Bulletin: NM2014001

Date:
January 07, 2014
To:
All New Mexico Issuing Offices
RE:
UNDERWRITING - Same-Gender Marriage in New Mexico

Dear Associates: 

On December 19, 2013, the New Mexico Supreme Court unanimously determined that same-gender civil marriages are legal under current state law. The Supreme Court’s decision has the effect of validating same-gender marriage in New Mexico. The decision is effective immediately, but is subject to the filing of a motion for rehearing. A motion for rehearing must be filed no later than January 3, 2014. If a motion for rehearing were to be granted, the Court’s judgment would be suspended pending the rehearing.

The decision has the effect of validating all marriage licenses previously issued by certain New Mexico County Clerks and marriages entered into in reliance on such marriage licenses, as well as now requiring all County Clerks to issue marriage licenses to same-gender couples using gender-neutral marriage license forms.

Set forth below is a schedule of Counties identifying the date on which same-gender marriage licenses were first issued either voluntarily by the County Clerk or in response to a lower court order:

Bernalillo County                       August 26, 2013 (by court order)

Doña Ana County                      August 21, 2013 (voluntarily by County Clerk)

Grant County                             September 8, 2013 (by court order)

Los Alamos County                   September 4, 2013 (by court order)

San Miguel County                    August 28, 2013 (voluntarily by County Clerk)

Sandoval County                       February 20, 2004 (Issued licenses for one day)

Santa Fe County                       August 23, 2013 (by court order)

Taos County                             August 27, 2013 (by court order)

Valencia County                        August 28, 2013 (voluntarily by County Clerk)

Accordingly, same-gender couples, if duly married under New Mexico law, will be legally entitled to all of the rights, benefits, privileges and obligations of civil marriage, in the same manner as has been historically available to opposite-gender couples. Since the parties to a same-gender civil marriage will be married in every respect, this decision will affect title insurance underwriting, particularly in the areas of conveyancing, community property, dissolution of marriage, inheritance, and other issues.

The Supreme Court’s decision did not specifically address all of the issues that same-gender marriage has raised, but the court used expansive language in describing how same-gender marriage should be treated:

[C]ivil marriage shall be construed to mean the voluntary union of two persons to the exclusion of all others. In addition, all rights, protections, and responsibilities that result from the marital relationship shall apply equally to both same-gender and opposite-gender married couples. Therefore, whether they are contained in NMSA 1978, Chapter 40 [Domestic Affairs] or any other New Mexico statutes, rules, regulations, or the common law, whenever reference is made to marriage, husband, wife, spouse, family, immediate family, dependent, next of kin, widow, widower or any other word, which, in context, denotes a marital relationship, the same shall apply to same-gender couples who choose to marry.

For purposes of underwriting title insurance, it is Stewart Title Guaranty Company's position that the New Mexico law applicable to opposite-gender spouses applies equally to same-gender spouses, and Stewart Title Guaranty Company will treat the issues with respect to same-gender spouses in the same manner as it treats opposite-gender spouses.

The following specific issues may arise in your transactions:

Vesting. If a married opposite-gender couple comes to the title company and claim to be married, the prevalent practice has been to show them on the deed as “husband and wife” without confirming their actual marital status. When a same-gender couple comes to the Title Company and states that they are married, you should not attempt to confirm their actual marital status in any way that is different than what you ask of an opposite-gender couple.

Owners/borrowers may request their marital status be shown in the vesting deed or deed of trust. The party preparing the documents may honor that request since marital status is not insured by the policies. So long as the person who prepares the deed is following the grantees’ instructions, the title company should have no liability if the grantees’ relationship is misstated in a deed. If the grantees execute a mortgage or deed of trust, it does not matter how the grantees’ relationship is described in the mortgage or deed of trust: so long as all vested owners execute and deliver the mortgage or deed of trust, the instrument will be considered valid. We suggest that the deed preparer honor the borrowers’ instructions as to how they wish to have vesting shown on a mortgage or deed of trust so long as the wording clearly shows a marital relationship: e.g., “as a married couple,” “as spouses,” “husband and husband,” and “wife and wife.”

With respect to Schedule A in an owner’s policy, the policy should not insure the manner in which the parties hold title (the historical practice of including the phrase “as husband and wife” may suggest that coverage that is not intended under the policy). When completing item no. 4 in Schedule A listing the current owner (in a lender policy) or the current insured (in an owner’s policy), you should either (a) completely omit any reference to the relationship of the parties or the manner in which they hold title, or (b) quote the language from the deed itself. In an owner’s policy an incorrect statement about marital status, when so requested by the insured and stated in Schedule A, would be a matter created, known, suffered or assumed by the insured and excluded by the terms of the policy.

Examples of how Schedule A should read are as follows:

Mark Smith and Susan Smith

Joseph Smith and Robert Jones

Mark Smith and Susan Smith, who acquired title by deed reciting:  “Mark Smith and Susan Smith, husband and wife.”

Joseph Smith and Robert Jones, who acquired title by deed reciting:  “Joseph Smith and Robert Jones, a married couple.”

Joseph Smith and Robert Jones, who acquired title by deed reciting: "Joseph Smith and Robert Jones, who are married to each other." 

Mark Smith and Susan Smith, who acquired title by deed reciting:  “Mark Smith and Susan Smith, husband and wife, as joint tenants.”

Joseph Smith and Robert Jones, who acquired title by deed reciting:  “Joseph Smith and Robert Jones, husband and husband, as joint tenants.”

Just like opposite-gender couples, same-gender couples can hold title as tenants in common or as joint tenants in addition to owning their interest as community property.

Community Property. In the counties that issued marriage licenses before the Supreme Court’s decision, you should treat a same-gender couple’s interest in property as community property, if they took title as a married couple. For couples married after the date of the Supreme Court’s decision, you should treat their interest as community property from the date they took title as a married couple. When conveying community property or encumbering community property, both same-gender spouses must join in the conveyance instrument.

Property acquired by one same-gender spouse during marriage presumptively is community property, unless it meets the requirements for sole and separate property under NMSA § 40-3-8.

Sole and Separate Property. If the parties took title before they were married, then presumptively their interests are sole and separate property. If title is vested in only one of the spouses, as a matter of prudent practice, please obtain a sole and separate property agreement from the non-vested spouse, to try to avoid any question that a transmutation into community property has occurred. This is consistent with our approach for opposite-gender couples.

Out of State Marriages. Although the Supreme Court’s decision does not specifically address the issue of whether New Mexico recognizes same-gender marriages made in other states, based on the Court’s expansive language and for purposes of title insurance underwriting, please proceed on the assumption that a lawful same-gender marriage in another state will be treated as a lawful marriage in New Mexico, so that the same requirements applicable to a New Mexico married same-gender couple would apply to an out-of-state married same-gender couple.

Divorce. Since same-gender couples have the right to marry, they have the corresponding right to divorce. Please treat divorced or divorcing same-gender couples in the same manner as opposite-gender divorces. In particular, please continue to require a deed from the ex-spouse who is relinquishing rights to real property in the divorce and/or marital settlement agreement.

Wills and Probate. Wills and probate may not be affected substantially by the court’s ruling, except in the case of intestacy. Under New Mexico’s intestacy laws, the surviving spouse has the priority right to be named personal representative of the estate of the deceased. That notwithstanding, you are still to rely on letters testamentary or letters of administration as evidence of the authority of someone to act on behalf of the deceased’s estate.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter. 

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None