New Mexico Transfer on Death Deed Form

What Is a New Mexico Transfer-on-Death (TOD) Deed?

A New Mexico transfer-on-death deed, or TOD deed, is authorized under the Uniform Real Property Transfer on Death Act to transfer property upon the death of the owner.¹ A property owner may use a TOD deed to designate a beneficiary while the owner is alive, but the transfer occurs only when the property owner dies.²

The TOD deed must be recorded in the public records in the county where the property is located.³ A TOD deed does not affect the property owner’s rights during his or her lifetime. In fact, the property owner may sell or mortgage the property even if a TOD deed has been signed.⁴ When the owner dies, the deed transfers the property rights to the person named on the deed, who is called the designated beneficiary.⁵

What Is the Purpose of a New Mexico TOD Deed?

Signing a TOD deed is a quick way to transfer property to any person or persons without going through the probate court. A TOD deed is non-testamentary, meaning it is not part of a will, so there is no need for probate proceedings to transfer the property.⁶

What Is the Benefit of Avoiding Probate?

Probate proceedings can be extremely costly and time-consuming, so avoiding probate can save time and money. Property that goes through probate proceedings may take months or even years to be transferred to the new owner. A TOD deed helps to pass the title to the designated beneficiary with little time and administrative cost. If the TOD deed was properly signed and recorded, it cannot be undone by a will that conflicts with it.⁷ Also, personal and family information will be kept private by avoiding the public probate process.

What Type of Property Can Be Transferred Using a New Mexico TOD Deed?

A property owner can use a New Mexico TOD deed only to transfer rights to New Mexico real estate.⁸ If the owner has real property in another state and wants to transfer it, that property cannot be transferred using a New Mexico TOD deed.

TOD deeds are also not used to transfer non–real estate property. However, New Mexico does offer transfer-on-death security registration.⁹ When the owner dies, New Mexico law allows ownership of the securities, such as stocks and bonds, described on the beneficiary form to transfer to the named beneficiary.¹⁰ The beneficiary forms used for TOD designations for securities differ from the ones used for real property. New Mexico TOD deeds are effective only for rights to real property.

What Is the Effect of a New Mexico TOD Deed While the Owner Is Alive?

A property owner who records a New Mexico TOD deed holds sole rights to the property for his or her lifetime.¹¹ This means the property owner may transfer or mortgage the property. A beneficiary has no usable right to the property during the owner’s life, even if the beneficiary is aware of the deed.¹²

Further, a TOD deed does not affect the right of a secured, unsecured, or future creditor to get debt payment from the property owner.¹³ Likewise, a creditor of the designated beneficiary cannot claim the property.¹⁴ The recording of the deed also does not affect the property owner’s or the beneficiary’s right to receive any form of public assistance.¹⁵

Can the Owner Sell the Property after Recording a TOD Deed?

A New Mexico TOD does not limit the property owner’s right to sell the property, transfer it, or mortgage it while he or she is alive.¹⁶

Is a New Mexico TOD Deed Revocable?

A New Mexico TOD deed can be revoked, or undone, even if the deed or any other document says it cannot.¹⁷ A property owner has three options to revoke a TOD deed or a portion of the TOD deed:

1. The owner may complete a revocation form that clearly revokes the property and confirm it before a notary.¹⁸
2. The owner may create a new TOD deed that transfers the property to someone else, confirm it before a notary, and record it in the county where the property is located.¹⁹
3. The owner may transfer the property to another person by creating, confirming, and recording a new deed that clearly revokes the TOD deed.²⁰

When a TOD deed is recorded, it cannot be revoked by a revocatory act (such as by physically destroying the deed) the way that a will may be revoked.²¹

What Is the Effect of a New Mexico TOD Deed after the Owner Dies?

