Costa Rica Succession (2023)

16 Jul Costa Rica Succession

Posted at 22:39hin UncategorizedbyInheritEstate.com [aka: Foreign Legal Consultant, P.C.]0 Comments

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Successions of foreign citizens in Costa Rica

Attorneys at Inheriestate have a wide geographic scope in which they work. They have years of experience working on all countries of the American Continent. In Costa Rica they have worked in the provinces of Alajuela, Cartago, Guanacaste, Heredia, Limón, Puntarenas and San José.

Will verification

For thesuccessions of foreigners’ assetsit is vital to verify that the person made awill in its country of originand whether it complies with the laws of Costa Rica, in terms of validity. This applies, for example, if the foreigner has family in Costa Rica that can rightfully inherit the assets.

If in the country of origin of the foreigner a sentence related toa will that includes assets located in Costa Ricais dictated, then the Corte Suprema de Justicia (Supreme Court of Justice) is responsible for validating the sentence issued abroad.

At Inheritestate,we present you ourspecialized service in estate and probate. We are in full capacity to perform theprobatesas well as anon-testamentary proceeding, also if you are in the process of preparing yourestate planning, or creating a trust fund for your loved ones.

Please do not hesitate to ask us about our services inInheritance Law.

Costa Rican Law:

In Costa Rica the law gives no protections for the family or children. There are no restrictions to give his entire fortune to someone who is not part of the family. It is important to discuss and plan possible restrictions between Costa Rica and country of origin.

There are no taxes on inheritance.

It is better to keep your assets and funds on behalf of a company. It is easier to structure your estate.

In all cases, it is important to discuss your Costarican will with a notary or lawyer who knows the Costa Rican laws.

In Costa Rica, the Civil Code (Codigo Civil) governs and regulates a will (testamento) and inheritance in legal matters. According to Costa Rican law, foreigners are treated in the same way as local citizens. Costa Rican law allows for a “fast track” process in inheritance cases, which is carried out in the presence of a Notary Public and applies when all parties involved are of legal age and all are in agreement with the specified asset disposition and/or other instructions. However, judicial inheritance cases that reach the Civil courts (for probate) can take between one year and five years to be resolved, depending on the complexity of each case.

Wills: a will allows you to dictate who gets what. Die without one, and the government decides who gets what, without regard to your wishes or your heirs’ needs.

Exequatur: This is a Recognition Action. It is cumbersome and requires you to:

(1) Obtain a judgment from the probate court in the country where the Will was issued.

(2) Have the foreign court Judgment apostilled for use in Costa Rica

(3) Have the documents officially translated into Spanish and certified by the Ministry of Foreign Relations.

(4) Hire an Attorney to file for the recognition process before the First Chamber of the Supreme Court.

(5) Begin an abbreviated probate process in Costa Rica.

Solution: Have a Costa Rican Will

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You can limit the Costa Rican Will to cover only your assets located in Costa Rica. Leave your foreign Will intact to handle your assets located outside of Costa Rica.

Types of Costa Rican Will:

  1. Testamento Cerrado (Closed Will Mystic): Will Placed in a sealed envelopein the presence of a Notary Public.
  2. Testamento Abierto (Open Will Notarial): Will Granted Before a Costa Rican Notary Public

Witnesses to the Will: You need 3 individuals to witness your signature on the Will. If you do not speak Spanish you will require an additional 2 Witnesses that will act as translators of the content of the Will.

Joint Tenancy Property “ Propiedad en Derechos”

Ther is NO automatic “RIGHT OF SURVIVORSHIP”

Costa Rica Joint Tenancy means one spouse owns ½ and the other the other ½. In the event of death you must probate the Will to have the other half transferred to the surviving spouse

There are different TYPES OF POWERS that an ATTORNEY can have:

  1. Poder Generalisimo The most expansive one. Needs to be recorded
  2. Poder General. Generally use for administration – More restrictive
  3. Poder Especial. Issued for a specific act or series of acts that may be required POA Can be Revoked. POA ends with the death of the issuer.

What if you die without a will?

