Estate Planning Costa Rica: What Foreigners Need to Know About Wills, Probate, and Transferring Assets

Foreign nationals who own assets in Costa Rica — real estate, vehicles, bank accounts, shares in a Costa Rican entity — will leave those assets to be sorted out after they die. Corporation and estate planning in Costa Rica determines how that process unfolds in practice. In Costa Rica, that sorting-out process is called sucesión, and it is governed by a civil law framework that does not care where the deceased lived, what their home country’s laws say, or how clearly a foreign will spells out their intentions. Costa Rican assets go through Costa Rican succession proceedings. That is not optional.

This article explains how the estate planning landscape works for foreign property owners in Costa Rica: what probate involves and costs, what a Costa Rican will accomplishes, how the life estate option works, what corporate structures can and cannot do for estate planning purposes, and how the Sociedad Civil fits into the picture for owners who are planning from scratch.

The Starting Point: Probate Is Mandatory

Costa Rica operates under a civil law system. Under this framework, the legal transfer of assets belonging to a deceased person requires formal judicial or notarial authorization. Heirs cannot simply take possession of Costa Rican assets because a will or a family agreement says they should. For assets located in Costa Rica, the courts or a notary must supervise the transfer.

This applies to every foreign national who owns Costa Rican assets — regardless of nationality, residency status, whether a valid will exists in the home country, or how clearly the foreign will states the intended disposition. A U.S. will, a Canadian will, a German will — all are respected by Costa Rican law, but none bypass the Costa Rican succession process. They provide instructions the Costa Rican proceeding will follow, once the will has been legalized, translated, and formally recognized.

Testate vs. intestate proceedings

A succession proceeding where a valid will exists is called sucesión testamentaria. The court or notary’s role is primarily to verify the will, confirm the heirs, and supervise the transfer of assets according to the deceased’s instructions. With a Costa Rican will and cooperative heirs, this process is faster and less expensive than the alternative.

A succession proceeding without a will — or where the will is disputed — is sucesión intestada. The Código Civil‘s statutory succession order determines who inherits: first, children, parents, and spouse; then grandparents and other predecessors; then siblings; then nieces and nephews; and eventually the state if no eligible heirs exist. The intestate process is slower, more document-intensive, and removes the owner’s ability to direct where specific assets go.

The Costa Rican Will: What It Accomplishes and What It Does Not

A Costa Rican will (testamento) executed before a Costa Rican notary in accordance with the Código Civil is the most effective single tool for making the succession process manageable. It allows the owner to designate specific heirs for specific assets, appoint an executor (albacea), and provide clear instructions that the Costa Rican succession proceeding will follow.

What a Costa Rican will does

• Enables the notarial succession process (faster and less expensive than civil court)
• Allows the owner to designate heirs outside the statutory succession order — including non-relatives, charities, or specific individuals
• Eliminates the need to legalize, translate, and certify a foreign will for use in Costa Rica
• Allows appointment of a specific executor (albacea) who manages the estate
• Can include specific instructions for Costa Rican assets while leaving a separate will to govern assets in the home country

What a Costa Rican will does not do

• Avoid the succession process entirely — a will still requires court or notarial administration of the estate
• Override Costa Rica’s forced heirship rules (legítima) — certain heirs (children, parents, spouse in specific circumstances) have statutory inheritance rights that a will cannot completely eliminate
• Transfer ownership automatically at death — the succession proceeding must still be completed and the title formally transferred

The forced heirship consideration

Costa Rica’s Código Civil contains forced heirship provisions (legítima) that protect certain heirs from complete disinheritance. Under these rules, legitimate descendants are entitled to at least 50% of the estate (the legítima estricta), with an additional 25% subject to certain conditions. A testator has free disposition over the remaining 25% (cuota de libre disposición). These rules apply to the estate as a whole and can affect how assets are distributed even with a carefully drafted will.

For most foreign nationals whose primary heirs are spouses and adult children who would have inherited the assets anyway, the forced heirship rules create no practical constraint. Where an owner wants to make distributions that cut out children or other statutory heirs, the rules are material and the will’s drafting requires specific legal advice.

The Life Estate: The Most Cost-Effective Lifetime Transfer

A life estate (usufructo) is a mechanism under the Código Civil that splits ownership of a property between the current owner’s right to use and enjoy it during their lifetime and the future full ownership that reverts to a designated person when the current owner dies.

How it works

The property owner transfers the fee simple (nuda propiedad) to the designated heir while retaining the usufructo — the right to use, live in, and benefit from the property — for the duration of their life. The transfer is executed by a notarial deed and inscribed in the Registro Nacional. The Registro Nacional records the property as jointly encumbered: the usufructuario (the current owner retaining use rights) and the nudo propietario (the heir holding future full ownership).

