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By Roberto Ortíz de Montellano
If you are from the U.S. or Canada and you have been a resident of Mexico for some time now, for sure you are aware of the many cultural differences between our countries, and you might be aware as well that these cultural differences are also reflected in our legal systems, specifically in legal concepts that you have in the U.S. and Canada, but that we don’t have in Mexico.
How can this affect you in Puerto Vallarta?
If you and your spouse are buying property in Mexico, at a fist glance you might think that including both of your names as joint tenants in the purchase deed (or trust deed in this case) has you both covered in terms of what in the U.S. and Canada is called Right of Survivorship.
Well, I have news for you: in Mexico there is no such thing as a Right of Survivorship.
So if Mexico has no Right of Survivorship, what does that mean for you and your spouse?
Well it means, that if either one of you dies, the ownership rights on the property (or in this case beneficiary rights on a trust) that belonged to the deceased will NOT automatically pass to the surviving spouse without any further legal requirement, and eventually some proceeding before your trust bank will have to be initiated and fees and taxes will have to be paid.
But not everything is bad news…
Your trust agreement should have a testamentary clause where you designate substitute beneficiaries, so you have to make sure that in that clause you and your spouse designate each other as substitute beneficiaries in case of death, and both of you can designate as a second substitute beneficiary, either your kids or whoever you decide. This way you are legally protected in terms of the estate planning for your property in Mexico.