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You need a Will and Life Insurance in Costa Rica for the purpose of Estate Planning.
When moving to Costa Rica, for some strange reason, people often think that they don’t need estate planning here. Costa Rica is just like any other country. It is so important to address this issue when moving to any foreign country as you are acquiring new assets and, yes, new debts.
Can My Foreign Will Work? Yes, But…
The laws in Costa Rica are different than they are back in your home country. Your foreign Will can only be validated through a recognition act called “exequatur”. This is a cumbersome and expensive process as it requires the following steps:
- Obtain a judgement from the probate court in the country where the Will was issued.
- Have the foreign court judgement apostilled for use in Costa Rica.
- Have the documents officially translated into Spanish and certified by the MINISTRY OF FOREIGN RELATIONS.
- Hire an attorney to file for the recognition process before the FIRST CHAMBER OF THE SUPREME COURT.
- Begin an abbreviated probate process in Costa Rica. This part can take approximately 2-3 YEARS!
Example: An American in Costa Rica
There was an American client of ours who passed away, leaving behind his wife and two children. In Costa Rica you cannot have two owners of a bank account (a joint account). There can only be 1 owner, with the spouse as a second signatory on the account. If you go into the bank and tell them that your spouse passed away, they will immediately freeze your bank account, which can leave you penniless until you settle the estate.
If a person dies with secured debts, such as a mortgage, the interest must be paid, highlighting the critical need for life insurance, which this person in the example lacked. The mortgage loan goes into arrears if payments aren’t made, and the foreclosure process begins. Even if a private lender extends your time, as in this case, he can only wait so long for the borrowers’ spouse to come up with a solution.
The grief, like that of many people who have recently lost a spouse, can be overwhelming, and the last thing you want to do is make major financial decisions that will affect you and your children on the spur of the moment. When a foreclosure process begins, you may feel compelled to sell the property as soon as possible. If you don’t have a Will, you won’t be able to sell your home until it has gone through the time-consuming and costly probate process.
Interest will accrue, late fees will accrue, and now foreclosure costs will be added to the bill. This increases the overall cost of the situation. In the end, one has very few options other than to liquidate the house for a very low price in order to cover these costs.
All of this could have been avoided with a Will and life insurance. If you’re elderly and don’t qualify for life insurance, a Will can help speed up the probate process and give your spouse access to assets so they can plan an exit strategy and pay off your debts.
What We Can Do For You
At CRIE, we never want to see anyone in the situation described above.
We’ve enlisted the help of independent attorneys, notaries, and insurance agents who can help you with every aspect of getting the right Will and Life Insurance policy.
Contact us now for an initial free consultation and referral.