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HB 183: PERPETUITIES FOR CERTAIN TRUST PROPERTIES

An Act Relating To Property; Revising The Statutory Rule Against Perpetuities As It Affects Property Interests, Including Real Property Interests, Held In Trust.

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MILD HB 183
PERPETUITIES FOR CERTAIN TRUST PROPERTIES

Legislative URL:
HB 183 on nmlegis.gov
Emergency Clause:
No
Germane:
N/A
Location:
S Flr
Action:
[3] HJC [10] DP [14] fl/a- PASSED/H (60-0) [10] SCONC/SJC-SCONC [39] w/o rec-SJC [41] DP/a API.
Issue(s):

Related Legislators

Bill Sponsor:

Related Documents

Downloads:
Introduced
HJC Committee Report
House Floor Amendment 1
Final House Vote
SCONC Committee Report
SJC Committee Report
Fiscal Impact Report
Summary

New Mexico’s statutory rule against perpetuities provides, with certain exceptions, that when a non-vested interest in property is created, ownership in the property must vest or terminate no later than 21 years after the death of an individual then alive. This rule prevents assets from being tied up in trust for too long thus escaping certain kinds of taxes.

 

This bill excludes property interests held in trust from the rule, with the exception of real property held in trust. For real property held in trust, (presumably including water rights), the bill creates a new rule requiring distribution of such property or rights 365 years from the later of the date on which an interest in real property is added to or purchased by a trust or the date that the trust became irrevocable. The bill also details the required method of distribution of the property or rights at that time.

 

One concern with the bill might be that real property could be tied up in trust for hundreds of years, thus escaping taxes that bolster the state’s economy.