Cross-Border & Expatriate Planning

Cross-border estate planning for US-Mexico families involves a US planning layer and a Mexico planning layer that must be designed to work together. The US layer covers wills, trusts, and powers of attorney under Texas and federal law. The Mexico layer covers Mexican succession law, fideicomiso beneficiary designations, and Mexican inheritance rules, and requires a separately retained Mexican attorney.

The most common failure in cross-border planning is treating the US estate plan as complete when it addresses only US-sited assets. A family with Mexican real estate, Mexican financial accounts, or beneficiaries in Mexico who receive assets from a US estate all face issues that a US will does not resolve on its own. Edison Legal drafts US documents that account for the cross-border dimension and identifies where Mexican counsel needs to be engaged to complete the plan.

When a US citizen who owns Mexican property dies, the disposition of that property is governed by Mexican law, not US law. Property held in a fideicomiso passes according to the beneficiary designation in the trust agreement. Property held directly through Mexican title follows Mexican inheritance law and may require a Mexican probate proceeding.

A US will generally does not control the transfer of Mexican real estate. If the property is in a fideicomiso, the current beneficiary designation in the trust governs, which is why keeping that designation current and consistent with the US plan matters. For property held directly, the family may need to engage a Mexican notario and go through a Mexican succession proceeding. Edison Legal advises on US-side planning with these Mexico-side realities in mind; Mexican counsel handles the Mexico proceedings.

US persons with foreign financial accounts exceeding $10,000 in aggregate at any point in the calendar year must file an FBAR (FinCEN Form 114) annually. This reporting obligation exists regardless of whether the accounts are included in your estate plan, and failure to file carries substantial civil and in some cases criminal penalties.

The FBAR is filed electronically with FinCEN by April 15, with an automatic extension to October 15. FATCA (Form 8938) requires additional disclosure of specified foreign financial assets above thresholds that vary by filing status and residence. These reporting obligations do not create estate planning documents on their own, but an estate plan that organizes foreign asset ownership must account for the reporting implications. If you have unreported foreign accounts, consult a tax attorney about voluntary disclosure options before pursuing estate planning that would further structure those assets.

A Texas trust can name Mexican assets within the trust document, but a Texas trust does not automatically have legal effect over Mexican real estate. Mexican property requires Mexican legal mechanisms to transfer at death, and a separately retained Mexican attorney is needed to address the Mexico side of any cross-border plan.

The coordination challenge is practical: a Texas revocable trust may be designed to receive all of a person's assets at death, but Mexican real estate held in a fideicomiso passes according to the fideicomiso beneficiary designation, not the US trust. Aligning the US trust with the fideicomiso requires updating the fideicomiso beneficiary designation and, in some cases, restructuring how the Mexican property is held. That work requires a Mexican attorney. Edison Legal designs the US trust with that coordination in mind and identifies exactly what the Mexican attorney needs to address.

An expatriate estate plan is designed for US citizens or green card holders living outside the United States. Because US citizens are taxed on worldwide income and estates regardless of residence, an expatriate plan addresses US estate tax exposure, foreign asset reporting obligations, and coordination with the inheritance laws of the country of residence.

Key issues in expatriate planning include which assets are subject to US estate tax (all worldwide assets for US citizens; US-sited assets for most green card holders), whether a tax treaty between the US and the country of residence affects the estate tax calculation, how a US will is enforced in the country of residence, and whether a foreign power of attorney will be recognized by US financial institutions. For US citizens retiring to Mexico, the planning questions span both countries and require US and Mexican counsel working from a shared understanding of the plan.