NEW MEXICO WILLS AND TRUSTS REQUIREMENTS
Statutory Authority.
Wills:ย New Mexico Uniform Probate Code, NM Stat. Ann. ยงยง45-1-101, et. seq.
Trusts:ย New Mexico Uniform Trust Code, NM Stat. Ann. ยงยง46A-1-101, et. seq.
New Mexico Will Requirements.
Under New Mexico law, a testator must be โof sound mindโ and at least 18 years old or an emancipated minor to create a valid will.ย When determining whether a testator is of sound mind, New Mexico courts evaluate whether the testator understood that he or she was creating a will, had knowledge of the character and extent of the estate, and understood the individuals who would ordinarily have the right to share in the estate.
New Mexico wills must be in writing and must be signed by the testator (or by another person for the testator at the testatorโs express direction).ย A valid New Mexico will must also be signed by at least two witnesses.ย Witnesses must observe the testatorโs signing of the will and must themselves sign the will while in the presence of the testator.ย ย
The only statutory requirement to serve as a witness to a New Mexico will is that the individual be โgenerally competentโ to act as a witness.ย While it is preferable for witnesses to be โdisinterestedโ (i.e., not have any interest in the testatorโs estate), the witnessing of a will by an interested person does not invalidate a New Mexico will or any provision thereof.ย ย
New Mexico law allows a testator making a will to incorporate by reference a written statement or list disposing of items of tangible personal property not addressed within the will itself.ย Often called a โmemorandum of personal property,โ the list must include the testatorโs signature and must identify the items of personal property and intended beneficiaries with reasonable certainty.ย A New Mexico memorandum of personal property can be prepared before or after the willโs execution and can be altered by the testator after the listโs initial creation.
Significantly, a memorandum of personal property incorporated into a New Mexico will cannot be used to distribute assets not qualifying as โtangible personal property,โ such as real estate, and cannot be used to distribute cash.
Though notarization of a will is not strictly required, a New Mexico will can be made โself-provedโ through execution of a notarized affidavit by the testator and the willโs witnesses.ย The affidavit can be executed simultaneously with the will or at a later date while the testator and witnesses remain living.ย When a New Mexico will is self-proved, it can be admitted to probate without witness testimony.
Within the self-proved affidavit, the witnesses and testator attest to the facts necessary to establish the willโs validity. ย The New Mexico legislature provides a sample form for a self-proved affidavit, at NM Stat. Ann. ยง45-2-504.
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Amendment, Revision, and Revocation of New Mexico Wills.
Amendment of New Mexico will can be accomplished through a codicil (a later-executed addendum to an existing will) or execution of a new will that includes the desired amendments.ย In either case, the new will or codicil must satisfy all formalities required for a New Mexico will.
A New Mexico will can be revoked if the testator performs a โrevocatory actโ with the intent to revoke the will.ย Revocatory acts include burning or tearing of the will.ย Alternatively, a will can be revoked through the testatorโs execution of a subsequent revocatory instrument which expressly revokes the will and satisfies all formalities for creation of a will.
A New Mexico will be can also be revoked through execution of a later will that either expressly or implicitly revokes the prior will.ย A later will is considered to implicitly revoke a prior will if it disposes of substantially all of the testatorโs estate.
If a later will does not completely dispose of the testatorโs estate, it is presumed to have been intended as a supplement to the earlier will, with the later-executed will controlling in the event of any conflicting provisions.ย ย
If, after executing a will, a New Mexico testator is divorced, any provisions in the will in favor of the former spouse are deemed to have been revoked unless the will, a court order, or a property settlement agreement between the former spouses expressly states otherwise.ย ย
If a New Mexico testator marries after execution of a will, the surviving spouse inherits the same share of the estate he or she would have inherited had the testator died intestate, adjusted for any distributions to children of the testator born before the marriage and who are not children of the surviving spouse.ย A later-wed spouseโs share is inapplicable if the will was made in contemplation of the marriage, the testator intended the will to apply notwithstanding the marriage, or the testator made other provisions for the surviving spouse outside the will.