It is called INTESTATE. This means you die without having a valid Will. The CONSEQUENCE is that the Costa Rica Civil Code applies.

Intestate Distribution of Assets

1st DEGREE: Spouse (or free union spouse), children and parents of the deceased

2nd DEGREE: Grandparents

3rd DEGREE: Natural born siblings on the mother’s side

4th DEGREE: The nephews of the deceased

5th DEGREE: The uncles of the deceased

6th DEGREE: The Board of Education

The Probate Process.

The JUDICIAL PROBATE is Filed before a Civil Court with proper jurisdiction.

The rules of Civil Court procedures applies to the proceeding. It takes longer depending on the Civil Court involved.

On the other hand, the NOTARY PROBATE is requested before a Costa Rican Notary Public It is Only Available if there are no minor children and if there are no contested issues between heirs.

The Probate Process in Costa Rica has the following Steps

  1. Opening of the Probate Process
  2. Take inventory and appraisal of Estate Property
  3. Declaration of the legitimate heirs of the Estate
  4. The ratification of the Estate and the Executor
  5. Distribution and Partition of the assets of the Estate

Where and How You Die Define the Procedure that is Required

Death in the Hospital: The hospital will deliver the certificate of death to next of kin. The next of kin may accept delivery of the body through the funeral home of their choice. The Funeral services are arranged. The deceased is buried in the cemetery of their choice or is cremated or repatriated.

Death at Home Due to Documented Illness: The lead treating physician may issue a certificate of death. Funeral arrangements are made with the funeral home of your choice.

Death From Accident, Violence or unknown factors: The proper Legal authorities must be contacted so that the body may be removed with proper legal authorization. The deceased must be transported to the forensic lab so that an autopsy can determine the cause of death. The authorities will deliver the deceased’s body to family members, along with the certificate of death. Funeral arrangements and burial, cremation or repatriation are arranged.

Medical Autopsy: A Medical Autopsy is mandatory:

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  1. Death due to violence (homicide, suicide, accidents)
  2. Natural death when there was no medical treatment
  3. Natural death with medical treatment but suspicious circumstances.

Things you can inherit in Costa Rica:

Property: Property or real estate that is inherited is governed by the territorial principal (location of the property).

Gifts, inheritances or donations are not specifically taxed under Costa Rican law. However, the transfer of property and property rights in general are taxed according to a progressive table: rates range from one to two percent depending on the specific values.

Community property: in “civil law” countries community property regimes are quite common. Community property that crystallizes on the dissolution of the marriage. Several Central American countries, including Costa Rica, do not treat assets as jointly owned until a death or divorce dissolves the marriage. As such, each spouse may be free to transfer assets as he or she pleases, free from the other’s property rights. Only at the end of the marriage, will the spouse’s communal interest in property owned at the date of death of the first spouse arise. Community Property is made up of the assets that come into a marriage during the marriage. Costa Rica does apply community property. However it crystallizes upon the DIVORCE of the parties or DEATH of one of the parties.

Forced Heirship and Community Property: Testator is free to dispose of their property i.e. no forced heirship. However there are limitations:

  1. Must provide for the support of minor or disabled children. Article 595 Civil Code.
  2. Support for spouse & distribution of community property. Family law dispositions come into play. Spouse entitled to ½ of community property.

Land: Many foreigners who buy property in Costa Rica do not realize that proper estate planning for their assets in the country is as or even more important than it is for their holdings at home, because of the likely distance between their named beneficiaries and the assets in question.

If you own land or other assets in the country, or are in the early stages of formalizing ownership, bear in mind that a smart structuring of your holdings is imperative to ensure that they end up in the intended hands and in full accordance with your wishes.

Few people enjoy thinking about their mortality and the distribution of their assets after the inevitable happens. However, people generally like even less the idea of leaving their assets in the wrong hands or making things even more difficult for bereaved loved ones.

The first thing to know regarding this matter is that even if you have arranged a will, trust or similar instrument in your native country, you cannot assume that it will effectively cover your assets here. On the contrary, most foreign instruments will not be valid here, as wills in this country are regulated by Costa Rican law and must be very formal. Additionally, assuming probate procedures are initiated in your country of origin, their enforcement in this country may pose challenges for many reasons, including distance, formalities and jurisdiction issues.

