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Wills, Inheritance & Death in Costa Rica Presentation by Roger A . Petersen A ttorney at Law San José, Costa Rica www.plawcr.com / www.costaricalaw.com S WILLS WHY A WILL ? 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. Foreign Will in Costa Rica Is my Foreign Will valid in Costa Rica – YES - However …… Exequatur This is a Recognition A ction. I t 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 M inistry of Foreign Relations. (3) Hire an A ttorney 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 You can limit the Costa Rican Will to cover only your assets located in Costa Rica. Leave your foreign (U.S. or Canada) Will intact to handle your assets located outside of Costa Rica. Note: U.S. Estate Planners are trained and accustomed that there should only be one will in effect at a time. However when other countries are involved this may not be the best approach. Types of Costa Rican Will Testamento A bierto Testamento Cerrado Open Will Closed Will Notarial Will M ystic (Secret) Will Granted Before a Costa Rican Notary Public Placed in a sealed envelope in the presence of a 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. Name Your Beneficiaries NUM BER ONE HUND RED FOUTY EI GHT: Before me, M A RI A SA NCHEZ PEREZ, Notary Public with office in San Jose, personally appeared WA LTER HA RRI SON, of legal age, divorced, businessman, resident of Escazu, Urbanization Bello Horizonte from the first entrance one hundred meters south and five hundred west with passport number BR 1646432 and STATES: That he appears in this act to state this Last Will and Testament according to the laws of Costa Rica and the following clauses: FI RST: That he names A NNE O’ BRI EN, no second surname on account of her Canadian nationality, of legal age, married, businessperson, resident of Vancouver, Canada and born on December 23, of 1971, only heir of all my assets, property, share certificates, bank accounts which are located in Costa Rica and which I may have at the time of me death Name the Executor of the Estate and A lternative Executor SECOND : That he designates A NNE O’ BRI EN as the Executor of the estate for all purposes as required by law. In her absence I name a substitute, M r. RONA L D JONES, no second surname on account of his Canadian nationality, of legal age, married, businessperson, resident of 200 Royal Street Vancouver, Canada, THI RD : In the event the testator and the beneficiary die in the same act he confers his entire estate to the children of A NNE O’ BRI EN which may living. FOURTH: That it is his intention that this L ast W ill and Testament only apply to assets that are located in Costa Rica. THAT IS A LL. If the intent is for this to be a Costa Rica only Will –then indicate so in the Will Open Wills are Filed The Corporation in Costa Rica Notary Public Drafts Property Deed CORPORATIO N Your Corporation Owns Property You own the Shares Spouses are on the Board or M anagers of the corporation. Either acting jointly (limited) or acting independently of each other (full authority). The Corporation as an Estate Planning Tool It is NOT automatic. The shares of your corporation will not “ automatically” pass to your heirs. They will pass according to the terms of your Will The Corporation as an Estate Planning Tool Board of Directors of S.A . or M anagers of S.R.L Spouses acting jointly or independently of each other allows spouse to take over management of the corporation You could put your children/ heirs in the corporation with limitations. “ ……. in the event of the death, or medically declared incapacity of either the President or Secretary of the corporation theTreasurer will have unlimited Power of Attorney..” Joint Tenancy Property With Right of Survivorship In the United States Joint Tenancy Property “ Propiedad en Derechos” In Costa Rica 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 POWERS OF ATTORNEY 1. Poder Generalisimo The most expansive one. Needs to be recorded 2. Poder General. Generally use for administration – M ore 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. M EDICA L DIRECTIVES Sample M edical Directives To agree to, refuse, or withdraw consent to any type of medical care, treatment, surgical procedures, tests, or medications. This includes decisions about using mechanical or other procedures that affect any bodily function, such as artificial respiration, artificially supplied nutrition and hydration (that is, tube feeding), cardiopulmonary resuscitation, or other forms of medical support, even if deciding to stop or withhold treatment could or would result in my death; To have access to medical records and information to the same extent that I am entitled to, including the right to disclose health information to others; to authorize my admission to or discharge (even against medical advice) from any hospital, nursing home, residential care, assisted-living or similar facility or service; Testamento Vital o De Vida Sample Used in Spain Costa Rica M edical Directives & Euthanasia Costa Rica A ctive Euthanasia is illegal – criminal offense Costa Rica Passive Euthanasia where you refuse medical treatment is a “ grey area” A rticle 46 Civil Code “ Every person may refuse to be submitted to a examinations, medical treatment or surgery…” No Laws or Regulations directly addressing Living Wills in Costa Rica. INHERITA NCE Dying with or without a Will W I TH A W I L L I NTESTATE NO W I L L INTESTATE This means you die without having a valid Will CONSEQUENCES The Costa Rica Civil Code K ICK S in Intestate Distribution of A ssets 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 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. The Probate Process JUDI CI A L PROBATE NOTA RY PROBATE Filed before a Civil Court with proper jurisdiction Requested before a Costa Rican Notary Public The rules of Civil Court procedures applies to the proceeding Only Available if there are no minor children Takes longer depending on the Civil Court involved. Only available if there are no contested issues between heirs The Probate Process 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 COM M UNITY PROPERTY Community Property is made up of the assets that come into a marriage during the marriage. In the U.S. you have “ community property” states (California) and separate property states. Costa Rica does apply community property. However it crystallizes upon the D IVORCE of the parties or D EATH 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. M ust provide for the support of minor or disabled children. A rticle 595 Civil Code. 2. Support for spouse & distribution of community property. Family law dispositions come into play. Spouse entitled to ½ of community property. Distribution Example A sset: Real Estate worth $300,000. A ssume it was purchased during the marriage. Heirs. The spouse and 2 children. Surviving spouse gets $150,000 as community property. The remainder, $150,000 would be the value of the Estate. That would be divided 1/ 3 each. $50,000 for spouse and $50,000 for each of the children. COSTA RICA TA XES INHERITA NCE S Inheritance / 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. Property Transfer Taxes 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. DYING IN COSTA RICA What Happens ? S FORM DS-2060 Costa Rica Death Certificate The Civil Registry http:/ / tse.go.cr Where and How You Die Define the Procedure that is Required S Death in the Hospital The hospital will deliver the certificate of death to next of kin. Next of kin may accept delivery of the body through the funeral home of their choice 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. The deceased is buried at the cemetery their choice, cremated or repatriated. Death From A ccident, 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. M edical Autopsy A M edical A utopsy is mandatory: 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. CREM ATION 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. REPATRIATION Repatriation Insurance You Can’t Take it With You For M ore Information Visit www.CostaRicaLaw.com Thank You Lic. Roger Petersen www.plawcr.com / www.costaricalaw.com 506-2288-2189 Ext. 101 e-mail: [email protected]