Your Will

It’s generally younger people who don’t plan ahead and think about making up their Wills.  But living in Mexico with property and assets you should give this immediate consideration and take action accordingly. If you bought property in any country your legal adviser would counsel you into taking out the appropriate paperwork so that your wishes are adhered to upon your death.   Don’t shy away from this!  Remember there are only 2 sure things in life: death and taxes.

When you buy a property locally it (currently, September 2013) has to be done through a bank trust (“Fideicomiso”) as this area is within the 50 miles ocean (30 miles border) zone.  If you don’t know about this, you should ask your realtor.  The “escrituras” (deeds) state who is your beneficiary/ies. Remember to tell your beneficiary! Your property reverts to whoever is named in that trust.  It’s as simple as that.  They will need to come here with all the usual proof of identity, plus the bank trust Deed, the Death Certificate and go to the appropriate bank.  It’s all very logical.  There is no protracted Probate period.  At that time your beneficiary can liaise with a realtor, Lawyer and/or notario regarding sale of the property – or whatever.  Once they have completed the appropriate paperwork, the beneficiary can receive the sales proceeds by wire transfer in their home account.

Currently (September 2013) legislators are looking at changing the law so that the banks do not in fact hold the trust to your property.  This is because a lot of prospective purchasers do not like the thought of their property “owned” by a bank – even though they can deal with it in every aspect as if they owned it outright.  And a lot of those prospective purchasers are disgruntled with the market/etc wherever they live and would really like to live or own in Mexico.  So the latest idea is designed to stimulate the Mexican property market, with resultant monies going into tourism, businesses, employment, etc, ie, generating income into Mexico in general and not just money going into the banks. (We all agree the banks in any country have far too much money). If this law passes throughout Mexico – or even if it is just where you have purchased property – then you will (eventually) not have the umbrella of – or financial liability to  – a bank trust.

At that time you WILL need to make a WILL.   “I WILL”  is your wish, your intention, your chance to “speak from the grave”.

If you have become a Mexican citizen – congratulations! You WILL need to make a WILL as you do not require a bank trust.

If you have a totally new property and the developer has not yet given title, you might want to consider a Will in the unfortunate event that you die before you officially receive it.    Remember, this article is not just for old people, death can happen to anyone at any time.   It is also a good idea to send an Instruction to the Developer, designating your beneficiary in case of death.  If the Developer recognizes that instruction, it will prevent you heir to go through Probate and pay the taxes of the transfer from you to them.

The bank trust refers to the PROPERTY.  If you want to leave the contents – furniture, vehicles, boats, heirlooms, jewellery, books, cats & dogs,  the money in the bank – then you need to  – THINK!!! Surely where you live you would deal with all of this in each individual compartment, and it is no different here.  Make up your mind who gets what – and THEN put it into  – yes, a WILL.  Do this here, in Spanish.  If you have a non Mexican Will for these “personal items” that will only complicate and delay matters – and it would need to be officially translated as well as officially notarized which would actually cost more money.  (You can’t take it with you, but why pay out unnecessarily by not doing it the Mexican way?).

Regarding your bank account: when you opened it you made a contract naming the beneficiary. That is the person who gets that money, even if you have stipulated somebody else in your Will.  The bank account nomination has priority over your Will.

If you have set everything up correctly and then changes occur in your life – 2nd or 3rd wife; hate the officially designated beneficiary and want to change – then of course, as in any country – you will need to change or modify your intentions, whether it’s in your escrituras or your bank account or your Will.  And of course you will have to pay for any modifications.   A single man recently changed his escrituras beneficiary, and the total charge was 14,000 pesos, being 6,000 to the notario for all the work involved, the papers, dealing with the bank, etc .  The balance of 8,000 pesos went into taxes and filing fees!  It took just a little over a month to get it all done.

If you are husband and wife, you would consider having your property (bricks & mortar, cars etc) on the “y/o” basis.

Two very small words in Spanish are not difficult to understand, meaning and/or (either/or).  In death it means the other half automatically inherits without too much aggravation.  Without the “y/o” then it’s like a Probate situation.  You can have “y/o” to the spouse and then a beneficiary upon the death of the surviving partner. There are certain Banks that might raise an issue with this, but it is customary to be accepted.

Trying to cheat the system to save a few bucks is not a good idea.  Years ago, a few foreigners were given the advice to have their property in a corporation.  The lawyers happily did their job and established them…making a tidy sum.  THEN they discovered it was in fact illegal to inhabit a property that is in a corporation.  The lawyers once again happily did the job of dismantling the corporations.  To avoid those pesky bank fees,  these folks paid 10-12 years worth of bank fees to the lawyers…only to still have to pay the bank fees.  Fortunately they did not sell through the corporation, since taxes would have been huge!

And finally: As an FYI to all of the people that lose sleep over hiding their property’s paperwork:   Stop it.  If you have a trust, you only have a COPY (yes I know it looks wonderful, nice cover, lots of stamps and stuff).   The bank has the actual title (of course!!).  If you ever lose your COPY, provide ID etc and you can get a copy of it (at a price of course).  Just make sure you have that  important account number and the Deed Number, Notario and Date of the Deed.

Many thanks to Notario Sr Javier de la Peñai who has verified this information.

javierdelapenai@gmail.com

05 September 2013

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Disclaimer: This information is not meant as legal advice. It is for educational and informational purposes only. Government policies vary between States and offices, and Mexican Government officials have broad discretion in how they individually enforce policies, so, your personal experiences may vary. See a professional for advice on important issues.