The logical solution is to prepare and sign a Costa Rican will, with all the formalities required by local law, to cover your assets here.Couples can create joint wills, which usually have provisions for both separate and simultaneous deaths.

The Costa Rican will should be prepared by a local attorney, and in most cases will consist of what is called an “open will,” which is issued before a notary public and entered into his “protocol book.” This, in turn, ends up going to the National Archives to be deposited until needed. If confidentiality of the document’s contents is required, other options are available as well. The will can be replaced or invalidated at a later time by the individual who issued it.

It is advisable to discuss your Costa Rican will with an attorney at Inheriestate, so that issues such as conflicts or coordination between wills – for example, acknowledging the existence of the Costa Rican will or excluding the application of the foreign will to assets in Costa Rica – , if needed, can be taken into account.

Corporations: Adequate estate planning for your property in Costa Rica should not end with a will, which should not be your sole means of protection. It is strongly advisable to ensure that you hold title to your land and all other assets by means of a local corporation (sociedad anónima[S.A.] orsociedad de responsabilidad limitada[S.R.L.]) for which powers of attorney, share ownership and certificates can be structured in a way that allows for compliance with your wishes after your death.

This goal can be accomplished in many ways under a company structure, and specific needs and conditions should be taken into account to determine the best alternative for a particular individual. Corporations do not die, so share ownership and power of attorney for the disposition of assets become the key issues here.

The use of a Costa Rican corporation would actually be the first line of defense to be relied upon after death, enabling quicker distribution of assets and a much simpler process for loved ones outside of Costa Rica. In the event this first line of defense fails or is insufficient, a Costa Rican will – though requiring a longer and more complicated process – provides a backup that will ensure appropriate distribution of assets and end any dispute regarding the wishes of the deceased.

Survivorship Accounts: Accounts owned jointly (i.e. an Account of A and B) are subject to having the shares of the decendant account holder turned over to the estate for inventory. The balance of accounts owned severally (i.e. an Account of A or B) may be disposed of by the surviving account holder without regards to the existence of a probate procedure.

Payable on Death Accounts: Banks are required to disclose information regarding accounts held by the decedent if they receive a request from a probate judge. Post-mortem instructions to banks for performance upon death of the account holder have been deemed as valid by the Supreme Court even if they do not have the formalities of a will.

House, apartment or land: in order to inherit a house you need to obtain a Succession, Inheritance, Probate court Order, and then register the house, apartment or land in the registry office, which is the Costa Rican government database for property rights in Costa Rica.

Car or Motorbike: you need to obtain a Succession, Inheritance, Probate court Order, and then register them at the Registro Vehículos Costa Rica.

Household chattels: means all furniture, curtains, drapes, carpets, linen, china, glassware, ornaments, domestic appliances and utensils, garden appliances, utensils and effects and other chattels of ordinary household use or decoration, liquors, wines, consumable stores and domestic animals owned by the intestate immediately before the intestate’s death. Things like a motor vehicle, boat, aircraft, racing animal, original painting or other original work of art, trophy, clothing, jewelry, or other chattel of a personal nature are not included as Household chattels.

Life Insurance: When a person who has contracted life insurance dies, the beneficiary of such insurance must claim the corresponding compensation or benefit. To check if a relative had life insurance or not, you can consult the life insurance register in Costa Rica, where you can get information on who are the beneficiaries of insurance contracts with death coverage, as well as the current contracts in which it was insured the deceased person and with what insurance company.

Family company: In business, unexpected events can dramatically change the fortunes of a company.

If you are not already in the business, think carefully before entering it. But If you are already in the business and have ambitions to take over as leader (whether you are a family member or not), consider adopting these guidelines:

  • Have a personal development plan.
  • Find and use a suitable mentor or coach.
  • Identify opportunities for skills development, e.g. turn-around situations, start-up situations, handling employee performance problems.
  • Gain experience outside the business.
  • Develop your profile independent of the owner’s, e.g. by joining industry associations and attending relevant seminars.
  • Ensure regular communication with the owner.

