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New Mexico Living Trust Form (Revocable)

New Mexico Living Trust Form (Revocable)

Updated May 09, 2024

A New Mexico living trust is a legal document used to transfer the grantor’s assets into a separate entity to be managed by a trustee and distributed to their beneficiaries after they die. The advantages of a living trust are that it avoids probate and can be amended or revoked by the grantor at any time.

Requirements (5)

  1. Competent: The grantor must have the capacity to create a trust.
  2. Intent: The grantor must indicate the intent to establish a trust.
  3. Definite Beneficiary: Unless it is a charitable trust or a trust for the care of an animal, the trust must have a definite beneficiary.
  4. Trustee’s Duties: The trustee must have duties to perform.
  5. Sole Trustee Cannot be the Sole Beneficiary: The same person cannot be the sole trustee and the sole beneficiary of the trust.[1]

Laws

Amending/Revoking – Unless the terms of the trust state that it is irrevocable, the grantor may amend or revoke the trust at any time.[2]

Bond Requirement – The trustee is not required to give a bond unless this is a requirement under the terms of the trust or the court has deemed a bond necessary to secure the performance of the trustee’s duties.[3]

Certification of Trust – In lieu of providing a person other than a beneficiary with a copy of the trust instrument, the trustee may furnish a certification of trust confirming the date of the trust, the identities of the grantor and trustee, and other relevant information.[4]

Co-Trustees – If co-trustees are unable to reach a unanimous decision, then they may act by majority decision.[5]

Contesting a Trust – An action to contest a trust must be commenced within 120 days of notice being given by the trustee of the trust’s existence or within three years of the grantor’s death, whichever is earlier.[6]

Costs Related to the Trust – The trustee may only incur reasonable costs of administration in relation to the trust property and its purposes.[7]

Jurisdiction – An out-of-state trust is valid in New Mexico if its creation was in compliance with the laws of the jurisdiction where the trust instrument was executed.[8]

Oral Trusts – An oral trust must be established with clear and convincing evidence.[9]

Pet Trusts – A trust may be established to provide for the care of one or more animals that are living during the grantor’s lifetime. When the last surviving animal passes away, the trust terminates.[10]

Signing Requirements – A living trust does not have to be signed under New Mexico statute.

Spendthrift Provision – A spendthrift provision is only valid if it restrains the voluntary and involuntary transfer of a beneficiary’s interest.[11]

Trustee’s Compensation – If the terms of the trust do not specify the trustee’s compensation, the trustee is otherwise entitled to reasonable compensation.[12]

Trustee’s Duties – The trustee has a duty to prudently administer the trust in good faith, in accordance with its terms and purposes, and in the interest of the beneficiaries.[13]

Trustee’s Powers – Along with the powers conferred upon them by the terms of the trust, the trustee is empowered to collect, sell, exchange, partition, or otherwise change the character of trust property.[14]

Sources

  1. § 46A-4-402(A)
  2. § 46A-6-602(A)
  3. § 46A-7-702(A)
  4. § 46A-10-1013(A)
  5. § 46A-7-703(A)
  6. § 46A-6-604(A)
  7. § 46A-8-805
  8. § 46A-4-403
  9. § 46A-4-407
  10. § 46A-4-408(A)
  11. § 46A-5-502(A)
  12. § 46A-7-708(A)
  13. § 46A-8-801
  14. § 46A-8-816