MEXICO Law and Practice Contributed by: Christian Lippert, Gabriela Pellón, Fabiola Jiménez and Cecilia Díaz de Rivera, Galicia Abogados
Galicia Abogados Torre SOMA Chapultepec Av. Campos Elíseos, 204 27th Floor Polanco 11550 Mexico City Mexico Tel: +52 55 5540 9200 Email: contacto@galicia.com.mx Web: www.galicia.com.mx
1. Contemporary Cultural Considerations in Succession Planning 1.1 Social and Cultural Attitudes Family as the Core of Succession Planning In Mexico, most businesses are family run. Accord- ing to data from CONCANACO SERVYTUR ( Confed- eración de Cámaras Nacionales de Comercio, Servi- cios y Turismo ), in 2023, 85% of businesses in Mexico were family businesses, which generated approxi- mately 75% of Mexico’s GDP and more than 70% of jobs. Therefore, family has a very important role in economic life in Mexico and plays a significant role in estate planning, since the transfer of wealth is gener- ally viewed as a family matter, and decisions about inheritance are often made with the goal of maintain- ing family unity rather than maximising individual ben- efit. Open conversations about death, inheritance and estate planning remain culturally sensitive topics, and many families delay formal planning until it is unavoid- able. Freedom of Testation and Alimony Obligations Although each Mexican state has its own civil code, the general principles are consistent with those of the Federal Civil Code and the Civil Code for Mexico City. Answers in this section are based on the provisions of both civil codes. Mexican laws generally grant broad testamentary freedom to testators aged 16 and over, but this free- dom may be limited by post-mortem alimony obliga- tions to certain family members, including:
• descendants, until they reach 18 years of age, or beyond if they are completing their studies or have a disability that prevents them from working; • ascendants who lack sufficient means of support; • spouses or concubines (common law partners) who are unable to work and lack sufficient assets; and • siblings under 18 years of age or those with dis- abilities preventing them from working, under certain conditions. Generational Wealth and Business Continuity As mentioned above, family businesses are a domi- nant feature of the Mexican economy. Therefore, their continuity across generations is a primary driver of estate planning. Fideicomisos (ie, Mexican trusts) are flexible and adaptable structures that generally suit most wealth management structures and families, since they provide mechanisms to protect assets from fragmentation. Charitable and Community Legacies For many families, incorporating philanthropy into their succession plans is not merely a financial deci- sion but a reflection of deeply held values. Allocating a portion of the family’s wealth to philanthropic endeav- ours can provide a sense of fulfilment and a purpose that transcends the mere preservation of economic assets across generations. As a result, philanthropic planning has become an increasingly significant com- ponent of comprehensive estate strategies. In Mexi- co, philanthropy has grown as a succession planning consideration among the country’s wealthiest families,
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