,
will pay for skilled nursing care.
Medicaid, in addition to paying for care
provided in a nursing home or other care
facility, will, in some cases, pay for at-
home care. The different types of care
and services that the programs provide are
explained below.

Skilled Nursing Facility –

A skilled nursing facility (SNF) can be a
stand-alone facility or can be part of a
nursing home or hospital. A SNF provides
around-the-clock nursing services (to
those in need of medical or nursing care)
or rehabilitative services to manage,
observe and evaluate care. Examples
of such services are those of a licensed
nurse or rehabilitation therapist (physical,
occupational, or speech-language). Medicare
certifies these facilities if they have the
staff and equipment to give skilled nursing
care or skilled rehabilitation services.

Medicare will only cover skilled nursing
care when you meet certain conditions
and, generally, only for a short time after
a hospitalization (see “Eligibility,” below).
Medicare does not pay for long-term
custodial care.

Note: The following explains benefits
under the Original Medicare Plan (see this
chapter for information about different
Medicare plan types). If you are enrolled
in a Medicare managed care or private
fee-for-service plan, you are still entitled
to at least the same benefits, but choice
of facility, costs, coverage and rights or
protections may be different.

Eligibility. Medicare will cover skilled
nursing facility care only if all of the
following are true:

• You have Medicare Part A.

• You have days left in your benefit
period (see below).

• You have a qualifying hospital
stay of at least three days in a row
(not including the day you leave

• You must enter the SNF within a
short time (generally 30 days) of
leaving the hospital.

• Your doctor has determined you
need daily skilled care (five to
six days per week is okay if only
receiving rehabilitation therapies).

• You need the skilled services for a
medical condition that was treated
during the qualifying three-day
hospital stay, or that started while
getting SNF care for another

• The SNF is certified by Medicare.

Covered services. When you qualify
for SNF care, Medicare pays for the

• Semi-private room

• Meals

• Skilled nursing care

• Physical therapy

• Occupational therapy*

• Speech-language therapy*

• Medical social services*

• Medications

• Medical supplies and equipment

• Ambulance transportation – if
necessary to safely transport to a
provider of services not available
at the SNF

• Dietary counseling

* Rehabilitation therapies are covered only
if they are reasonable and necessary for
treatment of the patient’s condition.

Skilled nursing facility stays and benefit
periods. Medicare uses a period of time
called a “benefit period” (see above for an
explanation of “benefit periods”) to keep
track of how many days of SNF benefits
you use and how many are still available.

You get up to 100 days of SNF care in a
benefit period. The benefit period begins
on the day you start using hospital or SNF
benefits. Once you use the 100 SNF days,
your current benefit period must end before
you can renew your SNF benefits.

Your benefit period ends when you have
not been in a SNF or hospital for at least 60
days in a row; or if you remain in a facility,
when you have not received skilled care
for at least 60 days in a row.

There is no limit to the number of benefit
periods you can have. Once a benefit period
ends, however, you must have another
three-day qualifying hospital stay and meet
the other requirements before you can get
another 100 days of SNF benefits.

You do not need a new three-day hospital
stay if your break in SNF care has been
less than 30 days. In that case, your
benefit period has not ended. However, the
coverage available is limited to the number
of unused SNF days left in your benefit

If you have a break in SNF care of more
than 30 days but less than 60, you need
another three-day hospital stay to qualify
for more SNF care, but coverage is limited
to the number of unused SNF days left in
your benefit period since the period has not

Costs. Under the Original Medicare Plan,
Medicare pays 100 percent of the first 20
days of SNF care for each benefit period.
You will be required to pay part of your
care for each benefit period your SNF stay
exceeds 20 days and all your care if your
SNF stay exceeds 100 days.

You must also pay any additional charges
not covered by Medicare, such as telephone
and laundry fees.

Note: Your costs may be different if you are
in a Medicare managed care or private fee-
for-service plan. Check your plan for costs.

Note: Costs tend to go up every year. For
the most up-to-date information regarding
what Medicare covers, contact Medicare
or the New Mexico Aging and Long-Term
Services Department. (See “Resources”)

Help with paying for SNF care. What if
your skilled nursing facility stay extends
past that which is covered fully by Medicare
(20 days)? How do you pay the coinsurance

Medicaid. If you qualify for both Medicare
and Medicaid, Medicaid will pay the
coinsurance not paid by Medicare for SNF
care. In addition, Medicaid may pay for
long-term care in a nursing facility under
certain circumstances.

Medigap policy. If you have a supplemental
insurance policy (a Medigap policy) to fill
the gaps in your Medicare coverage, the
policy will likely pay the SNF coinsurance
for days 21-100. Check your individual
policy to determine if you have coverage.

Long-term care insurance. If you have
long-term care insurance, check your policy
to see what care is covered. Some policies
will pay the coinsurance for days 21-100.
Some policies only pay for long-term
custodial care. Some pay for both.

Employer or union coverage. If you have
coverage from an employer or union, check
with your benefits administrator regarding

Private pay. If you do not qualify for
Medicaid, do not have coverage through
your employer or union, and did not
purchase any type of private insurance,
then it is expected that you will pay for the
care from your own funds.

When Medicare ends. When the SNF
thinks you no longer qualify for Medicare
coverage, they must provide you with
a Skilled Nursing Facility Advance
Beneficiary Notice of Medicare Non-
Coverage. If you think you still need SNF
care, you have the right to have Medicare
review the SNF’s opinion. The notice of
non-coverage must tell you:

• The date your Medicare coverage
will end.

• Why your stay is not, or no longer,

• Your right to request the SNF to have
Medicare review the SNF’s opinion
of non-coverage (sometimes called
a “demand bill”).

• That if you request a demand bill,
you are not required to pay for your
SNF stay until you are informed of
Medicare’s decision.

• Where you should sign to show you
got the notice.

The SNF cannot make you pay a deposit
for services that Medicare may not cover
until Medicare makes its decision, but you
must continue to pay the costs you would
normally pay under Medicare while the
demand bill is being processed. If Medicare
decides your care is no longer covered, you
are responsible for the cost of the care you
received while you were waiting for the

You may have a right to a fast appeal if you
do not agree with this decision. During a fast
appeal, an independent reviewer called a
Quality Improvement Organization reviews
the decision. You should receive a notice
from Medicare telling you how to contact
the Quality Improvement Organization. If
you do not receive this information, you
should request it.

Note: If you are in a Medicare managed
care or private fee-for-service plan, check
with your plan to find out how you will
know when Medicare coverage is ending,
and how you appeal.

Nursing Facilities and

As discussed above, Medicare will
pay for a limited amount of skilled
nursing care. Oftentimes, individuals who
once required skilled nursing care recover
enough to require a lesser level of care,
what is referred to as “custodial care.”
Custodial care is for individuals who require
assistance with many of the activities of
daily living, such as bathing, toileting and
eating. Medicare does not, however, pay
for custodial care. If Medicare does not
pay for this level of care, who does?

If you need custodial care, there are several
payment options, namely: private pay,
long-term care insurance and Medicaid.

Private Pay. If you require nursing home
custodial care and have sufficient income
and assets, it is expected that you will pay
for your own care.

Long-Term Care Insurance. Long-
term care insurance is relatively new, and
policies may vary greatly. Policies may or
may not cover: nursing home care, home
health care, personal care in your home,

services in assisted living facilities, services
in adult day-care centers, and services
by licensed providers or agencies only.
Because policies vary in their coverage, it
is critical to understand what services and
providers are covered and where you can
access these services and providers.

Whether or not you should purchase a long-
term care policy depends on many factors.
The two major factors are cost and need.
Long-term care insurance is quite expensive
unless you lock into a low premium when
you are young and healthy. The younger
and healthier you are when you purchase
your long-term care insurance, the lower
your premium will be. If you wait to
purchase long-term care insurance until
shortly before you need it, your premium
will be very expensive, a reflection of your
age and state of health.

Another thing to consider is whether you
have any assets to protect. If you have
very few assets and would quickly qualify
for Medicaid anyway, you may want to
consider forgoing the insurance and saving
your money. Finally, you should consider
whether you can afford the premiums now,
and whether you will be able to afford
them in the future, should your financial
situation change (due to the death of a
spouse and the subsequent loss of that
spouse’s income, for example). With long-
term care insurance, if you miss a premium
payment, you may lose the coverage, and
all the previous premiums you paid will
have been for nothing.

Institutional or Long-Term Medicaid.
Nursing home costs, like health care costs
in general, have skyrocketed over the past
decade. Very few individuals can afford to
privately pay for this type of care for very
long. If you did not purchase long-term
care insurance and are not able to privately
pay for custodial care in a nursing home,
you may qualify for Institutional or Long-
Term Care Medicaid.

Qualifying for Institutional Care
Medicaid. As noted before, Medicaid
is a need-based, state-run program that
provides health insurance to individuals
who meet certain income and asset
eligibility requirements. The following
sections outline the income and asset
eligibility requirements for married and
single applicants. They are current as of
the publication date of this handbook. As
with all Medicaid programs, the eligibility
requirements change at least yearly to
reflect inflation and changing budgetary
priorities of the state and federal

Married Applicants. It used to be that
in order to qualify for Medicaid financial
assistance, you had to be very poor, and, if
your spouse stayed at home (was not also
in a nursing home), he or she would have
to become impoverished as well. This is
no longer true. It is still expected that, if
you have the ability to pay for your own
nursing home care, you will do so. That
has not changed. What has changed is that
if you are married and need to go into a
nursing home, but your spouse is still well
enough to stay at home, your spouse will
be allowed to keep a substantial amount
of the community assets to live on. How
much your spouse will be allowed to keep
depends upon the amount of your joint
income and assets.

As of the publication of this handbook, an
at-home spouse of a nursing home patient
is allowed to keep the following income
and assets:

• The home.

• A car of any value as long as the car
is used for transportation.

• One half of the couple’s assets (in
2009, at least $31,290, but no more
than $109,560).

• At least one half of the couple’s
monthly income. It usually works
out that the at-home spouse is
allowed to keep a majority of the
monthly income. The minimum
monthly income allowance is
$1,750 until mid 2009, and the
maximum monthly allowance is

In addition to the income and asset
requirements, the applicant must be 65
years old, blind or disabled and require
nursing home level care.

Single Applicants. If you are single,
divorced, widowed or your spouse is
already in a nursing home, Medicaid will
pay for custodial care in a nursing facility
if you meet the following requirements:

• You must be 65 years old, blind or
disabled and require nursing home

• You have no more than $2,000 in
personal resources. This includes
the cash surrender value of any non-
term life insurance policies (burial
insurance and term life insurance
are not counted).

• You have no more than $1,500 in a
burial account. These burial funds
cannot be commingled with non-
burial funds. In lieu of the burial
account, you may choose to purchase
a pre-paid burial agreement (there
is no limit as to how much the pre-
paid burial agreement may cost). It
must be pre-paid and irrevocable
(you cannot get your money back).
A burial space or an agreement for
the purchase of a burial space is an
excluded resource, regardless of

• You may have one car of any

• Your income is not more than $2,022
per month (these figures are for
the year 2009). The nursing home
resident gets $60 of this amount
each month for personal needs, such
as toiletries, beauty shop visits and
cigarettes. This money is placed in
a special account. The remainder
of the income is paid to the nursing
home for the cost of care.

• The nursing home resident’s home
(if the equity equals $750,000 or
less) is not counted as an asset as
long as the person states that he/she
intends to return home, even if only
to die. The intent to return home
does not have to be a realistic one.
Because the house is not counted as
an asset, it will not have to be sold
to pay for the nursing home care.
The state of New Mexico has the
power, however, to make a claim
against the nursing home resident’s
estate after that person dies to
recover the costs paid by Medicaid
for that person’s care.

Note: As with many of the programs
mentioned in this handbook, the income
and asset information for Institutional Care
Medicaid is subject to change on a yearly
basis to reflect inflation, availability of
funds and program priorities.

Keep in mind that Medicaid does not
pay for the first 30 days of nursing home
care. Often patients have coverage either
through private pay or Medicare for the

first 30 days they are in a facility, and there
is no problem. What happens to those with
few or no assets who require custodial care
and have to move into a nursing home? For
these individuals, paying the first month of
nursing home care until Medicaid becomes
available is very difficult, if not impossible.
If you are in this position, you should
contact the Aging and Long-Term Services
Department at (800) 432-2080.

Income Diversion Trusts. If your income
exceeds the limit for qualifying for
Institutional Care Medicaid, you will be
expected to pay for your own nursing home
care. However, as of the publication of this
handbook, the average cost of a nursing
home in New Mexico is about $5,037 per
month. What do you do if your income
exceeds the limit to qualify for Institutional
Care Medicaid but is less than the $5,037
per month it will cost to be in a nursing
home? The solution to this dilemma is an
Income Diversion Trust. This is a special
type of trust that has nothing to do with your
property or avoiding probate. Each month
your (the nursing home patient’s) income,
over the maximum allowable income
($2,022 for 2009), is put into the trust. From
the maximum allowable income, the trustee
may take a small fee and your personal
care allowance is deducted. The remaining
amount is paid to the nursing home as
your “medical care credit.” Your income
(the portion that was over the maximum
allowable income) accumulates in the trust.
This type of trust is irrevocable, meaning it
cannot be changed or revoked. Upon your
death, the state of New Mexico’s Medicaid
program gets any money remaining in the
trust as reimbursement for the cost of your
care in the nursing home. Considering the
cost of nursing home care in New Mexico,
this is a pretty good deal.

It is important to note that a nursing home
cannot treat you differently because you
are receiving assistance from Medicaid.
You have the same rights as every other
patient in the facility, regardless of how you
are paying. (See the section on Residents’
Rights, later in this chapter)

A word of caution about qualifying for
Institutional Care Medicaid. When it
is anticipated that a loved one may need
nursing home care, many families begin
trying to take assets out of the loved one’s
name, thinking that this will help him/
her qualify for Medicaid. If the individual
owns a home or other real estate, they
may transfer the property into someone
else’s name. If the individual has money
in the bank, they may withdraw the money
and put it into another’s account or start
making gifts. These types of transfers are
never advisable without first obtaining the
advice of an attorney who has experience
in this particular area.

When an individual applies for Institutional
Care Medicaid, a fairly extensive check is
made of the applicant’s financial situation.
For almost all transfers of assets, there is
a “look back” period of 60 months. This
means that certain transfers of assets will
be scrutinized, and if the transfers are
found to be inappropriate, the applicant
will be subject to a penalty period in which
he/she will have to pay for his or her own
nursing home care. The penalty period is
determined by dividing the value of the
transferred asset by the average cost of
nursing home care in New Mexico. For
example, if, during the look back period,
you gifted your home worth $100,000 to
a friend, then you could be penalized for
19.8 months (or 100,000/5,037 = 19.8) and
will not be eligible for Institutional Care
Medicaid for those months.

Note: There are no penalties for transfers
of assets made between spouses.

It is advisable to be completely candid when
applying for Institutional Care Medicaid.
In some cases, as noted above, applicants
(and if they are married, their spouses) are
allowed to keep a substantial amount of
income and assets.

State-Run Facilities for
Nursing Home Care

What happens to those who have no
private long-term care insurance, do
not qualify for Medicaid and do not have
the resources to pay for nursing home
care on their own? Those who fall into
this category are not denied care. In New
Mexico, there are two state-run hospitals
for indigent individuals who need nursing
home level care. They are located in Ft.
Bayard and Las Vegas.


Selecting A Nursing Facility

If you require skilled nursing care and are
in the Original Medicare Plan, you can go
to any Medicare-certified skilled nursing
facility (SNF) if a bed is available. If you
belong to a Medicare managed care plan,
you must use a SNF that belongs to your
plan. If you are in a Medicare private fee-for-
service plan, you can go to any Medicare-
certified SNF if a bed is available, but you
must notify your plan prior to admission
(otherwise, you may have to pay more for
your SNF care). Instructions for notifying
your insurer should be on your insurance


If the hospital you are in has its own SNF
unit, you may be able to move to that unit
if a bed is available. If you have been living
in a nursing home or are planning to make
a long-term move to a facility, you may
want to use the SNF in that facility, if there
is one.

If you do not require skilled nursing care,
you can go to any nursing facility that has
beds available. If you are on Medicaid, you
must go to a nursing facility that accepts
Medicaid patients.

If you do not know much about the nursing
facilities in your area, there are several
resources you can check to learn more about
what is available. The discharge planner or
social worker at your hospital should have
a list of local nursing facilities, or your
doctor may have experience with some or
all of the nursing facilities in your area.
You may also call the Aging and Long-
Term Services Department’s Long-Term
Care Ombudsman Program (LTCOP) for
information on SNFs in your area at (866)
842-9230. The LTCOP advocates for the
recognition, respect and enforcement of
the civil and human rights of residents of
long-term care facilities in New Mexico.
In addition to a small number of highly-
skilled staff, many volunteers throughout
the state regularly visit nursing homes and
other long-term care facilities to ensure
that residents are properly treated. The
LTCOP’s primary duty is to investigate and
resolve complaints made by or on behalf
of residents. In discharging this duty, the
LTCOP often coordinates with other state
agencies, including the Department of
Health, the Human Services Department,
and the Adult Protective Services Division
of the Aging and Long-Term Services
Department. The LTCOP staff regularly
visit nursing facilities to speak with
residents, investigate complaints, help
solve problems and monitor quality of care.
They are a good source of information about

facilities. In addition, you can get general
information about all nursing facilities
in your area on the Medicare website at (click on or search
for “Compare Nursing Homes in Your
Area”). The information provided includes
inspection reports, number of staff, and
resident information.

If possible, visit the facilities you are
considering (or have a family member
or friend visit) to ask questions and get a
first-hand impression. Trust your senses.
If you don’t like what you see on a visit,
if the facility doesn’t smell clean, or if
staff are not helpful or don’t make you
feel comfortable, you may want to choose
another nursing facility.


Resident Rights

Nursing facility residents have certain
rights and protections under the law.
Nursing facilities must tell you these rights
as well as give a copy of the rights to all
new residents. Resident rights include:

Respect: You have the right to be treated
with dignity and respect.

Services and fees: You must be informed
in writing about services and fees before
you are admitted.

Money: You have the right to manage your
own money or to choose someone you trust
to do this for you.

Privacy: You have the right to privacy and
to keep and use your personal belongings
and property, as long as they don’t interfere
with the rights, health or safety of others.

Medical care: You have the right to be
informed about your medical condition
and your medications and to see your
doctor. You also have the right to refuse
medications and treatment.

Activities: You have the right to spend day-
to-day time in a way that means something
to you.

Virtual visitation: New Mexico has
a“Granny Cam” law which allows a nursing
facility resident or family of a resident to
have a video camera installed in their room
in order to monitor possible abuse. If you
have a roommate, the roommate must give
written permission to install the camera
before you can proceed. The intent of this
law is not only to catch abuses on film
but also to create a strong disincentive to
abusers who, knowing that there is a camera
on them, will treat the resident properly.

For more information regarding your
rights as a nursing home resident, contact
Medicare at (800) 633-4227 or visit their
website at, or you can
contact the Aging and Long-Term Services
Department’s Ombudsman Program at
(866) 842-9230 or www.nmaging.state.

Other Long Term
Care Facilities

In addition to skilled nursing facilities
and nursing homes, there are many other
types of long-term care facilities.