Title to New Mexico real property is transferred to a surviving designated beneficiary under the recorded TOD deed when the owner dies.²² If the owner who dies is a joint owner of the property, the property rights belong to the surviving joint owner or owners.²³ However, the TOD deed becomes effective if the owner who dies is the last surviving joint owner.²⁴

The property is transferred subject to all recorded transfers, legal obligations, contracts, mortgages, liens, and other recorded rights.²⁵ A TOD deed transfers property without promising a clear title (no warranty of title) even if the deed says otherwise.²⁶

Can a New Mexico TOD Deed Leave Property to Multiple Beneficiaries?

In New Mexico, a TOD deed may leave a property’s title to one or more beneficiaries when the owner dies.²⁷ When there are two or more beneficiaries, the property is transferred to the named persons in equal and undivided shares with no right of survivorship.²⁸ The language in the law can be understood to mean that the property owner may include specific statements in the TOD deed that control the transfer and holding of rights.²⁹

Can Joint Owners Sign a New Mexico TOD Deed?

Both sole owners and joint owners may transfer their rights to real property with a TOD deed.³⁰ Joint owners of New Mexico real estate may record a TOD deed transferring the property upon their deaths. A person who holds title to the property at the same time as one or more other people with a right of survivorship is called a joint owner.³¹ In New Mexico, a joint tenant is also considered a joint owner, but the term does not include a tenant in common.³² A TOD deed signed by both joint owners transfers the property to the named beneficiary upon the death of the last surviving joint owner.³³

Joint owners may also revoke a TOD deed. However, if one joint owner revokes a TOD deed that has been recorded by multiple joint owners, it does not affect the deed or the rights of other joint owners.³⁴ A TOD deed recorded by joint owners is revoked only if all the living joint owners revoke it.³⁵

What Happens if the Beneficiary Named in a New Mexico TOD Deed Dies before the Owner?

A beneficiary’s rights lapse, or end, if the beneficiary dies while the owner is alive.³⁶ Generally, a lapsed TOD deed has no effect and the property may become part of the owner’s probate estate. However, when there are two or more beneficiaries, the share of a non-surviving beneficiary that lapses is transferred to the other beneficiary.³⁷ When there are two or more surviving beneficiaries, the lapsed rights are transferred in proportion to their rights to the remaining part of the property.³⁸ The property owner may also include specific provisions governing the transfer and holding of interests in the TOD deed.³⁹

How Can a Real Estate Owner Avoid a Lapsed TOD Deed?

New Mexico law allows for naming multiple TOD deed beneficiaries.⁴⁰ A property owner who records a TOD deed should name multiple beneficiaries to avoid a lapsed TOD deed. That way, even if a beneficiary dies during the owner’s lifetime, the other beneficiary will receive the lapsed rights of the beneficiary who died. A property owner may also name another beneficiary by providing that option on a recorded TOD deed.⁴¹ The deed may state that the other beneficiary takes title only if the first beneficiary dies during the owner’s life.

Must the Owner Notify the Beneficiaries of the New Mexico TOD Deed?

Under the New Mexico Real Property Transfer on Death Act, recording a TOD deed does not require notice or delivery to the named beneficiary during the property owner’s life.⁴² Likewise, acceptance by the named beneficiary is also not required during the owner’s life.⁴³ A property owner may also revoke or change an existing TOD deed without telling the beneficiary.

Can a New Mexico TOD Deed Be Used when the Property is Mortgaged?

A property owner in New Mexico may record a TOD deed when there is an existing mortgage on the property. Usually, a mortgage agreement includes a due-on-sale clause that requires the balance of the loan to be paid off faster if the property owner transfers the property without the lender’s consent. However, a federal law called the Garn-St. Germain Depository Institutions Act of 1982 says lenders cannot use due-on-sale clauses or demand faster payment in response to “a transfer to a relative resulting from the death of a borrower.”⁴⁴ An unpaid mortgage balance does not make a TOD deed ineffective or void.

New Mexico real estate in a TOD deed is transferred subject to all recorded transfers or debts, including a mortgage, during the property owner’s lifetime.⁴⁵ Thus, the beneficiary takes title to the property with any existing mortgage unless the mortgage debt is paid using other funds from the property owner’s estate.

