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Thanks for that CRF. A shame that insurance here is not very good on a totaled car. If your experience and comments I've heard apply to most cases.

Edited by jamesofomaha

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Some more info re dissolving a corporation. A friend of mine said he found an attorney to do it for $120. Go figure. My attorney quoted me $1,000. Guess who won't be my attorney any more?

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Okay I'm not an attorney and I don't play one on TV nor the internet.

However, I am sharing with you what I've been told by 2 attorneys re corporations vs having property in your name. This is what I've been told:

"If you have your car or property in your own name, even if you have a will that is legal in Costa Rica, when you die that property will go into probate, it will take a long time to resolve who gets it after you die, and "the government vultures" (my attorneys' term) will charge you 10% or more OF THE VALUE OF YOUR ENTIRE PROPERTY for their "services"."

I was told therefore that having the property - such as a car or house or land - in a corporate name, (S.A. or SRL) will allow you to make someone such as your wife, son, daughter, whoever, the new owner of the property if you die, thus avoiding probate completely.

Also it prevents someone from taking your land from you in case someone is hurt badly on your property and they sue you and it's determined that it's your fault. If it's in an S.A. they can't come after you.

Again this is what I was told, that's all I know about it. I'm not an attorney!

Edited by jamesofomaha

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James, above you wrote, "Also it prevents someone from taking your land from you in case someone is hurt badly on your property and they sue you and it's determined that it's your fault. If it's in an S.A. they can't come after you."

I think you have that exactly backward. If your property is in a corporation and the corporation is successfully sued, the liability for damages is limited to the value of the assets held by that corporation. So if, for example, someone falls on your property and is seriously injured, they can sue the corporation and win its assets, the property, but they cannot sue you personally and take (say) your bank account if it's held in your own name. If that bank account is in the corporation's name, then it is an asset of the corporation and thus liable to seizure. 

That is why the traditional advice is to have separate corporations to own each parcel of real estate and each vehicle you may own. If in an accident your vehicle corporation is found to be at fault, the victim can seize the assets of that vehicle's corporation (the vehicle or whatever may be left of it), but they cannot seize your real estate because that's in a different corporation. Likewise, if someone is injured on your property owned by "Corporation A", they could not seize the real estate owned by "Corporation B". 

 

Edited by David C. Murray

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On 9/19/2017 at 8:05 AM, David C. Murray said:

James, above you wrote, "Also it prevents someone from taking your land from you in case someone is hurt badly on your property and they sue you and it's determined that it's your fault. If it's in an S.A. they can't come after you."

I think you have that exactly backward. If your property is in a corporation and the corporation is successfully sued, the liability for damages is limited to the value of the assets held by that corporation. So if, for example, someone falls on your property and is seriously injured, they can sue the corporation and win its assets, the property, but they cannot sue you personally and take (say) your bank account if it's held in your own name. If that bank account is in the corporation's name, then it is an asset of the corporation and thus liable to seizure. 

That is why the traditional advice is to have separate corporations to own each parcel of real estate and each vehicle you may own. If in an accident your vehicle corporation is found to be at fault, the victim can seize the assets of that vehicle's corporation (the vehicle or whatever may be left of it), but they cannot seize your real estate because that's in a different corporation. Likewise, if someone is injured on your property owned by "Corporation A", they could not seize the real estate owned by "Corporation B". 

 

Hi David, It sounds like you know what you are talking about but that's not the way it was explained to me. 
Are you an attorney? 
Do you have a link that explains your info in layman's terms by any chance?

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James, I'm not an attorney but I've consulted with some and I've read up on the issue. I don't know how this matter was explained to you or by whom, but I think your understanding is inside-out.

Think about it . . . Suppose you trip and fall in a store that's owned by a corporation. You successfully sue the corporation and are awarded damages because the corporation is found to be liable for your injuries. You can collect from that corporation, but you cannot collect from the unrelated corporation that owns the gas station next door. They are separate entities. You didn't fall in the gas station, so how might they be held liable? 