Assisted Living

If you can no longer live independently
but do not require the level of care
given at a nursing home, an assisted living
facility might be right for you. Assisted

living facilities bridge the gap between
living independently and living in a
nursing home. Residents of assisted living
facilities generally do not require constant
care but do need help with such tasks as
housekeeping, laundry, bathing, eating and

Assisted living is not an alternative to
nursing home care. Instead, it is a different
level of care for more independent residents.
Some assisted living facilities provide
medical care, while others provide only
room and board. Depending on the level
medical care provided, Medicaid (through
the CoLTS waiver programs, discussed
below) may cover part of the cost of some
assisted living facilities.

Continuing Care Facilities

Many assisted living facilities are also
part of what is called a “continuing care
facility.” Continuing care facilities provide
various levels of care. Usually, continuing
care facilities include independent living,
assisted living and nursing home facilities,
all within the same building or set of
buildings. Thus, residents may initially
move into the independent living facility,
and, as they require more assistance, move
to the assisted living and then the nursing
home facility. This means that a resident in
a continuing care facility can easily move
to a another part of the facility if more
assistance is required without having to
go through the stress of looking for a new
facility and relocating or adapting to a new

Other Care Options

In addition to going into a nursing home or
other facility, Medicaid also has programs
that may pay for someone to care for you in
your own home. Each program has its own
eligibility requirements. For information
on any of the following programs, contact
your local Income Support Division office
or the Aging and Long-Term Services
Department at (800) 432-2080 or www.

Program of All Inclusive Care for the
Elderly (PACE). The PACE program is
an optional benefit under both Medicare
and Medicaid available only to the frail
elderly. In order to qualify, an applicant
must be at least 55 years old, be able to
live in the community safely, have specific
long-term care needs, live in a specific
area of Albuquerque, and be eligible for
Institutional Medicaid.

The PACE program offers a comprehensive
package of medical and social services
aimed at keeping individuals as independent
as possible and out of nursing homes. The
medical services are provided at an adult
day health care center, although services
may be provided in-home and through
outside referral services, as needed. The
applicant returns home in the evening.
Meals and transportation are included.
Services are provided 24-hours a day,
seven days a week, 365 days a year.

Unfortunately, as of the date of publication
of this handbook, the PACE program is only
available in limited areas of Albuquerque.
For more information about the PACE
program, contact Total Community Care
Center at (505) 924-2650, or visit their
website at,

or visit the Aging and Long-Term Services
Department website at www.nmaging.

Medicaid Personal Care Option. The
goal of the Medicaid Personal Care Option
program is to improve the quality of life
for the disabled and the elderly and prevent
them from having to enter a nursing facility.
Personal Care allows consumers to live in
their own home and achieve the highest
level of independence possible. Medicaid
Personal Care Option is available to
individuals who:

• Are on a FULL Medicaid coverage
category (except for waiver or
nursing facility categories). The
most common category of eligibility
is an SSI category;

 • Are 21 years of age or older; and

• Meet the level of care required
for nursing facilities which is
determined by the Third-Party
Assessor provider.

There are two options available in the
Medicaid Personal Care Option program.
These options are Consumer-Directed and
Consumer-Delegated. In both options the
consumer may select a family member
(except a spouse), friend, neighbor, or
other individual as their attendant. All
attendants must be 18 years of age or older
and be able to pass a nationwide caregivers
criminal history screening.

• Consumer-Directed Option. The
consumer acts as the employer.
The consumer selects, hires, trains,
supervises, and terminates his or
her Personal Care attendant. The
type of training the Personal Care
attendant receives is at the direction
of the consumer. Up to eight hours
of training per year is paid for by
the Medical Assistance Division.
These hours can be for the consumer
or the personal care attendant. The
Personal Care agency acts as the
fiscal agent and is responsible for
processing all financial paperwork
and issuing pay-roll.

• Consumer-Delegated Option. The
Personal Care agency performs
all employer-related tasks. This
includes hiring, training, supervising,
and terminating Personal Care
attendants. The Personal Care
agency also is responsible for
processing all financial paperwork
and issuing payroll.

Services offered under the Medicaid
Personal Care Option program include:

• Mobility

• Eating

• Self-administered medication

• Skin care

• Cognitive functioning

• Household services

• Individualized bowel and bladder

• Meal preparation

• Support services

• Bathing

• Minor maintenance of assistive

Note: The Personal Care Option program
does not provide 24 hours of care per day and
may not be the most appropriate program
for some individuals. Approximately half
of the participants receive about 28 hours
of care per week.

CoLTS C Waiver Program (formerly
Disabled and Elderly Waiver Program).
CoLTS C Waiver (CCW) Program is similar

to the Personal Care Option. “CoLTS”
stands for “Coordination of Long-Term
Services.” To qualify for this program you
must be medically eligible for custodial
nursing home care, and meet the same
financial eligibility requirements as for
Institutional Care Medicaid. The benefits
and services provided under the CCW
program are more extensive than those
provided under the PCO.

Services available:

• Adult day health

• Assisted living

• Bowel and bladder services

• Case management services

• Emergency response

• Environmental modifications

• Homemaker services

• Homemaker respite

• Therapies

• Private duty nursing (RN & LPN)


Unfortunately, the CCW program is
limited. The number of positions available
is controlled and dependent upon federal
approval and state appropriations. Persons
registered for the CCW program may have
to wait on a central registry until a position
becomes available.

How to apply:

• By calling toll free (800) 432-

• The Aging and Long-Term
Services Department has created
a comprehensive statewide home
and community-based Resource
Center staffed with knowledgeable
personnel ready to register seniors
and people living with a disability
for the CCW Program.

• Assessment conducted over the

• Name placed on central registry.

Mia Via Program

Mia Via is a self-directed waiver program
which gives its recipients the power to
choose and manage the services they receive.
Medicaid recipients who are eligible for
other long-term services programs (such
as the CoLTS C Waiver Program) will be
eligible for Mia Via. Mia Via participants
can choose the services they need, hire
their own workers, and decide how and
when to spend their Mia Via budget, with
the advice of a consultant if necessary. For
more information, go to
or contact Aging and Long-Term Services.

Community Based Assistance
– Aging and Long-Term

There are a number of other resources
and programs available to assist senior
citizens. Not all programs are available
in all areas. Contact your local senior
citizen’s center, your local Office of Senior
Affairs, or the Aging and Long-Term
Services Department at (800) 432-2080, for
information about the following programs
in your community.

Senior Citizen’s Centers. Senior citizen’s
centers provide meals, activities and
information for seniors. Many senior
centers have volunteer opportunities for
seniors. Senior centers are good places to
make new friends, stay informed and keep
active, both physically and mentally.

Meal Delivery Service. Meal delivery
services, often called “Meals on Wheels,”

are available for qualified elderly and
disabled individuals. Meals are delivered
to your home.

Transportation. If you are elderly or
disabled, there may be special transportation
services provided in your area to take you
to doctor’s appointments and to do errands,
such as your shopping. Check with your
local senior center or in the telephone
directory in the county or city government
pages under “Transportation,” for
information about transportation services
in your area.

Home Assistance. Home assistance
workers, called “homemakers,” help with
light housekeeping and some cooking,
offering some relief from daily chores for
caregivers and their charges.

Home Repair. Home Repair is a program
that assists in improving and repairing
homes so that participants are able to
remain in their homes. Some of the repairs
and improvements include adding grab
bars, wheelchair ramps, and generally
increasing accessibility for the disabled and
impaired. In Albuquerque, these services
are provided by the City of Albuquerque
Home Services Program.

Adult Day-care. Just as children’s day-
care centers began to appear when both
spouses entered the workforce, adult day-
care centers are beginning to appear now
because more adults, unable to be alone,
are being cared for by their families at
home, rather than in a facility. In addition
to having trained staff supervising the
participants, the centers often serve meals
and provide supervised activities. Some
adult day-care centers will even pick up
participants from their homes. Many adult
day-care centers charge by the actual time
the participant is in the center, rather than
charging a flat fee.

Mental Health

Mental health problems, including
depression and anxiety, can come
at any age. If you think you are having
problems that are affecting your mental
health, talk to your doctor. You can get help.
Medicare, Medicaid and many insurance
plans cover both outpatient and inpatient
(hospital) mental health care.

The following describes Medicare coverage
of mental health services. Remember, if
you also have Medicaid, it will pick up
your deductible and co-insurance. If you
have Medicaid only, or have the Medicare
Managed Care Plan, you belong to an HMO,
which will determine when you qualify for
mental health services, what services you
can have and who your provider can be.
Contact your HMO for details. Insurance
plans vary as to what they will cover. Check
with your plan.

Outpatient Benefits

If you are in the Original Medicare Plan
and have Medicare Part B, Medicare
covers visits with these type providers for
mental health services:

• Doctor (psychiatrist or other)

• Clinical psychologist

• Clinical social worker

• Clinical nurse specialist

• Nurse practitioner

• Physician’s assistant

Remember, not all health care providers
are signed up with Medicare. Before your
treatment, be sure to ask if the provider you

have chosen accepts Medicare. Medicare
Part B deductibles and co-insurance
payments apply. (See Chapter Two)

Outpatient services are those that do not
require an overnight stay and can be given
in a clinic, doctor or therapist’s office, or
the outpatient department of a hospital.
Medicare covers services such as:

• Individual and group therapy by
qualified professionals (not support

• Counseling for your family to help
with your treatment

• Mental health evaluation and

• Medication management

• Individualized activity therapies as
part of your treatment

• Individual patient training and
education about your condition

• Occupational therapy that is part of
your treatment

• Prescription medicines that cannot
be self-administered (not medicines
you can take yourself)

• Laboratory tests.

• Screening for mental health
conditions during the one-time
“Welcome to Medicare” physical

Partial Hospitalization

Sometimes, your mental health care
needs are more involved than what
can be provided in visits to your doctor
or therapist’s office. You may require
“partial hospitalization,” and, under certain
conditions, Medicare will help pay for this
kind of care.

Partial hospitalization is a structured
program of active treatment that is longer
and more intense than office visits. To be
covered by Medicare, a doctor must say
that you would otherwise need inpatient
treatment. These programs are given
through hospital outpatient departments or
community mental health centers. Again,
remember to check that the program is a
Medicare provider.

Note: Partial hospitalization will cost you
more than outpatient care. Under partial
hospitalization, Medicare pays 50 percent
of most services after you meet your
deductible. On the other hand, Medicare
generally pays 80 percent for outpatient
care, just like any other Part B benefit.

Inpatient Hospitalization

When you require hospitalization for
your mental health care, Medicare
Part A helps pay in the same way as for any
other inpatient hospital care. Inpatient care
can be provided in a general hospital or in
a Medicare-certified psychiatric hospital.
The only difference is that you have a
lifetime limit of 190 days in a psychiatric
hospital. There is no lifetime limit of days in
a general hospital. Otherwise, deductibles,
co-insurance and benefit periods are
calculated exactly the same for inpatient
mental health care as for any other inpatient
hospital care. (See Chapter Two)

For more information contact Medicare
and request “Medicare and Your Mental
Health Benefits” at (800) 633-4227 or visit

Dental, Vision
and Hearing

Medicare does not cover eyeglasses,
hearing aids or most outpatient dental
work. However, there are some programs
that may assist you with these needs.

Federally Qualified Health Centers
(FQHC) provide health care services on
a sliding-fee scale for patients who have
no, or inadequate, health care coverage. In
addition, the services provided by many
FQHCs include dental and vision care, as
well as prescriptions. If you have Medicare
but have difficulty with your out-of-pocket
health care expenses, you may want to
consider seeking care at a FQHC. To find
a FQHC in your area, contact the New
Mexico Primary Care Association at (505)

The Seniors EyeCare Program (formerly
the National Eye Care Project) is a
program that links qualifying patients with
participating ophthalmologists who provide
vision services and eyeglasses free or at
reduced cost for low-income individuals.
If you are a U.S. citizen or legal resident 65
years or older, and you have not been to an
ophthalmologist for 3 years or more and do
not have an HMO or Veteran’s vision care,
you may contact (800) 222-EYES (3937)
to apply for this assistance.

The Hear Now Program is a program that
provides reconditioned hearing aids to low-
income patients at reduced costs. Call (800)
648-4327 or go to www.sotheworldmayhear.
org for more information.

For more information on any of these
programs contact the Aging and Long-Term
Services Department at (800) 432-2080.


Senior Citizens’ Resources

Entry site for seniors to locate U.S.
Government and other web sites on topics
of interest to senior citizens.

Administration on Aging

Provides links to an infinite number of
government and non-government sites for
information relevant to seniors.

New Mexico Department of Insurance

(800) 947-4722 (statewide)

(505) 827-4601 (Santa Fe)


Health insurance program for seniors and
the disabled.

(800) MEDICARE ((800) 633-4227)

TTY/TDD: 1-877-486-2048

Income Support Division (Medicaid,
SSI, food stamps, utility assistance)

Local office is listed in the telephone
directory under State Government –
Human Services Department – Income
Support Division.

Social Security Administration

Local Office is listed in the telephone
directory under U.S. Government –

Social Security Administration

(800) 772-1213

Eye Care America

Raising awareness about eye health,
screening and information about eye care.

(800) 222-3937

National Hospice Organization

Provides free consumer information on
hospice care and puts the public in direct
contact with hospice programs.

(800) 658-8898

New Mexico Health Facility

Licensing Bureau

Establishes, monitors and enforces quality
standards for health facilities in New

(505) 476-9025 (Santa Fe)

(505) 841-5800 (Albuquerque)

(505) 528-5079 (Las Cruces)

(505) 627-8343 (Roswell)

Partnership for Prescription Assistance

PPA helps provide free or nearly free
prescription drugs to patients who cannot
pay for their medications.

Total Community Care (PACE)

Available to person 55 years and older.
A day health care center offering
comprehensive set of services aimed
at keeping those, who would otherwise
require institutionalization, at home.
Currently available to Albuquerque
residents only.

(505) 924-2650

New MexicoAging and Long-Term
Services Department Resource Center

State agency assisting the elderly and
those with disabilities achieve the highest
quality of life.

(800) 432-2080

Hear Now Program

Hearing aid assistance.

(800) 648-4327

Benefits Counseling Program (HIBAC)

Provides free, unbiased information
about health care options and other

(800) 432-2080

(505) 265-1244 (in Albuquerque)


























46 - Chapter 3 - Consumer Protection New Mexico Senior Legal Handbook

Chapter Three

Consumer Protection

If you purchase goods or services for a non-
business purpose, you are a “consumer.”
The majority of businesses and salespeople
offering goods and services are honest, but
there are businesses and salespeople who
will try to cheat and take advantage of you.
Senior citizens are often targets of these
unscrupulous and dishonest businesses
and salespeople.

As a consumer, you are protected from
dishonest or unscrupulous people and
businesses by a variety of state and federal
laws; however, it is up to you, the consumer,
to enforce these laws. If you feel that you
have been taken advantage of or lied to by a
salesperson or business, contact an attorney
or the Consumer Protection Division
of the Attorney General’s office. (See
“Resources” at the end of this chapter.) It
is also up to you, as a consumer, to protect
yourself from dishonest or unscrupulous
people and businesses.


This chapter will discuss the different
types of consumer transactions, the laws
that protect consumers, how to protect
yourself, and, finally, the consequences of
“over consuming.”

Consumer Transactions

Any discussion of consumer issues
would be incomplete without offering
some general advice about dealing with
businesses and salespeople. You are your
own best protection against dishonest and
unscrupulous businesses and people. Here
are some general warnings to remember
when you are considering the purchase of
any goods or services:

• Carefully choose the people with
whom you do business. If possible,
deal with businesses and people
who are familiar to you or have
a good reputation among your
friends or in the community. Word
of mouth is a good indicator about a
business or salesperson. Remember,
if something sounds too good to be
true, it probably is.

• Do not let anyone pressure you into
buying anything at any time. There is
seldom an offer that is good “for one
day only.” Any reputable business
or salesperson will give you time to
think about what you want to do.

there is seldom an offer that is good
“for one day only.” Any reputable
business or salesperson will give you
an opportunity to think about what
you want to do. There are some types
of consumer transactions that allow
you three days to cancel a purchase
under the “Cooling-Off Rule”
(discussed at length later in this
chapter). However, this rule does not
apply to all consumer transactions.
Take time to think before you enter
into any consumer transaction, since
once you agree, you may not be able
to change your mind.

• You do not have to pay for anything
that comes in the mail that you did
not order.

New Mexico Senior Legal Handbook Chapter 3 - Consumer Protection - 47

Credit Purchases

Buying on time or credit means that
you borrow the money to pay for the
good or service. You agree to pay back the
money, plus a finance charge, in a specified
amount of time. These days it is almost
impossible to make a major purchase
without using credit. The following are
some important terms you will see when
you borrow money.

• Cash price. The cash price is the
amount a good or service would
cost if you paid cash, in full, for the
item at the time of the purchase.

• Finance charge. A finance charge is
the cost of borrowing money to pay
for a good or service. It generally
includes interest but may include
other fees as well.

• Total of payments. The total of
payments is the total amount you
will pay for the good or service over
time, which includes the cost of
the good or service and the finance

• Amount financed. The amount
financed is the initial amount you
are borrowing, also known as the

• Annual percentage rate. The
annual percentage rate is the rate of
interest you will pay for the good or
service over time. The interest rate
can be fixed, meaning it remains
the same over the life of the loan, or
it may be variable, meaning it can
change over the life of the loan.

Whenever you purchase any good or service
using credit, the federal Truth in Lending
Act requires creditors to give you a written
statement advising you of the amount
financed, the annual percentage rate, the
finance charge and the total payments for
the purchase you wish to make.

The majority of credit purchases are made
with credit cards. When you use a credit
card, you will incur a monthly finance
charge on any unpaid balance; however,
if you pay the balance in full, you may be
able to avoid the monthly finance charge. If
you are only paying the minimum monthly
payment required by the lender, you may
only be paying the monthly finance charge
and not any of the principal. In fact, the
minimum monthly payment may not even
cover the monthly finance charge, meaning
you are paying interest on the interest. If
this is the case, your balance owed will
actually grow even if you do not make
any new purchases on the account. If at
all possible, pay more than the minimum
monthly payments. If you are only able
to pay the minimum monthly payment
on your credit card(s), you may have
overextended yourself by making too many
credit purchases and should stop using
your credit cards. What to do if you have
overextended yourself financially will be
discussed later in this chapter.


Every day we enter into numerous
contracts, most of which are informal
and implied. For example, when we eat in
a restaurant, it is implied when we order
and eat our food that we will pay for it
after we are through with the meal. That
process is actually an unspoken agreement
or contract: the restaurant is providing
food in exchange for our payment. There
are some contracts, however, that are
formal, meaning there is a written, signed
agreement between the parties.

Oftentimes, you will be required to sign
a contract for the purchase of goods and
services. Other names for a contract are
“purchase agreement,” “agreement,”
“lease” and “rental agreement.” No matter
what it is called, it is still a contract. It
is imperative that, prior to signing any
contract, you read and understand what you
are signing and agreeing to do. The law
assumes that when you sign a contract,
you have read and understood the
contract. The following is some cautionary
advice to consider before signing any

• As noted above, read the contract
before you sign it. If there is
anything in the contract you do not
understand, ask questions until you
understand the whole document. If
after asking questions you still don’t
understand the whole document,
ask someone you trust (not the
person who wants you to sign
the contract) for assistance. Any
reputable business or salesperson
will let you take the contract home
to study before you sign. As noted
above, there is seldom a good or
service that is available “for one
day only.” The same good or service
will be available to you when you
understand the contract.

