Friday 23 April 2021

Estate Planning Tips For Foreigners Living in Costa Rica

(QBLOGS) Most foreigners arriving to live and acquire assets in Costa Rica will already have a valid Will drafted in their home jurisdiction, designed to cover the disposition of all of their world assets on their death.

Such a Will may be recognized in Costa Rica to cover the disposition of assets acquired in Costa Rica, following the Probate of the Will in the home jurisdiction. Following Probate in the home jurisdiction, such a Will would have to translated into the Spanish language and submitted by way of an Application to the Costa Rica Court, through a process known as “Letters Rogatory”. Following this procedure, which would be similar to a second Probate process, the foreign Will would be valid to cover the disposition of the Costa Rica assets of the deceased.

A more practical, time-efficient and less costly approach to the disposition of the Costa Rica assets on death, is to have a Costa Rica “en situ” Will prepared, which covers the disposition of the Costa Rica assets and is specifically subordinated to the foreign Will for the disposition of all other assets located outside of Costa Rica.

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This would allow for the Probate of the Costa Rica Will to be commenced immediately following the death of the Testator, shortening the time for the disposition of the Costa Rica assets and incurring less Attorney fees and court costs in the process.

For major assets, such as land and vehicles held in a Costa Rica Corporation, the most expeditious and cost effective manner to deal with the disposition of such assets on the death of the owner, is to appoint the heir(s), or the Executor of the foreign Will, as an active member of the Board of Directors of the Costa Rica Corporation, which is the registered owner of the assets(s), with the full power of sale on behalf of the Corporation.

This allows the appointed heir, or Executor to deal with the sale of the property immediately upon the death of the Corporate Shareholder, without the requirement for Probate. In this instance, the Corporate Shareholder would remain the owner of the Company Shares, allowing for a change of the Board of Directors at any time during their lifetime, should circumstances change.It must be remembered, that the heir, or Executor appointed as an active member of the Board of Directors, would also be legally able to sell, or encumber the property during the lifetime of the Shareholder owner, so obviously, care must be taken regarding the party so appointed. The real benefit in this scenario, is that Attorney and other Probate fees equal to between 6% and 12% of the Estate value may be completely avoided.

It is wise to commence these Estate Planning measures from the outset of acquiring assets in Costa Rica as a foreigner, to avoid the duplication of legal costs, to effect the necessary corporate changes at a later date.

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FACT CHECK:
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Richard Philpshttp://costaricacanadalaw.com/
Attorney Richard (Rick) Philps is a Canadian citizen, naturalized as a citizen of Costa Rica. Rick practiced law in Victoria, B.C., Canada as a member of the Law Society of British Columbia, for fourteen years, prior to moving to Costa Rica in 1998. Rick then earned his Bachelor of Laws and Licensing Degrees (Civil Law), with Honours, and a Post-Graduate Degree in Notary and Registry Law, from the Metropolitana Castro Carazo and Escuela Libre de Derecho Universities, in San Jose. Rick is a member of the Costa Rica College of Lawyers, and practices law in Costa Rica in the areas of real estate and development, corporate, commercial, contract, immigration, and banking. To contact Attorney Rick Philps about hiring him as your Costa Rican Attorney; Email: rick@costaricacanadalaw.com, Website: www.costaricacanadalaw.com

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