Estate Planning: For Whom?

Often thought to be for the benefit of future generations, one of the greatest advantages of a good estate planning is frequently overlooked: the possibility of customizing a set of principles and guidelines that will govern the management of the estate for the benefit of the primary beneficiary once he or she is unable to do so directly.

The devastating effects of the COVID-19 pandemic reinforced the awareness of the human vulnerability to unexpectedly become incapable of self-managing one’s estate, due to either psychological or physical disabilities. Most jurisdictions, as is the case for Costa Rica, fail to provide statutory provisions to effectively deal with such situations and thus, in lieu of an appropriate and voluntary estate planning strategy, the owner of the estate may be forced to endure uncomfortable conditions which could have otherwise been prevented. The inability to access funds could preclude the owner of the estate to enjoy the level of healthcare and other services that could have been paid for by the estate, which was the result of many years of hard work and continued commitment. Moreover, whether a person facing a serious and painful medical condition or terminal disease should have the right to decide to control his/her dying process has slowly become a more widely accepted discussion. An array of medical, technological, and legal developments has awarded people with the opportunity to choose, under specific circumstances, to willingly terminate their lives and thus, having control over the dying process, provided the person has taken certain actions to be eligible for such alternative. Founded in 1998, Swiss not-for profit member society DIGNITAS has been pioneer in encouraging, implementing, and procuring freedom of choice, self-determination, and self-responsibility, in life and at life’s end, by offering assisted suicide services. "To live with dignity-To die with dignity" is DIGNITAS’ motto.

            In addition to securing one’s needs to be covered upon an unforeseen event resulting in physical or cognitive disabilities, adequate estate planning could prevent dependents (such as minors and people with special needs) from an unfortunate situation where the only income to support their living means is temporarily suspended or even worse, indefinitely vanished.

Unlike other jurisdictions, Costa Rican legislation does not contemplate forced heirship. Except for specific circumstances, a person has full flexibility as to determining who to designate as inheritors or beneficiaries and the way to distribute the asset(s) among them, provided however, the deceased has taken a proactive approach towards implementing an estate planning. Failure to implement an estate plan would lead the estate to be distributed following statutory provisions, which might not be aligned with the wishes of the deceased. 

By designing a custom-made estate plan, the person will be able to explore the available options and tailor them to his or her particular needs, the nature of the assets that conform the estate, as well as the locations of such assets. A proper estate planning, and one that is continuously reviewed and updated works as an excellent tool to protect one’s estate. In addition to securing the interests of the beneficiaries, an adequate estate plan will ensure an expedited and tax efficient distribution of the estate and in some cases, even prevent conflicts among beneficiaries, which could often lead to discrepancies and ruptures of family bonds.