Pub. 12 2015 Issue 3

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S 8 EXECUTIVE VICE PRESIDENT’S MESSAGE JOHN W. ANDERSON, EXECUTIVE VICE PRESIDENT New Mexico Bankers Association 2016 Legislature is Just Around the Corner Twenty-three states have decanting statutes that permit the trustee to modify irrevocable trusts either directly or by distributing the trust assets to another trust. I t is difficult to believe the 2016 Legislature is due to begin in three months. How time f lies. We are beginning to put together our legislative list which includes a comprehensive trust estate and wealth management package. The bills are intended to substantially increase state business in the trust sector. The legislation will include: • Revision of the Uniform Rule Against Perpetuities to create a new exemption for property held in trust. Generally, the Rule invalidates certain unvested property interests if they do not vest within 21 years of the death of a person now living or within 90 years of the creation of the property interest. This new exemption provides no termination for unvested per- sonal property held in trust, while real property can be held in trust for 365 years after the later of the date upon which the trust acquired the property or the date of the trust became irrevocable. At the conclusion of that period, the trust must distribute the property: (1) as if the trust had been terminated, if such termination provides for a means of distribution; (2) if the termination does not provide for a distribution, then to the beneficiaries who are entitled to receive income from the trust; and (3) if neither (1) nor (2), then according to New Mexico law governing the distribution of intestate real property. • Revision of state Income Tax Act to create a new deduction from net income of an estate or trust for certain income sequestered within the overall trust or estate that is set aside for future distributions to a non-resident individual. The deduction would not include income from allocable sources of income occurring in NewMexico such as income derived from real property, mineral, oil and gas interests and water rights, but would allow the deduction for business income that would be apportioned to the non-resident’s state of residence were the income directly distributed to the beneficiary rather than flowing through the trust. The