Airplane miles: Most airlines and credit card companies would like you to think that you are simply not allowed to inherit airline miles.

But that’s not necessarily the case.While it is true that most airlines technically “own,” the frequent flyer miles your loved one earned, there’s no reason for you not to be assertive about requesting that the miles are transferred to your account. After all, your loved one earned these assets by regularly using the airline’s services, or by outright purchasing those miles.

A few companies are very empathetic and up front about allowing you to transfer airline miles after the death of a loved one, and make it as easy as possible to bequeath them to survivors, and for those survivors to claim them.

Before you make your first call, have copies of the death certificate, the deceased’s loyalty program account numbers, address and email details ready. Be sure you have your own account, into which the awards can be transferred.

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Aircraft: The new owner must register the aircraft in theDirección General de Aviación Civil (Costa Rica)

Jewelry: The administrator, the person appointed by the court to manage an estate when there isn’t a will, is responsible for dividing the deceased’s personal belongings, including his/her jewelry.

According to Will

If the will left specific instructions for pieces of jewelry, the administrator must follow those instructions first. An administrator only divides jewelry not specifically left to a person in the will.

Dividing by Value

The administrator must divide the jewelry among heirs equally. The administrator should have all jewelry appraised by a professional jeweler or appraisal service and uses the value the jewelry pieces to give each heir an amount of jewelry equal to their her share. An administrator, like an executor who doesn’t have jewelry division instructions, divides jewelry among the heirs by appraised value.

Dividing by Request

Dividing jewelry is often more difficult if the heirs want specific pieces for sentimental reasons. The executor still must have the jewelry appraised, as each beneficiary is entitled to an equal share. He may take the appraisal list and meet with the siblings to discuss who will receive what. If one heir agrees to take jewelry worth less because of personal reasons or to please another heir, the administrator has to give that heir more of the other personal possessions to make up the difference in value. Ultimately, it is the administrator who is distributing the estate and he must decide who gets what if the heirs can’t agree. He may try to fulfill requests and get heirs to agree to avoid problems, but he has the authority to divide the jewelry as he sees fit, as long as each heir gets their fair share.

Collections: Like every other valuable asset a collector owns, art, antiques, and collectibles should be addressed within his or her comprehensive estate plan. However, art and collectibles comprise a special asset class – there may be issues of title, valuation, provenance and restoration that affect the collection and likely fall outside of these advisory experts’ areas of expertise.

Virtually every collector would like to maintain or increase the value of his or her collection.Most would agree that the collection should be protected from loss, damage, the claims of creditors, and unnecessary taxation.Beyond these basic priorities, collectors may utilize their art and collectibles to achieve a number of goals.

FAQ

What is Probate?

The action or process of proving before a competent judicial authority that a document offered for official recognition and registration as the last will and testament of a deceased person is genuine.

What about TAXES in Costa Rica?

Estate Taxes Costa Rica applies territorial taxation. Costa Rica does not apply an inheritance tax. Watch for foreign remittance tax if the proceeds are generated in Costa Rica and sent to a foreign domiciled heir. To transfer real estate from the deceased to any of the heirs the applicable property transfer, registry fees and Notary fees are due payable. Estimate 3.5% of the value of the asset as reported in the inventory of the Estate.

What are the Requirements for CREMATION?

The certificate of death or medical report is required. Costa Rica Law requires that bodies for cremation have been autopsied first. Some local funeral homes have their own licensed autopsy facility. If the body is in the Forensic Lab then this has already been done and no additional procedure is required. If not, an autopsy may be conducted by a pathologist. The funeral home can assist with this procedure.

Which family members will inherit your assets if you don’t leave a will in Costa Rica?

This week we’ll resume the interesting subject ofwillsand probates, explaining the procedure to follow when a person dies without leaving one and, if so, which family members lead thesuccession chain.

Clearly themaking of a will before a notary publicand in full use of your faculties, will prevent your precious assets (jewelry, money, properties, etc.) to be awarded to people (heirs) that you probably never imagined.

So, what happens when there is nowill? In that case comes into force theCosta Rican lawand the closest relatives of thetestator.

