Giving Notice Before You Move a Trust: How New Mexico’s Decanting Timeline Works
Key Takeaways: New Mexico’s Uniform Trust Decanting Act, §§ 46-12-101 through 46-12-129 NMSA 1978, requires an authorized fiduciary to give notice in a record not later than 60 days before exercising the decanting power. The period begins the day notice is given and ends 59 days later. Notice must reach each settlor of the first trust if living, each qualified beneficiary, holders of presently exercisable powers of appointment, persons with the right to remove or replace the fiduciary, other fiduciaries of both trusts, and the attorney general where charitable interests apply. Notice must describe the intended exercise, state the proposed effective date, and include copies of both trust instruments. The period may be shortened if all entitled persons waive it in a signed record.
If you are a trustee preparing to move assets from one irrevocable trust into a new one, New Mexico generally requires you to give notice in a record not later than 60 days before you exercise the decanting power. The requirement comes from the Uniform Trust Decanting Act, codified at Sections 46-12-101 through 46-12-129 NMSA 1978. The notice period begins the day notice is given and ends 59 days later. Missing a required recipient, sending incomplete notice, or moving too early can complicate an otherwise well-planned restructuring.
Walk-in Wills helps New Mexico trustees plan and document decanting notice correctly the first time. If you are weighing whether decanting is appropriate and how to satisfy the notice requirements, Walk-in Wills offers an unhurried, plain-English conversation about your trust and your options. Call (505) 903-7000 or schedule your consultation today to talk through the timeline before any deadline starts running.
Why Trust Decanting New Mexico Trustees Consider Requires a Waiting Period
The waiting period ensures interested parties learn about a significant change before it becomes final. Decanting allows an authorized fiduciary to distribute property from a first trust into a second trust with modified terms. Because the change can occur without a court order in many cases, the Legislature built in a notice window as a procedural safeguard.
Laws 2016, ch. 72, § 3-101 made the Uniform Trust Decanting Act effective January 1, 2017. The 2016 Senate decanting bill contains the operative notice language now codified at Section 46-12-107(C), which directs that an authorized fiduciary "shall give notice in a record of the intended exercise of the decanting power not later than sixty days before the exercise."
Who Must Receive NMUTDA Notice
The statute identifies the recipients, and the list is broader than most trustees expect. Under Section 46-12-107(C)(1) through (7), notice generally must go to:
- Each settlor of the first trust who is living
- Each qualified beneficiary of the first trust
- Each holder of a presently exercisable power of appointment over the first trust
- Each person with authority to remove or replace the authorized fiduciary
- Each other fiduciary of the first trust
- Each fiduciary of the second trust
- The attorney general, where the first trust contains a determinable charitable interest
Section 46-12-108 also allows notice to be given to a representative on behalf of certain persons under the Act’s representation rules.
There are limited relief valves. Section 46-12-107(D) provides that an authorized fiduciary is not required to give notice to a person who is not known to the fiduciary or who is known but cannot be located after reasonable diligence. Documenting your search efforts is generally far more persuasive than describing them from memory months later.
The Content the Notice Must Contain
Timing alone does not satisfy the rule. Section 46-12-107(E) requires the notice to specify the manner in which the fiduciary intends to exercise the decanting power, state the proposed effective date, and include a copy of the first-trust instrument along with copies of all second-trust instruments.
When the Notice Period Can Be Shortened
The 60-day window is not immovable, but shortening it requires cooperation. Under Section 46-12-107(F), the decanting power may be exercised before the expiration of the notice period if all persons entitled to notice waive the period in a signed record.
| Element | General rule under the Act |
|---|---|
| Advance notice | Generally not later than 60 days before exercise |
| Period measurement | Generally begins the day notice is given; ends 59 days later |
| Early exercise | Permitted if all persons entitled to notice waive the period in a signed record |
| Unknown or unlocatable persons | Notice not required after reasonable diligence |
| Effect of notice | Does not itself constitute consent or bar a later court application |
Trustee Duties Do Not Pause During the Notice Period
Sending notice is a procedural step, not a substitute for fiduciary judgment. Under NM Stat § 46-12-104(A), an authorized fiduciary exercising the decanting power "shall act in accordance with its fiduciary duties, including the duty to act in accordance with the purposes of the first trust." A statement of fiduciary duty in decanting reinforces that notice and fiduciary obligations operate together.
The Act does not impose a duty to decant at all. Section 46-12-104(B) provides that the Act does not create or imply a duty to exercise the decanting power or to inform beneficiaries about the applicability of the Act.
