{Business & Money}
Mexican Wills
A “Must” for Anyone with Assets in Mexico by Kristy Deegan
In general, in the United States there is a right of survivorship when a death occurs. The United States law provides for a joint will for the married couple. Many married couples have a joint Will, living trust, family trust or the like. When one partner dies under these circumstances, the “property” (all belongings, homes, land, etc.) is passed on to the designated parties with relative ease. If there is no Will or trust, the “property” must go through probate—a legal process to determine the rightful heirs. Part of that process is to publish a notice in all the surrounding areas requesting that any person who feels they are a rightful heir or have liens on the “property” come forward. If no one comes forward, the right of survivorship is implemented and the surviving spouse becomes the heir. What is the law in Mexico? There is no right of survivorship provision in Mexico. If a spouse dies, and there are no children, the court will search for heirs for the spouse’s 50 percent in the following order: parents, grandparents, siblings and cousins. If there are children, the court would rule equal percent to surviving spouse and children. If there were two sons, the two sons and the spouse would each get an equal part of the ownership. The legal process is governed by the Baja California Civil Code, so each state may have varying processes for the court. This is not a Federal issue. If there is no Will and all the heirs agree to the distribution, one can resolve the property ownership through the Notaria. If there is any conflict, it must go through the court.
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April 2010 – Mexico Living’s Baja California
How it works in Mexico: Because there is no right of survivorship, each individual owner of “property” should have a Will. When a spouse dies, and a Will is in place, the transfer of property is relatively simple. The designated heirs present the Will to the Notaria and the transfer is made with a signature. The “new” owners of land are registered with the bank and the Public Records. There are two choices if there is no Will. 1) If there is no conflict, the heirs can go directly to the Notaria for distribution of the property. 2) If there is any conflict, the heirs must go through a process similar to probate in the United States. For example: When a spouse dies, the courts will start the process of “looking” for heirs. They will first look for the children, then parents, then grandparents, then siblings and then cousins. When this search is exhausted, the court de-
termines the rightful heirs and the surviving spouse can possibly be totally disinherited and excluded. A Will or Family Trust written in the United States, it is NOT valid in Mexico. In order to make it valid, one must have the document translated by a court approved translator (up to $20 per page) and presented to the Judge for official acceptance. This is a lengthy and costly process. If a Mexican Will is in place, this process can be avoided. Why do you need a Will if you have a fideicomiso? A fideicomiso is a legal document that allows foreigners to own property within the protected zone in Mexico. It is a renewable trust held and administrated by the bank and it designates the legal owners of the property. In the Mexican constitution it states that no foreigners may be allowed to own property in Mexico. The fideicomiso is regulated by secondary legislation as an exception, which states that under certain conditions, foreigners may own property with the implementation of a fideicomiso. For El Dorado Ranch in San Felipe there are two classifications of fideicomiso: Master Trust and Individual Fideicomiso. Both have the same rights and privileges but differ in the rules about beneficiaries. The purpose is to define the beneficiary differences and how a Will relates, not to fully explain the fideicomiso. The Master Trust consists of a large number of lots at El Dorado Ranch. The Master Trust is the only method of privatizing a large number of lots at the same time, in order to facilitate the transfer. The owner owns a “beneficiary interest” in the whole. Each lot is not correlated to a specific person. One cannot designate a survivor beneficiary if he is a member of the Master Trust. Every person listed on the Master Trust should have a Will in order to avoid the above process. For example, If Mary and John are married and they purchased a lot in the Master Trust with Joe and Sarah (married), who is the heir if Sarah dies? If Sarah does not have a Will, one quarter of the ownership is unclaimed. Joe, nor Mary and John, automatically get Sarah’s quarter. The court begins the process to locate Sarah’s family and rightful heir. Each of the four people in this partnership of land ownership should have a Will to avoid any conflict of rightful ownership.
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The Individual Fideicomiso does allow for a designated survivor beneficiary. For example, Susan and Ron are married and they are both listed on the fideicomiso. They designated their son to be the beneficiary. When either Susan or Ron (or both) die, the son will present the fideicomiso to the Notaria and the transfer will go smoothly. However, the fideicomiso only covers the land and the structures. All other possessions are not covered. If anyone in the family wants to take possession of any of the contents or vehicles, the heirs must go through the court process described above. The purpose of the Will is to avoid any possible conflict and to preserve the legal rights of the land. Even though we think that today there will be no conflict, obtaining a Will ensures it. Leased Land: Any agreements entered into before the spouse dies are still legally binding and continue as agreed. Therefore, a lease agreement signed prior to the spouse’s death will continue to the end of the lease. The same legal process as previously stated applies to the contents, vehicles and bank accounts. What a foreigner should do to be protected: A Mexican Will is a very simple process: 1. Fill out the form 2. Attorney prepares the document 3. Signature by Notaria, you and witnesses 4. Final copy received in Spanish. You may obtain an English translation for a fee. We, at San Felipe Management Services, have a process where you fill out the form with us, we send the form to the Attorney and the document is prepared. The Notaria, or designee, comes to San Felipe for signature, and the final document is sent to us by bus and available for local pickup. The cost is US$400 per person and the inconvenience is minimal. The laws are different in Mexico. We may or may not agree with the laws here, but we must live by them. I can’t state this strongly enough: There is NO right of survivorship in Mexico.