• Sometimes a seller will promise
you something that is not part of the
written contract in order to induce
you to sign the contract. There is
no guarantee you will get what the
seller verbally promised you
because it is not a part of the written
contract. If there are any verbal
promises or agreements between
you and the seller, make sure
they become part of the written

• Before you sign a contract, make
sure that you really want to do
what you are agreeing to do in the
contract. It is not rude, impolite or
bad manners to decline a good or
service or to refuse to enter into a
contract. Sometimes a seller will try
to appeal to your sympathy in order
to make a sale. They may tell you
a hard luck story so that you will
feel sorry for them and purchase
the good or service they are selling.
Most likely the story is not true,
and, even it were true, it is not your
responsibility to solve the seller’s

• Never sign a contract that has blank
spaces that can be filled in later.
Insist that any blank spaces in a
contract be filled in prior to signing.
If the seller refuses to do so, take
your business elsewhere.

• As noted in the introduction to this
chapter, every consumer has certain
legal rights and protections under
the law. Do not sign a contract that
takes away these legal rights. Any
reputable business or salesperson
would not ask or expect you to give
up these rights or protections.

• Before signing any contract, ask
about your right to cancel the
contract. Certain types of consumer
transactions, specifically door-to-
door sales and sales at facilities
rented by the seller on a short term
or temporary basis, are subject to
a three-day cancellation period,
commonly referred to as the
“Cooling-Off Rule.” The “Cooling-
Off Rule” will be discussed at
greater length later in this chapter.

• If you feel at all pressured or rushed
to sign a contract, don’t sign. The
good or service will still be there

after you have had a chance to think
about it.

• Keep a copy of all contracts,
receipts, payment records, billing
statements and any letters you send
or receive regarding the good or

• Make sure you keep the seller/
creditor informed of any address
changes to ensure that you receive all
billing statements, correspondence
and warranty information about the
good or service.

Finally, before you sign any contract, ask
yourself the following questions:

• Do I really want what I am
agreeing to buy? Remember, not
all transactions have a “cooling-
off” period, should you experience
buyer’s remorse.

• Do I understand the entire contract?
Saying, “I did not understand the
contract,” is not a defense. The
law assumes you have read and
understand any contract that you

• Do I know the total price I am paying
for the good or service, including
any finance charges or other fees?

• Do I know how long it is going to
take to finish paying for the good or

• Is this the best price for the good or
service? What about the quality of
the good or service? Sometimes the
least expensive option is not always
the best one. Remember, you get
what you pay for.

• Can I really afford the good or service?
If my financial circumstances were
to change for the worse, would I
still be able to make the payments
on the contract?

• Is the good or service I am
purchasing guaranteed? You don’t
want to make payments on an item
you can no longer use because
it doesn’t work. (Make sure any
guarantees are in writing.)

Shopping by Phone,
Mail and the Internet

Today, one hardly has to leave the house
to make a purchase. You can purchase
just about anything, from groceries to
cars, by phone, mail or the Internet, and
have it delivered to your door. As with
any purchase you make, it is a good idea
to make sure the company you are dealing
with, whether it is by mail, telephone or
the Internet, is legitimate.

Shopping by phone, mail or the Internet is
a convenient alternative to shopping at a
store, especially for those who have trouble
getting around. There are special rules
that cover merchandise ordered by mail,
telephone, computer and fax machine.
Under the Federal Trade Commission’s
Mail or Telephone Order Rule, a company
must ship your merchandise within the
time stated in its ads or within 30 days of
receiving your order, if no time is given. If
you do not receive the item within the time
promised, you have the option of canceling
your order and receiving a refund. If you
are applying for credit to pay for your
purchase at the same time you place your
order, and no time is stated in the company’s
advertisement, the company has 50 days to
ship your order after receiving it.

If you use your credit card to pay for
merchandise ordered by mail or phone,
you are protected by the Fair Credit
Billing Act (FCBA). The FCBA protects

you in the event of a billing error or
disputed charge. The charge could be for
an incorrect amount, for merchandise you
did not order or for merchandise you did
not accept. If you want to dispute a charge,
you need to write to the creditor at the
address for “billing inquiries” indicated on
your monthly statement. Be sure to include
your name, address, credit card number
and a description of the billing error. You
must contact the creditor in writing within
60 days after the first bill or statement
containing the error. You must pay the
undisputed portion of the bill, including
any finance charges.

You may also dispute charges for
unsatisfactory goods or services. You must
have made the purchase in your home state
or within 100 miles of your current billing
address, and the charge for the good or
service must be over $50. You must first
make a good faith effort to resolve the
dispute with the seller.

As a consumer you must always use caution
when making any purchase. The same
common sense safeguards apply whether
you are making a purchase at a store,
from a door-to-door salesperson, or by
mail, phone or the Internet. Only deal with
companies that are familiar to you and that
have a good reputation among your friends
or in the community. Remember, that if
it sounds too good to be true, it probably
is, even on the phone, through the mail or
on the Internet. Those who shop using the
Internet should use extra caution as the
rules are not as straightforward as with
other methods of shopping.

The advent of the Internet has opened up
a whole new world of possibilities and,
unfortunately, problems. There are many
legitimate uses for the Internet. You can pay
your bills, shop for everything under the
sun, make travel arrangements, and even
find a mate. However, while the Internet
promises many exciting possibilities,
you must exercise caution and use good
judgment when using the Internet.
Never give out any personal or financial
information, such as your credit card or
bank account information, unless you are
absolutely sure that you are dealing with a
legitimate and reputable business. It is also
most important to make sure that any time
you provide personal information of any
nature over the Internet, you are on a secure
site. A secure site is one that has protections
built in to prevent unauthorized individuals
from gaining access to information being
exchanged on the website. You can
sometimes tell if a site is secure by looking
at the address bar at the top of the screen. It
will contain the address for the site you are
viewing. A secure Internet site will have an
“s” after “http” in the website address, for
example “https:// . . .” Doing business on
the Internet using a secure site offers some
protection against becoming a victim of
consumer fraud; however, even using a so-
called “secure” site may not totally protect

There are many individuals who make it their
life’s work to find ways of gaining access
to secure information on the Internet. You
may have heard or read in the newspaper
about individuals who have somehow
managed to gain access into the computer
systems of major companies or financial
institutions, exposing their customers’
personal and financial information. This
is called “hacking,” and it is a crime. It is
akin to breaking into a home or business
and taking things that do not belong to you.
The information gained from breaking
into these computer systems is often used
to steal money by using the credit card

numbers or raiding the bank accounts of
the companies’ customers. Sometimes the
personal information gained from these
computer system break-ins can also be
used to steal the victim’s identity. This is
especially damaging, as the thieves may
make major credit purchases, open credit
card accounts or get into all sorts of trouble,
all using your personal information. The
damage done by this type of crime can take
years to rectify.

When doing business on the Internet, as
with any method of doing business, you
want to make sure that you are dealing
with a reputable and legitimate individual
or company. As of the writing of this
handbook, the Internet is virtually an
unregulated entity. There are different
“watchdog” groups that informally monitor
the Internet for inappropriate activity
relating to whatever their interest is. There
are watchdog groups devoted to consumer
issues. These consumer watchdog groups
put the public on notice about individuals
and companies whose business activities are
not legitimate or who defraud consumers.
Any oversight by any watchdog group is
strictly voluntary, however.

If you have done business with an Internet
company and believe you are a victim
of fraud, you can report the fraud to the
National Fraud Information Center-Internet
Fraud Watch, the Better Business Bureau
Online, the New Mexico Attorney General’s
Consumer Fraud Division or to the United
States Federal Trade Commission. (See
the “Resources” section at the end of this
chapter for the contact information for each
of these resources.)

The best practice is to thoroughly check
into any business (including an Internet
business) before you deal with it. You can
contact the Better Business Bureau Online
to see if there is any information available
about the individual or company. You can
also type the company site into a search
engine to find out if there are any reviews
or comments available online about the
company which might help you decide if
you want to do business with the company.
Additionally, you can confirm a physical
address and telephone number for the
company. If they have none, then take your
business elsewhere. It is to your benefit
to take the time to do some research. It is
very wise to exercise caution when doing
any kind of business, or simply browsing,
through the Internet.

The Cooling-Off Rule

The “Cooling-Off Rule” gives the buyer
three days to cancel purchases of $25 or
more. The Cooling-Off Rule applies only
to sales made in your home or workplace,
such as door-to-door sales, or sales at a
location that is not the seller’s permanent
place of business, such as fairgrounds,
hotels or convention centers.

Under the Cooling-Off Rule, the salesperson
must tell you about your right to cancel at
the time of the sale. The salesperson must
also give you two copies of the cancellation
form (one to keep and one to send to cancel
the sale), as well as a copy of your contract.
The contract must also explain your right
to cancel and include the name and address
of the seller, as well as the date the sale
was made. The contract must be in the
same language that the salesperson used
in his or her presentation. For example, if
the salesperson communicated to the buyer
in Spanish, the contract must also be in

If you have made a purchase or signed a
contract covered by the Cooling-Off Rule
and wish to cancel the sale or contract,
you must sign and date one copy of
the cancellation form and mail it to the
address given for cancellation. If you
were not given the cancellation form, you
may cancel by stating your desire to do
so in writing and mailing it to the address
given for cancellation. Make sure that the
cancellation is postmarked before midnight
of the third business day after the contract
date (Saturday is considered a business
day, Sundays and federal holidays are not).
You may want to consider sending your
cancellation by certified mail, as proof of
the mailing date and proof of receipt of the
cancellation are important. You do not have
to give any reason for canceling the sale.

The seller then has 10 days to cancel
and return any promissory note or other
negotiable instrument you signed, refund
all your money, tell you if any product
you have will be picked up, and return any
trade in.

The seller must either pick up any items
left with you or reimburse you for any
mailing expenses if you agree to send back
the items. If you received any goods from
the seller, they must be made available for
return to the seller in as good condition
as when you received them. If you do not
make the goods available to the seller or
say you are going to return them and fail
to, you may remain obligated under the

It is important to keep in mind that the
Cooling-Off Rule applies to very few types
of contracts. The Cooling-Off Rule should
not be a factor when deciding whether
or not to make a purchase or enter into a
contract. In other words, don’t carelessly
make a purchase or sign a contract because
you think you can later change your mind.

If you experience any problems under the
“Cooling-Off Rule,” contact the Federal
Trade Commission’s Consumer Response
Center, Federal Trade Commission,
Washington, DC 20580, or call them at
(877) 382-4357.


A warranty is either an express or implied
promise that a good or service is
actually what it is represented to be. When
you purchase a good or service, it comes
with an implied or unspoken promise that
it is what it is represented to be. Sometimes
goods or services also come with an
express or written warranty (that is part of
the contract itself) that the good or service
is what it is represented to be. Obviously,
express warranties are easier to prove than
those that are only implied.

Implied warranties are essentially a
promise that a good or service will do what
you would expect it to do. The expectation
has to be reasonable. For example, if you
contract with someone to fix a leak in your
roof, you have an expectation that after the
repair is made, your roof will no longer
leak. That is a reasonable expectation. On
the other hand, if you get hair transplants
because you want to look more attractive
to women, but even with your new, full
head of hair you find that you are still
unable to get a date, there has been no
breach of implied warranty because that is
an unreasonable expectation.

Sometimes sellers are so eager to sell you
something, they will try to convince you or
imply that their good or service is the right
one for your particular purpose. This type

of warranty is called an “implied warranty
of fitness for a particular purpose.” For
example, you go to a tire store because
you need new tires for your car. Your car
requires tires of a certain size, and the tire
dealer you have selected does not carry
tires in that size. The tire salesperson tries
to convince you that the tires he carries will
work fine on your car, even though they
are not the right size and putting the wrong
size tires on a car may cause damage to the
car and may even be dangerous.

As with other consumer rights and
protections, you must enforce your own
rights with respect to warranties. The first
step is to deal directly with the business or
salesperson who sold you the good or service.
If you have an express or written warranty,
read the warranty for instructions on how
to make a warranty claim. If the warranty
was implied, send a written complaint to the
business from whom you obtained the good
or service. Be specific about the problem
and about what you want to happen. Make
sure you include copies of your receipt,
billing statements, cancelled checks or other
documents (never send original documents,
you may never get them back). Remember
to include your name, address and telephone
number so that the seller can reach you.
Don’t delay in sending this information.
Send the information to the customer service
department if you are dealing with a large
company. If the company you are dealing
with is small, send the letter directly to the
owner. When you send the information, ask
the post office for some sort of delivery
confirmation. The cost of this service is
minimal and is valuable documentation
that the business actually received your
correspondence. Keep copies of any letters
for yourself. Be patient. You must allow the
business a reasonable amount of time to
make the situation right.

If you have waited a reasonable amount
of time and have not had your concerns
satisfied, you should contact the
Consumer Complaints Division of the
Attorney General’s office or the Better
Business Bureau. If your concerns remain
unresolved, your local TV news station or
newspaper may be interested in your story.
If you bought the warranted good or service
on credit, and still owe money, you may
not have to continue paying for that good
or service. Read your credit agreement or
contact the creditor for more information.
(See Resources)

If your concerns have still not been
addressed to your satisfaction, you have
the option of taking the business to court.
If the amount of money involved is small,
you may handle the matter on your own,
without an attorney, in small claims
court. Small claims court is called either
Magistrate Court or Metropolitan Court,
depending upon which part of the state you
live in. If the amount of money involved
is substantial, the matter is complex or the
seller has sued you, contact an attorney.

Consumer Fraud

Senior citizens are targets and victims
of consumer fraud, perhaps more often
than any other crime. The reasons for this
are many. From a practical perspective,
seniors, more than any other group, are
likely to be home during the day when a
majority of sales calls, both telephone and
door-to-door, are made. Other reasons
include the victim’s diminished capacity,
loneliness, inability to recognize a scam,
fear of being perceived as rude or impolite
and financial insecurity.

It is difficult to know exactly how many
seniors fall victim to consumer fraud every
year, as it an underreported crime. Often
seniors will not report that they have
been victimized by an unscrupulous or
dishonest person or business because they
are embarrassed or ashamed for having
become a victim.

Consumer fraud is one of the few crimes
where the victim actually facilitates the
commission of the crime. Certain behaviors
put you at risk of becoming a victim of
consumer fraud:

• When you make the initial contact
with the person or business (the
“offender”); for example, placing a
call to a telephone number seen on
a television commercial.

• When you provide information
about yourself that enables the
offender to defraud you.

• When you are charmed into
believing that the offender is your
friend, and you let your guard

• When you believe the offender’s

• When you give the offender access
to your funds, by writing a check,
giving a credit card number or bank
account number.

Other traits that may cause one to be
more susceptible to exploitation include
compassion, a trusting nature and being
easily intimidated. Unfortunately, many
people are victims of consumer fraud over
and over again, never learning from their
past experiences. In fact, the strongest
predictor of one becoming a victim of
consumer fraud is having been a victim in
the past.

How can you protect yourself from
unscrupulous and dishonest people and
businesses? First and foremost, learn to
say “No.” When someone calls on the
telephone or shows up at your door, you
simply say, “I’m not interested. Thank
you. Good bye,” then hang up the phone or
shut the door. Here are some other ways to
protect yourself:

• Take your time. As has been and
will be noted many times in this
chapter, there is seldom an offer
that is good “for one day only.”
Any reputable business or charity
will give you written information
about the good, service, investment
opportunity or charity that is the
subject of the offer. Remember the
old adage: “Act in haste, repent in

• Talk to a family member, friend
or other trusted individual prior to
responding to any offers. Remember
that your family and friends have
your best interest in mind, while the
person trying to sell you something
does not.

• Hang up if you are asked to pay a
fee to collect a prize or if you do not
remember entering the contest. Any
legitimate contest does not require
a winner to pay a fee to collect a

• Do some investigating. Call the
New Mexico Attorney General’s
Office Consumer Protection
Division to make sure that the
business or charity you are dealing
with is legitimate. Do this before
you purchase a good or service, or
donate money. (See Resources)

• Never, ever give out information
about your credit cards or bank
accounts unless you are absolutely

certain that the business or charity
with which you are dealing is
legitimate and you have thought
about and are sure you wish to make
the purchase or donation.

• If a business or charity insists on
immediate payment (for example,
suggesting you wire or send money
by overnight delivery), this is an
indication that the business or
charity is not legitimate, and you
should not deal with it.

• Put yourself on the national “Do Not
Call” list. The “Do Not Call” list is a
national registry established by the
Federal Trade Commission (FTC),
which prohibits most telephone
solicitors from contacting you. You
can add your name and telephone
number to the registry by contacting
the FTC. (See Resources)

• Remove your name from many
national direct mail lists by
contacting the Direct Marketing
Association. (See Resources)

The final thing to remember is that solicitors,
whether they use the phone or visit your
home, will say just about anything to get
you to say “Yes.” They will charm, flatter,
intimidate, stretch the truth, and some will
even lie. They will lead you to believe
that they really care about you, when all
they really care about is getting your
money. Don’t fall victim to their tactics.
Remember, you are the only one who can
protect yourself from becoming a victim of
consumer fraud.

Door-to-Door Sales

The era of the door-to-door salesman is
almost gone. There are, however, some
goods and services that are still sold from
door-to-door. The most important thing to
remember is that you do not have to talk to
a door-to-door salesperson. It is not rude,
impolite or bad manners to refuse to talk
to a door-to-door salesperson or even to
refuse to open your door to one.


Door-to-door salespeople are masters of
their trade. They often sell big ticket home
improvement items, such as siding and
replacement windows. They are friendly.
They may greet you by name, talk to you
about your family and their own family,
and seem to want to be your friend, when
in actuality their sole objective is to make a
sale. Frankly, the door-to-door salesperson
does not care about you at all. They prey
on the elderly, who may be lonely and just
happy to talk to someone. Don’t be fooled
by their tactics. After the sale is made, you
will never see them again.

You can protect yourself against the door-
to-door salesperson’s tactics. As discussed
above, you don’t have to open your door
when a salesperson comes to your house.
If you decide to open your door, or if the
salesperson catches you while you are in
your front yard, do not let the salesperson
into your house. This is for your own
safety. It is perfectly okay to tell someone
that they may not come into your house.

If you think you may be interested in
the product or service the salesperson is
selling, take some time to think about it.
Any reputable business or salesperson will
gladly give you materials and even a copy
of the contract to study before you commit
yourself. This will give you an opportunity
to check out the company and to compare
prices to see if you can get a better deal
somewhere else. If the salesperson won’t let
you do this, it is most likely not a company
you want to do business with.

If, after taking time to think about the offer
the salesperson has made, you decide to go
ahead and sign the contract, all the advice
regarding contracts in the “Contracts”
section (see above) is applicable.

Door-to-door sales contracts are one of
the few types of contracts that are covered
by the Cooling-Off Rule. This means that
you may cancel the sale or contract within
three business days of the date of the
sale or contract. The Cooling-Off Rule is
discussed at length earlier in this chapter.

Telephone Solicitation

As with door-to-door sales (discussed
above) you need to protect yourself
from those who sell goods and services
over the telephone. Telephone solicitors
use the same hard-sell, aggressive tactics
that door-to-door salespeople often use.
There are ways to protect yourself.

The best defense against a telephone
solicitor is not to speak to him or her. Once
you find that you are on the line with an
unsolicited salesperson, politely say that
you are not interested and hang up. It is
that simple. It is not rude, impolite or bad
manners; after all, they are invading your
privacy by calling in the first place on the
telephone line that you pay for.

