Transfering Your Real Estate, Jewelry & Money
Editor’s Note: This article has been edited and published with permission from Lic. Sonia Diaz, who provides consulting services for health, life, auto, and property insurance in Puerto Vallarta / Riviera Nayarit and San Miguel de Allende.
Plan Ahead!
Many foreigners invest in real estate in Mexico to benefit from the financial returns, to enjoy their leisure time by owning vacation property, to retire, or a combination of all. Ironically, few foreigners give any thought to what will happen to their property when they die. Here are some insights on how Mexican law deals with property owned by foreigners upon death. It is best to plan!
Wills for Property Owners (Real Estate, Jewelry, Money)
Anyone living in Mexico full-time, or anyone who owns property in Mexico (real estate, bank accounts, jewelry, or other) should have a Will that is recognized in Mexico.
Most foreigners who own property in restricted areas on the coast or border, do so through a Bank Trust (“fidecomiso”). If that is the case, beneficiaries are named in the Trust Deed, thereby eliminating the need for a Will prepared in Mexico for that property.
However, please check if only immediate family members (spouse or children) may be beneficiaries of the trust property. Furthermore, bank accounts and other property, such as vehicles and jewelry, may not be included in the Trust Deed and therefore may require a Will or the probate process to be transferred.
If you own property directly in non-restricted areas, or own property or conduct business through a Mexican corporation, you must have a Will that is recognized in Mexico to transfer that property or assets.
Property transferred on death is not subject to capital gains taxes in Mexico but, in some cities, real estate is subject to transfer duties.
Dying Without a Will
If a foreign property owner dies without a Will, the law provides that their property is divided proportionately between their legal spouse (not common-law spouses) and their children. The process is complicated and requires the translation and certification of foreign documents such as marriage certificates, marriage contracts, birth certificates of the children, and if they are minors, the representation of those minors by an independent tutor in Mexico. The process may take more than a year and can be very costly.
Wills Prepared Outside of Mexico
Wills prepared outside of Mexico are valid in Mexico, but having them legally recognized is a complicated, lengthy, and expensive process.
To obtain recognition in Mexico of a Will prepared in the USA or Canadian, the Will must be translated into Spanish by an official court-approved translator. The Will must also be “Apostiled” (USA) or “Legalized” (Canada) by the country in which it was prepared.
This process can take several months and can cost a significant amount to complete. If certain issues arise, the Will may be required to be probated before the Mexican courts which adds months or more to the process of transfer of title. During this time, the property in Mexico may not be disposed of and management may be difficult.
Wills Prepared in Mexico
Although Mexican law allows for different types of Wills, one prepared by a “notario” (Notary Public) is more readily recognized and requires fewer steps to have it officiated. Usually, the Will is written in Spanish, prepared by a “notario”. If you are not bilingual, a certified translator is required by law to create your Will. If the Will is prepared in dual column format (English and Spanish) by English speaking “notario”, then no translator is needed.
For property, including real estate that is not held within a Bank Trust, a Will made in Mexico identifies the beneficiaries (general heirs that inherit all the property) and specific legatees (individuals that inherit an identified item or amount of money). It also appoints an executor who will administer the property until it is transferred to the heirs and will assist the notary with this process.
A foreigner needs to go before a Notary to grant his/her Will made in México. Lawyers can act as legal counsel and advise foreigners on how to structure their Wills, transfer their property, and consider certain fiscal consequences on the transfer of property. Most lawyers prepare the Will on behalf of their clients, in Spanish, explain the contents to their clients in their language of choice and then have a Notary register it to give it full legal effect. The Will needs to be signed in the presence of the Notary.
All over Mexico, “notarios” charge half-price in September. The typical fee in September is approximately 2,000 pesos. With an INAPAM senior’s discount card it may be less. When a certified translator is required, the cost is approximately 500 pesos.
Obtaining Death Certificates
When a death occurs in Mexico, normally a funeral home representative is required to go with a family representative to REGISTRO CIVIL. The family representative will need an ID and the deceased person’s official ID (Passport, Visa, or INE). The funeral home representative will provide the required documents pertaining to the death.
REGISTRO CIVIL will issue a death certificate. It is very important at that time to ask for additional certified copies of the death certificate, typically, 5 or more copies. Keep the original in a safe place.
When a death occurs outside of Mexico for a person who is a property owner or legal resident of Mexico, you must obtain a certified copy of the death certificate and have it “apostilled” or “legalized” by the issuing country. The death certificate must also be translated into Spanish by a certified translator.
Notification to Immigration (INM) and Tax Authorities (SAT)
If the person was legally in Mexico as a Temporary or Permanent, the Immigration Department, INM must be informed. When married, the surviving spouse informs INM through a change in marital status, and by presenting the visa and death certificate of the deceased. SAT (Mexican tax authority) must also be notified If the person was registered for tax purposes. There are no other Mexican requirements.
The death of a Canadian in Mexico requires a family representative to go to the Canadian Embassy. This person must have with them their Canadian passport and birth certificate. A passport of the deceased person plus an original or certified copy of the death certificate is also required.