What are the immediate family benefits when there is no will?

Without awill, a judge will fall back on the award that is granted by law. The tentativeheirswill be summon by a judge and become aboard of heirspresided by a judge, who will guide them to take decisions and protect the interests of all. For example, theheirsmay decide to sell a house and divide the gain but they cannot leave a relative unprotected.

Now, when there is nowill, thetestatorhas, by law, direct heirs that receive its assets, this is what we callfirst succession degree: spouse, children and parents. Thesecond succession degreeincludes grand children and grand parents, third degree brothers and so on until the boards of education become heirs.

The judge directing the board of heirs will watch over the spouse to receive 50% of the assets, with the condition that the marital assets (acquired by both during the marriage) correspond to the other 50%. It means that the spouse will not inherit more than half of the direct assets of thetestator.

The rest of the possessions will be distributed equally between children and parents. In the specific case of children conceived outside a marriage (adults or minors), they will becomeheirs of equal degreethat the kids procreated within a marriage.

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It’s very clear what family members have priority over the assets, but you may be wondering, what if thetestatorhas no spouse, children or parents? Well, then thesuccession chainwill continue as follows:

  1. Brothers and sisters
  2. Nephews or nieces
  3. The Government: the Education Boards where the testator has assets

How to proceed when a foreigner dies, leaving properties in Costa Rica?

We are experts in dealing with situations where a foreign citizendies leaving assets or properties in our country.

It will be necessary to verify the lastwill andtestamentmade by the person in his/hers country of origin, with the objective that aCosta Rican notarycorroborates if it fulfills the validity formalities required by Costa Rica such as: if it was processed by a notary public in the presence of three witnesses and written in public deed, among other requirements.

Another possibility is the issuance and recognition of awillor testamentissued in another country and duly processed before that country´s judge. This may include assets left by a citizen in Costa Rica. Locally then, it will be necessary to have this judgments recognized by the justices of the Corte Suprema de Justicia (Supreme Court of Justice), who must give validity to the sentence issued by the foreign judge.

The distribution of the assets of a loved one should be done with a proper and timely legal advice,to ensure that the possessions will be distributed without setbacks and equitably, as estimated by law.

What Types of Wills are there in Costa Rica?

Anyone can write a will as long as they are of legal age and not mentally ill. According to Costa Rica’s Civil Code, there are two main types of wills:

Open Will

Usually a Notary Public (a Costa Rican attorney acting privately) drafts the will, according to the person’s instructions, into his/her protocol (legal book) in the presence of three witnesses.

If the person who is creating the will does not speak Spanish, two of the three witnesses must speak the same language of the interested party and must also speak Spanish.

The Notary Public must then file the document with the National Archives (Registro Nacional) which is in Zapote, San José. Only parties who are directly involved in the will can get copies from the Archives. Because the National Archives keeps the will in their records, a new copy can be requested should it be lost. If a new will is filed, it replaces the previous one.

Closed Will

The person concerned must write a document with his/her instructions and desires, place it in a sealed envelope and deliver it to a Notary Public. Two witnesses must be present when the sealed envelope is handed to the Notary Public, who certifies what has transpired.

Usually, the Notary Public keeps the sealed envelope, although it could be someone else. To make the will effective, once the writer of the will dies, the sealed envelope is handed to a judge who opens it and legally validates it. Because of the closed nature of this procedure, there is the danger that the sealed document may become lost or, in an extreme case, manipulated.

There are variations, legalities and formalities to these two basic types of will. Usually a qualified Notary Public takes care of these points. It is recommended to consult with an attorney’s office (Notary Public) for more details as well as estimates on costs, which are high and can reach 15 percent (including legal fees, taxes, other charges) of the total value of the assets.

What happens if I don’t leave a will?

When aperson dies without leaving a will, it is necessary, in most cases, to turn to alegal advice at Limeresthat provides you four elements: Experience, security, reliability and speed of action.

We talk about speed of action because, as yourlegal advisers,we must prevent that unscrupulous people may get benefit from the assets.