You can also sign up for caller identification
(Caller I.D.) service through your local
telephone company. Caller I.D. allows you
to see what number is calling before you
answer the telephone. If an unrecognizable
number appears, you know not to answer
the phone. Another way to avoid calls from
unsolicited salespeople is to purchase an
inexpensive telephone answering machine.
An answering machine allows you to screen
your calls and then decide whether or not
to pick up the phone.

Finally, in 2003, Congress passed a law
that set up the National Do Not Call
Registry. The Do Not Call Registry is a
list of individuals who do not wish to be
contacted by telephone solicitors. Once
you have been on the list for 31 days, most
solicitors are prohibited from contacting
you. If you are on the Do Not Call Registry
and a prohibited solicitor contacts you,
you may file a complaint with the Federal
Trade Commission (FTC), the agency that
administers the Do Not Call Registry.

Inclusion on the Do Not Call Registry is
not automatic. You may add your telephone
number to the Do Not Call Registry by
telephone, (888) 382-1222 or (866) 290-
4236 (TTY), or by going online to www. Adding your telephone
number to the Do Not Call Registry is

The FTC is warning consumers to be wary
of scams associated with the Do Not Call
Registry. If anyone ever calls you claiming
to be from the FTC, a state agency or a
private company, offering to sign you up
for the Do Not Call Registry, do not give
any information. This is a scam. They may
be trying to get your personal information
or money. As noted above, signing up for
the Do Not Call Registry is free and can
only be done by you.

There are people who pretend to be selling
goods and services in order to obtain
personal information, such as credit card
numbers, bank account information and
Social Security numbers. Sometimes these
people prey particularly on the elderly.
Once they have this information, there is

no telling how much damage can be done.
The best way to protect yourself against
this type of crime is never to give any
personal information to anyone over the
phone, unless you are absolutely sure that
the person or business you are dealing with
is legitimate.

Mail and E-mail Solicitation

On any given day when you pick up your
mail, you will likely find mixed in with
your bills and letters notification that you
may be a winner of a lottery, sweepstakes
or contest. The notification may also direct
you to send some money to cover taxes or
service charges. Is it for real? Could you
have actually won?

There are many legitimate contests and
promotions out there, but how can you tell
the good from the bad? Generally speaking,
legitimate contests and promotions are
ones that you must enter. If you receive
notification that “you are a winner” but did
not enter the contest, chances are you are
the target of a scam. Also, if you must pay
money in order to get your prize, it is not a
legitimate contest.

With the advent of the Internet and e-mail,
an amazing amount of information has
become available at the touch of your
fingers. You can shop, pay your bills, keep
in touch with family and friends, and get
information on just about any subject
under the sun, all without leaving the
comfort of your home. Unfortunately, with
this wonderful innovation comes many
new ways to end up a victim of consumer

When you check your e-mail, you may
have noticed many unsolicited messages
for anything from prescription medications
to pornography. It is important to keep in
mind that the Internet is wholly unregulated
and anyone can make any type of claim or
post any type of information on it. While
much of the information on the Internet
is on-the-level and valid, there is some
information on the Internet that is false and
intended to victimize the reader. Because
of the unregulated nature of the Internet, it
is difficult to identify and stop those who
use the Internet to victimize.

One very prevalent type of scam is the so-
called “Nigerian” or “Advance Fee Fraud”
schemes. These scams were formerly
initiated by mail or fax; however, they are
now almost exclusively initiated through
e-mail. There are several variations of this

In one variation, the victim receives
an e-mail from an alleged “official”
representing a foreign government or
agency, usually Nigeria. The “official”
describes a situation in which he or she is
unable to access millions of dollars which
are in a “suspense account.” The “official”
seeks your assistance in transferring these
millions into a foreign bank account,
specifically your bank account. In exchange
for providing this service, you will receive
a percentage of the money. In order to
facilitate the transfer, you are asked to
send blank letterhead, your bank’s address,
telephone and fax numbers and your bank
account information. Some even encourage
you to travel to Nigeria to complete the

Another common variation involves an
alleged inheritance. The victim receives an
e-mail from what appears to be an attorney
regarding the death of a benefactor who
provided for the victim in his or her will.
Sometimes the benefactor is said to be a

long lost relative of the victim. In order
to collect the money, the victim must first
pay an inheritance tax or other government
fees. The victim may also be encouraged to
travel to Nigeria.

These schemes have become very
sophisticated. Those who are perpetrating
the fraud may use forged or false documents
bearing what appears to be official Nigerian
government letterhead and seals. They may
present false letters of credit and bank

It would seem unimaginable to most people
that anyone would respond to such e-mails.
Yet there are a large number of individuals
who are seduced by the prospect of easy
money. If you receive e-mails (or regular
mail or faxes) of this type, the best course
of action is to simply not respond but rather
forward the e-mails to the Federal Trade
Commission at Responding
to these e-mails can be costly, and in some
cases even dangerous. In fact, some who
have traveled to Nigeria in response to these
types of e-mails have actually been killed.

If you are tempted to respond to this type
of e-mail, consider this. Why would you,
out of the millions and millions of people,
here in New Mexico, the United States
and abroad, be singled out to share in this
monetary windfall? When you look at it
from that perspective, it does not make any
sense. If you have already been victimized
by this type of scheme, contact your local
United States Secret Service field office.
(See Resources)

Other Scams

Unfortunately, there are people who
make their “living” cheating other
people out of their money. There are so
many different types of scams that it would
be impossible to discuss each one in detail;
thus following is a discussion of a few of
the most widely used scams.

Pigeon Drop Scam

In this scam, the con artists work in pairs
or teams. The first con artist befriends
the victim, and the second con artist
approaches the two claiming to have found
money or valuables. After some rehearsed
conversation between the con artists,
perhaps about how excited they are and
what they would do with the money, the
con artists suggest splitting the money three
ways. They will then suggest meeting at an
attorney’s office or some other location to
split up the money. But then they wonder,
can they trust you? They ask you for some
“good faith” money, which will be returned
to you after the goods are divided. You
comply with this request and give the pair
a large sum of money. When you arrive
at the designated meeting spot later that
day, the pair are nowhere to be found, and
neither is your money.

If you are ever approached by someone who
offers to share found money or valuables
with you, common sense should tell you
that something is not right. Why would
someone offer a perfect stranger a share in
a financial windfall? The best advice is to
trust only those people you know. While a
person may seem kind, honest and friendly
on the surface, or appear to be authoritative,
they may have a dishonest ulterior motive.

Bank Examiner Scam

In the bank examiner scheme, the con
artists pose as bank examiners, FBI agents,
police officers, detectives or bank officials.

The con artist contacts you pretending to
be conducting an investigation. To assist
in this investigation, you are asked to
withdraw your money and give it to the
investigators. Your money will be returned
after the investigation is completed. Of
course, you never see your money again.

Whenever financial institutions or
government agencies conduct internal
investigations, they never use customers.
In fact, many financial institutions attempt
to protect their customers by having them
read and sign a form prior to withdrawing
large sums of money. The form alerts
customers to the existence of these types
of scams and encourages the customer to
speak to bank officials or the police if they
are a victim of such a scam.

Pyramid Scheme

A pyramid is an investment scheme in
which money is made by getting others
to join. The selling of a product is secondary.
The main focus is the recruitment of new

Pyramid schemes are illegal. Operating
a pyramid scheme in New Mexico is a
felony. If you are considering this type
of investment, you will come out a loser.
It is wise to check with the New Mexico
Attorney General’s office, prior to becoming
involved in any type of investment scheme,
to ensure that what you are about to do is
legal and legitimate.

Chain Letter

Chain letters are a variation on the
pyramid scheme, discussed above. We
have all, at one time or other, received a
letter promising riches if we send the same
letter to several of our friends, sometimes
either including or requesting a small sum
of money. The letter promises that in a
few months, we will receive hundreds
of money-filled letters. This is further
compounded by the urban legend or myth
that not responding to or “breaking” a chain
letter is bad luck.

If you receive this type of letter, you should
simply throw it away. Operating a pyramid
scheme is a felony in New Mexico.

Home Equity Loan Scams

For many seniors, the equity in their home
is their only asset. Some seniors are
tempted to utilize the equity in their home
to help make ends meet, to pay off bills or
other legitimate reasons. You should use
special caution when choosing a lender, as
there are many unscrupulous lenders who
prey on senior citizens, the end result being
the loss of the largest and, in some cases,
the only asset you had.

The techniques used by these unscrupulous
lenders are varied, but there are some
similarities in the various methods.
Generally, the first step is to get the
homeowner/victim to sign a first, second
or third mortgage. All this requires is the
homeowner’s signature. The homeowners
have no idea what they are signing, as the
documents are complicated and, to further
compound the matter, are written in very
fine print. Perhaps out of embarrassment or
intimidation, the homeowner will not take
the time to actually read the documents, or,
if they have actually read them and don’t
understand them, will not seek assistance.

The terms of the loan are very unfavorable
to the homeowner, with an extremely high

interest rate and high up-front costs. There
may be a balloon payment at the end of the
term of the loan.

These loans are a boon to the lender who
makes an enormous profit if the loans are
paid off due to the high interest rates and
other charges, and, if the consumer fails to
pay and defaults on the loan, the lender then
forecloses. Either way, the lender comes
out on top, and the consumer loses.

Payday Loan Scams

Sometimes it is difficult to make ends
meet, especially if you are a senior
living on a fixed income. You may be
tempted to take out a small, short-term loan
from any one of a number of businesses
such as “payday loans,” “cash advance
loans” or pawn shops. These small, short-
term loans typically work as follows: the
borrower writes a personal check for the
loan amount, plus whatever fees the lender
requires. The check is post-dated (usually
for two- or three-weeks time ahead), and
that is when the loan is due to be repaid.
When that date arrives, the borrower has
three options. One option is to let the
lender cash the post-dated check, and the
transaction is completed. Another option
is for the borrower to repay the loan and
fees in cash, and, again, the transaction is
completed. Unfortunately, what commonly
occurs is the final option: the borrower
“rolls” the loan over, meaning the borrower
extends the term of the loan. In order to do
this, the borrower pays any fees associated
with the initial loan again. This scenario
is repeated over and over, until the fees
end up amounting to more than the initial
amount borrowed.

While these loans are relatively easy to
get, even for those whose credit is less
than perfect, you should avoid them if at
all possible. According to the AARP, the
typical APR is 391 percent and can even be
as high as 1,000 percent. If you are unable
to pay back the initial amount borrowed,
plus any additional fees on the loan’s due
date, you are at risk of getting trapped in an
endless cycle of debt, the amount of which
far exceeds the original amount borrowed.

The really appalling thing about these
types of loans, which, as noted above, can
sometimes have an APR as high as 1,000
percent, is that they are perfectly legal and
thus, technically, not a scam. However,
the people and companies who make
these types of loans have been known to
use questionable methods when trying to
collect delinquent accounts. The AARP
suggests several alternatives to obtaining
this type of loan, such as borrowing from
family or friends or seeking a small loan
with a reasonable interest rate from your
bank, savings and loan, or credit union.
You might also consider taking a small
cash advance from a credit card. Even
though the interest rate on credit cards is
rather high (typically around 18 percent), it
is still a better rate than getting a “payday”
type of loan.

Work-at-Home Scams

Everyone has probably seen the posters
tacked on to telephone or light polls,
proclaiming: “Work part-time for full-time
pay!” “Earn money working at home!”
“Earn up to $3,000 per month working
from home!” It sounds too good to be true,
and it is. According to the AARP, con artists
running work-at-home scams cheat people
out of $427 billion dollars a year.

There are several types of work-at-home
scams, including: medical billing, envelope

stuffing, assembly work and stand-alone
business opportunities. Some of these
businesses run like a pyramid scheme,
with money being made by bringing in
new recruits. A common characteristic of
many work-at-home scams is that you are
required to send money up front for the
things necessary to run the “business,” such
as contacts to get started in the business,
supplies to assemble into products, or
“personal coaching” and training.

The wisest course of action is to simply
pass on any work-at-home business
opportunities. After all, if it were really
that easy to make large amounts of money
stuffing envelopes, wouldn’t everyone
clamor for such an opportunity?

The preceding examples are just a fraction
of the many types of scams currently being
perpetrated against senior citizens. If you
have been a victim of a scam, or someone
has attempted to victimize you, contact your
local police and the New Mexico Attorney
General’s office Consumer Protection
Division for assistance. (See Resources)


What are your options if you, like
millions of other Americans, overuse
your credit? The first thing that comes to
people’s minds when they find themselves
with more debt than they can possibly repay
is bankruptcy; however, bankruptcy is not
always right or necessary for everyone. This
section will outline the options, including
bankruptcy, available to those who find
themselves unable to manage their debt.

Seniors get into debt for many reasons. The
most common reason is the use of credit
cards to help make ends meet. Seniors whose
only income is Social Security oftentimes
do not have enough money each month to
satisfy even the most basic needs of shelter
and food. That does not include healthcare
costs, most notably prescription drugs. For
those seniors who are not willing to choose
between food and medicine, credit cards
may be their only option. Use of credit cards
to help make ends meet, however, leaves
one with a stack of bills that they cannot
pay because they are using the credit card
to make ends meet. It becomes a vicious
cycle of taking a cash advance on one card
to pay the minimum monthly payments on
the other cards. In the meantime, because
you are only paying the minimum payment
(which may not even cover the interest),
the balances are going up rather than down.
Soon, you find yourself in a situation that
seems insurmountable. What should you


The first thing that comes to most peoples’
minds is bankruptcy. Bankruptcy is
a process that affords protections to both
the debtor and his or her creditors. There
are several different types of bankruptcy.
The type of bankruptcy you file depends
on the type of debt involved and the type
and amount of your assets. The most
familiar types of bankruptcies are Chapter
7, 11 and 13. Chapter 7 bankruptcy sells
the debtor’s assets and disburses those
assets to the creditors. Any remaining
debt is discharged. Chapters 11 and 13
bankruptcies involve a reorganization and
adjustment, respectively, of the debtor’s
debts, meaning the debtor still pays some
or all of their debts.

There are costs involved with a bankruptcy.
There is a filing fee, which cannot be
waived; however, the bankruptcy court

will allow you to pay in installments.
Additionally, you will need to hire an
attorney to handle the bankruptcy for you.
It is not recommended that you attempt to
handle a bankruptcy without the assistance
of an attorney.

Claim of Exemptions and
“Judgment Proof” Status

If you are sued by a creditor, and the
creditor obtains a judgment against
you, New Mexico law may provide some
protection for your income and assets and
may eliminate the need to file for bankruptcy.
The following sections describe in general
terms the protections available to debtors
under New Mexico law. If you should find
yourself deeply in debt or with a judgment
entered against you, the best course of
action is to seek the advice of an attorney
(see the “Resources” section at the end
of the chapter), as each person’s situation
is unique. What works for one individual
may not work for you.

Creditors have several options available
to them to collect a judgment based on an
uncollected debt. If the debtor owns real
estate, the creditor can place a lien on the
property. If a lien is placed on real estate
owned by the debtor, the creditor can move
to foreclose the lien, forcing a sale of the
property, or wait until the debtor sells the
real estate and be paid from the proceeds
of the sale. A creditor can seize and sell
a debtor’s personal property to satisfy a
judgment based on an outstanding debt.
If the debtor is employed, the creditor can
have the debtor’s wages garnished. The
debtor’s bank accounts are also at risk for
garnishment. Garnishment is a process
in which the court orders a third party to
turn over the debtor’s income or assets
controlled by that third party (an employer
is most often the third party). In short,
income and assets are involuntarily taken
from the debtor by a creditor to satisfy a
judgment based on an outstanding debt.
Among other things, a debtor’s wages and
bank accounts are subject to garnishment.

Before a creditor can use any of the above
methods of collecting an outstanding debt,
the creditor must first obtain a judgment
against the debtor. In order to do this, the
creditor must file a lawsuit against the
debtor. Many debtors do not have any
defenses as to why they cannot pay the debt
(being elderly and on a fixed income, while
difficult, is not a defense to nonpayment of
a debt). Thus, the creditor almost always
obtains a judgment against the debtor for
the amount of the outstanding debt, interest,
attorney’s fees and court costs. The interest
on the outstanding debt continues to accrue
until the debt is paid.

Note: While most seniors who owe
outstanding debts have simply overextended
themselves, there are circumstances where
a debtor may have defenses to nonpayment
of an outstanding debt. For example, an
error on the part of the creditor, fraud and
some predatory lending practices may give
rise to a defense that the debtor may use. The
following are not defenses to nonpayment
of an outstanding debt: being elderly, being
disabled, not reading the contract, being
on a fixed income, losing a job, or losing
a spouse. These circumstances, while
difficult, do not relieve a debtor from the
obligation of repaying a debt.

While creditors do have a wide range
of options when attempting to collect a
judgment based on an outstanding debt,
there are some protections afforded debtors

under New Mexico law. These protections
may eliminate the need for a bankruptcy.

With respect to a debtor’s income, there
are several limitations as to what and how
much a creditor can garnish. For example,
a debtor’s employment income can only be
garnished if the debtor earns at a minimum
an amount equal to the federal minimum
hourly wage multiplied by 40 hours. A
creditor is also limited in how much of
a debtor’s employment income they can
garnish. A debtor is allowed to keep 75
percent of his or her disposable income
(salary less social security, federal and state
withholdings, and any other deductions
required by law) or an amount equal to the
federal minimum hourly wage multiplied
by 40 hours, whichever is greater. Whatever
employment income remains after applying
the above formula is given to the creditor
to be applied to the outstanding debt. If all
or part of a debtor’s income is derived from
retirement or pension funds, including
Social Security, these sources of income
are exempt from garnishment.

Note: Income from pension and retirement
are by law exempt from garnishment.
However, once the pension or retirement
income is in a bank account, it is subject to
garnishment. You may be able to recover
this income, but it may be difficult and

In addition to protection for a debtor’s
income, the law also offers some protection
for a debtor’s real and personal property.
New Mexico law exempts some real and
personal property from being seized and
sold by a judgment creditor to satisfy
an outstanding debt. Each person has
the following exemptions that protect
your property from ordinary judgment

• Homestead exemption. Your home
equity up to $60,000 per person or
$120,000 for two people owning
the home jointly. This exemption
does not apply to taxes, mortgages
or liens placed on the title because
of work done on the house.

• Exemption in lieu of a homestead
exemption. If you cannot or choose
not to claim a homestead exemption,
you are entitled to an exemption
of real or personal property in the
amount of $5,000.

• Life, accident, and health insurance
benefits and life insurance

• Personal property worth $500.

• Tools of the trade worth $1,500.

• A vehicle valued at $4,000 or a
couple could have one vehicle
valued at $8,000.

• Jewelry worth $2,500.

• Social Security, pension or
retirement benefits.

• Clothing, furniture, books, medical
or health equipment being used for
the health of the person, not for his
or her profession.

This is not a complete list of the available
exemptions. You should consult with an
attorney to determine which exemptions
apply to you. (See Resources)

The exemptions do not apply if the
personal property is used as security. For
example, if you purchased an automobile,
and it was used as security for the loan,
the vehicle exemption would not apply. As
noted above, if the debt to be collected is
based on taxes owed, the exemptions do
not apply. Finally, if the attempt to collect
the debt is based on past due child support
or delinquent federal student loans, the
exemptions do not apply.