Must a New Mexico TOD Deed Be Recorded?

The property owner must record a TOD deed before death.⁴⁶ A New Mexico TOD deed becomes effective only if it is recorded with the county clerk’s office where the property is located.⁴⁷ If there is more than one property and they are in more than one New Mexico county, the property owner should record the TOD deed in each county. A TOD deed signed and confirmed by a notary but not recorded in the proper county before the owner dies is invalid. In this case, the property becomes part of the owner’s probate estate.

Can a New Mexico TOD Deed Be Signed by an Agent under a Power of Attorney?

New Mexico law for TOD deeds is silent about whether an agent under a power of attorney can sign a TOD deed. It does say that a New Mexico TOD deed must have all the required elements and must follow all the rules for a properly recorded deed that transfers property during life.⁴⁸ Essential elements include the owner’s signature in front of a notary that acknowledges the signature.⁴⁹ The TOD deed must be signed by each transferor of the property.⁵⁰

General rules for transfers of real property allow a property owner’s legal agent or attorney to sign a deed on a property owner’s behalf.⁵¹ Documents that affect the title to a real property signed by an owner’s legal agent—under a valid power of attorney—have the same force and effect as if the owner signed it.⁵² Assuming these rules apply, an agent may be able to legally sign a New Mexico TOD deed only if a power-of-attorney document specifically states they have the power to do so.

Can an Agent under Power of Attorney Sign a TOD Deed if the Owner Is Incapacitated?

New Mexico law is not clear about whether an agent under a power of attorney can sign a TOD deed on behalf of a property owner who is unable to sign for themselves. To make or revoke a TOD deed in New Mexico, a property owner should have the same ability required to make a will.⁵³ However, general rules for power of attorney may apply in such cases.

In at least one case, the New Mexico Court of Appeals ruled that an agent could revoke a TOD deed by power of attorney— where the owner was alive with lower mental ability—even though the document did not specifically allow it.⁵⁴ The court noted that revoking the TOD deed fell squarely within the permitted authority to sign deeds, and also to sell or transfer the real property.⁵⁵

What Are the Requirements for a New Mexico TOD Deed?

New Mexico law requires a TOD deed to meet three requirements to be valid.

1. It must contain the “essential elements and formalities of a properly recordable inter vivos deed.”⁵⁶
2. It must state that the transfer to the named beneficiary will occur upon the owner’s death.⁵⁷
3. It must be recorded in the public records in the county clerk’s office where the property is located before the owner’s death.⁵⁸

To meet the first requirement, a New Mexico TOD deed must have each of these elements to legally transfer real property upon the property owner’s death:

• Name of property owner. It must identify the owner or owners of the property.
• Description of the property. It must include a legal description of the subject property that is to be transferred upon the owner’s death.
• Name of chosen beneficiary. It must name a specific beneficiary or multiple beneficiaries to take title when the owner dies.
• Alternate beneficiary (optional). A property owner may also include the name of another beneficiary in case the previous beneficiary dies before the owner. It should state that the alternate beneficiary takes title only if the first beneficiary dies during the owner’s life.
• Transfer on death. It must state that the owner intends title to transfer to the beneficiary or beneficiaries upon the owner’s death.
• Revocability. It should state that the TOD deed can be revoked, is not effective until the owner’s death, and revokes any prior TOD deeds affecting the property.
• Owner’s signature. It must be signed by the property owner or owners.
• Notarization. The owner must confirm their signature before a notary public or another person authorized by law to take acknowledgments.
• Recording. A TOD deed must be recorded before the property owner’s death in the public records in the county clerk’s office for the county where the property is located.⁵⁹

A description of the payment for the property (consideration) is not needed in a New Mexico TOD deed.⁶⁰

The New Mexico TOD deed law includes a basic form for creating TOD deeds.⁶¹ The law also includes a form for revoking TOD deeds.⁶² TOD deeds may closely follow the form provided in the law.

