Legal and estate structuring
The legal structure of your California purchase
Holding title in your personal name, in an LLC or in a trust is not a formality: it's a decision with consequences for taxes, privacy, asset protection and inheritance. And it's far cheaper to get it right from the start than to fix it later.
Photo: Tuxyso · CC BY-SA 3.0 · cropped
Changing the ownership of a property after buying can reset the property tax and trigger costs you would have avoided by deciding well on day one.
The options
The three most common structures
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Personal name
The simplest and cheapest. It usually makes sense when the property is for family use and your financial situation is straightforward. The downside: your name goes on the public record, and inheritance in California can go through a lengthy court process (probate).
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In an LLC
Common for investment properties. It separates your personal assets from the property's risk and offers more privacy. It involves annual costs to maintain the entity and a different tax treatment that you should review with an accountant.
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In a trust
Widely used to avoid probate and to order inheritance. It can be combined with the other structures. It requires careful drafting, especially if the beneficiaries live in Mexico.
Before you choose
What to review before deciding
- Whether the property is to live in, to rent, or mixed use
- Your tax residency and whether you file in Mexico, the U.S., or both
- FIRPTA: the withholding that applies when a foreign national sells U.S. property
- How you want it to be inherited and who the beneficiaries would be
- Whether you're buying alone or with partners
Who gives the advice
Our network
We work with Mexican and U.S. business attorneys and with accountants who handle dual filing. We don't provide legal or tax advice ourselves: we sit you down with someone who can, and translate the options into plain language.
- Attorneys business attorneys in Mexico and the United States
- Accountants who handle filing in both countries
- Plain language we translate the options so they make sense
Before you make an offer, let's review how you should hold title
Photo: Gregg M. Erickson · CC BY 3.0 · cropped