For some Californians, estate planning isn’t just about passing on a home in Bakersfield or a cabin in the Sierras—it’s about protecting real estate across borders, whether it’s a vacation home in Mexico, inherited property in the Philippines or a lakeside cottage in Canada. These global ties raise an important question: Can a California trust be used to manage or transfer foreign real estate?
The short answer is: it depends. A California trust is a powerful tool for managing and distributing U.S.-based property, but things get more complicated when it comes to assets in other countries.
What a California Trust Can Do—Within the U.S.
California residents frequently use revocable living trusts to manage their assets and avoid probate. These trusts work well within the United States because each state generally honors the legal instruments of another under the Full Faith and Credit Clause of the U.S. Constitution. This cooperation allows trust-based planning to avoid court delays and simplify transfers to beneficiaries.
However, this legal harmony does not extend internationally.
Foreign Real Estate and the Law of the Land
The ability of a trust to govern real estate depends heavily on where that real estate is located. In legal terms, this is known as the “lex rei sitae” rule, meaning the law of the place where the property sits controls how that property can be transferred.
This principle means that a California trust—no matter how carefully drafted—cannot override another country’s inheritance laws or property title rules.
Let’s Look at Three Countries
Mexico
Mexico’s constitution restricts foreign property ownership, particularly in coastal and border zones. In those areas, foreigners must use a fideicomiso, a type of Mexican bank trust. A U.S.-based trust cannot directly hold title in these zones, and even outside of them, Mexican notaries and registrars typically require compliance with Mexico’s inheritance processes. A California trust alone will not substitute for that.
Canada
Canada is more flexible but still complex. Property laws differ by province, and although some provinces may recognize foreign trusts in theory, they often require probate filings and tax declarations locally. A U.S. trust must be validated or supplemented by local legal action in many cases before the property can pass to a beneficiary.
Philippines
The Philippines imposes strict limits on foreigners’ land ownership. Those restrictions may apply even if the owner was born in the Philippines and later became a U.S. citizen. Additionally, the country does not recognize foreign trusts for title purposes. That means a Philippine court may require a local probate process before property can transfer—even if a California trust directs otherwise.
Coordinating California and International Estate Planning
If you own property in another country, it’s critical to understand that your California estate plan may not control it. In many cases, you’ll need to take additional steps, such as:
- Preparing a separate will or estate plan in a foreign jurisdiction
- Consulting with legal counsel licensed in the country where the property is located
- Considering whether a local trust or co-ownership arrangement may better achieve your goals
- Reviewing foreign inheritance taxes and real property transfer rules, which often differ significantly from U.S. standards
These steps may help avoid double probate, tax complications, and unintentional disinheritance.
What You Can Do Now
- Make a complete inventory of your real estate, including any foreign holdings.
- Discuss your trust and estate plan with a California attorney to ensure your documents are complete and properly structured.
- Coordinate with an attorney in each country where you own property to verify whether your California documents will be recognized—or whether you need a parallel plan in that country.
Disclaimer
The information in this article is based on California law and the author’s understanding of general legal principles. This article is for educational purposes only because the author is not licensed to practice law in Mexico, Canada, the Philippines, or any other foreign jurisdiction. It should not be taken as legal advice regarding international property. If you own or expect to inherit real estate outside the United States, you should consult a qualified attorney in the country where the property is located.
Work With an Estate Planning Attorney Who Understands Cross-Border Concerns
A California trust can be an excellent tool, but it’s not a magic passport across borders. If you or a loved one owns real estate abroad, the best time to review your estate plan is now—before complications arise.
If you live in Kern County, California, attorney Jared R. Clemence can help you evaluate your estate plan, coordinate with foreign counsel, and ensure your assets are protected on both sides of the border. To schedule a consultation, book an appointment online today.