One structural provision often surprises trustees. Section 46-12-104(C) provides that, except as otherwise provided in a first-trust instrument, the terms of the first trust are deemed to include the decanting power for purposes of the Uniform Trust Decanting Act, Section 46A-8-801 NMSA 1978, and Subsection A of Section 46A-8-802 NMSA 1978. This ties the decanting analysis back to the general duties to administer the trust and act in the beneficiaries’ interests. Careful trust administration guidance can help a trustee show the decision was made within those duties. Section 46-12-115 separately addresses trust instruments that expressly restrict or prohibit decanting.
💡 Pro Tip: Keep a dated file containing the notice, proof of delivery to each recipient, your diligence notes for anyone you could not locate, and any signed waivers. Documentation created contemporaneously is generally more useful than a reconstruction assembled later.
How Decanting Fits Within Broader New Mexico Trust Law
Decanting does not operate in isolation. New Mexico has adopted the Uniform Trust Code as Chapter 46A NMSA 1978, along with provisions governing directed trusts and the Uniform Principal and Income Act, §§ 46-3A-101 through 46-3A-603 NMSA 1978. Each can affect how a trustee analyzes allocation, direction, and duty questions when moving assets to a second trust.
Directed trusts deserve particular attention. Where a trust director holds power over investments or distributions, the allocation of responsibility between trustee and director can shape who qualifies as an authorized fiduciary able to exercise a decanting power.
Trustees should confirm current language rather than rely on summaries, including this one. The New Mexico Compilation Commission publishes statutes through NMOneSource.
What Notice Does and Does Not Accomplish
Receiving notice is not the same as approving the decanting. Under Section 46-12-107(G), receipt of notice, waiver of the notice period, or expiration of the notice period does not affect the right to file an application under Section 46-12-109 asserting that an attempted exercise is ineffective because it did not comply with the Act or was an abuse of discretion or breach of fiduciary duty.
The Act is not designed to punish good-faith administrative errors. Section 46-12-107(H) provides that an exercise of the decanting power is not ineffective because of the failure to give notice to one or more persons if the fiduciary acted with reasonable care to comply. Whether reasonable care existed depends on the facts.
Trustees comparing state approaches often find the contrast instructive. Our discussion of decanting rules in Arizona illustrates how similar frameworks can diverge in application.
💡 Pro Tip: Calendar the exercise date the day you send notice, and calendar it conservatively. Because the period generally begins the day notice is given and ends 59 days later, an off-by-one error can place the exercise a day early.
Frequently Asked Questions
1. Does the 60-day notice rule apply to every New Mexico decanting?
The advance notice requirement generally applies to exercises of the decanting power under the Uniform Trust Decanting Act, §§ 46-12-101 through 46-12-129 NMSA 1978. The Act generally applies to trusts with their principal place of administration in New Mexico or governed by New Mexico law, and Section 46-12-103 excludes certain trusts from its scope.
2. Can beneficiaries stop a decanting by objecting during the notice period?
An objection generally does not, by itself, halt the exercise. However, Section 46-12-107(G) preserves a person’s right to file an application under Section 46-12-109 regarding compliance, abuse of discretion, or breach of fiduciary duty. A trustee facing objections should generally pause and seek counsel before proceeding.
3. What happens if I discover a qualified beneficiary after sending notice?
Section 46-12-107(H) provides that an exercise is not ineffective solely because notice was not given to one or more persons where the fiduciary acted with reasonable care to comply. The safer course is often to give notice to the newly identified person and restart or extend the timeline.
4. Does the trust document itself affect the decanting power?
It can. Under § 46-12-104(C), except as otherwise provided in a first-trust instrument, the terms of the first trust are deemed to include the decanting power. Section 46-12-115 addresses instruments that restrict or prohibit decanting, so limiting language should be identified before any notice goes out.
5. Do I need a lawyer to prepare the notice and the second trust?
There is no statutory requirement to use counsel, but the notice must include the first-trust instrument and all second-trust instruments, which means the new trust must already be drafted. The Act requires the exercise to be made in a record signed by an authorized fiduciary that identifies the first and second trusts. Coordinating the drafting, notice content, and timing is where many avoidable problems arise.
Getting the Timeline Right the First Time
Decanting can be a genuinely useful fix for an irrevocable trust that no longer serves its purpose, and the notice rule is the gateway to doing it properly. The core requirements are: confirm that the Act applies and that the instrument does not restrict decanting, identify every person entitled to notice, include the required content and documents, respect the 60-day notice period unless every entitled person waives it in a signed record, document the exercise in a signed record, and act consistently with your fiduciary duties throughout.
You deserve an attorney who is still available when a question comes up two weeks after the documents are signed. Walk-in Wills works with New Mexico trustees and families through unhurried, in-person conversations and proper in-office execution, with flat-fee transparent pricing and a one-hour free consultation for new estate-planning matters. Call (505) 903-7000 or reach out to our team to review your trust before the notice clock starts.
Disclaimer: This content is for informational purposes only and is not legal advice. Every case is unique, and results may vary. Consult an attorney about your specific circumstances.