The protections available to debtors
under New Mexico law are not automatic.
The debtor must take steps to put these
protections in place. If you are sued by a
creditor, and the creditor obtains a judgment
against you, you will be served with several
very important documents, including a
“Notice of Right to Claim Exemptions
(Garnishment),” “Notice of Right to Claim
Exemptions from Execution,” “Claim
of Exemption from Garnishment,” and
“Claim of Exemptions on Execution.” You
must fill out these forms in order to claim
the exemptions that apply to you. You have
only 10 days to fill out these forms and
file them with the court, or you will lose
your right to claim any of the exemptions
discussed above. If you do not claim your
exemptions, the creditor will obtain a writ
of execution for seizure of your property.

If your only income and assets consist of
items listed in the above exemptions, you
are what is called “judgment proof.” This
means that if a creditor were to obtain a
judgment against you, there would be no
way for that creditor to collect the judgment
because your income is protected and you
have nothing that can be turned into cash to
satisfy a judgment. A few words of caution
about judgment-proof status. First of all,
if a person whose income and assets fall
under the above exemptions makes credit
purchases knowing he or she cannot pay
the creditors, their judgment-proof status
may not act as a shield to protect against
the creditors. The protections provided
by New Mexico law are not intended to
facilitate fraud. Secondly, if you default
on your unsecured credit, your good credit
rating will be lost.

One of the hardest things to face when
dealing with debt issues is the constant and
sometimes harassing calls from creditors.
In some circumstances, there are laws that
protect debtors from this type of harassment.
You should contact an attorney to see if
these protections are available to you (see
resources). The best way to deal with these
harassing calls is simply not to speak to the
caller. Just hang up the phone. You may
also use the caller identification service
provided by your local telephone company
to determine whether or not to answer the
call, or you may purchase an inexpensive
answering machine and screen your calls.

A final word of caution when dealing with
debt issues: do not give away your assets
to avoid paying your debts. Some people
who are experiencing financial difficulties
are tempted to transfer assets out of their
names and into the names of their family
members in an attempt to shield their assets
from creditors. These types of transfers are
illegal and will be voided by the court. A
debtor may not transfer assets in an attempt
to avoid paying a judgment creditor.

If you find yourself in a financial bind and
are unable to pay all of your creditors,
the first thing you should do is stop using
your credit cards and live on a cash basis.
You need to take a realistic look at your
finances, set your priorities and put your
money into the necessities, such as rent or
mortgage, utilities, food and healthcare.
Finally, you should consult with an attorney
to determine if your income and assets
are such that New Mexico law would
provide sufficient protection or if filing
for bankruptcy is the appropriate course of
action. (See Resources)


New Mexico Attorney General’s Office

Consumer Protection Division

State agency that investigates consumer

(800) 678-1508

Federal Trade Commission

Federal agency working to prevent
consumer fraud.

(877) 382-4357

(866) 653-4261 (TTY)

Better Business Bureau

(703) 276-0100

Direct Marketing Association

Mail Preference Service

PO Box 643, Carmel, NY 10512

Lawyer Referral for the Elderly

Program (LREP)

Free legal advice and brief services to
New Mexico seniors, 55 and over, via a
telephone helpline.

(505) 797-6005 (Albuquerque)

(505) 876-6657 (outside Albuquerque)

Law Access New Mexico

Legal assistance for low-income New
Mexicans via a legal helpline.

(505) 998-4529 (Albuquerque)

(800) 340-9771 (outside Albuquerque)

Senior Citizen’s Law Office

Offers legal services to Bernalillo County
residents 60 and over.

(505) 265-2300



66 - Chapter 4 - Housing New Mexico Senior Legal Handbook

Chapter Four


Housing Assistance

Public housing was established to assist
low-income, elderly and disabled
individuals and families obtain safe, decent
and affordable housing. Public housing
comes in all shapes, sizes and types, from
single-family houses to high-rise apartment
buildings. According to the United States
Department of Housing and Urban
Development (HUD), approximately 1.2
million households are living in public

The term “public housing” is a general one
that applies to several different programs.
There are dwellings built specifically as
housing for low-income individuals and
families, commonly referred to as the
“projects.” There are also dwellings that
have been converted into public housing.
Finally, there are voucher programs,
commonly known as the “Section 8”
housing program. The Section 8 program
deals with properties that are owned
by private individuals or other private

The federal government, through HUD,
administers aid to local public housing
authorities (PHAs), which in turn manage
and administer public housing to eligible
individuals and families. Eligibility for
public housing is based on: 1) income; 2)
whether you qualify as an elderly person,
a disabled person or as a family; and 3)
your status as a U.S. citizen or eligible
immigrant. If you meet the aforementioned
criteria, your local PHA may also check
your background (including your criminal
history) to determine the likelihood of your
success as a tenant. Your application will
be denied if your past habits and practices
indicate a high risk of failure as a tenant.
Examples of problematic habits and
practices include having a criminal record
or a history of disruptive, inconsiderate
behavior, paying rent late or not at all, or
causing property damage.

If you are interested in finding out more
about public housing in your area, look in
the telephone directory in the “Government”
section, under your city or county’s heading
for “Public Housing” or “Housing.”

Public Housing

As noted above, the term “public
housing” is a general term for housing
tied to some form of governmental
assistance. Technically, public housing is
housing owned by a governmental entity
(city, county, state, or federal) and leased
to low-to moderate-income individuals
and families who meet certain eligibility
criteria. There are very few public housing
projects in New Mexico, with the majority
of those being in Albuquerque.

If you meet the income and other eligibility
requirements for public housing, you will
pay no more than 30 percent of your income
for rent, with the difference paid by HUD.
If your income goes up, your rent may go
up as well. If your income goes down, your
rent must also go down.

Those living in public housing have rights
most other tenants do not have. If you live in

New Mexico Senior Legal Handbook Chapter 4 - Housing - 67

public housing and have a complaint against
the PHA, there is a grievance procedure
that must be followed. Additionally, certain
steps must be followed before a public
housing tenant can be evicted. While all
of the aforementioned provisions are in
place to protect the tenant, there are other
provisions that benefit the landlord and
oftentimes work to the detriment of the
tenant. There has been in place for some
time a “one-strike” policy with respect
to the commission of certain crimes on,
near, and sometimes off the public housing
premises, by the tenant, a member of the
tenant’s household, or someone within the
control of a tenant (in other words, a guest).
This “one-strike” policy provides for the
eviction of the public housing tenant for the
commission of a crime, even if the tenant
was not the one who committed the crime.
Thus, a public housing tenant can be evicted
for the actions of someone wholly unrelated
to him or her, if it is found that the tenant
had “control” over the individual. Having
control over an individual can simply
mean that the person is your acquaintance
or the acquaintance of someone in your
family, and that person committed a crime
on or near (and sometimes off) the public
housing premises.

Unfortunately, the demand for public
housing far exceeds the availability of such
housing. In many cities, there are long
waiting lists. It is a good idea to apply for
public housing through more than one PHA
to give yourself the best chance of actually
getting into the program.

Section 8 Housing

In New Mexico, most public housing
units are not owned by the government
but are owned by private citizens or other
private entities. Public housing owned by
a private citizen or private entity is called
Section 8 housing (now known as “Housing
Choice”). As with public housing owned
by the government (discussed above), you
must meet certain eligibility requirements
in order to qualify for Section 8 housing,
requiring income checks and investigation
into your background. If you are accepted
into the program, you will receive a
“voucher.” The voucher entitles you to
choose the dwelling of your choice, whether
that is an apartment, a single-family home,
a condominium or a townhouse. The
landlord, however, has to agree to take
the voucher and not all landlords will
take a Section 8 voucher. When you find a
dwelling to rent, you only pay an amount
equal to 30 percent of your income as rent,
with the PHA paying the other 70 percent.
As with government owned public housing,
the “one-strike” policy, discussed above,
applies to Section 8 voucher tenants.

There are two different types of vouchers.
One is called a “project-based voucher,”
and the other is called a “tenant-based
voucher.” A project-based voucher attaches
to the particular rental unit. Thus, if the
individual or family moves, they do not have
the right to continued housing assistance,
although they can reapply. With a tenant-
based voucher, the voucher attaches to the
individual or family, and not the particular
unit. Consequently, if they decide to move,
they can take the voucher with them to their
new dwelling, as long as the landlord takes
Section 8 vouchers. Given the portability,
tenant-based vouchers are more desirable.
As with government owned public housing,
the demand for Section 8 vouchers far
exceeds the number available, making for
long waiting lists in many New Mexico

Rights And

Many seniors find it more convenient
and affordable to rent rather than
own their residence. When entering into
a landlord/tenant relationship, each party
has rights, responsibilities and duties. It
is important to understand exactly what
rights you have, and what duties and
responsibilities you are undertaking,
before you enter into an agreement to rent
a residence. The Uniform Owner-Resident
Relations Act governs the rental of dwelling
units in New Mexico.

The Rental Agreement

When you find a place that you
would like to live, whether it is a
house, apartment, townhouse, condo, or
mobile home, you will enter into a “rental
agreement” with the landlord. As with all
contracts, it is always recommended that
a rental agreement be in writing for the
simple fact that putting such agreements in
writing protects both you and the landlord.
A typical rental agreement establishes the
amount of rent, when rent must be paid, the
length or term of the agreement, the amount
of the security deposit, and how each party
must give notice to end the agreement, as
well as many other provisions.

Typical tenancies (the length of time a
dwelling is rented) run from year to year or
from month to month. Most tenancies are
for a fixed term of one year initially and after
that year is up, run from month to month,
unless the parties agree to enter into a new
lease for a term of another year. The length
of the tenancy usually governs the amount
of notice either the landlord or tenant must
give one another to make any changes. For
example, if your tenancy is from month to
month, the landlord will have to give you
at least 30 days notice before raising your
rent. On the other hand, a tenant has to
give the landlord at least 30 days written
notice before moving out. If you have a
fixed-term lease, for example for a one-
year term, your landlord cannot raise your
rent during that year. You cannot move out
during that year either, however, without
possibly incurring damages, such as owing
rent for the time while the landlord tries
to rent out your apartment. If you have a
fixed-term lease, you may or may not have
to give notice that you intend to move out
at the end of the term. You should consult
your lease to make sure.

Prior to taking possession of a rental unit,
inspect the unit with the landlord to ensure
that the unit is in good condition. Make a
list of the furnishings, if any, and note the
condition of each item. Additionally, you
and the landlord should make a note of any
defects in the condition of the unit. If you
and the landlord disagree about anything
on the list, note that there is disagreement
and initial it. Taking pictures of the rental
unit prior to taking possession may also
be helpful. Written agreements and
documentation are your best evidence
and defense in the event of a dispute
with your landlord.


When entering into a rental agreement,
it is customary for the landlord to
ask the tenant for a deposit. This deposit,
sometimes referred to as the security
deposit or damage deposit, protects the

landlord against losses from unpaid rent
or extraordinary damage to the property.
A landlord may not charge you for normal
wear and tear to the rental unit. Taking
pictures of the unit prior to moving in is
a good idea in the event there is a dispute
about the condition of the unit when you
move out. It is also a good idea to get a
dated receipt for the entire amount of the
deposit paid.

A landlord may not charge a deposit of
more than one month’s rent on any lease
less than one year in length. If the lease
is for one year or longer, the landlord
may collect a deposit for more than one
month’s rent, but the landlord must pay the
tenant the current passbook interest on the
whole deposit. Under New Mexico law, a
landlord may not require a deposit that is

A landlord may require a tenant to pay the
last month’s rent as further security. The
landlord does not have to pay interest on
this amount.

Upon moving out of a rental unit, the
landlord is required to return the damage
or security deposit to you within 30 days of
the date the rental agreement ends or when
you move out, whichever is later. If the
landlord keeps part or all of a deposit, he or
she must provide an itemized written list of
the deductions from the deposit along with
any remaining balance. If the landlord fails
to return the deposit, or send a written list
of deductions and any remaining balance
within 30 days, the landlord loses the right
to withhold any portion of the deposit,
loses the right to make any type of claim in
court with respect to the deposit, and will
be liable for attorneys’ fees and court costs
in any action brought by you to recover the

Landlord’s Responsibilities

In entering into a rental agreement, a
landlord has many responsibilities.
The first responsibility is to hand over
possession of the rented premises to the
tenant at the time specified in the rental
agreement. If the landlord fails to do this,
the tenant is not responsible for any rent
until possession is delivered. The tenant
may also:

• Terminate the rental agreement
effective immediately upon written
notice to the landlord. The landlord
must return all prepaid rent and any

• Demand that the landlord perform
under the rental agreement; in
other words, deliver possession of
the rental unit to you. The tenant
may also maintain an action for
possession of the premises against
the person or persons who are
wrongfully in possession.

A landlord must also:

• Comply with the requirements of all
applicable housing codes affecting
health and safety.

• Make repairs and do whatever is
necessary to keep the premises in a
safe condition.

• Keep the common areas of the
premises in a safe condition.

• Maintain all systems (electrical,
plumbing, etc.) in good and safe
working order.

• Provide and maintain a means for
the collection and removal of trash.

• Supply running water, both hot
and cold, and reasonable heat at all

Tenant’s Responsibilities

The tenant also has responsibilities under
the rental agreement, first and foremost
to pay the rent and pay it on time. If you
pay with cash, make sure you always get a
receipt from the landlord or owner. Tenants
also must:

• Comply with the requirements of all
applicable housing codes affecting
health and safety.

• Keep the rental unit in a clean and
safe condition, and, when moving
out, leave the unit in a clean
condition, except for normal wear
and tear.

• Dispose of all trash in a clean and
safe manner, as provided for by the

• Keep all plumbing fixtures in the
rental unit as clean as their condition

• Use all systems (electrical,
plumbing, etc.) in a reasonable

• Not destroy, damage or remove
any part of the rented premises, nor
allow anyone else to do so.

• Not act in such a way that disturbs
the quiet and peaceful enjoyment of
other tenants on the premises.



As noted above, one of the many
responsibilities of a landlord is to
keep the rental unit in good repair and in a
safe condition. If a landlord fails to make
necessary repairs that impact the health
and safety of the occupants of the rental
unit, you have several options. The first is
to give the landlord written notice of the
repairs that need to be made. This written
notice must also state that if the necessary
repairs are not made by a specified date (at
least seven days from the landlord’s receipt
of the notice), the rental agreement will end.
If the landlord makes a reasonable attempt
at the repairs within the time specified in
the written notice, you may not end the
rental agreement. If after receiving written
notice, the landlord still fails to make the
necessary repairs, you may end the rental
agreement, and the landlord must refund
any prepaid rent and deposits to you.

Another option you may use if a landlord
fails to make necessary repairs is rent
abatement. Rent abatement is reducing the
amount of rent paid to reflect the reduced
value of the rental unit resulting from
failure to make necessary repairs. The first
step is to notify the landlord in writing that
if the necessary repairs are not made within
seven days of receipt of the notice, the rent
will be abated. You may reduce the amount
of pro-rata daily rent by one third for each
day from the date the landlord is notified
through the day the necessary repairs are
completed. If the condition of the rental
unit is such that it cannot be lived in, and
you actually do not live in the rental unit,
you may abate the rent 100 percent from
the date of notification through the day the
necessary repairs are completed.

There are some repairs for which use of rent
abatement is not appropriate. You may not
use rent abatement for repairs on items that
are considered amenities, such as exercise
equipment in the apartment complex gym.
Rent abatement is intended only for repair
of those items that affect the habitability
of the rental unit, such as heat, water and
electricity, to name just a few. A broken
exercise cycle in the apartment complex
gym does not affect the habitability of the
rental unit.

Neither of the two options described above
are lawful unless the proper notice is given
to the landlord. The purpose of the notice
requirements is to give the landlord one
final opportunity to make the necessary
repairs. Failure to give the required notice
could result in the tenant being sued
by the landlord for breach of the lease


The most important thing to know
about evictions is that no one can
remove you or your possessions from
your rental unit without an order issued
by a judge.

If you fail to pay all or part of the rent, the
first thing a landlord must do is give you
written notice that you have three days to
pay the rent. If, after written notice, you
still do not pay the rent, the landlord then
must go to court to have you evicted. If you
move out before the landlord evicts you,
you may still be responsible for any unpaid
rent owed to the landlord.

If you have violated the rental agreement in
some other way, the landlord may give you
written notice that you have seven days to
correct the violation. If you fail to correct
the violation, the landlord may go to court to
evict you. If you commit the same violation
within six months, the landlord does not
have to give you an opportunity to correct
the violation, only written notice that the
rental agreement will end in seven days. If
you commit what is called a “substantial”
violation (for example, engaging in illegal
activity), the landlord only has to give you
three-days written notice that the rental
agreement will end and does not have to
give you any opportunity to correct the
violation. If you choose to move out before
the landlord evicts you, you may still be
responsible for any money you may owe.

If the landlord goes to court to evict you,
you do not have to move out when you
receive notice of the court proceeding.
You have every right to fight the eviction
in court. You may present a defense to
the landlord’s claims, submit evidence,
and present witnesses on your behalf. The
landlord must prove that you violated the

A landlord may not lock you out of your
rental unit or remove your possessions
without a court order. Also, a landlord
may not shut off your utilities. Finally, a
landlord may not retaliate against you for
exercising or enforcing your rights under
the lease or the Uniform Owner-Resident
Relations Act.

The rules relating to personal property left
at a rental unit after a tenant moves out
are too complex to be dealt with in this
publication. You should seek the advice
of an attorney. Better yet, always remove
all of your personal property from a rental
unit when you move out.

Mobile Home
Park Living

Many seniors are attracted to mobile
home park living because it is
more private than apartments, relatively
inexpensive and very convenient. Mobile
home park living does, however, present
a unique set of issues because you do not
own the land upon which your home sits.
Because of this, there are several safeguards
built into the law to help protect those living
in mobile home parks.

The first safeguard is that the rental
agreement must be in writing and must
include the following provisions:

1. The length of the lease, the amount
of the rent and the amount of rent
increases (if any) for each of the
preceding two years.

2. The day the rental payment is due.

3. The day when rent will be considered

4. The rules and regulations of the
park currently in effect.

5. The zoning applicable to the park

6. The name and mailing address
where a decision of the manager
may be appealed.

7. The name and mailing address of
the park.

8. All charges to the tenant other than

9. An explanation of the tenant’s
right to request alternative dispute

The second safeguard is that the landlord
must give the tenant advance, written
notice if he or she wants the tenant to move
out. The written notice is called a “Notice
to Quit” and should include the following:

1. The name of the landlord or of the
mobile home park.

2. The mailing address of the

3. The location or space number where
the mobile home sits.

4. The county in which the mobile
home is located.

5. The reason for ending the
tenancy, and the date, place, and
circumstances of any acts allegedly
justifying ending the tenancy. The
landlord must have a valid reason
for asking you to move out.

The notice must be either hand delivered to
the tenant or posted at the main entrance to
the mobile home. If service is by posting,
the notice must also be sent by certified
mail, return receipt requested. A tenant has
at least 30 days from the end of the rental
period during which the notice is received
to move his or her mobile home. An owner
of a multi-section mobile home has at least
60 days to move.

Mobile home parks may adopt rules and
regulations concerning the residents’ use
and occupancy of the park. The rules
and regulations must be explicit, non-
discriminatory, and reasonable. New or
amended rules and regulations must be
submitted to the tenants for comment at
least 60 days prior to being implemented.
All or any portion of a mobile home park
may be designated for adult only occupancy
after six months’ notice to the residents.

If a mobile home park landlord provides
utility services for the tenants, he or she
may not charge the tenant more than the
amount he or she paid for the utility services.
The landlord must give reasonable access
to records of meter readings taken at the
tenant’s mobile home space.