If there is nowillthe Costa Rican laws are clear about granting benefits to the direct relatives of thetestator, orfirst succession degree: Spouse, children and parents. To do that, aboard of heirswill be created, presided by a judge that will help them distribute the assets as the law requires, to make decisions and protect the interests of them all.

How are the assets distributed when there is no will?

Thespouse of the testatorreceives 50% of the assets only if the assets accumulated by both parties during their marriage (marital assets) correspond to the other 50%.

From the distribution of the 50% of the assets, the otherhalf willbe received equally by thechildren or parents of the testator.

What happens if the person dies without a will and without direct relatives?

Thechain of succession,according to the Costa Rican Law, continues with the brothers or sisters, nephews or nieces of the testator, or the State, specifically the Education Board of the places where thetestatoraccumulated its assets.

    FAQs

    Does Costa Rica have inheritance tax? ›

    Costa Rica does not have an inheritance tax.

    Is a US will valid in Costa Rica? ›

    Having a Foreign Will

    If a probate process was opened in a foreign country, then any orders issued in that court process would need to be recognized in a court in Costa Rica. This requires obtaining certified court documents and Apostilles to be able to present them for recognition in Costa Rica.

    Is Costa Rica a community property country? ›

    Those properties include agricultural land, houses, cementeries, communal halls, and others. Costa Rica has a partial community property regime, assets brought to marriage or inherited during marriage remain individual exclusive property, while all property acquired during marriage is joint property.

    What is a will when someone dies? ›

    This is a legal document which gives you the authority to share out the estate of the person who has died according to the instructions in the will. You do not always need probate to be able to deal with the estate. If you have been named in a will as an executor, you don't have to act if you don't want to.

    What is the gift tax on $100000? ›

    Gift tax rates
    Value of gift in excess of the annual exclusionTax rate
    $20,001 to $40,00022%
    $40,001 to $60,00024%
    $60,001 to $80,00026%
    $80,001 to $100,00028%
    8 more rows
    1 Dec 2021

    Does Costa Rica recognize trusts? ›

    In Costa Rica, trusts are regulated by articles 633 onward of the Commercial Code, as follows: "Through trust agreements, the trustor gives to the fiduciary the property of assets or rights: the fiduciary is obligated to utilize them for the legal and pre-determined purposes established in the constituted act."

    Can the government take your land in Costa Rica? ›

    In Costa Rica there is an Expropriation Law, designed for when the Government needs to use all or part of private property for public purposes. As examples we have when a new highway or road is built or expanded, when it is necessary to install high power lines structures and when bridges are built.

    Is divorce legal in Costa Rica? ›

    It's a fact of life. The objective behind divorce is the dissolution of the marriage. You can get a divorce in Costa Rica in two main ways: by a mutually consented divorce or by divorce litigation, which initiates with the filing of legal action. You must know that a divorce lawyer is essential in both scenarios.

    What is the common property of the spouses? ›

    Community property is property that is owned equally by the spouses. In community property states, money earned by the spouses during marriage and all property bought with those earnings are generally considered community property. Likewise, spouses are equally responsible for debts incurred during marriage.

    How can I leave money to my son but not his wife? ›

    Set up a trust

    One of the easiest ways to shield your assets is to pass them to your child through a trust. The trust can be created today if you want to give money to your child now, or it can be created in your will and go into effect after you are gone.

    What happens to bank account when someone dies? ›

    With a valid beneficiary in place, funds in a bank account go to the beneficiary. That person will need to contact the bank and provide documentation to claim funds. If the beneficiary dies before the bank account owner, the assets typically go to the deceased's estate.

    Do US citizens need a visa for Costa Rica? ›

    US nationals do not require an entry visa to Costa Rica. However, they must have a current valid passport and a return ticket to exit Costa Rica within 90 days. (Either to return to your country or to go to another country).

    Is Costa Rica safer than the US? ›

    Costa Rica Crime Rates Compared to the United States

    While 2017 saw a record number of homicides in Costa Rica, there has been a slight decline since. As of 2021, the murder rate in Costa Rica is 11.5 per 100,000 people. The murder rate in the U.S. is just 7.5 per 100,000 people.

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