Make a Living Trust in New Mexico

Learn what a New Mexico living trust can do for you.

What is a living trust?

A trust is an arrangement under which one person, called a trustee, holds legal title to property for another person, called a beneficiary. You can be the trustee of your own living trust, keeping full control over all property held in trust.

A "living trust" (also called an "inter vivos" trust by lawyers who can't give up Latin) is simply a trust you create while you're alive, rather than one that is created at your death under the terms of your will. The beneficiaries you name in your living trust receive the trust property when you die.

In contrast to revocable trusts, irrevocable trusts cannot be revoked or modified after they are signed. Irrevocable trusts can be useful tools for specific goals, like reducing taxes, but they require giving up ownership and control of trust property.

Do I need a living trust in New Mexico?

The main advantage of making a living trust is to spare your family the expense and delay of probate court proceedings after your death. But do you really need a trust?

New Mexico uses the Uniform Probate Code, which simplifies the probate process, so making a living trust may be more trouble than it saves.

New Mexico has a simplified probate process for small estates. In New Mexico, a small estate is either an estate under $50,000 or an estate of a married person if the couple owned their principal residence as community property, that property has a property tax value of $500,000 or less, and other assets need to be probated. N.M. Stat. Ann. § 45-3-1201 or N.M. Stat. Ann. § 45-3-1205.If your estate fits into either one of these categories when you die, then the probate process may be straightforward and relatively inexpensive, so you may not need to worry about avoiding probate with a living trust.

Also, in New Mexico, you can transfer real property with a transfer-on-death deed. So if you're thinking about making a living trust mainly to keep your home out of probate, consider using a transfer-on-death deed instead.

    In New Mexico, if I make a living trust, do I still need a will?

    Yes, you always need a will. A will provides a backup plan for any property that doesn't make it into your trust. For example, if you acquire new property and don't add it to your trust before you die, that property won't pass under the terms of the trust document. You can use a will to name someone to inherit property that you haven't left to a particular person or entity in your trust.

    If you don't have a will, any property that isn't transferred by your living trust or other method (such as joint tenancy) will go to your closest relatives as determined by New Mexico state law.

    Can writing a living trust reduce estate tax in New Mexico?

    Probably not. Most people do not need to worry about estate taxes because the federal estate tax is levied only on estates worth close to $12 million. New Mexico does not have its own estate tax.

    That said, if your estate is close to $12 million, you may be able to use a more complicated trust (such as an AB trust) to reduce or avoid estate taxes.

    How do I make a living trust in New Mexico?

    To make a living trust in New Mexico, you:

    1. Choose whether to make an individual or shared trust.
    2. Decide what property to include in the trust.
    3. Choose a successor trustee.
    4. Decide who will be the trust’s beneficiaries – who will get the trust property.
    5. Create the trust document. You can get help from an attorney or use Quicken WillMaker & Trust, see below.
    6. Sign the document in front of a notary public.
    7. Change the title of any trust property that has a title document—such as your house or car—to reflect that you now own the property as trustee of the trust.

    You can use Quicken WillMaker & Trust to make a living trust using your computer. It has a simple interview format that allows you to complete the trust at your own pace, and it gives you lots of legal and practical help along the way. Based on your responses, the program produces a living trust document customized for you and your situation. With Quicken WillMaker & Trust, you can also make a will, powers of attorney, health care directives, and many other useful documents. Use it just for yourself or for your entire family.

    For more on New Mexico estate planning issues, see New Mexico Estate Planning on Nolo.com.

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