When the usufructuario dies, the usufructo extinguishes automatically. The nudo propietario becomes the full owner without any succession proceeding for that property. The transfer does not go through probate. The Registro Nacional is updated to remove the usufruct encumbrance on the presentation of the death certificate.

The cost advantage

The life estate is the least expensive lifetime transfer mechanism available for Costa Rican real estate. On a $100,000 property, the cost is approximately $1,312 — substantially less than a direct deed transfer ($3,697) or a corporate share transfer ($2,809). For owners whose primary estate planning goal is ensuring a specific property passes to a specific heir without going through probate, the life estate is often the most straightforward and cost-effective approach.

The limitation

Once a life estate is established, the usufructuario cannot sell or mortgage the property without the nudo propietario’s consent. The fee simple is split. A transaction involving the property requires the participation of both the usufructuario and the nudo propietario. For an owner who might want to sell the property later, this limitation is worth weighing against the estate planning benefit.

The Transfer Cost Comparison

The following table compares the approximate costs of different transfer methods for a property valued at $100,000 USD. Costs are approximate and based on historical reference figures — confirm current figures with a Costa Rican notary or attorney.

Note: These figures are approximations for illustrative comparison purposes. The actual costs depend on the specific transaction structure, current tax rates, and notarial fee schedules. Transfer costs scale with property value — a $500,000 property will have proportionally higher costs across all categories.

Corporate Ownership and Estate Planning: What It Can and Cannot Do

A significant portion of Costa Rican estate planning advice centers on the idea that holding property in a corporation avoids probate. This is not accurate, and the misunderstanding has led many property owners to carry unnecessary compliance obligations in exchange for an estate planning benefit the corporate structure does not actually provide.

What corporate ownership does not do

If you own shares in a Costa Rican corporation when you die, those shares go through Costa Rican succession proceedings — the same process that would apply to directly held real estate. The succession proceeding addresses whatever you hold at the time of death. If what you hold is shares in an SA that holds a property, then shares in an SA are what goes through succession. The corporate layer does not eliminate the proceeding.

What corporate ownership can do

What corporate ownership makes possible — for owners who plan ahead — is a lifetime transfer of the shares to heirs at a lower transfer cost than a direct real estate conveyance. The numbers from the comparison table show why: transferring shares representing a $100,000 property costs approximately $2,809, compared to $3,697 for a direct property transfer. This saving is real but modest.

More significantly, a corporate structure allows the owner to remain in control of the entity — as president, as manager, as the person who can act on the entity’s behalf — even after transferring the shares to heirs. The owner can transfer the economic ownership to the next generation while retaining operational control. This is a genuine and useful estate planning feature when the circumstances call for it.

When a commercial entity is and is not the right choice for estate planning

For an owner who already has a property in an SA or SRL, maintaining the existing structure and using a lifetime share transfer as part of the estate plan is a sensible approach. Moving the property out of the entity has costs; leaving it and planning around the existing structure avoids those costs.

For an owner who is starting from scratch — no existing entity, no existing property — and whose primary goal is estate planning rather than commercial activity, the Sociedad Civil is worth serious consideration before any commercial entity is formed. The Sociedad Civil provides the same lifetime transfer mechanics as a commercial entity, without the annual commercial governance requirements. Article 19 in this series covers the Sociedad Civil for estate planning in detail.

The Two-Will Strategy

Many foreign nationals who own assets in both Costa Rica and their home country benefit from a two-will strategy: one will governing assets in the home country and a separate Costa Rican will governing Costa Rican assets specifically.

The advantage is practical. A Costa Rican will that addresses only Costa Rican assets eliminates the need to legalize, translate, and formally recognize a foreign will in the Costa Rican succession proceeding. It is drafted in Spanish, executed before a Costa Rican notary, and follows the Código Civil‘s formal requirements — so it is immediately usable in the succession process without the additional steps a foreign will requires.

The two wills must be drafted to avoid conflict. The Costa Rican will should explicitly state that it applies only to assets located in Costa Rica, and the home-country will should state that it applies to assets outside Costa Rica. An attorney familiar with both jurisdictions should review both documents to ensure there is no overlap, contradiction, or unintended effect of one will on the other.

Trusts in Costa Rica

Trusts (fideicomisos) exist in Costa Rica under the Código de Comercio and are administered by licensed trustees — typically financial institutions. A Costa Rican trust can hold assets, including real estate, and the beneficial ownership structure of the trust determines who receives the assets on the settlor’s death.

