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 judgment from the probate court in the country where the will was issued.
- Have the foreign court judgment 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 someone passes away with secured debts such as a mortgage, the interest payments still have to be made — highlighting the crucial need for life insurance, which this person in the example did not have. If the payments aren’t made on the mortgage loan, it goes into arrears and the foreclosure process starts. Even if a private lender gives you a little more time as in this example, he can only wait so long for the borrowers’ spouse to figure out a solution.
Like many people who just lost a spouse, the grief can be overwhelming and the last thing you want to do is improvise major financial decisions that will affect you and your children. Once a foreclosure starts, the panic sets in to sell the property if you can. If you do not have a will, then you can’t even sell the house until it goes through the lengthy and costly probate process.
Interest will accumulate, late fees will accumulate, and now add foreclosure expenses to the bill. This makes the whole situation very, very costly. This leaves one with very few options in the end except to liquidate the house at a very low price, just to cover these costs.
A Will and life insurance would definitely have alleviated all of this. If you are elderly and do not qualify for life insurance, at least a Will can expedite the probate process and give your spouse access to assets so that they can make an exit strategy and pay off the loans.
What We Can Do For You
At CRIE, we never want to see the above situation happen to anyone.
We enlisted the expertise of independent attorneys, notaries and insurance agents who can assist with all aspects of obtaining the right Will and Life Insurance policy for yourself.
Contact us now for an initial free consultation and referral.