Death is not a fun or happy subject to write about, however I felt it was important to write about and if you are considering purchasing in Costa Rica, you should read this.
This article is a true life story that is happening right now to a client of one of the agents that works in my group. My associate asked for my help and if I would meet with his clients. For privacy reasons, I will only refer to him as the Client and have full permission to write about this.
The client had been coming to Costa Rica for many years and fell in love with the weather, country and of course the warm and loving people. After years of looking around the country he realized that the Papagayo area made the most sense for him, many services, international airport and great private hospitals, pristine beaches and warm weather.
This client purchased the home of his dream here in Playas del Coco just a year ago. After acquiring the property he set his tasks to update the property and house to suite himself. He added a new patio around the pool, built an outdoor kitchen and BBQ rancho with half bath, added lush landscaping to enhance the beauty of the property and the outdoor living area, painted the house and added all new A/C units. He spent a good amount of money getting the house just the way he wanted it so he could enjoy his life in Costa Rica.
Now comes the horrible and unfortunate part of this story, it started out nice but there is tragedy as well.
The client, in all the years he spent here in Costa Rica, meets a wonderful Costa Rican woman that he fell in love with. They spent almost all their time together. When he purchased the house he wanted to take care of her. He did this by adding her as a part owner of the corporation and gave her forty percent ownership in the corporation that owns the house. All sounds nice right? Nice guy! He loves her…
Well just after they got the house the way they wanted it. The client was not feeling to well and something was just not right. So the client went to see a local doctor that gave him a complete look over, had all sorts of blood tests done and since the client is in his seventies, the Doctor asked him if he had ever had a PSA test done and had his prostrate checked by an urologist. The answer was no and the local doctor set it all up for him right away as he could not find anything wrong from the results of the blood tests he ordered.
Well unfortunately for the client after meeting with the urologist and having the extra blood test completed, it showed that he potentially has prostate cancer, his PSA count was off the charts and after more tests it was confirmed. After hearing this news the client decided to go back to Canada to get a second opinion. Well the second opinion was confirmed as well and along with the prostate cancer the cancer had already spread to his liver and then metastasized in his brain.
The client fearing the worst decided to list his house for sale, as deep down inside he knew what was coming. That’s when the real problems stated. He contacted my associate to sell the home and get it listed, however he put a very unrealistic price on it that he would never get. After 2 months of being on the market the client called the listing agent and his girlfriend here in Costa Rica complaining that the house has not sold or even had any showings.
After the listing agent and the girlfriend tried to explain to him that the price was too high for the current market conditions, he said he wanted to talk to the listings agents’ broker. That’s where I came into this story.
The Listing agent asked me if I would help his client understand the situation at hand with the current market and what the next steps are to be taken. The girlfriend was all on board she got it and understood. So I agreed of course and we set a conference call where all of us could be together.
When we connected with the client he started right off the bat being a bit difficult and defensive, I had to do my best to calm him down. After asking him many questions, I was able to find out that even thought his girlfriend had forty percent ownership in the corporation she had no legal authority to act on behalf of the corporation.
That was his decision as the buyer and he had every right to decide on that. However the task he did not do was to set up a Costa Rica will and final testament or set the corporations up for his demise.
After a while he finally agreed to lower the price to a more reasonable level to get the property in Costa Rica sold. At this point he tells his girlfriend to go ahead and sign the listing agreement. I had to make him aware that only he could do this as he had full power of attorney over the corporation that holds the property and that the listing contract would not be valid without his signature as the person with full power of attorney.
His response was “well I am going to die most likely in the next few months anyway as the Doctors don’t give me much of a chance.”
He kept saying “Oh well my Canadian last will and testament can take care of everything when I pass on. To a certain degree he was correct; yes his Canadian last will and testament will take care of the issues of settling his estate. But he had not put his Costa Rica girlfriend on that will, nor does he have a Costa Rica last will and testament. This can cause all sorts of problems when he unfortunately finally passes.
Whether or not he adds the girlfriend to his will, that is his choice, however he should have added the beneficiaries of his will to his Costa Rica corporation and given that person full powers to act on behalf of the corporation or at the minimum just transfer the shares to them now and he still keeps full power, so when he unfortunately does pass on it will be so much easier for the beneficiaries of his estates.
If he does not do this now, then upon his death, the quagmire to finally get the house turned over to the estate could take almost a year if not longer in Costa Rica alone, and this does not include the probate process in Canada or until the estate is finalized and turned over to the beneficiaries.
When the estate of this gentleman is finally settled in the courts of Canada, then the process of transferring the sixty percent share ownership of the corporation to the name if the heirs will start. This could be a year plus time frame if not longer.
So when you decide to purchase property in this beautiful country I call home, and won’t be sorry when yo do, just make sure you do your homework and get you affairs in order, all of them including your death, make sure you have your last will and testament ready in your home country and also in Costa Rica and please make sure you set you corporation up correctly.
Do not be afraid to talk about death with you legal advisor. It is really the only thing you have to do in life well except maybe paying taxes.
Make Sure You Protect Your Property in Costa Rica – And Your Heirs – When You Die.
Article/Property ID Number 5683
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