MEXICO Law and Practice Contributed by: Christian Lippert, Gabriela Pellón, Fabiola Jiménez and Cecilia Díaz de Rivera, Galicia Abogados
particularly through private foundations and civil asso- ciations ( asociaciones civiles and fundaciones ). 1.2 Wealth Profiles and Industry Influences Legacy and New Generation Wealth Mexico’s economic landscape is shaped by the coexistence of long-established multi-generational fortunes and a rapidly expanding cohort of first-gen- eration wealth creators. Legacy wealth is predomi- nantly rooted in industries such as food and bever- age, agriculture, mining, real estate, manufacturing and large-scale retail. These families typically control complex portfolios comprising operating businesses, real property holdings and financial investments, all of which demand comprehensive intergenerational suc- cession strategies. Growth Sectors and New Wealth Creation In recent years, the technology, financial technology and digital commerce sectors have given rise to a new cohort of high net worth individuals, concentrated pri- marily in Mexico City and Monterrey. This emerging client profile tends to be younger, with greater inter- national mobility and a higher degree of openness to non-traditional planning instruments, such as offshore trust structures and cross-border corporate arrange- ments. Cross-Border Wealth and Multi-Jurisdictional Ties A considerable proportion of Mexico’s wealthiest families maintain significant connections to the United States, Spain and other jurisdictions, whether through commercial operations, real property ownership or multiple citizenships. This multi-jurisdictional expo- sure gives rise to particular complexities, as these cli- ents are required to navigate two or more distinct legal and tax frameworks concurrently. Accordingly, estate planning strategies for such families must account for both Mexican and foreign succession and tax obliga- tions. Prevalence of Real Estate Holdings Across all wealth levels, real estate continues to rep- resent the single most significant asset class held by Mexican families. Consequently, the structuring of real property transfers – including the deployment of fide - icomisos and a thorough assessment of applicable state-level real estate acquisition taxes (ISAI) – con-
stitutes a fundamental component of virtually every estate plan.
2. Residency and Domicile for Purposes of Wealth and Estate Planning
2.1 Determining Domicile Legal Definition of Domicile
Under the Federal Civil Code and the civil codes of Mexico’s 32 states, domicile is defined as the place where an individual has established his or her principal residence, with the intention to remain there. A person may have more than one place of residence but only one legal domicile for civil law purposes. Among other things, the domicile of a person determines the com- petent courts for proceedings involving their estate and the applicable civil law in succession matters. Scope of Wills Over Worldwide Assets Under Mexican laws, wills have worldwide effects, which means that the most recent will granted by an individual overrules any prior ones. However, for par- ticular assets (such as shares and real estate proper- ties) located abroad, it is sometimes advisable to grant local wills specific to such local assets, provided that any such local wills must acknowledge the existence of the “main will” and specify that they only apply to the local assets. Any such “local wills” will have to be homologated in Mexico. Domicile in Marital and Inheritance Claims According to the National Family and Civil Procedural Code, jurisdiction for purposes of divorce is asserted based on the latest marital domicile. The Civil Code defines marital domicile as the domicile agreed to by the spouses, in which both spouses have equal authority and standing. Jurisdiction for purposes of succession proceedings is asserted based on the last domicile of the deceased. In the absence thereof, jurisdiction will be asserted based on the domicile where the real property of the inheritance is located. If there is real property located in several states, the succession proceeding may be brought before the judge of the state in which there are more properties. In the absence of the above,
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