Estate Probate in Mexico

Estate Probate in Mexico

This article was written by a Canadian Financial Planner with over 20 years specializing in non-residency. If you would like no-cost assistance or advice about Canadian Non-Residency, Click Here.

Does Mexico have probate? In a word, yes, but you need to understand it. Mexico Probate is similar to Canada, but with some differences. Let's look at both.

Probate in Canada

At the time of your death there is generally a requirement that your last will and testament be legally approved by the courts under the laws of your province or territory, a process known as Probate. The probate process also confirms the appointment of your executor, and each province specifies what documentation is required as part of the probate process. Probate can be expensive because it generally involves legal and accounting fees in addition to the government probate fee.

Wills in Canada are subject to a court process known as "probate", which can be expensive because it generally involve legal and accounting fees in addition to the government probate fees (taxes). Probate can also be time consuming.

More complex estates, involving real property and businesses, can be tied up in the courts for years. Additionally, assets are restricted in the court’s jurisdiction, not allowing the family to access chequing accounts, to sell real property, or to liquidate assets. Attorney and court costs could deplete smaller estates.

Thus the true value of a Will, besides making sure that your wishes are taken into consideration, is to make the probate process in Canada proceed more smoothly, saving time, money and hassles. Otherwise, if the estate has to be distributed by the courts, it may take a year or more for assets to be distributed to your loved ones. 

Probate is Public Knowledge

Another little known fact is that probate in Canada makes the Will a fact of public record, meaning that anyone can access the information about how the estate is distributed. This can become a sensitive issue, for same-sex couples for example, leading to challenges to overturn your wishes. This doesn’t mean you shouldn’t have a Will. It may mean that you should discuss these concerns with your financial planner before you put a Will in place to explore alternative ways of distributing or owning assets in order to protect privacy as much as possible if you feel this is important.

There are types of investment accounts in Canada that will bypass probate and the beneficiaries are not made public. See How to Buy a Pension for more information on setting up regular investment accounts that will bypass probate and not become public knowledge.

When Does Probate Kick In?

Do not think that everything automatically goes to your spouse without any costs. It is true that items owned jointly, such as your home (in most cases), is passed along to the surviving spouse without any problems. But those items which are held in your name only may have to pass through the probate process depending upon their value and the nature of the asset.

A good example of this is when you have a regular investment account (not RRSP or RRIF) in your name only. Those accounts have to be probated, although there are certain types of accounts for regular investments that will bypass probate. See How to Buy a Pension for more information on setting up a regular investment account that will bypass probate.

How Much Does Probate Cost?

It varies in Canada with the probate fees (taxes) ranging up to about 2% of the estate value being probated. However, the legal and accounting costs can run that bill up significantly and something in the order of 4-7% is not uncommon. It pays to do some tax planning up front.

How to Minimize Canadian Probate
  1. Own assets jointly with your spouse or legal partner. 
    1. Making one or more of your children a joint owner (of your home for example) may not be a great idea. That may even trigger capital gains on your home down the road.
  2. Name beneficiaries on accounts, insurance policies whenever possible.
  3. Give it away before you die.
  4. Consider the strategy outlined in How to Buy a Pension for bypassing probate for regular investment accounts, TFSA, RRSP, RRIF and more. This strategy can bypass probate for any beneficiaries you wish...friends, grandchildren etc.

Probate in Mexico

In Mexico, the probate process is generally carried out before a Notary Public (Notario), and is always a private affair.  However, in the event that the heirs are underage, or if there is a court challenge, the probate process must involve the courts. In this case, the Will would be made available only to the judge and the interested parties, not to the general public.

How Much Does Probate Cost?

Usually, the probate process in Mexico is quicker and much less expensive, with most estates settled in 3 to 6 months. However, in Mexico you may find that Notary fees are quite high. We have heard of estate costs & fees totaling 10% in Mexico.

How to Minimize Mexican Probate

These are similar to Canada... name beneficiaries on property; own assets jointly; or give it away before you die.

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