New Mexico Trust Litigation Lawyer

Quick Summary: New Mexico Trust Litigation Lawyer

• “Trust litigation” refers to legal action taken against a trust or its trustee.
• An “interested party” has standing to sue a trust in New Mexico, including beneficiaries and those affected by the trust’s administration.
• Cases could involve a breach of trust, trust validity contests, trustee removal, creditor claims, or torts.
• An out-of-court agreement may be possible, but successful resolution may require an order from a district court.

Need immediate help? Contact New Mexico Financial & Estate Planning Attorneys.

A trust that’s improperly operated can inflict major, lasting damage. Whether a trustee is acting improperly or there is a disagreement between beneficiaries, it’s vital to act quickly when a trust isn’t delivering on its intended outcomes.

Fortunately, New Mexico has the Uniform Trust Code and trust litigation procedures available to protect those who are negatively affected. Concerned parties can work with a New Mexico trust litigation lawyer to build a legal strategy and pursue a desirable outcome. 

New Mexico Financial & Estate Planning Attorneys has deep experience with handling trust litigation matters. We’ll help you identify and pursue your best legal options, which could include filing a case with the district court or seeking alternative dispute resolution, such as mediation.

Senior Attorney Don Harris and the rest of our legal team take trust-related disputes quite seriously, as their outcomes often have major consequences. Don’t hesitate to reach out to us for answers to your questions, guidance on your case, or legal representation for all trust litigation-related matters.

Call us at (505) 503-1637 or contact us online to schedule a no-obligation appointment and speak with a knowledgeable attorney in New Mexico about your disputed trust case.

Common Types of Disputes a New Mexico Trust Litigation Attorney Can Handle

Trusts include named beneficiaries. These are individuals with special privileges, which include the right to receive trust distributions. 

If the trust is mismanaged in any way, such as when a beneficiary’s privileges aren’t honored, beneficiaries have standing to request relief from the presiding district court. Relief can take many different forms, including removal of the trustee, an order to force the trustee to do (or not do) something, and restitution for any financial or material harm inflicted.

At New Mexico Financial & Estate Planning Attorneys, Don Harris and the rest of the legal team have extensive legal experience handling these types of cases, both in and out of court. 

Common scenarios our New Mexico trust litigation attorneys can manage include:

• Breach of fiduciary duty: A trustee has special responsibilities to the trust and its beneficiaries. When they fail to uphold these responsibilities, a district court with jurisdiction over the trust can order corrective action. They may, for example, require the trustee to pay restitution or other damages to the affected parties.
• Trust contest: Someone can contest a trust on several grounds, including improper formation, lack of grantor capacity, illegal provisions, jurisdictional concerns, or conflicts with other legal documents.
• Improper trust administration: A beneficiary (or, potentially, another interested party) can seek relief from a district court with jurisdiction when a trustee fails to operate the trust in accordance with its provisions and the grantor’s original intent.
• Trust-related torts: Trusts can cause legal injuries, or torts, in the same manner that a business or individual can. For example, a trustee’s actions could lead to a physical injury, economic harm, or some other form of loss that can be grounds for a lawsuit and damages claim under New Mexico’s tort laws.
• Trust administration questions and court intervention: A court can often assist when intervention is needed to interpret a trust’s language, evaluate the proper course of action for a trustee, or modify the trust in ways that can’t be handled without a court order.

Who Can Take Legal Action Against a Trust or Trustee?

There are two general categories of legal standing that can allow a person (or legally recognized organization) to build a case against a trust/trustee:

• Those who have entered into a fiduciary relationship with a trustee: A trustee has a fiduciary duty to the beneficiaries of a trust, meaning they hold extra responsibilities and can be held liable for a breach of trust when they violate those duties as stated in NM Stat § 46A-10-1001. Depending on the way a trust is structured, the trustee may also owe a fiduciary duty to a grantor (the person who formed the trust), especially when the trust is revocable.
• An interested party, including one that has suffered or will suffer harm: Any person or organization materially affected by a trust’s administration could be considered an “interested party.” The most common examples are a person, business, or other legal entity that has been harmed by the trustee’s actions or the administration of the trust. Interested parties can also include individuals requesting court intervention to avoid likely harm, such as someone contesting the ownership of an asset supposedly held by the trust.

