International estate law consists of two main categories of laws: asset protection laws and succession laws. Asset protection laws cover how individuals can protect their wealth from creditors, taxes, and other risks, while succession laws govern the transfer of assets upon death. International estate law also considers the legal concepts of domicile, situs, and nationality when determining how to administer a person's estate.
Asset Protection Laws in International Estate Planning
Asset protection laws can be used to protect your assets from creditors, taxes, or other risks. Generally speaking, international estate law allows ultra-high-net-worth individuals (UHNWI) from Mexico and Latin America like you to use certain strategies, such as trusts and foreign corporations, to safeguard their wealth. For example, if one of your heirs is a U.S. citizen or legal resident, you may want to create a dynasty trust to protect a business that is physically located in Mexico from being subject to gift or estate taxes that could force the need for liquidation as a way to repay the debt.
Succession Laws in International Estate Planning
Succession is the legal process of transferring assets to a person's heirs after their death. If a person does not have a valid will, intestate succession laws specify who is eligible to inherit and in what proportion based on the individual's nationality and residence. If a person does have a valid will, the terms of the document dictate how assets are distributed. When a person owns a family business, their estate plan may also include the use of life insurance as a succession planning tool that will allow heirs to keep the company's finances stable as it transitions to new ownership.
Important Factors to Consider
International estate planning attorneys develop customized plans that are targeted to each client's unique needs based on the challenges posed by domicile, situs, and nationality.
- Domicile refers to where a person has permanent residence and intends to stay permanently or indefinitely. It is used to determine which laws apply when settling an estate.
- Situs refers to the legal jurisdiction in which assets are located, such as real estate, stocks, and bonds.
- Nationality is the country where a person is legally considered a citizen, and it determines the laws that apply to their estate.
These three factors can affect multiple aspects of the planning process, including the reporting requirements between Mexico's tax authority (Servicio de Administración Tributaria or SAT) and the IRS as the result of automatic and permanent Foreign Account Tax Compliance Act (FATCA) regulations. Working with an experienced international estate planning lawyer helps protect your family's safety and privacy.
Do You Need an Estate Planning Attorney Who Speaks Your Culture?
Proactive planning requires an international estate planning attorney who understands the unique needs of Mexican and Latin American investors. An advisor who only works 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 transnational clients from the U.S. and Mexico with cross-border interests. To schedule a consultation, contact us online or call us today at (800) 694-6604.