The fideicomiso is a legitimate estate planning tool in Costa Rica, particularly for more complex arrangements involving multiple beneficiaries, assets with conditions attached, or asset protection goals that a simple will or corporate structure cannot accomplish. Like commercial entities, trusts are subject to the RTBF beneficial ownership declaration obligation under Ley 9416.

For most foreign property owners with straightforward estate planning goals — specific asset to specific heir — a Costa Rican will combined with a life estate or a Sociedad Civil is a simpler and less expensive approach than a trust. A trust makes most sense when the complexity of the arrangement warrants the additional structure and cost.

What a Good Estate Plan for a Foreign Property Owner in Costa Rica Looks Like

There is no single right answer, but a well-considered estate plan for a foreign property owner in Costa Rica typically involves:

• A Costa Rican will — drafted in Spanish, executed before a Costa Rican notary, addressing all Costa Rican assets specifically
• A clear home-country will — addressing all assets outside Costa Rica, with explicit language limiting its scope to non-Costa Rican assets
• A lifetime transfer mechanism where the cost benefit justifies it — life estate for direct real estate, corporate share transfer or Sociedad Civil partnership interest transfer for corporate-held assets
• Clean entity compliance — any entity involved in the estate plan must be in good standing, with current books, current RTBF filings, and no outstanding tax obligations
• Clear documentation of ownership — share registries current, titles clean, no informal arrangements that would complicate a successor’s ability to establish what the deceased held

The best time to put this in place is while the owner is alive, healthy, and able to make deliberate decisions about their assets. The succession proceeding is not the right time to discover that the corporate books were never properly maintained, that the life estate was never executed, or that the will addresses assets in the wrong country.

Frequently Asked Questions: Estate Planning Costa Rica

Does a foreign will work in Costa Rica?

Yes. A foreign will is recognized by Costa Rican law, but it must be apostilled, translated into Spanish by a certified translator, and formally recognized by the Costa Rican succession proceeding. This adds time and cost to the process. A Costa Rican will drafted specifically for Costa Rican assets eliminates these requirements and enables the faster notarial succession process.

Does Costa Rica have inheritance tax?

No. Costa Rica does not impose an inheritance tax on assets transferred through succession. The costs of the succession process are procedural — notarial fees, attorney fees, transfer taxes on specific property transfers — not a percentage tax on the estate value. However, heirs should confirm with advisors in their home country whether the home country taxes foreign inheritances received by residents.

Can a Costa Rican will leave property to anyone, including non-relatives?

Yes, subject to the forced heirship rules (legítima). A testator can leave property to anyone — a friend, a charity, a non-relative partner — over the portion of the estate that is freely disposable. The legítima provisions protect certain close relatives (primarily descendants) from complete disinheritance over their protected share. Within those constraints, a Costa Rican will has considerable flexibility.

How long does the Costa Rican succession process take?

With a Costa Rican will and cooperative heirs, the notarial process typically takes 6 to 12 months from filing to completed title transfer. Without a will, or with a foreign will that must be legalized, the process typically takes 1 to 3 years or more. Disputes among heirs or complex asset situations extend the timeline. Having a Costa Rican will, organized documentation, and a clear picture of what assets exist and where they are located is the most reliable way to minimize the timeline.

Can I use the same life estate strategy for a property held in a corporation?

Not directly — the life estate mechanism applies to real property titles, not corporate shares. The equivalent strategy for a corporate-held property is a lifetime transfer of the shares to the heirs while the current owner retains management authority (as president or manager) during their lifetime. This achieves a similar practical result — the economic ownership transfers to the heirs now, the current owner retains control — through a different legal mechanism. The Sociedad Civil‘s founding document can be structured to address this transition explicitly.

Planning Ahead Changes What the Process Costs

The difference between a Costa Rican estate that was planned for and one that was not is measured in time, cost, and the amount of uncertainty the heirs face. An owner who has a Costa Rican will, has executed a life estate or transferred shares to heirs during their lifetime, and has kept the ownership documentation in order leaves their heirs a manageable process with predictable costs.

An owner who did none of those things — who held real estate in personal name with no will, or whose corporate books were never properly maintained — leaves their heirs a reconstruction project that requires resolving problems they did not create, in a legal system they may not know, in a language they may not speak.

The work required to plan properly is not large. A consultation with a Costa Rican attorney who handles both estate planning and corporate matters, a well-drafted will, and attention to the lifetime transfer options that fit the situation — these are achievable steps for any foreign property owner in Costa Rica. The cost of taking them is a fraction of what the alternative produces.

Feel free to reach us with your questions or comments.