A trust is an alternate option for holding\ntitle to real property. Trusts involve three parties: the settlor (sometimes\ncalled the grantor), who contributes property to the trust; the trustee, who\nholds title to the trust property and administers the trust; and the\nbeneficiary, who has a present or future interest in the trust.<\/p>\n\n\n\n\n\n\n\n
A living (inter vivos) trust is an estate\nplanning tool governed by NMSA 1978, Chapter 46A (Uniform Trust Code). The\nsettlor executes a trust instrument, an unrecorded document designating the\ntrustee (oftentimes themselves, a successor trustee who will take over the\ntrustee\u2019s duties upon the settlor\u2019s death or incapacity), and one or more\nbeneficiaries, as well as outlining the trust\u2019s assets and provisions for its\nadministration. <\/p>\n\n\n\n
In order to transfer property to a trust,\nthe settlor executes a deed to title the property in the name of the trustee as\nthe trust\u2019s representative. Upon death, the trustee transfers assets to the beneficiaries\nas stated in the trust instrument, thereby avoiding probate.<\/p>\n\n\n\n
New Mexico\u2019s Uniform Trust Code outlines\nthe powers of the trustee. Generally, these include \u201call powers over the trust\nproperty that an unmarried competent owner has over individually owned property\u201d\nunless otherwise limited by the terms of the trust (NMSA 1978, \u00a7 46A-8-815).\nThis includes the specific power to \u201cacquire or sell property, for cash or on\ncredit, at public or private sale\u201d (\u00a7 46A-8-816(B)). <\/p>\n\n\n\n
To remove property from a trust, the trustee\nexecutes a deed, conveying title to a new owner (the grantee). Deeds\ntransferring property from a living trust can sometimes be named after the\nexecuting grantor (e.g. \u201ctrustee\u2019s deed\u201d), though they are functionally\nequivalent to statutory deeds, which are named for the type of warranty they\ncarry. <\/p>\n\n\n\n
New Mexico recognizes three basic deed\ntypes: warranty deed, special warranty deed, and quitclaim deed. The type of\ndeed used will depend on the situation, as each deed carries its own level of\nwarranty of title. <\/p>\n\n\n\n
The grantor of a warranty deed covenants\nthat he is lawfully seized of the property in fee simple; that the title is\nfree from encumbrances (unless otherwise stated); that the grantor has good\nright to convey title; and that he will warrant and defend the title \u201cagainst\nthe lawful claims and demands of all persons\u201d (\u00a7 47-1-37). <\/p>\n\n\n\n
In a special warranty deed, the grantor\ncovenants that the title is free from encumbrances and that the grantor will\nwarrant and defend the title \u201cagainst the lawful claims and demands of all\npersons claiming by, through or under the grantor, but against none other\u201d (\u00a7\n47-1-38). <\/p>\n\n\n\n
Finally, a quitclaim deed is simply a deed\nin fee simple transferring \u201cany interest the grantor owns in the premises,\nwithout warranty\u201d (\u00a7 47-1-30).<\/p>\n\n\n\n
A deed conveying property with the highest\nlevel of warranty opens the grantor to a substantial degree of liability, even\nif he has no knowledge of the quality of title prior to his appointment. A quitclaim\ndeed may purport to convey interest even if the grantor has no interest to\nconvey.<\/p>\n\n\n\n
Any conveyance from a trustee should meet all form and\ncontent requirements for conveyances affecting title to real property. Apart\nfrom vesting title in the name of the grantee, the granting clause should\ninclude specific information about the granting party, such as the name of the\nexecuting trustee and the trust, and the execution date of the trust\ninstrument. The trustee must sign the instrument in the presence of a notary\npublic before it is recorded in the county in which the subject real property\nis situated. <\/p>\n\n\n\n
When conducting business involving a trust, second parties may require a certification of trust under \u00a7 46A-10-1013, which document confirms the trust\u2019s existence and the trustee\u2019s authority to enter into transactions for the trust.<\/p>\n\n\n\n