Technical article

The Mexican Bank Trust at Death: Who Gets the Home and What the Bank Does

The home then passes without a Mexican court probate, if the trust is set up that way.

By Neil Solomon · 4 min read

Imagine a retired couple from Ohio with a condo near a Mexican beach, held through a bank trust. They have two daughters, one in Canada and one in Ohio. They wonder what happens to the condo when the second of them dies. The figures below use a home worth US$350,000, an example one service firm used in its own article.

Why a bank is in the picture

Mexico's foreign investment law draws a restricted zone. It reaches 100 km from the borders and 50 km from the beaches. Inside it, a foreigner may not hold title to a home directly. A Mexican bank holds the legal title as trustee, and the foreigner is the beneficiary. The bank needs a permit from the Foreign Ministry. This comes from the statute itself.

The trust runs up to 50 years and may be extended on the owner's request. The ministry must rule within 5 working days at its central office or 30 working days at a state office. If it does not rule, the request counts as approved.

Outside the zone, a foreigner may own by direct deed after filing a written agreement with the ministry.

What the beneficiary holds

A law-firm guide and several brokers describe the beneficiary as the person who may use, lease, improve and sell the home. The bank follows the beneficiary's directions. These are tier B and C sources, and they agree with each other.

At death

One service firm's article from 2023 says the owner can name substitute beneficiaries in the trust contract. The home then passes without a Mexican court probate, if the trust is set up that way. The substitutes give the bank an apostilled, translated death certificate. The bank applies for a new permit in their names. An appraisal fixes the value at the date of death. The same article says that without a substitute, probate may take "a year minimum".

That author runs a services firm, so this is one firm's account of how it works in practice.

The broker figures differ from one another. Banks set their own fees, and no official schedule is in these sources.

Two tax rules that touch trusts

The federal tax code treats some trust moves as a sale. Naming a beneficiary other than yourself while giving up the right to take the home back is one. A later hand-over of a beneficiary's rights to someone else is another. This is a tier A source.

When a non-resident sells a Mexican home, the tax is 25% of the gross price with no deductions. The seller may instead choose the top income-tax rate on the gain, using a Mexican representative in one reading. The statute text and a Chambers guide differ on whether a representative is needed when the sale is by public deed. When the sale is by public deed, the notary calculates and pays the tax. A tax-firm table lists 35% as the 2026 top rate, and a law-firm guide says up to 35% of net gain. The statute is the tier A source for the 25% choice.

Who else the law touches

Mexico has no forced share for children. A law-firm guide on succession says it does allow support claims against an estate. Those who can claim are minor or disabled children, parents without means, and a spouse unable to work. A person may make a will from age 16.

A trust can change the beneficiary too. One broker says this starts with a notice to the bank and needs federal approval, and that a transfer of the rights to a Mexican national may let the home leave the trust. Both are tier C.