New Mexico § 45-3-922 - Apportionment by will or other dispositive instrument

§ 45-3-922. Apportionment by will or other dispositive instrument

A. Except as otherwise provided in Subsection C of this section, the following rules

apply: (1) to the extent that a provision of a decedent's will expressly and unambiguously

directs the apportionment of an estate tax, the tax must be apportioned accordingly; (2) any portion of an estate tax not apportioned pursuant to Paragraph (1) of this

subsection must be apportioned in accordance with any provision of a revocable trust

of which the decedent was the settlor that expressly and unambiguously directs the

apportionment of an estate tax. If conflicting apportionment provisions appear in two or more revocable trust instruments,

the provision in the most recently dated instrument prevails. For purposes of this paragraph: (a) a trust is revocable if it was revocable immediately after the trust instrument

was executed, even if the trust subsequently becomes irrevocable; and (b) the date of an amendment to a revocable trust instrument is the date of the amended

instrument only if the amendment contains an apportionment provision; and (3) if any portion of an estate tax is not apportioned pursuant to Paragraph (1) or

(2) of this subsection, and a provision in any other dispositive instrument expressly

and unambiguously directs that any interest in the property disposed of by the instrument

is or is not to be applied to the payment of the estate tax attributable to the interest

disposed of by the instrument, the provision controls the apportionment of the tax

to that interest. B. Subject to Subsection C of this section, and unless the decedent expressly and

unambiguously directs the contrary, the following rules apply: (1) if an apportionment provision directs that a person receiving an interest in property

under an instrument is to be exonerated from the responsibility to pay an estate tax

that would otherwise be apportioned to the interest: (a) the tax attributable to the exonerated interest must be apportioned among the

other persons receiving interests passing under the instrument; or (b) if the values of the other interests are less than the tax attributable to the

exonerated interest, the deficiency must be apportioned ratably among the other persons

receiving interests in the apportionable estate that are not exonerated from apportionment

of the tax; (2) if an apportionment provision directs that an estate tax is to be apportioned

to an interest in property a portion of which qualifies for a marital or charitable

deduction, the estate tax must first be apportioned ratably among the holders of the

portion that does not qualify for a marital or charitable deduction and then apportioned

ratably among the holders of the deductible portion to the extent that the value of

the nondeductible portion is insufficient; (3) except as otherwise provided in Paragraph (4) of this subsection, if an apportionment

provision directs that an estate tax be apportioned to property in which one or more

time-limited interests exist, other than interests in specified property under Section

11 of this act, the tax must be apportioned to the principal of that property, regardless

of the deductibility of some of the interests in that property; and (4) if an apportionment provision directs that an estate tax is to be apportioned

to the holders of interests in property in which one or more time-limited interests

exist and a charity has an interest that otherwise qualifies for an estate tax charitable

deduction, the tax must first be apportioned, to the extent feasible, to interests

in property that have not been distributed to the persons entitled to receive the

interests. C. A provision that apportions an estate tax is ineffective to the extent that it

increases the tax apportioned to a person having an interest in the gross estate over

which the decedent had no power to transfer immediately before the decedent executed

the instrument in which the apportionment direction was made. For purposes of this subsection, a testamentary power of appointment is a power

to transfer the property that is subject to the power.