So I’ve always been one of those responsible lads that did estate planning. Even as a high school teen working part time at the Sears, I filled in all the forms so that if I died some life insurance money would float to the surface for my Mom.
With increased earnings, kids, investments, my company, health care power of attorneys and real estate my estate planning got wildly more complicated only to settle back down again in retirement to the simpler Sears times. Sort of….
Retirement in Mexico has its unique set of estate planning issues for foreigners and the more planning one does, the more likely it is your assets will go to someone you’d like to celestially see enjoying them.
Now, if like many ex-pats, you’ve a US-based pension, 401Ks and bank accounts your US-based last testament will (morbid pun intended) rule. In and of itself, a US based will is as useless here as a Mexican will is in the North. Many folks only keep enough money in a Mexican bank account to pay small, local bills.
Others, like myself, have Mexican bank accounts/investments with higher balances. With these in your side pocket you’ll need to put some more thought into the state of your estate.
I’ve seen several elderly ex-pats blissfully thinking the money in their Mexican bank account will pass to their children and, if said kids are lucky, maybe some will. Normally bank folks know the heir will only be in town for a few days and they’ll simply delay closing an account until that pestering heir has gone back over the wall.
Next the child will hire a Mexican lawyer long-distance to represent them to the bank while the bank negotiates for returning a percentage of the account to the lawyer. The lawyer will then take their cut and wire the money North.
So, for example, Mrs. Brady had 100K USD peso equivalent in a bank here so the bank may keep 50%, the lawyer 30% and Marcia, Marcia, Marcia may, years down the road, see the remaining 20K coming her way. Marcia was always the lucky one (according to Jan).
Even bank chains with branches in the North won’t be of any help. Once you cross international boundaries the bank of the same name in the US is considered a different company and will be of no help with their similarly named financial institution to the south, and vice versa.
Another caveat to Mexican accounts is the designated inheritor supersedes any person named in one’s will. The key here, if a foreigner, is make sure the name on the bank form matches exactly what is on their passport – character for character. (For example Mary Todd Lincoln isn’t the same as Mary T. Lincoln or Mary Lincoln.)
Real estate – the other great sticky wick – is as convoluted.
You leave no will, or the person in line to inherit is already dead, the property goes to the government for education. You can, at closing, designate who inherits the property in the deed. However, closings are very costly here so it’s normally best to 
place that information in the will in case those line to have your home die themselves or become somehow incapacitated.
Plus, a cool bonus is wills go on sale for 25% off each September in the government’s efforts to get folks to write wills!
According to local legal eagle, Ian Clement, there are two scenarios for a foreigner inheriting your property.
One is they can take possession of the property, showing their birth certificate and pay very little tax.
Or, secondly, if the beneficiary of your largess desires to sell the property, your heir will need to become resident Mexicans or pay from 25 to 30% in additional local taxes.
Residency requirements are in a constant state of flux. When I got mine you could have it for free upon proving you lived here 5 years and had a certain minimum, very minimum, income. Now I’ve met folks that pay thousands in fees to receive residency from a Texan consulate that same day. Hard to predict what the requirements will be when you transition off this mortal tether.
A third option is when someone knows your former piece of paradise is empty they can move in, pay utilities and such, so that in a handful of weeks they become the legal owner from rather liberal squatter laws. If your once precious bundles of joy are slow moving on coming down and setting the wheels in motion to own your castle, they can lose your property to a former neighbor or maid in record time.
For example, Mrs. Brady has passed and the local 24 hour society disposed of her remains. Her three sons – Greg, Peter and Bobby – arrange to come down on a 3 day weekend months later. However, Greg, Peter and Bobby are middle aged men with jobs and families that don’t speak Spanish or have ever even been to town before. 
By now, Mrs. Brady’s housekeeper, Alice, had taken over the home as her own and changed the locks.
The lads get nowhere with the bank that holds Carol Brady’s account and watch their mother’s pesos slip away from them with the ease and agility of an escaping eel.
A work-around is to leave your bank account and property in a Mexican’s name that you’ve fallen in love with or wish to reward. A local bank is way more likely to transition your investments to a fellow Mexican way more likely to leave your deposits right where they are. Plus, if moving into your former palace, custom and laws will heavily lean in their favor for doing so.
Estate planning, at its base, is simply another way of expressing love and sometimes you love someone by simply leaving them alone – not expecting them to come down to fight battles in a Spanish-speaking war that can last the rest of their lifetime.
