Mexico Finance Insurance

Without a doubt, making the decision to adopt is one of the most wonderful moments in one’s life. However, with this decision comes the consciousness that adoption is an expensive choice. Although adoption costs may vary depending on the adoption type, often, the costs involved in completing an adoption are between $15,000 and $25,000.

Funding options available to prospective adoptive families are numerous and they offer to adoptive parents the flexibility to choose the best option for their case. Although costs may be discouraging, there are several ways through credits, reimbursements, and other benefits that can lower these costs efficiently and quickly.

Some of these options include, but are not limited to, the following: 

1. State Tax Credit Relief

Currently, fifteen States (Arizona, California, Idaho, Iowa, Kansas, Maryland, Massachusetts, Michigan, Missouri, New Mexico, North Dakota, Oklahoma, Utah, West Virginia, Wisconsin) offer federal tax credit, up to $12,150 for offsetting adoption expenses. The Hope for Children Act (Public Law 107-16) of 2001 asserts that tax credit relief includes adoption expenses, court fees, lawyer fees and travel expenses. 

2. Federal Tax Credit Relief

Adoptive families may claim $11,390 on federal tax income return for qualified expenses of finalized adoption within the year. Qualified expenses are considered adoption expenses, travel expenses, legal fees, court expenses and other expenses directly related to the adoption.

The tax credit is not valid for taxpayers with high modified adjusted gross incomes. Although the tax credit is set to expire in 2010, there have been numerous legislative suggestions that the benefit for adoptive families should be permanent. 

3. Corporate Adoption Assistance Programs (AAPs)

Many corporations provide Adoption Assistance Programs (AAPs) that benefit up to $5,000 per finalized adoption and do not exceed $20,000 per employee. The provisions include placement fees, adoption expenses, medical expenses, travel expenses, legal fees, court expenses and immigration and translation fees.

In addition, Adoption Assistance Programs provide reimbursement of qualified expenses assisting prospective adoptive parents to take advantage of federal income tax provisions. 

4. Military Personnel Subsidy Program

Full-time military personnel are entitled to one-time subsidy program that provides up to $2,000 per child per year with a limit of $5,000 per member. The subsidy covers all expenses of finalized adoptions including adoption fees for domestic and international adoption, placement fees, counseling fees, legal fees, and medical expenses for the birthmother and the newborn. 

5. Refinancing home equity loan

Prospective adoptive parents can refinance their mortgage and get a low interest rate from the bank, which often is tax deductible. As the adoption expenses accumulate, they are written in a checkbook and are added to the current loan balance. 

6. Borrowing from 401-k plan

Adoptive families may be eligible to borrow from their 401-k plan at a very low interest rate and fund all adoption expenses. 

7. Using credit cards available

Prospective adoptive parents who have good credit history may ask from their credit card company lower interest rates for adoption funding purposes.

8. Agencies / Organizations

There are numerous organizations that may assist by providing financial aid to adoptive families. Applying for adoption grants, receiving clothing vouchers, foster care payments and medical services are some alternative options. 

There are great examples of people who sold their property for the sake of adopting a child. Regardless of the type of financial assistance that adoptive families may choose, one thing is certain: adoptive parents who really want to adopt, always find a way to finance their adoption. They don’t let any stone unturned, they speak up everywhere for their intention and they knock on all doors until they gather the amount required to offer a neglected child or an innocent infant a real home.

Personal financial planning seems like such a lofty task to so many people. But it is really a simple idea. You are in control of where your money goes.

So few people are. And there really isn’t any reason why. Managing your finances isn’t a difficult task. In fact, it is one you must master in today’s world. It will get you to where you are heading. It will help put your kids through college, it will take you on that second honeymoon, it will buy your home and retire you in comfort. How could you not learn the basics?

There are three general processes in managing your finances.

First, you must be able to control your day to day finances. This is your spending and your earning. You must create a budget, perfect it and learn to utilize it. You have to put the credit cards aside and get out of debt. You have to choose saving over spending sometimes.

The key behind managing your money is that it is no longer managing you. When you are in debt and your money is all spent as soon as you are paid, you aren’t in control. When you decide where that money is going and it goes to where it earns you money, you are the one in control.

The second aspect of financial planning is seen in the choosing and working towards realistic long-term goals. These goals are the motivation behind controlling your finances. You may want to get out of debt, buy a house, go to college and retire comfortably. You might want to see the ocean for the first time — in Mexico. You might want to tour Europe with your daughter when she graduates college. No matter what your goal, it will be the fuel to keep you on the right path. Use it.

The third factor is the building of a financial safety net around your family to prevent financial disasters. You need to have adequate insurance to protect you and your family from illness, death and lawsuits. You need to have a will in place. You must have an emergency savings account that has enough money in it to cover three to six months of expenses.

Your emergency savings not only cushions your budget from the unexpected, it also prevents the usage of credit and protects your savings. You won’t have to dip into retirement when something major goes wrong. You don’t have to use an emergency credit card and then pay high interest to replace something that is broken. You have protected your finances.

Take the time to learn how to manage your finances. It means less stress on you and your family. Yes, it takes a little time and a little work. But it will pay you back many times over.