As far as the law is concerned, the corporation that owns your vehicle is as unrelated to the corporation that owns your real estate as is the corporation that owns the gas station unrelated to the corporation that owns the store where you fell. If you hit a pedestrian with your car, you'll probably be found liable; but your real estate corporation will remain untouched as it has no legal relationship to the vehicle corporation.

Think of it another way . . . Suppose I hit a pedestrian with my vehicle. Would you expect that your real estate corporation would be jeopardized? No! And why not? It's because there is no legal relationship between my vehicle corporation and your real estate corporation. The legal relationship between my vehicle corporation and your real estate corporation is as nonexistent as the legal relationship between the corporation that owns the store and the corporation that owns the gas station. 

(The foregoing are all layman's terms.)

 

 

Edited by David C. Murray

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David is quite right. One of the reasons people that rent out homes or have a B&B for example, tend to have it in a S.A, is that if someone drowns in their pool, they personally won't be held responsible.

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Wouldn't it be less complicated just to get liability insurance?  

I know people who have a B&B and it is not in a corporation but they do have liability insurance.

 

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However, if you as the driver of the vehicle are found liable, your personal assets, including those held by SAs in which you own shares, can be attached to pay damages. Simply because a vehicle is owned by a Persona Jurídica doesn't absolve the driver of said vehicle of all criminal and civil responsibility. If you're drunk and run over a family you're going to jail. If you're on your phone, cross the center line and cause an accident, you will be liable.

Edited by induna

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Yes, it is. I'm just saying that some people seem to be implying that having a car in an SA protects the driver from liability. It doesn't.

Insurance is relatively cheap. I believe we pay a bit over 10 mil a month for 400 million in third party injury protection and 60 million in third party property damage. That is a lot of coverage here. I don't carry coverage for theft/collision. Where I live theft is not an issue, and since Costa Rica is a strict fault jurisdiction, I will only have to pay to repair my car if the accident is my fault, or the other driver is uninsured. My car isn't worth much, any?, more than the 6 million coverage that the marchamo provides. So even if the other driver has the minimum coverage I should get my money back. I'm willing to self insure for damage to my car that is my fault.

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You are all correct that public liability coverage on your vehicle and on your homeowner's insurance is the single best way to protect your interests.

In both cases, the premiums are very reasonable and, should you be likely to be found liable, most injured parties would settle for the limits of the policy in an out-of-court settlement rather than go through the pain and cost of a legal suit which they might not win or live to see resolved.

Covering your potential victims also provides a measure of humanity. Should I injure someone, and especially if it really is my fault, I want to be held liable for my misdeed. I want my victim to be cared for. At the same time, I would prefer not to be bankrupted. 

 

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On 7/7/2017 at 5:13 PM, jamesofomaha said:

I don't have bars either. I will not live that way. If it ever came down to having to live that way here, I'd try to move somewhere else.
I know the majority of people do but to me it would make me feel like I was living in a jail. Even with nice "pretty" bars...

I have lived here in Costa Rica in houses that have bars and houses that don't.  After a little while, the bars just don't bother me and they become kind of "invisible."  It's kind of like having tinnitus:  You have noise in your ear(s) all the time, but it is prominent only when you think about it.

I do live in a town that is pretty crime-free and safe but some people do have bars, including me.  My windows have jalousie openings and the bars let me keep them open most or all of the time without fear that someone will remove the panes and grab something or come into my house.  Does that happen here?  Not really -- but you just never know.

There is a lot of wildlife around my house and those bars never seem to interfere with my view of them.

I know people who also have bars around the outside of their porches and this comes in handy if you have small children or like to keep stuff on your porch.  It also keeps unwanted vendors at bay and keeps that randomly drunk guy from entry into your house when he thinks it's his.  It's also handy when you are working in the back of the house but still want to keep the front door open for the air flow.  Mostly this is used with people who live in a town or small city. 

My only worry (and its a small one...) is if a fire starts that is between me and one of my doors.  My Plan B is that I live in a Tico-style house where the walls don't go all the way up and I would just climb over the wall!  haha

 

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