Going to Court

The Metropolitan Court usually handles
landlord/tenant issues in Bernalillo
County. In the rest of the state, Magistrate
Courts (small claims courts) handle landlord/
tenant issues. The courts provide forms for
the filing of actions and answers. Evidence
necessary for presenting a case may include

documents (for example, leases, receipts,
bills, and copies of any notices given by
your landlord), photographs, and witnesses.
Think carefully before proceeding without
an attorney, as you will not receive any
assistance from the court. You may want
to consult an attorney if you have a good
defense, or if your case is a complicated
one. If you are a New Mexico resident over
age 55, you can call LREP for assistance.
(See Resources)


Landlord/Tenant Hotline

(505) 983-8442 (Santa Fe)

New Mexico Legal Aid

Civil legal services for low-income New
Mexicans. See the “Attorney” listing in
the yellow pages of your local telephone
directory for the telephone number of the
Legal Aid office nearest you.

Law Access New Mexico

Legal assistance for low-income New
Mexicans via a legal helpline.

(505) 998-4529 (Albuquerque)

(800) 340-9771 (Outside Albuquerque)

Public Housing Authority (PHA)

Administers public housing programs for
low-income individuals. Look in the blue
Government pages of your local telephone
directory under your county or city for the
PHA nearest you.

Lawyer Referral for the Elderly

Free legal advice and brief services to
New Mexico seniors, 55 and over, via a
telephone helpline.

(505) 797-6005 (Albuquerque)

(800) 876-6657 (Outside Albuquerque)

United States Department of Housing

and Urban Development (HUD)

Albuquerque Regional Office

625 Silver Ave. SW, Suite 100

Albuquerque, NM 87102

(505) 346-6463





74 - Chapter 5 - Property Ownership New Mexico Senior Legal Handbook

Chapter Five

Property Ownership

Real Property

Houses and land are real property.
You can sell, transfer, will or give
away your real property. To prove you own
the property, you usually need a written
deed which shows that you have title to
the property. If you want to transfer the
property to someone else, you will need to
prepare a new deed. The person who owns
the property and who grants the property to
someone else is called the “grantor.” The
“grantee” is the person who is to receive
the property.

Forms Of Property

In New Mexico, legal title to property is
usually held in one of three ways: sole
ownership (the deed is in one person’s name
only), joint tenants (two or more people
hold the property in equal, undivided
shares), or tenants-in-common (two or
more people hold the property in equal or
unequal divided shares).

Joint tenants. A joint tenancy in real
property is ownership by two or more
people, each of whom owns the whole
property in equal, undivided shares. If one
joint tenant dies, the other joint tenant(s)
automatically becomes the owner of
that person’s share. If there are only two
joint tenants and one dies, the remaining
person becomes the sole owner of the
property. This automatic transfer is known
as the “right of survivorship.” Generally
speaking, property held in joint tenancy is
not affected by a designation in a will and
will not be passed on by a will.

To ensure that a joint tenancy is created,
a deed should include certain words that
create the joint tenancy. The deed should
contain words to the effect, “to X and Y as
joint tenants,” “to X and Y and the survivors
of them and the heirs and assigns of the
survivor,” or “to X and Y with rights of
survivorship.” To challenge a joint tenancy,
it must be proven that the grantor did not
intend to create a joint tenancy. It is very
important to remember that once a joint
tenancy is created, you cannot remove a
name or transfer full ownership without the
consent of the other joint tenants.

Tenants-in-common. If more than one
person owns a piece of property, it is
presumed the property is held by them as
tenants-in-common, unless the deed clearly
expresses an intent to pass the property in
some other manner (for example, as joint

Tenants-in-common own the property
together and may own unequal shares.
Tenants-in-common can transfer their
portion and, unlike joint tenancy, can pass
their portion to others through a will. A
tenant-in-common may also sell his or
her share of the ownership in the property
without the consent of the other Tenants-
in-common. The new owner will become a
tenant in common. Tenants-in-common can
partition or divide his or her share from the
other owner’s shares.

New Mexico Senior Legal Handbook Chapter 5 - Property Ownership - 75

Community Property
And Separate Property

New Mexico is a community property
state. “Community property” is defined
as property acquired by either or both spouses
during the marriage that is not separate
property. Separate property is defined as
property acquired by either spouse before
marriage or after divorce, property acquired
after a division of property resulting from
a permanent separation without a divorce,
property designated as separate by a court,
property acquired by either spouse by gift
or inheritance, and property designated as
separate by written agreement between the
spouses. The New Mexico courts assume
that property acquired during the marriage
is community and that each spouse owns
the property in equal shares, one-half to
each spouse. It is your obligation to prove

Community property includes earnings
of either spouse during the marriage and
property bought with community earnings.
If spouses divorce, the community
property is divided equitably between the
two. You may transfer your one half of the
community property by a will.

Voluntary Real
Estate Transfers

In New Mexico, real estate can be
voluntarily transferred by the following
methods: sale, gift, joint tenancy, transfer on
death deed, wills and intestate succession.
Joint tenancy, transfer on death deed, wills
and intestate succession are discussed at
length in Chapter Six, in the Estate Planning

If you decide to transfer your real estate
for any reason, you must realize that you
will no longer be the legal owner of the
property. The person to whom you transfer
the property can decide to sell the property
without your permission. You could
also be forced to move out of your house
by that person. If the person to whom
you transferred the property has financial
problems, goes through a divorce, or loses
a lawsuit, the property could be lost.

One way to prevent these problems is to
keep the property in your own name. Do
not let anyone pressure you into changing
a deed. If, upon your death, you want your
property to pass to a certain individual or
individuals, you can make provision for
this in your will or execute a transfer on
death deed. There is rarely a reason why
you should put someone else’s name on
the deed to your property or transfer the
property to someone else while you are still
living. The transfer of property between
spouses (specifically for the purposes of
qualifying for Medicaid) is an exception to
this general rule.

If, after knowing the potential problems,
you still wish to transfer your property, it
is advisable to see an attorney to ensure
the deed is drafted correctly, and that
your interests are protected to the extent
possible. New Mexico law requires that
any transfer of real property interest be in
writing, usually in the form of a deed. To
transfer land validly, the grantor (the owner)
must sign the deed. It is very important
that you do not sign any document that
is blank or that you do not understand.
The deed must describe the property to be
transferred accurately and also contain any
restrictions the grantor wishes to place on
the grantee. Most importantly, the deed
must express the grantor’s intent to pass

the property on. Use of the word “grant” is
construed by New Mexico courts to mean
“give, bargain, sell and convey,” making
“grant” an important legal word in a deed.

Another important thing to remember is
that a deed is not effective to transfer an
interest in land unless the grantor gives the
deed to the grantee. There is one exception
to this rule. A transfer on death deed does
not have to be delivered to the grantee to
be effective; however, it must be recorded
with the clerk of the county or counties
where the property is located, prior to the
death of the grantor, to be effective.

Types Of Deeds And
Recording Of Deeds

Deeds oftentimes contain promises
(commonly referred to as covenants)
that protect the grantee. A warranty deed
promises that the grantor’s title to the
property is good. “Good” title means that
there was nothing wrong with the title before
the grantor obtained title to the property,
and that nothing has gone wrong with the
title during the grantor’s ownership of the
property. A grantor who gives a warranty
deed is legally responsible if the title is not

A quitclaim deed makes no promises to
the grantee about the title to the property. It
simply releases any claim the grantor may
have to the land. You should proceed with
caution if you want to purchase property,
and the grantor only offers you a quitclaim
deed, as it warrants nothing. The grantor is
simply transferring whatever right, title or
interest he or she has in the property, if any.
If you are going to transfer or acquire land,
it is advisable to consult with an attorney to
determine what deed would be appropriate
for your particular situation.

Recording deeds to property is necessary
to protect yourself and future buyers. All
deeds, mortgages and other writings that
affect title to property must be recorded in
the office of the county clerk of the county
or counties where your property is located.
Recording all writings that affect title to
real property is notice to all the world of
your ownership of the property. If you
fail to record a deed, mortgage or other
writing, a court may protect the rights of a
person who later buys or takes a mortgage
on your property without notice of your
interest. Following is an example of such
a situation.

Amanda owns a piece of property and
sells it to Wendy. Wendy does not record
the deed. Amanda sells the same piece of
property to Gayolyn, who believes that
Amanda’s title is good because when she
researched the chain of title, she found
no record in the county clerk’s office of
Wendy’s deed. Gayolyn records her deed.
Even though Wendy bought the property
first and Amanda was wrong to sell the
same piece of property twice, the courts
will probably find Gayolyn to be the true
owner of the property because she recorded
If you give a power of attorney dealing
with real property to anyone, the power of
attorney (or revocation of such) must be
recorded with the county clerk.

Gifts Of Personal Property

A gift is a voluntary transfer of property
(real or personal) for which the “donor”
(the person who gives the gift) receives
nothing in return from the “donee” (the
person who receives the gift). The donor
must intend to make the gift and must deliver
the gift to the donee. The donee must accept
the gift. These steps result in a valid gift.

Gifts made during the lifetime of the donor
are called inter vivos gifts. This type of
gift cannot be taken back unless the donee
agrees to give it back.

Oftentimes people make gifts in anticipation
of their impending death. These deathbed
gifts differ somewhat from inter vivos gifts
in that, if the donor does not end up dying,
he or she may be able to get the gift back
from the donee.

Sometimes people make a gift that they
intend to have take effect upon their
death. For example, you might tell your
granddaughter that she may have a certain
piece of jewelry at your death. These types
of gifts are not valid because there is no
delivery to the donee. If you wish someone
to have something of yours upon your death,
you can achieve this through a bequest in a

If actual physical delivery of a gift is
impractical because of the size of the
gift, symbolic delivery may be permitted.
Symbolic delivery is achieved by giving
the donee something representative of the
actual gift item. For example, you may
give a note that states, “I am giving you my
piano because I never play anymore and I
know how much you admire it. You may
pick it up at any time.” Moving a piano is a
complicated endeavor, and it may be some
time before the donee is able to actually take
possession of the piano; thus, the courts
would probably consider the note sufficient
to prove the donor’s present intent to make
a gift of the piano to the donee.

If actual delivery of a gift is impractical
because of the location of an item,
constructive delivery may be permitted. In
constructive delivery, the donor gives the
donee the means to obtain possession of
an item, such as the key to a safety deposit
box at a bank. In such a case, a court may
find that the donor intended to make actual
delivery of the gift.

Transferring Property For
Medicaid Eligibility

With the aging of the baby boom
generation, more and more seniors
are going to need long-term nursing care.
This type of care, either in an institution or at
home, is expensive, and the costs continue
to rise. As of the writing of this handbook,
the average cost of nursing home care in
New Mexico is approximately $5,000 per

There are very few individuals who can
afford to pay privately for long-term care.
Medicare only covers 100 days of skilled
nursing home care, and that coverage is
only partial after the first 20 days. Most
health insurance polices do not cover long-
term care. There are supplemental insurance
policies that do pay for this type of care,
but, by the time the need arises, it is too
late to qualify for such insurance. Many
people find themselves needing long-term
care but without the means to pay for it. A
major source of assistance is the Medicaid
program, a federally-funded program
administered by the states.

Medicaid is a need-based program, meaning
there are income and asset eligibility
requirements. Because of these eligibility
requirements, people sometimes transfer
their property to someone else in order to
qualify for Medicaid. However, because of
the great need in this area and the limited
resources available, the government has
instituted penalties in the form of periods of
ineligibility for those who transfer property
or assets in order to qualify for Medicaid.
As of the writing of this handbook, there is
a “look back” period of 60 months for most
transfers, including transfers to relatives
and transfers from and to trusts. There is no
penalty for transfers of resources between

The laws and rules pertaining to Medicaid
for long-term care are far too numerous and
complicated to discuss in this publication.
Prior to making any transfers of property
or any other asset, it is highly advisable to
consult with an attorney who practices in
the areas of estate and financial planning for
the elderly and disabled. An attorney who
practices in this area will be well versed in
the most up to date laws and regulations
pertaining to Medicaid for long-term care.

Spanish and Mexican
Land Grants

You and your ancestors may have lived
in New Mexico for many generations.
You may hold your land under a legitimate
title received from people in Spain or
Mexico many, many years ago. You must
have legally sufficient possession of such
land that has been quiet, peaceful and
without interruption from the time the
United States government was first in New
Mexico. If the Spanish or Mexican title
is legitimate and you have fulfilled these
requirements, then you may have a lawful
claim to the property and legal ownership.
Proving legitimate title may be difficult and
may require court proceedings. If someone
challenges the ownership of your land,
contact an attorney for advice.

New Mexico has an extensive collection
of documents pertaining to Spanish and
Mexican land grants. Contact the New
Mexico Commission of Public Records,
State Records Center and Archives at (505)
476-7900, for more information.

Capital Gains Tax Break
For Homeowners

All homeowners can receive a tax benefit
upon the sale of their home. Formerly,
this benefit was only available to those 55 or
older but has now been extended to include
all homeowners. Prior to the availability of
this tax benefit, homeowners would have
to pay capital gains tax on the difference
between the original price of their house
(plus improvements) and the selling price
(assuming the house sold for more than you
paid for it). This could run into quite a bit
of money, especially for those homeowners
whose homes have appreciated a great deal
over the years.

In order to qualify for this benefit, you must
have owned and lived in the house for two of
the last five years. If you qualify, you receive
an exemption of $250,000 and do not have to
report the first $250,000 of the gain. If both
spouses own the house (for example, as joint
tenants), each spouse receives the exemption
for a total exemption of $500,000.

Tax laws and regulations are far too
complicated to be fully addressed in this
publication. If you have any questions

pertaining to this issue or any other
tax issue, it is advisable to contact the
Internal Revenue Service (IRS). The
IRS has automated telephone assistance,
live telephone assistance, a very useful
website and numerous publications that
can be ordered on just about any tax topic.
(See Resources) You may also seek the
assistance of a tax professional.

Borrowing Money On The
Equity In Your Home

If you own your home and have built
up equity, you may have thought about
refinancing, taking out a second mortgage,
or a home equity loan. Before considering
borrowing on the equity in your home,
carefully consider your options. If you
become unable to make the payments, you
could lose your home and any equity you
have built up.

If, after careful consideration, you decide to
go ahead and borrow money on the equity in
your home, take care in choosing the lender.
There are many unscrupulous lenders who
prey on the elderly, those with low incomes,
and those with less-than-favorable credit.
Shop around for the best interest rates and
other costs. Most importantly, don’t sign
anything that you don’t understand! If
there is something that you don’t understand,
ask for an explanation. Better yet, consult
with your attorney, financial advisor or
someone else you trust before making any
loan decisions.

If you should have second thoughts after
the loan closes, you may have at least three
business days from the date of closing to
cancel the deal. This is called the “right
of rescission” and is found in the Truth in
Lending Act. There are certain limitations
that apply to this right, thus you need to be
sure before signing anything.

If you have questions or concerns relating
to borrowing money on the equity in your
home, your right of rescission, or any other
consumer issues, there are several agencies
that are designed to help.


Internal Revenue Service

(800) 829-4477 automated telephone service

(800) 829-1040 live telephone service

(800) 829-4059 TDD

(800) 829-3676 forms and publications

New Mexico Attorney General’s Office

Consumer Protection Division

State agency that enforces consumer laws
in New Mexico.

(800) 678-1508

Federal Trade Commission

(877) 382-4357

(866) 653-4261 (TTY)


Albuquerque Regional Office

625 Silver Ave. SW, Suite 100

Albuquerque, NM 87102

(505) 346-6463

(877) 483-2489

AARP Home Equity Information Center

601 E. Street NW

Washington, DC 20049

(888) 687-2277

80 - Chapter 6 - Advance Planning New Mexico Senior Legal Handbook

 Chapter Six

Advance Planning:
Autonomy and Incapacity, Health
Care and End of Life Decision
Making, Personal Affairs
Assistance and Estate Planning

Autonomy and

As you grow older, you may become
unable to care for yourself or to
manage your property due to mental or
physical disabilities. With careful planning
now, you can decide how your affairs will
be managed and who will care for you and
your property should you become unable
to do so.

One of the most dreaded situations seniors
citizen face is losing the ability to care for
themselves and their property, commonly
referred to as incapacity, incompetence,
or loss of autonomy. An incapacitated
or incompetent person is substantially
unable to provide food, clothing or
shelter for him or herself, to care for his
or her physical health, or to manage his
or her financial affairs due to a physical
or mental condition, chronic use of
drugs, chronic intoxication, or other
cause. It should be noted that advanced
age, hospitalization or eccentricity
alone does not by itself mean a person is
incapacitated or incompetent. Refusal of
medical treatment, standing alone, does not
automatically mean one is incapacitated
or incompetent. Finally, simply because
one is physically able to sign his or her
name to a document, does not mean they
are mentally competent to do so. Very
generally speaking, for one to be considered
competent or to have capacity, he or she
must be able to report their past and present
personal history, where they are, what year
and day it is, and their understanding of the
document they are about to sign.

Incapacity or loss of autonomy can occur
suddenly (for example, when one has a
stroke), or it can occur gradually, as with
Alzheimer’s disease. The key to retaining
some control over your life is to prepare
ahead of time for a loss of autonomy by
taking steps to instruct your family and
loved ones of your wishes. The most
effective way to let your family and loved
ones know your wishes in the event you
should become incapacitated is to prepare
advance directives.

Advance directives, as the name suggests,
are documents prepared in advance of one
becoming incapacitated. These documents
include advance health care directives
(formerly known as “living wills”), powers
of attorney, anatomical gift documentation
(organ donation) and cremation statements.
These documents are not effective unless
the person executing them is competent.
If a person becomes incapacitated
prior to executing most of the above-

New Mexico Senior Legal Handbook Chapter 6 - Advance Planning - 81

mentioned documents, a guardianship or
conservatorship proceeding may have to
be instituted in order for decisions to be
made for the incapacitated person. These
proceedings are time consuming and

Health Care and End
of Life Decision Making

Advance Health Care
Directives and Powers of
Attorney for Health care

An advance health care directive,
formerly known as a “living will,” is
a document that allows you to determine
in advance whether medical treatment
should be used to prolong your life in the
event you are stricken with a terminal
illness or suffer a catastrophic event that
leaves you in an irreversible coma and
unable to communicate your wishes. You
will determine what type of maintenance
medical treatment, if any, you will be
given. Maintenance medical treatment
refers to nourishment, hydration and pain
medication. It is assumed by most (if not
all) physicians that an individual wants
to be made as comfortable as possible by
the administration of pain medication.
An advance health care directive does not
authorize euthanasia (mercy killing); it
simply allows people who are very ill to
have medical treatment stopped.

To ensure an advance health care directive
is valid, you must comply strictly with the
requirements for creating it. To execute an
advance health care directive, you must be
at least 18 years old and have capacity (see
above). The advance health care directive
must be in writing and signed by you. No
one can require you to execute an advance
health care directive as a condition of
being insured for or receiving health

In order for an advance health care directive
to be enforced, the physician in charge of the
patient’s care and another qualified health-
care professional must both examine the
patient and certify in writing that he or she
is in fact terminally ill or in an irreversible
coma. The standard used by the examining
physicians is that no reasonable expectation
for improvement exists, and the illness or
condition will result in death, regardless
of the use or withholding of maintenance
medical treatment. Enforcing an advance
health care directive does not constitute a
suicide for any purpose, including insurance.
Death resulting from the withholding or
withdrawal of maintenance medical care
in accordance with an advance health care
directive does not constitute a homicide,
murder, or any other crime.