If a child is born to or adopted by a testator after execution of a New Mexico willโand if the testator did not otherwise provide for or appear to intentionally omit the childโthe child inherits a share of the estate.ย If the testator has no other children, the share is equal to what the child would have inherited had the testator died intestate.ย If the testator has other children provided for under the will, the share is calculated based upon the devises to other children.ย An omitted childโs share is inapplicable if the will leaves substantially all of the estate to the childโs other parent.
Holographic and Oral Wills.
New Mexico law does not recognize handwritten (holographic) wills. ย A will written in the testatorโs handwriting, signed, and attested by two witnesses can be admitted to probate if all formalities required to create a valid New Mexico will are satisfied.
Oral (or โnuncupativeโ) wills are not recognized under New Mexico law.
New Mexico Trust Requirements.
New Mexico trusts are primarily governed by New Mexicoโs Uniform Trust Code, enacted by the legislature at NM Stat. Ann, ยงยง46A-1-101, et. seq.ย A New Mexico trust can be formed for most any purpose; provided, however, the purpose of a New Mexico trust must be lawful, capable of being achieved, and not in conflict with New Mexico public policy. In general, the terms of a trust and the trust itself must be for the benefit of the trustโs beneficiaries.ย ย ย
New Mexicoโs Uniform Trust Code specifically authorizes, among other things, trusts created for charitable purposes (such as the relief of poverty, advancement of education or religion, or promotion of health, governmental, or municipal purposes) and trusts for the care of animals.ย
To create a valid trust under New Mexico law, the settlor must express an intent to create a trust and have adequate capacity (measured under the same standard applying to wills).ย A New Mexico trust is void to the extent its creation was induced through fraud, duress, or undue influence.
Additionally, New Mexico trusts must have a definite beneficiary (subject to exceptions such as for charitable trusts, trusts for the care of animals, and certain trusts created for noncharitable purposes) and a trustee with actual duties to perform.ย The trustee of a New Mexico trust has a duty to administer the trust prudently, taking into account the trustโs terms, purposes, and surrounding circumstances.ย The sole trustee of a New Mexico trust cannot also be the trustโs sole beneficiary.ย ย
New Mexico trusts can be created through transfer of property by a settlor to a trustee (either during life or through a will or other testamentary instrument), a declaration by the owner of property that it is owned as trustee, or by exercising a power of appointment in favor of a trustee.
Though most trusts are evidenced by a written instrument setting forth the trustโs terms, New Mexicoโs Uniform Trust Code recognizes oral trusts if the terms can be established by clear and convincing evidence.ย Certain types of trustsโsuch as trusts relating to real estateโmust be evidenced by a written instrument.ย
New Mexico law assumes that trusts are revocable unless the terms of the trust expressly provide that the trust is irrevocable.ย If the testator of a New Mexico revocable trust is divorced after executing the trust instrument, any provisions in favor of the former spouse are deemed revoked unless the trust instrument, a court order, or a pre- or post-nuptial agreement provides otherwise.
The general rule is that creditors of a trustโs beneficiary can attach the beneficiaryโs interest in the trust.ย However, New Mexico, like most states, recognizes spendthrift provisions, which help protect trust assets from creditors.ย If a New Mexico trust includes a valid spendthrift provision, a beneficiaryโs creditors (other than certain domestic support obligations, governmental claims, and claims arising from services provided relating to the beneficiaryโs interest in the trust) cannot ordinarily attach trust assets until actually distributed to the beneficiary.ย ย
Generally, creditors of a New Mexico trustโs settlor can reach assets held in a revocable trust and can reach assets held in an irrevocable trust to the extent distributions could be made for the settlorโs benefit.