Determining Standing as a Trustee

Legal standing is not always clear in trust dispute cases. Even beneficiaries may need to prove their status, especially when the trust doesn’t name them specifically. 

Individuals and organizations may need to refer to a beneficiary rights lawyer in New Mexico to get insights on their legal standing, what duties the trustee owes them, and other important information that could affect their case.

They also need to be sure that they are filing a dispute in the right jurisdiction. Depending on the nature of the case, trust litigation may need to be pursued in the district court where:

• The grantor resided at the time the trust was formed.
• Real estate owned by the trust is located.
• The trust’s primary business and administration took place (often the place where the trustee resides).

Examples of possible district courts where a trust dispute case in New Mexico may be filed include:

• Second Judicial District Court: Bernalillo County
• First Judicial District Court: Santa Fe County
• Third Judicial District Court: Doña Ana County

Determining Standing as an Interested Party

When a trust’s beneficiary owes a debt, a creditor to the beneficiary may be able to petition a district court to force the trust to make a distribution. These creditor claims can give rise to complicated legal concerns, especially when the trust is irrevocable, contains a spendthrift provision, or gives the trustee absolute discretion over distributions. 

Don F. Harris, Esq., is certified in creditors’ rights by the American Board of Certification. If you are trying to recover compensation in relation to a claim against a trust or its beneficiaries, he can assist you by providing a consultation and representing you throughout the course of your case.

Other parties that have been harmed by a trust or trustee’s actions may also have standing to file a claim. Refer to a New Mexico trust litigation lawyer for guidance on building a case, determining the right jurisdiction, and gathering evidence of liability.

When to Reach Out to a Breach of Fiduciary Duty Attorney in New Mexico

New Mexico’s statutes (Chapter 46A, Article 8) describe a trustee’s duties in detail. These include duties to avoid conflicts of interest, manage the trust to the best of their ability, provide regular accountings of trust activities to privileged parties, and remain true to the rules set by the grantor.

Because of these duties, beneficiaries may be able to hold a trustee liable for losses and damages when other causes of action, like a negligence claim, aren’t available. To learn about your options, speak with a trustee removal attorney in New Mexico.

For example, if a trustee makes a decision that benefits them personally but harms the trust’s portfolio, then they may be compelled to explain how their actions were necessary or beneficial to the trust. If the court determines that their actions were self-dealing, then they could be forced to repay damages or take other steps to fix the harm they caused.

In response to a breach of trust, a court can order several forms of relief (NM Stat § 46A-10-1001), including:

• Compelling the trustee to perform their duties in line with the trust agreement.
• Preventing the trustee from taking certain actions.
• Compelling the trustee to repay the damages they inflicted or the money they wrongfully obtained.
• Ordering the trustee to provide a detailed accounting.
• Removing and replacing the trustee.

Cases involving these matters are highly technical. Referring to a breach of fiduciary duty attorney in New Mexico may be best when seeking to understand what duties were owed, how those duties may have been breached, whether trustee removal is appropriate, and what other forms of relief may be available.

Challenging the Validity of a Trust With a Trust Contest Attorney in New Mexico

An interested party may be able to challenge the validity of a trust on several grounds, including:

• Improper trust execution
• Lack of grantor capacity
• Undue influence

These grounds are similar to the ways a will can be contested in New Mexico. For example, undue influence claims can be pursued when a grantor was manipulated by someone close to them into creating a trust that wasn’t in line with their actual preferences, intentions, or best interests. 

The grantor may also have failed to properly document the trust’s terms and execute a trust instrument in line with New Mexico’s Uniform Trust Code.

Get in touch with an attorney for guidance on undue influence claims in New Mexico and other types of litigation challenging the validity of a trust. You can also rely on our New Mexico trust planning services to reduce the risk of improper actions or mismanagement by a trustee.