As part of an advance health care directive,
you may choose an individual to make
health care decisions for you in the event
you become unable to make those decisions
yourself. This part of the advance health care
directive is called a “power of attorney for
health care.” The person you designate to
make decisions for you is called an “agent.”
An agent is someone you designate ahead
of time who steps into your shoes and acts
on your behalf. Because this is a position of
great responsibility, it is imperative that you
choose someone who you trust implicitly
since they may be making decisions that
will have a profound impact on your life.

It is recommended that the power of
attorney for health care be “durable.” This
means that the power of attorney will

remain in effect should you be found to be
incapacitated or incompetent, which, after
all, is the point of executing any advance
directive. In order for a power of attorney
for health care to be “durable,” it must
include a statement, such as the following:
“This power of attorney shall not be affected
by the disability of the principal.” It is also
recommended that the power of attorney
be “springing.” To be a “springing” power
of attorney for health care, there must be a
statement such as: “This power of attorney
shall become effective upon the disability
of the principal.” This means that the
power of attorney will only be effective if
and only if you (the principal) are found
to be incapacitated or incompetent by your
primary physician and one other qualified
health care professional. Until such a
designation is made, you are the only one
who may make decisions regarding your
own health care.

You may revoke an advance health
care directive or power of attorney for
health care at any time. To revoke the
designation of an agent in a power of
attorney for health care, you must first have
capacity (see above) to do so. If you have
capacity, you may revoke the designation
of the agent in writing or by personally
informing the supervising health care
provider. Revoking the designation in
writing is preferred. You should send a copy
of the revocation to all your health care
providers. You may revoke all other parts
of the advance health care directive, except
for the designation of the agent, at any time
and in any manner that communicates your
intent to revoke. Again, doing so in writing
is preferred.

Having a lawyer prepare your advance
health care directive is not necessary but
may be helpful. You can contact LREP for
free assistance with preparing this form at
(505) 797-6005 in Albuquerque or (800)
876-6657 (outside Albuquerque) or look
on the LREP website (
Public/legalforms.html) to download the

If you do not have an advance health care
directive and should become incapacitated
and unable to communicate your wishes,
New Mexico law allows a family member
to step in and act as a surrogate decision
maker. The law looks to the spouse or
life partner first for a surrogate. It there is
neither a spouse nor a life partner, the law
will look in descending order to an adult
child, parent, adult brother or sister, and then
grandparent. If none of these are available
to act as a surrogate, a close family friend
can act. If, after going through the list of
possible surrogates, no one is available to
serve, a guardian will have to be appointed
for the incapacitated person.

Organ and Tissue Donation

Many people decide to donate their
organs or tissue to others when they
die. Organ donation is considered only after
all lifesaving efforts have been exhausted.
The donation of one person’s organs and/
or tissue can save or improve the lives of
more than 50 people, according to the New
Mexico Donor Services.

Just because you are a senior, do not think
that you cannot be a donor. If you wish to
donate, you should tell your family, friends
and health care providers. In addition, you
should also prepare a “document of gift”
which is a signed writing expressing your
wish to donate. This writing can be in the
form of a donor card or a written statement.
It can be included in a will, although this is

the least effective form of making a donation
since the deceased’s will is usually read
well after the time when organs and tissues
can be procured. Alternatively, donor status
can be established at the time of applying
for (or renewing) a New Mexico driver’s

If the organ donation is not revoked prior
to the death of the donor, consent or
concurrence of the family or any other
interested party is not necessary upon the
death of the donor. Notwithstanding, you
should still inform your family and loved
ones of your desire to be an organ and/or
tissue donor.

If you have left no written instruction,
nor made any verbal instruction regarding
organ or tissue donation, your family, and in
some circumstances non-family members
such as domestic partners, can donate your
organs or tissue upon your death. However,
if one of your family members objects
to such a donation, the donation cannot
be made. If you have executed a written
refusal regarding donation of your organs
or tissue, or you have verbally made your
desire not to donate known, no donation
should be made.

For more information about organ and
tissue donation, contact the New Mexico
Donor Services at (505) 843-7672 in
Albuquerque or (800) 843-7672 if you live
outside of Albuquerque.

Funeral Plans and

One of the most difficult subjects to deal
with is death. Because death is such an
uncomfortable subject, many people leave
the details to others. Making preparations
for your funeral ahead of time can save
your family and loved ones unnecessary
pain and expense. Additionally, making the
arrangements ahead of time can also assure
that your final wishes will be carried out.

Funerals are often expensive, but the expense
can be lessened with proper planning. Most
funeral homes will assist the person making
the arrangements in finding a means to
pay for them. Government agencies may
provide certain benefits. For example, if
you are a veteran, you may qualify for a
national cemetery plot. If you think you
might qualify for a government benefit,
you should contact the appropriate agency
(Social Security, Veterans Affairs, etc.).
There are many different private burial
insurance plans available; however, such
plans should be approached with caution.

Cremation is a less expensive option
than burial. You may authorize your own
cremation in two ways. The preferred
way is to make a signed written statement
expressing your desire to be cremated.
This signed written statement must either
be notarized or witnessed by two persons.
You may also include an express statement
in your will indicating your desire to be
cremated; however, this method is less
desirable as oftentimes the deceased’s will
is not read until after his or her funeral.

If you do not leave written instructions about
your desire to be cremated (or whatever
method of disposition you desire), it will
be left to your family, and in some cases
non-family members, to determine how
handle your remains. If you have questions
or concerns about burial insurance plans,
contact the Insurance Division of the New
Mexico Public Regulation Commission at
(888) 427-5772.

Personal Affairs Assistance

As you age, you may find it increasingly
difficult to manage your personal
affairs. You may even become unable
to manage your personal affairs due to
physical or mental disabilities. With careful
planning, you can decide now, while you
are competent, who will step in and manage
your personal affairs should you become
unable to do so.

Power of Attorney

As discussed in the section on advance
health care directives, a power of
attorney is a document that gives one person
the power to act on the behalf of another.
The person giving the power is called the
“principal” and the person receiving the
power is called the “agent” or the “attorney
in fact.” Notwithstanding the name, the
person you choose to act on your behalf
does not have to be an attorney, nor does it
give the individual the authority to practice
law. Usually, the person chosen to be the
agent is a spouse, relative or close friend.
As noted above, the person you choose to
act on your behalf should be someone you
trust implicitly, as they may be making
decisions that could have a profound effect
on your life.

A power of attorney can be as limited or
as general as you wish. It can be as limited
as dealing with one real estate transaction,
or it can be as broad as dealing with every
aspect of the principal’s personal affairs.
When drafting a power of attorney, it is
important that you list specifically each
power you are giving to your agent. If you
give your agent the power to deal with
real estate, the power of attorney must be
recorded in the county or counties where
the property is located.

It is advisable that the power of attorney
be “durable,” meaning that it remains
effective should the principal be found to
be incapacitated. To be durable, the power
of attorney must contain language such
as the following: “This power of attorney
shall not be affected by the disability of the
principal.” You can also create a power of
attorney that does not come into effect until
the principal becomes incapacitated. This
is called a “springing” power of attorney
because it “springs” into effect upon a
finding that the principal is incapacitated.
To be springing, the power of attorney must
contain language such as: “This power
of attorney shall become effective upon
the disability of the principal.” Typically,
a finding of incapacity is made by two
physicians (one being the principal’s own
physician) certifying in writing that the
principal is incapacitated.

A power of attorney must be signed by
the principal, and that signature must be
notarized. There are now do-it-yourself
forms for powers of attorney available at
office supply stores or online; however,
these forms must still be signed and
notarized. Even with the availability of do-
it-yourself forms for powers of attorney, it is
still advisable to consult with an attorney.

A power of attorney is revocable at any
time; that is, the person giving the power
can also take it away. A power of attorney
can be revoked in writing by stating that
you want to terminate the power. You must
send a copy of the revocation to all places
your agent has done business on your behalf,
such as your financial institution. If your
power of attorney deals with real estate, the
written revocation must be recorded with
the clerk in each county where your real
estate is located. You may also tear up the

original and all copies. Upon your death,
your power of attorney becomes invalid.

For assistance with a free power of attorney,
contact LREP at (505) 797-6005, or toll
free (800) 876-6657.

Representative Payee and
Direct Deposit

A representative payee is a person who
has the authority to receive, sign
and cash another person’s government
benefit check (from Social Security,
Railroad Retirement or Veterans Affairs,
for example). A representative payee is
responsible for helping that person (the
beneficiary) manage the money from
the checks. Usually the representative
payee is a spouse, relative or friend of the

The government agency that administers
the particular benefit (for example, Social
Security) must authorize the representative
payee arrangement. Appointing a
representative payee does not require a
lawyer or action by a court. A representative
payee will be appointed only after a finding
that the beneficiary is unable to manage the
particular benefit.

The representative payee arrangement will
end upon a showing by the beneficiary
that he or she is now physically and/or
mentally able to manage the benefit. The
representative payee arrangement will also
end upon a showing that the representative
payee is not acting in the best interests of
the beneficiary.

Generally, those who receive a federal
government benefit (such as Social
Security, Supplemental Security Income,
Veterans Affairs, civil service, or Railroad
Retirement annuities) will have their
benefit check directly deposited into their
bank, savings and loan or credit union
account. Having your check automatically
deposited into your account makes it
virtually impossible for the check to be
lost, misplaced, stolen or destroyed.

To sign up for direct deposit, contact
your financial institution and request an
application. You can also contact your
local Social Security office to have direct
deposit set up. All the information you need
to set up direct deposit should be included
on your bank statement or personal check.
Do not forget to notify Social Security
of any address changes, even if you have
direct deposit. Additionally, if you decide
to change banks, you need to set up direct
deposit at the new bank. You should keep
the old account open until you are sure the
checks are being deposited into the new

Another option is to have your monthly
benefit placed on a Direct Express® card for
use as you would a credit card. See Chapter
One for more details on this alternative to
direct deposit.


A conservatorship is a legal procedure
that gives an individual, known as the
conservator, power over the property and
finances of an incapacitated individual.
An incapacitated or incompetent person
is one who is substantially unable to
provide food, clothing or shelter for him
or herself, to care for his or her physical
health, or to manage his or her financial
affairs due to a physical or mental
condition, chronic use of drugs, chronic

intoxication, or other cause. It should be
noted that advanced age, hospitalization or
eccentricity alone does not automatically
mean a person is incapacitated or
incompetent. Additionally, refusal of
medical treatment, standing alone, does not
automatically mean one is incapacitated or

A conservator may be appointed only after
a court proceeding. Any of the following
individuals may ask the court to appoint
a conservator: the person who needs
protection; anyone who is interested in his
or her estate, affairs or welfare, including
a spouse, parent, adult child, guardian or
custodian; or anyone who would be harmed
if the person’s property and affairs are not
managed effectively. The person who is to
be protected has the right to be represented
by an attorney throughout the proceeding.

The person who is to be protected
may request that a particular person be
appointed conservator, or the court may
appoint a person who is eligible to be
the conservator, according to law. Those
eligible for appointment include a spouse,
parent, adult child or a relative with whom
the protected person has been living.

The conservator has the power to deal with
the protected person’s money and property.
The conservator must provide the court
with a yearly accounting of the protected
person’s finances and property. Any person
interested in the welfare of the protected
person, including the protected person,
may petition the court for an accounting, a
bond, or for removal of the conservator. Any
interested person, including the protected
person, may petition the court for an end
to the conservatorship. The court will end
the conservatorship upon a finding that the
protected person is no longer incapacitated
or incompetent.

The conservator does not have the authority
to handle the non-financial, personal affairs
of the protected person. If necessary, a
guardian must be appointed to handle those


A guardianship is a legal procedure that
gives an individual, known as the
“guardian,” power over the personal affairs
of an incapacitated individual, called the
“ward.” An incapacitated or incompetent
person is one who is substantially unable
to provide food, clothing or shelter for
him or herself, to care for his or her
physical health, or to manage his or
her financial affairs due to a physical
or mental condition, chronic use of
drugs, chronic intoxication, or other
cause. It should be noted that advanced
age, hospitalization or eccentricity alone
does not automatically mean a person is
incapacitated or incompetent. Additionally,
refusal of medical treatment, standing
alone, does not automatically mean one is
incapacitated or incompetent.

A guardianship is established by a court
proceeding to protect an individual who
is unable to provide for his or her own
continuing care. The parent or guardian of
an incapacitated person may also appoint a
guardian in a will.

Many of the same provisions that
apply to conservatorships also apply to
guardianships. Anyone who is concerned
about the welfare of the incapacitated
person, including the incapacitated person,
may ask the court to appoint a guardian.

The incapacitated person has the right
to be represented by an attorney during
the proceeding. The court will appoint a
guardian upon a finding that the individual
is incapacitated and needs a guardian
to ensure his or her continuing care and
welfare. The court may appoint any
competent person or suitable institution as
a guardian. Oftentimes, the spouse, adult
child, parent or relative of the incapacitated
person will be considered for appointment
as guardian by the court.

A guardian has the same powers, rights
and duties for the incapacitated person as
parents have over their minor child. For
example, a guardian may give consent for
medical treatment for the incapacitated
person or determine where the incapacitated
person will live. A guardian’s responsibility
for the protected person ends upon the death
of the protected person, the incapacity or
death of the guardian, or upon a showing
that the protected person is no longer
incapacitated and therefore no longer needs
a guardian.

The need for a guardianship or
conservatorship can be eliminated with
careful advance planning, as discussed in
the preceding sections. By executing an
advance health care directive and power
of attorney in advance of incapacity
or incompetence, you ensure a smooth
transition should you become unable to
manage your own affairs, whether personal
or financial. Perhaps most importantly,
careful advance planning can save your
family and loved ones the emotional and
financial costs of having to go through a
court proceeding to have a guardian or
conservator appointed.

Estate and
Financial Planning

An issue of great importance to seniors
is what will happen to their property
upon their death. There are many things
you can do before your death to ensure that
your property is dealt with according to
your wishes. The following sections deal
with actions you can take now to enable
the smoothest disposition possible of your
assets upon your death.

Last Will and Testament

A will is a signed and witnessed document
that directs how your estate is to be
divided upon your death. You can dispose
of virtually anything in a will: money,
personal property, real estate, cars, etc. You
can name a guardian for your minor children
or incapacitated adult children. You may
also make provision for any pets you may
own. Finally, in your will you may appoint
a “personal representative.” The personal
representative is the person who handles your
affairs after your death.

The minimum legal requirements for making
a will in New Mexico are:

1. The person making the will (the
“testator” or “testatrix”) must be at
least 18 years old.

2. The person making the will must be
of sound mind. This means that you
understand what property you have
to give and to whom you are going to
give this property.

3. The will must be in writing and
dated. It is advisable to have the will

4. The person making the will must
sign the will. If he or she is unable to
sign, another person may sign at the
direction of the testator or testatrix
and in his or her presence.

5. The will must also be signed by two
witnesses. It is advisable that the two
witnesses do not receive anything
in the will. The two witnesses must
see the testator or testatrix sign the
will and also see each other sign the
will. The two witnesses must be able
to testify that the testator or testatrix
was of sound mind when the will was

While it is permissible to draft your own
will, it is not advisable. Hiring an attorney
to draft your will helps to ensure that it is
valid. An attorney can advise you whether
or not you even need a will (many people
do not even need one) and advise you
as to what property can be disposed of
through a will. Once you make a will, you
should review it on a regular basis or after
major life changes, such as births, deaths,
marriages or divorces.

If you have a will, you may make reference
to a separate list of personal property, such
as jewelry, furniture, photos, china, etc. This
list can be used to name who is to receive
such property, must describe the property
with some specificity and must name the
person who is to receive the property. The
list must be signed by the testator/testatrix
and dated. This list may be prepared either
before or after your will is prepared and
may be changed at any time; however, each
time you make a change you must sign and
date the list. You cannot dispose of money
or real estate with this list. You must have a
will to make use of such a list. If you make
this type of list, you should attach it to your

As noted above, not everyone needs a will.
Remember, if you have a will, those you
leave behind at your death may have to
go through a probate proceeding. There
are several alternatives to a will in New
Mexico. Consult an attorney to see which
type of estate planning is right for you.

Transfer on Death Deed

A transfer on death deed is one of several
alternatives to a will as a way to dispose
of real property. Transfer on death deeds
are relatively new to New Mexico; in fact,
New Mexico is one of very few states that
allow the use of such deeds. A transfer on
death deed is a special deed that allows you
as the owner of real property to designate
who will own your real property upon
your death, without having to go through a
probate. A major advantage of the transfer
on death deed is that the individual(s)
designated to own the property upon your
death (the “beneficiary”) does not have an
ownership interest in the property until you
die. Like any deed to real property, it must
be filed with the clerk in each county where
the real property is located. The deed must
be filed prior to the death of the property
owner. The owner does not have to notify
the beneficiary that there is a transfer on
death deed, nor does he or she have to notify
the beneficiary if the transfer on death deed
is revoked.

The transfer to the beneficiary is subject to
any mortgages, creditor’s claims against
the estate of the deceased, liens, easements,
and spousal and family allowances. For
example, if the real estate has a mortgage,
the mortgage will still need to be paid.

There are ready-made transfer on death deed
forms available. However, it is advisable to

have an attorney draft the deed for you, to
help ensure your wishes pertaining to the
transfer of your real property are fulfilled.

Payment on Death Accounts

Payment on death accounts (POD) are
an alternative to a will as a way to
dispose of the contents of bank accounts.
POD accounts are treated as normal bank
accounts during the lifetime of the person
who holds the account. On the death of the
person holding the account, any funds in
the account will be distributed according
to the designation made by the account
holder. The person designated by the
account holder to receive the remaining
funds is called the “payee.” During the
lifetime of the account holder, the payee
has no control over or claim to the funds in
the account. Contact your bank or financial
institution to find out how to set up a POD

Transfer on Death Accounts

Transfer on death accounts (TOD)
work in much the same way as POD
accounts, except instead of bank accounts,
they apply to securities (stocks and bonds).
The person who will receive the securities
upon the death of the owner is called the
“transferee.” As with POD accounts, the
transferee has no claim to or interest in the
securities during the owner’s lifetime. You
should contact your securities broker or
certificate issuer to find out how to set up a
TOD account.

Joint Tenancy

Joint tenancy is a way of holding property
that provides an inexpensive alternative
to a will and avoids probate and intestate
succession. Creating a joint tenancy
requires special words on a property deed.
When one of the owners or joint tenants
dies, the remaining owner(s) receives the
deceased owner’s share of the property
(in equal shares if there is more than one
remaining joint tenant).

There are numerous drawbacks to using
joint tenancy as an estate planning tool.
Additionally, now that New Mexico
has adopted the transfer on death deed
(discussed above), the reasons for using
joint tenancy as an estate planning tool,
except between spouses, have been all but

One major drawback to using joint tenancy
for estate planning is that the property is
at risk for claims from each joint tenant’s
creditors and spouses. The following
example may help to illustrate this
drawback. Your spouse recently passed
away. You and your now deceased spouse
held your house as joint tenants. Now you
are the sole owner of the house. You decide
to put one of your children on the deed so
that, when you pass away, your children
will not have to probate your estate. A
year passes, and the child you put on the
deed is now going through a divorce. The
child’s estranged spouse claims an interest
in your house as community property. If
you had used a transfer on death deed, your
child would have no ownership interest
in the property until your death, thus
protecting your property from the claims
of others. Since the advent of the transfer
on death deed, virtually the only remaining

legitimate use of joint tenancy as an estate
planning tool, with respect to real property,
is between spouses or life partners.


