Estate Planning when You Own Mexican Property

Are you planning to buy property in Mexico or have you inherited property there? Do you have a Will in Canada and wonder if it will apply in Mexico? Or are you thinking about making a Will specifically for your property in Mexico?

Here are some important things you should know:

Fideicomiso

A Fideicomiso, or trust, is a legal tool in Mexico that allows foreigners to own property within restricted zones, which includes areas within 100 km of the border and 50 km from the coast. It also plays a significant role in estate planning, as it allows for the designation of successors and can bypass complex probate processes. 

How it Works:

1. Legal Ownership: The property is legally owned by a Mexican bank or financial institution (the trustee) on behalf of the foreigner (the beneficiary). 

2.  Beneficiary Rights: While the bank holds legal title, the beneficiary retains all the rights of ownership, including the right to sell, lease, or improve the property. 

3. Estate Planning: The trust can designate successors, avoiding probate and simplifying the process of transferring ownership to heirs upon the beneficiary's death. 

4. Duration: The trust typically has a 50-year term but can be renewed indefinitely. 

5. Flexibility: The beneficiary can make changes to the trust, including designating new beneficiaries or modifying terms, as needed. 

Benefits of using a Fideicomiso:

1. Ownership Rights: Foreigners can enjoy equivalent rights to those of Mexican citizens, including the ability to sell, lease, or improve the property. 

2. Estate Planning: The process of transferring ownership to heirs is streamlined, avoiding the complexities of Mexican probate. 

3. Security: The Fideicomiso provides a secure and legal framework for foreign property ownership, ensuring compliance with Mexican law. 

Estate Planning Considerations:

1. Successors: It's crucial to designate successors in the Fideicomiso contract to ensure a smooth transfer of ownership upon the beneficiary's death. 

2. Mexican Will: While the Fideicomiso handles property held in trust, it's essential to have a Mexican will for other assets, such as personal property, to ensure comprehensive estate planning. 

3. Potential Issues: There have been instances where banks have failed to transfer property to designated successors, requiring heirs to go to court, so having a will can help mitigate these issues. 

4. Changing Beneficiaries: The beneficiary can change the trust's terms and beneficiaries during their lifetime, as needed, through a properly notarized instruction letter. 

Important Note: 

While the Fideicomiso offers numerous benefits for foreign property ownership and estate planning in Mexico, it's crucial to seek Mexican legal advice from a qualified Mexican lawyer to ensure proper implementation and to understand any specific implications for your situation. 

Hermes Sanchez

Practitioner of Mexican Law*

*Practitioner of Foreign Law, Mexico

Bachelor of Laws, Mexico, 2008

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