This memorandum responds to your request for our opinion on the ability of a minor
to hold title to certain types of property and how the property must be titled in
the State of New Mexico. You state that the regions have received numerous inquiries
from parents/representative payees as to whether or not minors can purchase real or
personal property such as real estate and motor vehicles. These inquiries have been
generated by the payment of large retroactive benefit checks resulting from the review
of some childhood disability cases. You asked us to address the following issues:
1. Does the State permit a minor to hold title to real property or personal property
such as an automobile?
2. If so, are Sere any restrictions as to the age of the minor or the types of property
that can be held?
3. Are there any specific requirements on how the property should/must be titled to
show the minor as the titleholder?
4. If a State does not permit a minor to hold title to property, or does not permit
the property to be titled/registered in the minor's name, what is the preferred method(s)
of titling the property to reflect or protect the minor's interest in the property
and satisfy SSA's regulatory requirements?
We are of the opinion that a minor may hold title to either real or personal property
in the State of New Mexico, without restriction as to age of the minor or the type
of property that may be held. Additionally, there are no specific requirements on
how the property must be titled to show the minor as the titleholder.
The State of New Mexico provides very little statutory guidance in this matter, and
no New Mexico case law directly addresses the issue of titling requirements for a
minor. Property may be transferred to a minor under the New Mexico Uniform Transfers
to Minors Act, (UTMA) enacted in 1989, which replaced the Uniform Gifts to Minors
Act in effect prior to the enactment of the current statute. The UTMA specifies that
any transfer made under the provisions of that Act is irrevocable, and creates custodial
property which is indefeasibly vested in the minor. N.M. Stat. Ann. §§ 46-720, 46-7-22
(West 1998). The New Mexico Uniform Probate Code defines "property" to include both
real and personal property or any interest therein, and means anything that may be
the subject of ownership. N.M. Stat. Ann. § 45-1-201 (West 1998). In light of this
definition, and because the UTMA specifically permits the transfer of property to
minors, which then becomes indefeasibly vested in the minor, we conclude that a minor
can hold title to real and personal property in the State of New Mexico.
New Mexico statutes do not restrict the types of property that can be held by a minor.
The statutory age of majority in New Mexico is 18 years, except that for the purposes
of the UTMA, a minor is an individual who has not attained the age of 21 years. N.M.
Stat. Ann. §§ 28-6-1, 46-7-12 (West 1998).
The only titling requirements for minor property holders are found in the UTMA, which
requires that property transferred under that statute be kept separate and distinct
from all other property in a manner sufficient to identify it clearly as custodial
property of the minor. N.M. Stat. Ann. § 46-7-23 (West 1998). Custodial property subject
to recordation or registration is so identified if it is either recorded or registered,
or held in an account designated in the name of the custodian, followed in substance
by the words: "as custodian for (name of minor) under the Uniform Transfers to Minors
Act." Id. However, the UTMA governs titling requirements for gifts or transfers made to a minor,
and the issues of this legal opinion concern the proper titling of property purchased
with monies already in the possession of a child beneficiary in his or her dedicated
account. A representative payee would not appear to be making a girl or other type
of transfer covered by the UTMA when he or she makes a purchase of property with a
minor's conserved funds. Thus, the UTMA would not apply to such purchases and would
not impose any titling requirements on the minor's property.
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 requires
that any past due benefit payments to individuals under age 18, such as the large
retroactive benefit checks that are the subject of this legal opinion, must be paid
into a separate dedicated account. Pub. Law 104-193. As codified by Social Security
regulations, the representative payee for the beneficiary is required to establish
an account in a financial institution dedicated solely to receiving such benefits.
See 20 C.F.R. § 416.640(e). The dedicated account may be a checking, savings, or money
market account, subject to specific titling requirements, but it may not be in the
form of certificates of deposit, mutual funds, stocks, bonds, or trusts.
Further, the use of the funds in the dedicated account is specifically restricted.
The funds may only be used for the benefit of the minor, and only for the following
allowable expenses: 1) medical treatment and education or job skills training; 2)
if related to the child's impairment(s), personal needs assistance; special equipment;
housing modification; and therapy or rehabilitation; or 3) other items and services
related to the minor's impairment(s) that the Social Security Administration determines
to be appropriate, subject to the representative payee's explanation of why or how
the other item or service relates to the impairment(s) of the minor. 20 C.F.R. §416.640(e)(2).
The use of funds from a dedicated account in any manner not authorized by this section
constitutes a misapplication of benefits. 20 C.F.R. § 416.640(e)(4). Although you
have not directly requested an opinion regarding the propriety of allowing a representative
payee to use a minor's funds to purchase houses or automobiles, we would point out
that under the above regulations, any such purchase should first be justified by showing
how the house or vehicle relates to the minor's impairment(s) and why the purchase
is necessary to meet the special needs related to the impairment(s).
To summarize, a minor may hold title to both real and personal property in the State
of New Mexico, without restriction as to age of the minor or the type of property
that may be held. Additionally, New Mexico law imposes no specific requirements applicable
in this case restricting how the property must be titled to show the minor as the