Wills and Inheritance in Costa Rica
Understand the implications of inheritance law on your assets inside and outside of Costa Rica, and information about the types of valid will available...
Whatever a person's age or stage of life, it is important to have a financial plan in place for retirement. When living abroad it is equally important to understand how the local laws affect assets within the country of residence and overseas, and to ensure that a valid will is in place.
In Costa Rica the Civil Code (Codigo Civil) governs and regulates a will (testamento) and inheritance in legal matters. According to Costa Rican law, foreigners are treated in the same way as local citizens.
Costa Rican law allows for a "fast track" process in inheritance cases, which is carried out in the presence of a Notary Public and applies when all parties involved are of legal age and all are in agreement with the specified asset disposition and/or other instructions.
However, judicial inheritance cases that reach the Civil courts (for probate) can take between one year and five years to be resolved, depending on the complexity of each case.
Property or real estate that is inherited is governed by the territorial principal (location of the property).
Gifts, inheritances or donations are not specifically taxed under Costa Rican law. However, the transfer of property and property rights in general are taxed according to a progressive table: rates range from one to two percent depending on the specific values.
Types of Wills
Anyone can write a will as long as they are of legal age and not mentally ill. According to Costa Rica's Civil Code, there are two main types of wills:
Usually a Notary Public (a Costa Rican attorney acting privately) drafts the will, according to the person's instructions, into his/her protocol (legal book) in the presence of three witnesses.
If the person who is creating the will does not speak Spanish, two of the three witnesses must speak the same language of the interested party and must also speak Spanish.
The Notary Public must then file the document with the National Archives (Registro Nacional) which is in Zapote, San José. Only parties who are directly involved in the will can get copies from the Archives. Because the National Archives keeps the will in their records, a new copy can be requested should it be lost. If a new will is filed, it replaces the previous one.
The person concerned must write a document with his/her instructions and desires, place it in a sealed envelope and deliver it to a Notary Public. Two witnesses must be present when the sealed envelope is handed to the Notary Public, who certifies what has transpired.
Usually, the Notary Public keeps the sealed envelope, although it could be someone else. To make the will effective, once the writer of the will dies, the sealed envelope is handed to a judge who opens it and legally validates it. Because of the closed nature of this procedure, there is the danger that the sealed document may become lost or, in an extreme case, manipulated.
There are variations, legalities and formalities to these two basic types of will. Usually a qualified Notary Public takes care of these points. It is recommended to consult with an attorney's office (Notary Public) for more details as well as estimates on costs, which are high and can reach 15 percent (including legal fees, taxes, other charges) of the total value of the assets.