1. N.M. Stat. Ann. § 45-6-402(G).
2. N.M. Stat. Ann. § 45-6-405.
3. N.M. Stat. Ann. § 45-6-409(C); N.M. Stat. Ann. § 14-9-1.
4. N.M. Stat. Ann. § 45-6-412.
5. N.M. Stat. Ann. § 45-6-413(A)(1).
6. N.M. Stat. Ann. § 45-6-407.
7. N.M. Stat. Ann. § 45-6-407, 408.
8. N.M. Stat. Ann. § 45-6-402(F).
9. N.M. Stat. Ann. § 45-6-301-311.
10. N.M. Stat. Ann. § 45-6-307.
11. N.M. Stat. Ann. § 45-6-412.
12. N.M. Stat. Ann. § 45-6-412(B).
13. N.M. Stat. Ann. § 45-6-412(C).
14. N.M. Stat. Ann. § 45-6-412(F).
15. N.M. Stat. Ann. § 45-6-412(D).
16. N.M. Stat. Ann. § 45-6-412(A).
17. N.M. Stat. Ann. § 45-6-406.
18. N.M. Stat. Ann. § 45-6-417; N.M. Stat. Ann. § 45-6-411(A)(3)(b).
19. N.M. Stat. Ann. § 45-6-411(A)(3)(a).
20. N.M. Stat. Ann. § 45-6-411(A)(3)(c).
21. See N.M. Stat. Ann. § 45-6-411(C).
22. N.M. Stat. Ann. § 45-6-413(A)(1).
23. N.M. Stat. Ann. § 45-6-413(C)(1).
24. N.M. Stat. Ann. § 45-6-413(C)(2).
25. N.M. Stat. Ann. § 45-6-413(B).
26. N.M. Stat. Ann. § 45-6-413(D).
27. N.M. Stat. Ann. § 45-6-405.
28. N.M. Stat. Ann. § 45-6-413(A)(3).
29. See N.M. Stat. Ann. § 45-6-413.
30. N.M. Stat. Ann. § 45-6-413(C).
31. N.M. Stat. Ann. § 45-6-402(D).
32. Id.
33. N.M. Stat. Ann. § 45-6-413(C)(2).
34. N.M. Stat. Ann. § 45-6-411(B)(1).
35. N.M. Stat. Ann. § 45-6-411(B)(2).
36. N.M. Stat. Ann. § 45-6-413(A)(2).
37. N.M. Stat. Ann. § 45-6-413(A)(3).
38. Id.
39. See N.M. Stat. Ann. § 45-6-413.
40. N.M. Stat. Ann. § 45-6-405.
41. See N.M. Stat. Ann. § 45-6-413.
42. N.M. Stat. Ann. § 45-6-410(A).
43. Id.
44. 12 USC § 1701j-3(d)(5).
45. N.M. Stat. Ann. § 45-6-413(B).
46. N.M. Stat. Ann. § 45-6-409(C).
47. Id. See also N.M. Stat. Ann. § 14-9-1.
48. N.M. Stat. Ann. § 45-6-409(A).
49. N.M. Stat. Ann. § 45-6-402(C).
50. N.M. Stat. Ann. § 45-6-409(A).
51. N.M. Stat. Ann. § 47-1-5.
52. N.M. Stat. Ann. § 47-1-11.
53. N.M. Stat. Ann. § 45-6-408.
54. Campbell v. Lieb, No. A-1-CA-35487, 2018 N.M. App. Unpub. LEXIS 296 (Ct. App. Aug. 7, 2018).
55. Campbell v. Lieb, No. A-1-CA-35487, at *10 (see N.M. Stat. Ann. § 45-5B-114(A)(3)).
56. N.M. Stat. Ann. § 45-6-409(A).
57. N.M. Stat. Ann. § 45-6-409(B).
58. N.M. Stat. Ann. § 45-6-409(C).
59. See N.M. Stat. Ann. § 45-6-409(C).
60. N.M. Stat. Ann. § 45-6-410(B).
61. N.M. Stat. Ann. § 45-6-416.
62. N.M. Stat. Ann. § 45-6-417.