Today could be your last day. The end could come fast, a collision with a bus or a whack from a coconut from a palm tree.
What happens then to all those assets accumulated in Costa Rica?
If the assets are in a personal name . . . ouch! The process is going to be difficult for heirs. Probate in Costa Rica is a long and tedious process involving a court case, which means finding a lawyer one can trust with tenacity to stay on top of the process. How do heirs know if an attorney is a lazy lawyer who will just exacerbate their situation?
Heirs also need to understand what is going on. This is the hard part, beginning with the different types of probate. Sucesorio is the word for probate here. Translated into euphemistic English, it means “a big headache.”
A very serious concern that most people do not know about is there are “gavilanes,” or vultures, reading obituaries and cross-referencing the information with the Registro Nacional to see if a deceased person owns a property. Those assets are the best to steal by notary fraud. How does a dead person sue a thief? Yes, heirs can sue, but the burden of proof is so great, the process becomes almost impossible.
This has happened to many Costa Ricans. The national registry now makes a check to see if the person transferring a property is dead or alive, but this process does not work for foreigners because the national registry computers are set up for Costa Rican identification numbers and no others.
A crook can actually move a property faster than one can do it legally, without worrying much about conviction. Suing the notary responsible for the transfer can even be harder.
During the probate process, heirs sit on pins and needles, never knowing whether assets will be lost to the unscrupulous. Once a property moves illegally to another person, the law is unclear who is protected.
There are three basic probate processes in Costa Rica: A “sucesorio judicial,” or court probate, a “sucesorio notarial,” or a probate performed by a notary without the normal court process, and a “fidecomiso testamentario” or the execution of an existing last will and testament trust.
“Sucesorio judicials” are the norm, take time, and are processed by a slow court system through a type of lawsuit.
“Sucesorio notarials” are rare. They are only used in certain circumstances when no one is fighting over assets and all beneficiaries are of legal age. The professional liability for an attorney and notary is enormous in using a sucesorio notarial. Documents need to be perfectly prepared.
“Fidecomiso testamentario” are the easiest to execute but assume that an existing last and will testament trust is in order.
No one thinks about walking around a corner and into a bus with their name on it, but today would be a good time to consider the possibility.
Some people insist on having property registered in their personal name. If this is the case, think about the possibility of using a usufruct right to protect loved ones, referred to as a “rights of survivorship” benefit.
This provides the ability to transfer a property to others, reserving the usufruct right so they cannot use the property until one’s death.
Using legal structures like limited companies and trusts are much better. Simple but effective succession plans written into a limited company structure work well. However, trusts provide more comprehensive succession structure with tax savings benefits to beneficiaries.
If a person dies with no plan, the law decides the beneficiaries. First line heirs with equal rights are parents, spouse and all children. When there are no heirs found in Costa Rica, the government could take everything.
A good will still needs a succession plan, meaning the ways and means to execute the will without difficulty. The choices when organizing ones demise are not the hard part. Making the decision to do so and stop putting it off until tomorrow is.