New Mexico: Annual Trust Accounting Requirements

Requirements one by one

New Mexico combines automatic and request-based recipients

NMSA 1978 § 46A-8-813(C) requires a report at least annually and at trust
termination. The automatic recipients are distributees and permissible distributees
of trust income or principal. Any other qualified or nonqualified beneficiary enters
the recipient group by requesting a report.

The qualified-beneficiary definition in § 46A-1-103(M) covers three distribution
horizons: current distributees, the next line if current interests ended without
ending the trust, and those who would take if the trust ended. That definition matters
for the separate vacancy rule, but it does not narrow the express request route for a
nonqualified beneficiary.

When a vacancy occurs and no cotrustee remains, the former trustee reports to the
qualified beneficiaries. A personal representative, conservator, or guardian may
send the report for a deceased or incapacitated trustee.

The statutory report has a compact financial core

Section 46A-8-813(C) requires trust property, liabilities, receipts and
disbursements, the source and amount of trustee compensation, a listing of trust
assets, and—if feasible—their respective market values.

The section does not prescribe a fiscal year, beginning balance, carrying values,
principal-and-income allocations, realized gains and losses, agent-fee schedules,
reconciliation, signature, oath, or final distribution plan. It also does not provide
a shorter financial period for the termination report; both annual and termination
reports use the same stated contents.

Delivery is based on likely receipt

NMSA 1978 § 46A-1-109 requires a reasonably suitable method likely to result in
receipt. It lists first-class mail, personal delivery, delivery to the last-known
residence or business, and a properly directed electronic message as examples. A
document need not be sent to a person whose identity or location is unknown and not
reasonably ascertainable. The report itself has no routine court-filing, certified-
mail, notarization, or proof-of-service requirement.

While a trust is revocable and the settlor has capacity, § 46A-6-603 makes beneficiary
rights subject to the settlor's control and the trustee's duties exclusive to the
settlor. NMSA 1978 § 46A-11-1104 generally applies the Trust Code and amendments to trusts
created before, on, or after their effective dates, but protects prior acts and
already-running statutory periods and excludes the Enabling Act trust.

Modification, beneficiary waiver, and settlor waiver use different rules

NMSA 1978 § 46A-1-105(A) generally lets the trust terms displace Trust Code defaults.
Its mandatory list preserves specified notice and request-response duties in
§ 46A-8-813(A)-(B), but does not preserve subsection (C)'s annual and termination
report duty. The trust terms may therefore alter that financial-report default.

A beneficiary may waive reports or other information and later withdraw the waiver
for future reports and information. The intended recipient may also waive transmission
under § 46A-1-109(C).

The settlor route in § 46A-8-813(F) is narrower and more formal because it can reach
the broader information duties. It operates only while the trustee is a regulated
financial service institution qualified to do trust business in New Mexico. The
waiver must be knowing and conspicuous, appear in the trust terms or a separate
settlor-signed affidavit, and state that the settlor was informed of the risks and
nevertheless directs withholding. It may cover all or part of the information, named
beneficiaries or classes, stated events, or discretionary withholding.

A report affects claims only with adequate disclosure and notice

NMSA 1978 § 46A-10-1005 does not turn every annual report into an automatic release.
The one-year breach-of-trust period begins only when the beneficiary or representative
is sent a report that adequately discloses a potential claim and informs the recipient
of the time allowed to commence a proceeding. Adequate disclosure means enough
information that the recipient knew of the potential claim or should have inquired.
If that route does not apply, the five-year period runs from the first listed ending
event.

Interested persons may separately use § 46A-1-111 to approve a report or accounting
or resolve trustee liability through a qualifying nonjudicial settlement. A
beneficiary consent, release, or ratification remains subject to
§ 46A-10-1009's improper-conduct and lack-of-knowledge exceptions.

Courts have broad remedies and fee discretion

For a breach of trust, NMSA 1978 § 46A-10-1001 permits a court to compel performance
or an account, stop or redress a breach, appoint a special fiduciary, suspend or
remove the trustee, reduce or deny compensation, trace or recover trust property, or
order other appropriate relief. Section 46A-10-1004 permits an award of costs and
reasonable attorney fees as justice and equity require.

What trips people up

• A nonqualified beneficiary can request the report. The request route expressly
  reaches other qualified or nonqualified beneficiaries.
• The vacancy audience is narrower. A former trustee reports to qualified
  beneficiaries, and only when no cotrustee remains.
• The one-year clock needs both elements. Adequate disclosure and notice of the
  time allowed to sue are both required.
• The July 1, 2003 exclusion in subsection (E) is not a report cutoff. It applies
  only to the two initial notices in subsection (B), not subsection (C)'s annual,
  termination, or vacancy reports.

Common questions

Must a New Mexico annual report be filed with a court?

No routine filing is stated. It is sent to the statutory recipients. A court may
separately order a trustee to account as a breach remedy under § 46A-10-1001.

Can a beneficiary waive only future reports?

A beneficiary may waive the right and later withdraw the waiver prospectively. The
withdrawal affects future reports and information rather than undoing a prior waiver.

Does receiving the annual report discharge the trustee?

No. A limitation notice, qualifying settlement, or valid consent, release, or
ratification has separate statutory requirements and exceptions.

Statutes and sources

• NMSA 1978 §§ 46A-1-103, -105, -109, -111, 46A-6-603, 46A-8-813, and
  46A-11-1104 — beneficiary class, trust-term control, delivery, settlement,
  revocable-trust rule, reporting, waivers, and transition rules. New Mexico
  Compilation Commission, NMOneSource
  (accessed 2026-08-10).
• NMSA 1978 §§ 46A-10-1001, -1004, -1005, and -1009 — remedies, costs,
  limitations, and consent/release rules. New Mexico Compilation Commission,
  NMOneSource (accessed
  2026-08-10).