All too often citizens of the United States, Canada and other countries ASSUME that property purchases are carried out automatically in Mexico in a manner similar to that of their native countries.  The first law of property purchase in Mexico is DON`T ASSUME anything!  Purchasing property is NOT  the same as in other parts of the world.

Would You Purchase a Property in Your Hometown Which Is Not Registered in the Local Public Registry or Land Titles Office?

Would you hand a complete stranger, without an office or an established business entity, a check for perhaps hundreds of thousands of dollars to pay for a property?  Why do so many foreigners do this when they purchase in Mexico?  Many do not realize that Mexico has a complex and complete legal system and a court system that is as well organized as any that exists in the United States, Canada or Europe.  It is essential that you have an idea of how the system works and what to expect when considering a purchase of property in Mexico.

Don’t Leave Your Brain at the Border!

Article 27 of the Mexican Constitution prohibits ownership by a foreign individual or business entity of real property (real estate) within the “restricted” zone which is an strip of approximately 30 miles from any coastline and 60 miles from any border.  Recognizing the demand by foreigners for ownership of property and recognizing the importance of making desirable properties available to foreigners for potential positive impact on the economy, the Mexican government implemented a series of Foreign Investment Laws beginning in 1973.  The law was modified in 1989 and again in December 1993, to incorporate the provisions of the NAFTA treaty passed in late 1993.

For those who are acquiring property for residential usage, the law requires that title to the property in the restricted zone be transferred to a Mexican bank, as trustee, in the establishment of a trust (fideicomiso) in which the foreigner is the beneficiary.  The bank is the titleholder of the real property and the foreigner is the owner of the rights of usage of the property.  The bank owns the real property rights and the beneficiary owns the personal rights of usage.  Ownership of these personal rights is evidenced through a deed prepared by a Mexican Notary Public and signed by a representative of the trustee bank.

Currently the term for a trust is fifty years.  The Foreign Investment Law of 1989 provides for renewal by filing an application.  Multiple renewals are permitted under the law.  By requesting extensions every fifty years, a property may be controlled by a family or business entity for generations.  For those foreign individuals or companies buying property in the interior of the country, not in the restricted zone, no bank trust is required but authorization from the Secretary of Foreign Relations must be obtained and ownership must be registered in the National Foreign Investment Registry located in Mexico City, as well as in the municipality where the property is located.

Avoid Mexico Taxes and Extra Costs. Leave the Mexico Deed in the Seller’s Name:  This is Wrong!

Until the buyer is formally named as the owner in fee simple or in the bank trust in a public document before a Mexican Notary Public, title to the rights in the property remain with the persons named in the previous property deed.  Their signatures are required to transfer title.  If the buyer fails to obtain his or her own deed he/she will be required to obtain the titleholder’s signature before a sale and transfer to another buyer.  This can be costly, frustrating, dangerous and time consuming.

The Importance of Mexico Registration of the Deed for Beneficial Rights.

The Mexico purchase/sale document signed by buyer and seller is generally legally valid between the parties to a transaction.  It most likely contains the description of the property, the price to be paid to the seller, and any other special terms and conditions.  It WILL NOT, however, provide valid notice to third parties unless it is recorded in the Public Registry Office of the municipality in which the property is located.  Mexico’s land registry system functions in much the same manner as the Public Registry offices in Podunk, North Dakota, Los Angeles, California, Ottawa, Canada or places in between.

many foreigners purchasing property in Mexico do not understand the importance of registration of their interest in property.  They believe that it should be left in the name of the property developer, in the Master Trust, or in the name of the previous holder of title.  What if the developer goes bankrupt?  What if the corporation and its principals, disappear?  Who can sign as the representative of the property?  Who then owns the property?  What happens if an unscrupulous seller sells the property to someone else?  While title is in the name of the seller, it is HIS/HER asset;  she may mortgage it, he may sell it again, it may be attached in satisfaction of a judgment, she may die without a will.

Unless the Deed for the rights of the Beneficiary has been Recorded, there may not be a remedy for the purchaser who neglected to obtain a registered deed…his or her interest and investment, may be lost.

To obtain the deed an appraisal, a property tax certificate, and a no-liens certificate must be obtained.  Notarized bank instructions must also be obtained if property is in the “restricted” zone.  Seller’s capital gains tax and Buyer’s acquisition tax must be paid.  The deed transferring rights to the buyer must be registered and stamped by both the tax office and the public registry.  If this process is not complete, the buyer is not fully protected.  The buyer’s ultimate protection is registration in the Public Registry office record, NOT the Notary Public or the trustee bank!

Financed Properties in Mexico

When property is sold with a down payment and the balance to be paid over a term of years, many sellers prefer to hold title to the rights in their name and transfer title to their rights only upon receipt of payment in full.  Meanwhile, however, the seller may die, may disappear, may bo bankrupt…again risky situations for the buyer.  the prudent buyer will insist upon a transfer of title and registration of a mortgage or pledge in which he gives his rights in the property as security for payment of the remaining purchase price.

In the event of default by the buyer, the seller must conduct a proceeding similar to a judicial foreclosure in the United States and Canada.  It is as troublesome as a foreclosure in any country in the world but notably more problematical.  The registered title and recorded pledge or mortgage provides the buyer a greater comfort level in his investment.  The lender also enjoys protection in having his loan recorded and will have an established legal proceeding to follow in the event of default by the buyer.