New Mexico Trust Litigation FAQ

What are the time limits for filing a trust contest or breach of fiduciary duty claim in New Mexico?

The time limit you have to file a claim against a trust/trustee depends on the nature of the injury suffered and the circumstances under which it occurred.

Breach of Trust

A claim related to damages resulting from an alleged breach of trust has to be pursued within a year of receiving notice of the breach of trust from the trustee. If no such notice has been provided, then a claim “must be commenced within five years after the first to occur of:

• “(1) The removal, resignation, or death of the trustee;

• “(2) The termination of the beneficiary’s interest in the trust; or
• “(3) The termination of the trust” (NM Stat § 46A-10-1005).

Other Claims and Torts

For non-breach-related claims, the affected party should refer to New Mexico’s statute of limitations for that specific type of claim. 

Here are some examples:

• Wrongful death: Three years (NM Stat § 41-2-2)

• Negligence resulting in injury to person or reputation: Three years (37-1-8)
• Breach of contract: Four years for sales and lease contracts (NM Stat §§ 55-2-725; 55-2A-506), and six years for other written contracts (NM Stat § 37-1-3).

Refer to a trust contest attorney in New Mexico for guidance on time limits, what actions can be taken, and how to build your case quickly to seek relief before your applicable statute of limitations expires.

There may also be timing concerns if the trustee in question is covered by a surety bond. Trustee bonding policies may have stipulations on the timing of damages recovery.

If your claim is being made in connection with an estate, testamentary trust, or other trust matter involving a deceased grantor, you can also speak with a formal probate lawyer in New Mexico to understand the best next steps to take. Acting quickly in these situations is key, so don’t hesitate to reach out to experienced legal consultants before probate concludes.

Can a beneficiary in New Mexico force a trustee to provide a trust accounting?

Yes. Under New Mexico’s Uniform Trust Code, trustees are required to provide beneficiaries with an accounting of trust assets at least once annually, and they “shall promptly respond to a beneficiary’s request for information related to the administration of the trust” (NM Stat § 46A-8-813).

A court may also order a trustee to furnish an accounting in relation to a breach of trust claim (NM Stat § 46A-10-1001).

How does New Mexico law determine whether undue influence affected a trust?

According to New Mexico’s Uniform Trust Code (NM Stat § 46A-4-406): “A trust is void to the extent its creation was induced by fraud, duress, or undue influence.”

While there is no specific legal test for undue influence, the harmed party can increase their chances of a court finding of undue influence by presenting “proof of a confidential relationship and suspicious circumstances” (Chapman v. Varela, 2009-NMSC-041).

What happens if a trustee in New Mexico refuses to distribute assets to beneficiaries?

The options available to a beneficiary depend on whether the refusal qualifies as a breach of trust. Looking at the trust’s terms or standards of distribution is the first step. If the trust clearly instructs the trustee to make a distribution under circumstances that currently exist, they may be in breach of trust by refusing to furnish a payment.

Some trusts are formed with strong discretionary protections for the trustee, however. This means the trustee has final say on whether to make a distribution. A court may order the trustee of a discretionary trust to make a distribution if the affected party can prove:

• That the payment would be in line with the standards of distribution used by the grantor to guide the trustee’s decision-making.
• The trustee cannot prove that their refusal is in the best interests of the trust and the beneficiaries as a whole.

Reach out to a New Mexico Trust Litigation Law Firm

Knowing the law and knowing your rights are the two key elements of filing a claim against a trust. You can even leverage this knowledge to pursue negotiations and other forms of New Mexico trust dispute resolution outside of court.

Whether you’re dealing with trust accounting disputes in New Mexico, a surety bond company denying your claim, or a trustee who’s failing to communicate with you in a reliable way, you have options.

Call Don Harris and the New Mexico Financial & Estate Planning Attorneys team at (505) 503-1637 or contact us online to get information on your legal options. We’ll schedule a confidential, no-obligation consultation to help you understand how you can best proceed with your case.