New Mexico trusts terminate upon revocation or expiration under the trustโs own terms, when there is no purpose of the trust remaining to be achieved, or when the trustโs purposes become unlawful, contrary to public policy, or impossible to achieve.ย A trust may also be modified or terminated by a court upon the petition of the settlor, trustee, and/or beneficiaries.ย Or, in some circumstances, modification or termination of a trust may be made upon the consent of the trustee and beneficiaries. Upon petition, a court may also reform or modify the terms of a trust to correct mistakes or accomplish the settlorโs tax objectives.
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New Mexico Statutory Will:ย New Mexicoโs legislature has adopted a simple โstatutory willโ that New Mexico testators can use for very simple estates.ย The statutory will incorporates default testamentary provisions set forth in the statute and has a fill-in-the-blank format.ย A statutory will formโwhich when properly completed complies with New Mexico requirements for a valid willโis set forth at NM Stat. Ann. ยง45-2A-17.
Estate Taxes: New Mexico does not impose either estate or inheritance taxes.ย Large New Mexico estates may still be liable for federal estate taxes.
Simplified Probate:ย New Mexico allows for transfer of certain estate assets outside probate through the use of an affidavit executed by the individual entitled to receive the asset.ย An affidavit can be used to transfer property if the estate value does not exceed $50,000 and for transfer of a residence owned as community property to the surviving spouse (if the value of the residence does not exceed $500,000).
A streamlined small-estate probate process is also available for qualifying estates upon approval of the probate court. A New Mexico estate is eligible for small-estate probate if the estateโs value (after deducting liens and encumbrances) is not greater than the sum of family and personal property allowances, administration costs, final expenses, and medical expenses from the decedentโs last illness.ย Personal representatives of qualifying small estates can take possession of estate assets, make distributions to heirs, and close the estate by affidavit without the more onerous ordinary probate process.
Non-Probate Transfers:ย New Mexico law provides multiple means of transferring assets outside of the probate process.ย In addition to living trusts, POD (payable-on-death) and TOD (transfer-on-death) designationsโwhich provide for automatic transfer to a named beneficiary upon an ownerโs deathโmay also be used in New Mexico.ย POD designations can be added to financial accounts and CDs. TOD designations are often used with registered securities, brokerage accounts, and similar financial assets.ย ย
Joint ownership provides another means of bypassing probate.ย Assets co-owned as joint tenants with right of survivorship automatically transfer to a surviving owner upon the other ownerโs death.ย Real and personal property can be owned in joint tenancy in New Mexico. New Mexico does not recognize tenancy by the entiretiesโanother joint ownership form that is only available for married spouses.
Transfer-on-Death (TOD) Deeds and Vehicle Titles:ย New Mexico law authorizes TOD designations on real estate deeds (sometimes called a โbeneficiary deedโ).ย When a TOD deed is recorded, the property automatically transfers to the named beneficiary upon the ownerโs death, but the beneficiary does not acquire present rights in the property until death actually occurs.
New Mexico does not permit TOD designations on vehicle titles.
Spousal Shares:ย New Mexico law does not provide for a spousal elective share.ย However, upon the death of a married New Mexico decedent, one-half of the coupleโs community property belongs to the surviving spouse, with the other half distributed through the decedentโs estate.
If a married New Mexico decedent is intestate, the surviving spouseโs share of the estate consists of either the entire estate (if the decedent left no surviving children or grandchildren) or (if the decedent leaves surviving issue) one-fourth of the decedent spouseโs separate property and half of the decedentโs interest in community property that the decedent could have passed by will.
New Mexico law also grants a surviving spouse an allowance of up to $30,000 from the decedentโs estate.ย The allowance takes priority over any claims against the estate and is in addition to any interest received by the surviving spouse through intestate succession or the decedentโs willโunless the will expressly provides otherwise.
Creating a will or trust does not have to be difficult or intimidating.ย However, certain circumstancesโlike second marriages, stepchildren, aging parents, special needs beneficiaries, guardianships, and business interests (to name a few)โcan add a layer of complexity and result in unforeseen long-term consequences.ย Whenever any out-of-the-ordinary issues are present, itโs a good idea to consult with an experienced attorney familiar with and licensed under the laws of the relevant jurisdiction.
