Antonio Gastélum
Dually licensed in Mexico and Texas, Antonio helps clients with international estate and business planning.

Hand pouring a pitcher of water to denote pour over will

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A pour-over will transfers your remaining assets to a previously established trust upon your death. Then, the assets contained in the trust are distributed according to the terms of the trust document. Pour-over wills are most commonly used with revocable living trusts.

Advantages of a Pour-Over Will

There are several advantages to this estate-planning approach. For example:

  • Your estate plan will be simpler because it will be governed by one document—the trust document.
  • You'll be able to protect your privacy because a trust doesn't become a public record after death, unlike a will.
  • The pour-over will provides an efficient way to take care of assets you didn't get around to transferring to the living trust before your death.

How Pour-Over Wills Work With Life Insurance

It is becoming common for wealthy Mexican investors who regularly travel or work within the United States to purchase U.S.-based life insurance policies. In comparison to the coverage available in the Mexican financial system, U.S. policies are significantly more cost-effective. However, life insurance policies purchased in the U.S. can present problems for estate planning when beneficiaries live in multiple countries.

To avoid tax liability for the beneficiary remaining in Mexico, the death benefit must be characterized as an inheritance. A pour-over will can help accomplish this goal. When the estate is named as the beneficiary, and the pour-over will transfers the proceeds to a trust, the trust beneficiaries will not be responsible for income taxes in Mexico because they would be receiving an inheritance, not an insured death benefit.

You Need an Estate Planning Attorney Who Speaks Your Culture

Proactive planning can help ensure that your family enjoys the same high standard of living for generations to come, but it's vital that you work with an international estate planning attorney who understands the unique needs of the Mexican investor. Attorneys who only work with U.S. citizens can easily make mistakes that leave your beneficiaries remaining in Mexico at risk. Antonio Gastélum and María Elia Gastélum have dedicated their practice to serving trans-national clients from both the U.S. and Mexico with cross-border interests.

To help you learn more about the value of life insurance as an estate planning tool, look for MEG International Counsel's forthcoming free whitepaper, How Should Residents in Mexico Hold Life Insurance Policies in the United States? To schedule a consultation to learn more about how we can help you protect your assets and investments in Mexico and abroad, contact us today.

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