A trust is one of several alternatives to a
will. In a trust, one person, called the
“settlor,” sets aside property or money for
the benefit of another person, called the
“beneficiary.” Instead of giving the property
or money directly to the beneficiary, the
settlor places it under the control of a third
person, called the “trustee.” Typically, the
trustee will invest the corpus (the assets) of
the trust and pay any interest earned to the
beneficiary. At the expiration of the trust,
the trustee distributes the corpus of the
trust to the beneficiary.

Trusts can be complex documents and are
oftentimes expensive to set up. There are
two types of trusts: testamentary (meaning
the trust is created in a will) and inter vivos
or living trust (meaning the trust is created
during the lifetime of the settlor). Some
situations where a trust may be appropriate
are when there are tax issues due to extensive
wealth, a settlor owns property in different
states, a marriage where either party has
children from a previous marriage, a parent
wishes to provide for an adult child who is
disabled or incapacitated, or the intended
beneficiary of the trust has proven him or
herself unable to handle money. A trust
allows the settlor to exercise some control
from the grave. For most individuals a
trust is not necessary; other estate planning
devices will do the job for a good deal less

Intestate Succession

If you do not do any type of estate
planning (such as a will, transfer on death
deed, etc.), your property will be disposed
of through a process called intestate
succession. In intestate succession, New
Mexico law determines who will receive
your property. For example, if you are
married when you die, your spouse is
entitled to one quarter of your separate
property and your entire one-half of the
community property (the other one-half
already belonged to your spouse). Your
children are entitled to the remaining three
quarters of your separate property. If you
have no children, your surviving spouse is
entitled to all of your separate property. If
you die without a spouse, your children will
receive all of your property in equal shares.
If you have no spouse or children, your
parents will receive all of your property. If
your parents have died, then your siblings
will receive your property. The search for
relatives continues down the line. The state
will get your property if and only if you
have no family or relatives, and you failed
to do any estate planning to designate
anyone else whom your property would
pass. This rarely happens; however, it does
illustrate the importance of appropriate
planning for the disposition of your estate
upon your death.


Probate is the process in which, after you
die, your property is collected, your
debts are paid and the remainder is then
distributed either according to your will or
through the process of intestate succession.
During probate, your property will be
administered by a person who is called a
“personal representative.” You may appoint

a personal representative in your will, or, if
you do not appoint one in your will or you
do not have a will, the court will appoint a
personal representative for you.

Many people fear the probate process, but
most fears about probate are unfounded.
In certain circumstances probate can be
costly and time consuming; however,
this is generally the exception and not the
rule. When probate does become costly, it
is usually the result of disputes between
family members that spill over into the
disposition of the deceased’s estate.

New Mexico law provides for both formal
and informal probate. Several factors are
relevant in determining the type of probate
that will be necessary, or if a probate is
necessary at all. We recommend that you
consult with an attorney to find out which
type of probate is appropriate. The costs
of probate will be paid out of your estate.
To ensure that the probate is administered
according to the law, it is wise to contact an
attorney for assistance.


Lawyer Referral for the Elderly

Free legal advice and brief services to
New Mexico seniors, 55 and over, via a
telephone helpline.

(505) 797-6005 (Albuquerque)

(800) 876-6657 (outside Albuquerque)

Senior Citizen’s Law Office

Offers legal services to Bernalillo County
residents, 60 and over.

(505) 265-2300

New Mexico Aging and Long Term
Services Department (formerly State
Agency on Aging)

State agency assisting the elderly and
those with disabilities achieve the highest
quality of life.

(505) 476-4799 (Santa Fe)

(800) 432-2080 (outside Santa Fe)

Law Access New Mexico

Legal assistance for low-income New
Mexicans via a legal helpline.

(505) 998-4529 (Albuquerque)

(800) 340-9771 (outside Albuquerque)

New Mexico Developmental Disability

Planning Council

Office of Guardianships

Adult guardianship services.

(505) 476-7321

New Mexico Legal Aid

Civil legal services for low-income New

See the “Attorney” listings in the yellow
pages of your local telephone directory
for the telephone number of the Legal Aid
office nearest you.

Adult Protective Services

Investigates claims of abuse, neglect and
exploitation of adults.

(800) 797-3260 (Statewide intake)

New Mexico Donor Services

Organ and tissue donation information.

(505) 843-7672 (Albuquerque)

(800) 843-7672 (outside Albuquerque)

92 - Chapter 7 - Family Relationships New Mexico Senior Legal Handbook

Chapter Seven

Family Relationships

As people age, their relationships continue
to change, whether it is becoming
a caregiver to a grandchild or seeking
a divorce after many years of marriage.
This chapter discusses the ever-changing
nature of family relationships: specifically,
grandparents raising grandchildren,
grandparent rights and divorce.

Grandparents Raising

Over the last decade, there has been a
significant increase in the number of
children being cared for by individuals other
than their parents. There are many reasons
for this: the parents may be deceased,
incarcerated or simply unable or unwilling
to care for their children. Most often the
burden of caring for these children falls on
the grandparents (at times, this burden is also
taken on by other family members, thus the
term “caregiver” will be used to encompass
any individual caring for another’s child).
This new responsibility often occurs at a
time in the caregiver’s life when they are
least equipped to care for young children
because they have failing health or are
living on a fixed income. Additionally,
many caregivers find it almost impossible to
gain access to benefits that they or the child
may be entitled to and to establish a legal
relationship with the child in order to make
decisions about the child’s education and
health care. Finally, many caregivers feel a
sense of isolation, as if they are the only
ones who are dealing with these issues.

This section will discuss how a caregiver
can establish a legal relationship with the
child, authorizing the caregiver, at the
very least, to enroll the child in school and
take care of the child’s health care needs.
This section will also cover what financial
assistance is available to caregivers and
how to access this assistance. Finally, ways
to overcome the isolation often associated
with raising someone else’s child will be

Kinship Guardianship

As a matter of public policy, the state
of New Mexico has determined that
the interests of children are best served
when they are raised by their parents. If the
parents are unwilling or unable to provide
appropriate care, supervision and guidance,
the child should be raised by a family
member. There are many children in New
Mexico (and all over the United States)
who are being raised by family members
other than their parents. As noted above
these family members will be referred to
as “caregivers.” More often than not, these
caregivers are the children’s grandparents.

There are many responsibilities that come
with the burden of raising someone else’s
child. The caregiver must make sure the
child receives necessary health care, is
enrolled in school, and has clothes to wear
and food to eat. Providing life’s necessities
can be problematic for caregivers. It is
sometimes difficult for the caregiver to
enroll the child in school or get the child
necessary medical treatment. Providing

New Mexico Senior Legal Handbook Chapter 7 - Family Relationships - 93

food and clothing for a child is expensive,
especially for caregivers on a fixed income.
How does a caregiver get the necessary
legal authority and financial assistance to
adequately care and provide for a child
placed in his or her responsibility?

In response to this need, New Mexico has
established the Kinship Guardianship Act
to assist caregivers who are taking on this
important responsibility. Under this Act,
you may obtain a Kinship Guardianship or
a Caregiver Affidavit.

Kinship Guardianship. A Kinship
Guardianship is a procedure in which an
individual is appointed by the court to serve
as the child’s guardian for an indefinite
period of time. Generally, this guardianship
is intended for situations where a parent has
left a child in the care of another for ninety
consecutive days, when a parent has given
consent for the guardianship, or if parental
rights have been terminated. The parents’
consent is not required for a guardian to be
appointed; however, it makes the process
much easier. A guardianship suspends
all of a parent’s rights. The guardian has
all the legal rights and duties of a parent
except the power to consent to the child’s
adoption. Guardianship under the Kinship
Guardianship Act is different from
guardianship of a minor under the Probate
code. You should consult an attorney for
advice on whether guardianship under
the Probate code is appropriate for your

Caregiver Affidavit. A Caregiver Affidavit
is a document executed by the child’s
caregiver that allows the caregiver to enroll
the child in school, as well as authorize
school-related medical care. If the caregiver
is a relative of the child, he or she may
also authorize general medical care, dental
care and mental health care. A Caregiver
Affidavit is valid for one year from the
date it is executed and has no effect on the
rights of the parents. The document must
be signed by the caregiver and notarized.
This document does not mean that you
have legal custody of the child and does
not give the more inclusive legal rights and
duties of a Kinship Guardianship.

Other Legal Relationships

There are several other ways to establish
a legal relationship with a child in your
care that will enable you to provide for the
child’s well being.

Parental Power of Attorney. A Parental
Power of Attorney is a document executed
by at least one of the child’s parents. It
gives the caregiver powers relating to the
care, custody and property of the minor
child or ward, except the power to consent
to the marriage or adoption of the minor
child or ward. It can be as broad or narrow
as the situation requires and is valid for
six months, after which a new one must
be executed. A power of attorney does not
affect the rights of the parents.

Custody. Custody, as the name implies, is
a court proceeding where, for an indefinite
period of time, someone other than the
child’s parent(s) is given the legal right to
physical control of the child. Each custody
arrangement is unique, thus it may or may
not affect the parent’s rights.

Adoption. Adoption is a court proceeding
where the parent/child relationship is
legally severed. The parental rights of the
child’s parents are permanently terminated,
and the adoptive parent(s) assumes all
parental powers and duties. The parents’
consent is not required; however, it makes

the process much easier. Once the adoption
is complete, the parents have no legal
relationship to the child, thus owe no duty
nor have any obligation to the child.

Note: There are special and additional
concerns when the minor child(ren)
is Native American. The Indian Child
Welfare Act (ICWA) is a federal law that
allows the Indian custodian or the Indian
tribe of a child to intervene at any point in
a state court proceeding for the foster care
placement of or termination of parental
rights to an Indian child. If you are the
caregiver of an Indian child, you should be
aware of the ICWA and seek the advice of
an attorney familiar with Indian Law.

Financial Assistance

Many grandparents who become
caregivers are retired and living on a
fixed income. Having one or more additional
mouths to feed and clothe can really put a
strain on an already tight budget. There is
financial assistance out there to help relieve
the burden on caregivers.

State Financial Assistance

The state of New Mexico provides the
following assistance for families in
need: food stamps, Medicaid, Temporary
Assistance for Needy Families (TANF),
Women, Infants and Children (WIC),
childcare, and housing assistance. All or
some of these benefits may be available
to caregivers. All of these benefits,
except housing assistance and child care,
are administered through your local
Income Support Division office. Housing
assistance is administered through your
local public housing authority, and child
care is administered through the Children,
Youth and Families Department. You will
need to bring proof that a child is living
with you. This proof can be in the form of
court papers, a letter from someone who
can attest to the fact that the child lives with
you, a caregiver affidavit (discussed above),
or a parental power of attorney (discussed
above). The following is a discussion of
each type of assistance in detail.

Medicaid. Medicaid is a health insurance
program for low-income individuals and
families. There are a couple of ways a child
who lives with a caregiver may qualify. A
child living apart from his or her parents
for thirty days will automatically qualify. A
child may also be able to qualify based on
the caregiver’s income.

Food Stamps. The Food Stamp program
assists low-income individuals and families
with purchasing food. The amount of food
stamps in dollars that you will receive
each month depends on your income and
family size. Whether you as a caregiver
will qualify depends on household income,
family size and other considerations.

TANF. Temporary Assistance to Needy
Families, as the name implies, is a temporary
cash assistance program for low-income
families. There are two ways a caregiver
may qualify for this benefit. The first is
based on family income. If a caregiver
qualifies on this basis, there are limits as to
how long a family may receive this benefit,
and there may also be an employment
requirement. A second way a caregiver
may qualify is to apply only for the child.
If the caregiver chooses this method, the
state Child Support Enforcement office
will automatically open a child support
case against both of the child’s parents.

WIC. The Women, Infants and Children
program provides nutrition assistance to
pregnant women, infants and toddlers to
ensure a healthy start in life. A caregiver
may qualify for this benefit if the child
being cared for is an infant or toddler, as
well as meeting certain household income

Child Care. If you are a low-income
caregiver of a child, you may qualify for
free or subsidized child care services.
Eligibility for such services is based on
household size and income. You may apply
for this benefit through the Children, Youth
and Families Department.

Housing Assistance. Housing assistance
is available to low-income individuals and
families in the form of subsidies. (Housing
assistance programs are covered in greater
detail in Chapter Four, entitled “Housing.”)
Eligibility for these programs is determined
by household size and income. For more
information on this benefit and how to apply,
contact your local public housing authority.
A list of public housing authorities is listed
in the telephone directory government
pages under the name of the city or county
where you live.

If you are already receiving benefits from
any of the programs discussed above, you
must report any changes to your household
to Income Support Division, Children,
Youth and Families Department, and/or to
your local public housing authority. If you
become a caregiver to a child, you may be
entitled to additional benefits. Conversely,
if you were a caregiver and the child or
children cease living with you, you must
also report this change to the appropriate
agencies, as the amount of your benefits
will likely change.

Federal Financial Assistance

There is very little in the way of federal
financial assistance for caregivers. The
two programs where assistance may be
available are through the Social Security
Administration and Veterans Affairs.
Whether benefits will be available to a child
under either of these programs depends
mainly on the child’s parent’s eligibility
for benefits under these programs.

As you can imagine, the rules for each of
these programs are quite complicated and
cannot be adequately addressed in this
publication. Following is a brief discussion
of the assistance available through each of
these programs. It is advisable to contact
each agency for information tailored to
your specific needs and situation.

Social Security. There are a number of
different ways a child under a caregiver’s
care may qualify for Social Security

• If the child is disabled, he or she
may qualify for Supplemental
Security Income (SSI) based on his
or her disability.

• Social Security survivor’s benefits
may be available to a child whose
parent(s) is deceased.

• A child may be eligible to receive
Social Security dependent benefits
if the child’s parent(s) receives
Social Security Disability.

• If the child’s caregiver receives
Social Security old age or disability
benefits, the child (or stepchild as
well in this case) may be eligible
for benefits if the child’s parent(s)
was disabled or deceased at the time
that the caregiver became eligible
for benefits.

The rules relating to eligibility for Social
Security benefits are quite complex, thus
it is advisable to contact your local Social
Security Administration office to see
how the rules apply to your individual

Veterans Affairs. A child may be eligible
for benefits from Veterans Affairs if the
child’s parent(s) is a veteran receiving
veteran’s benefits. Again, it is advisable to
contact the VA directly to determine how
the rules apply to your particular situation.

Other Financial

Parents are obligated for the support
of their children, even if the children
are not living with them. In addition
to the financial assistance discussed in
the sections above, there may also be
assistance available from the parents of the
child through child support payments and
private health insurance.

Child Support. As discussed above, if
the child is receiving financial assistance
from the state in the form of Temporary
Assistance for Needy Families (TANF),
the state will automatically initiate child
support proceedings against the child’s
parents. If the child is not receiving
TANF, you can apply to the Child Support
Enforcement Division (CSED) for
assistance in obtaining child support from
the child’s parent(s). You must be patient,
as CSED is overwhelmed with requests for

Private Insurance. A child can be covered
under a parent’s health insurance policy,
even if the child is not living with the parent.
Courts will often order a parent to include
a child under the parent’s health insurance
policy as part of a child support order. In
some cases, a child may be covered under
a caregiver’s health insurance policy. You
should check with your employer’s human
resources department or contact the health
insurer directly to see if your health insurer
offers such coverage.

Grandparent Rights

Traditionally in New Mexico, it has been
left to parents to decide with whom
their children may associate. There are,
however, certain limited circumstances
when you have a right to ask for visitation
with your grandchildren.

• The court may grant reasonable
visitation privileges to a
grandparent of a minor child as part
of a judgment, such as a dissolution
of marriage, legal separation or
an order establishing a parent and
child relationship.

• If one or both parents of a minor
child are deceased, any grandparent
of the minor child may ask the court
for visitation privileges with the
minor child.

• If a minor child’s home state is New
Mexico, and the minor child resided
with a grandparent for a period of at
least three months and the child was
less than six years of age at the start
of the three-month period, and the
child was subsequently removed
from the grandparent’s home, the
grandparent(s) may ask the court
for visitation privileges with the

• If the minor child’s home state is
New Mexico and the minor child

resided with a grandparent for a
period of at least six months and the
child was six years of age or older
at the start of the six-month period
and the child was subsequently
removed from the grandparent’s
home, the grandparent(s) may ask
the court for visitation privileges
with the child.

• A biological grandparent may ask
the court for visitation privileges
with respect to a grandchild when
the grandchild has been adopted
or an adoption is being sought
by a stepparent, a relative of the
grandchild, a person designated
to care for the grandchild as a
provision of a deceased parent’s
will, or a person who sponsored
the grandchild at a baptism or

• When a minor child is adopted by
a stepparent and the parental rights
of the natural parent are terminated
or are relinquished, the biological
grandparents may attempt to
establish visitation privileges.

Grandparents have no visitation rights
when the natural parents’ rights have
been terminated or relinquished, and
the child is adopted by a non-family

Consult an attorney, your local Legal Aid
office, or the Guardianship Legal Helpline
for advice and assistance in pursuing your
visitation rights. (See Resources)


Divorce can happen to any married
couple, even after many years of
marriage. In New Mexico you can obtain
what is referred to as a “no-fault” divorce;
in other words, neither party has to prove
that the other was at fault. A no-fault divorce
is simply based on the spouses’ inability to
get along with one another. Before you can
obtain a divorce in New Mexico, you must
be a resident of New Mexico and have lived
in the state for at least six months prior to
the divorce.

A divorce consists of two parts, the
dissolution of the marriage and the division
of property. Property is divided into two
categories, community and separate.
Community property is anything acquired
during the marriage other than by gift or
inheritance. Separate property is property
owned prior to the marriage, such as
gifts, inheritance, and items specifically
earmarked as separate property by written
agreement or court order. Community
property and separate property are covered
at length in Chapter Five, entitled “Property

If you and your spouse can agree as to how to
divide the property, debts and income, then
you may be able to obtain a do-it-yourself
or “pro se” divorce. Your local Legal Aid
office may offer a pro se clinic where you
can learn how to complete and file the
necessary forms. Your local courthouse
may have pro se divorce packets available
as well. Court employees, however, are not
allowed to help you fill out the forms.

If you and your spouse have acquired a
great deal of property or cannot agree how
to divide the property, debts and income,
then you may need to retain your own
separate attorney. It is not advisable to share
an attorney with your estranged spouse. If
possible, it is well worth the expense of
retaining your own attorney to protect your
individual interests.

If either you or your spouse has earned
retirement benefits or pension benefits
while you were married to one another,
these benefits are considered community
property. This is true even though you may
not have started receiving benefits from the
pension at the time of your divorce. Military
pensions are also community property.
If you are divorced in New Mexico, the
court will determine what percentage of
the pension each spouse should receive. In
order to receive your portion of the benefits,
additional legal documents are necessary,
and, consequently, you are strongly advised
to consult an attorney for assistance with
this process.

The court does not have to divide every
piece of property exactly down the
middle. The court is charged with making
equitable property settlements; however,
this does not necessarily result in an equal
division of property. In general, the court
will equitably divide the community
property and return the separate property
to its owner. Additionally, you and your
spouse can make trade-offs when dividing
property. For example, you may want
to keep a certain item of property and in
exchange, you may be willing to forgo
your community property interest in your
spouse’s pension.

There are limited circumstances in which