Ecuadorian vs. US Inheritance Law: What Expats Need to Know to Protect Their Estate

For many expats, a significant part of their life's savings and assets is located in their home country, often the United States. They have a will, a trust, or a clear plan for how those assets will be distributed after their death. However, when you acquire property and assets in Ecuador, a crucial fact often goes unaddressed: your U.S. will may not be valid for your Ecuadorian assets.

Ecuadorian inheritance law operates on a fundamentally different legal philosophy than that of the United States. Understanding these differences is not just a matter of legal curiosity; it is the single most important step you can take to protect your family and ensure your assets are distributed according to your wishes. This guide will provide a comparative analysis of the key differences in estate and inheritance law and highlight why an Ecuadorian will is a non-negotiable part of your estate plan.

The Most Important Difference: Forced Heirship

The central pillar of Ecuadorian inheritance law is forced heirship. This is a concept that is largely absent from the legal system in the United States and is the source of most of the confusion for foreigners.

Ecuadorian Law:

The law dictates how a mandatory portion of your estate must be distributed. You do not have complete freedom to leave your assets to anyone you choose. The law establishes specific "legitimate portions" that must go to certain close family members. This system is designed to protect direct family, particularly children, from being disinherited.

• 50% of your assets must be divided equally among your children and, if applicable, your parents.
• 25% of your assets (known as the "mejoras") can be distributed among your children and other descendants (e.g., grandchildren) in any proportion you choose.
• Only the final 25% (known as the "porción de libre disposición") is truly yours to distribute freely, meaning you can leave it to your friends, a charity, or any person not in your direct line of succession.

U.S. Law:

In the United States, you generally have full testamentary freedom to distribute your assets as you wish. With few exceptions (such as spousal rights), you can legally disinherit a child or leave your entire estate to a non-family member. This is the "right to a free disposition" that most Americans are accustomed to.

This core difference means that even if you have a valid U.S. will that leaves your Ecuadorian property to, for example, a distant relative, your children can legally challenge that will in Ecuador and claim the 75% portion of the inheritance they are legally entitled to.

Conjugal Society: The Married Couple's Trap

For married couples, another major difference can come as a significant shock.

Ecuadorian Law:

Ecuador recognizes something called "conjugal society" (sociedad conyugal). Under this principle, all assets acquired during the marriage are automatically considered to be owned 50/50 by both spouses, regardless of whose name is on the deed or bank account. If you die, your will can only distribute your 50% share of these communal assets. The other 50% automatically belongs to your spouse and is not part of your estate.

U.S. Law:

While "community property" exists in some states, it is not universal. In most U.S. states, property purchased in one spouse's name remains that spouse's legal property until it is transferred or an estate is settled.

This is a critical distinction. A U.S. will that leaves a home owned in one spouse's name to a child from a previous marriage may be invalid in Ecuador because the surviving spouse legally owns 50% of that property from the moment of purchase.

Requirements for a Valid Will in Ecuador

The legal formalities for a will are also very different. A will prepared in the U.S. will almost certainly not meet these requirements, rendering it invalid for your Ecuadorian assets.

Ecuadorian Law:

The most common form of a will for expats is a "closed will" (testamento cerrado). This will must be:

• Written in your native language (e.g., English).
• Sealed in an envelope.
• Presented to a Notary Public.
• Witnessed by five Ecuadorian nationals who are over 18 and residents of the city where the will is being executed.

The Notary, the witnesses, and a certified translator will then certify the document's validity.

U.S. Law:

The requirements for a will in the U.S. are generally much simpler. Most states require only two or three witnesses, who are often not required to be citizens or residents of the state.

The Role of an Ecuadorian Will and the Consequences of Dying Without One

Given these differences, it is highly recommended that any foreigner with assets in Ecuador create a separate, valid Ecuadorian will. This document will work in conjunction with your U.S. will (or other international will) to handle only the assets located within Ecuador.

• With an Ecuadorian Will: A properly drafted will ensures your assets are distributed according to your wishes, within the confines of forced heirship laws. It simplifies the legal process for your family, saving them from navigating a complex, time-consuming, and expensive court proceeding.
• Without an Ecuadorian Will (Intestacy): If you die without a valid will in Ecuador, your estate will be handled through a process called intestate succession. The law will strictly and inflexibly distribute your assets according to a hierarchy:
  • First to your children.
  • If no children, then to your spouse and parents.
  • If no parents, then to your spouse.
  • If no spouse, then to siblings, and so on.

This can be a long, complicated, and costly process for your family, often involving a court-mandated administrator and a potentially unfavorable distribution of your assets.

Inheritance Tax in Ecuador

Ecuador has an inheritance tax that applies to inheritances received by heirs.

Ecuadorian Law:

Inheritance tax is progressive, meaning the rate increases as the value of the inheritance increases. However, there are significant exemptions, particularly for direct family members. Small to medium inheritances are often taxed at a very low rate or are completely exempt. Your lawyer and accountant can help you understand the current rates and exemptions to plan accordingly.

U.S. Law:

The U.S. does not have a federal inheritance tax. Instead, it has a federal estate tax, which is levied on the total value of the decedent's estate. This tax only applies to estates valued at many millions of dollars.

Final Thoughts: Don't Leave Your Estate to Chance

The differences between Ecuadorian and U.S. inheritance law are profound. A will prepared in your home country simply cannot account for the principles of forced heirship or conjugal society, and it will not meet the strict legal requirements for a valid will in Ecuador. The result is a high risk of your estate being tied up in court for years, with a distribution that you never intended.

The only way to ensure your wishes are carried out and your loved ones are protected is to work with a local, English-speaking attorney. They will draft a valid Ecuadorian will that navigates the legal landscape, protects your assets, and provides a clear, official path forward for your family during a difficult time.

Ready to start your estate plan in Ecuador? Don't risk legal complications. We connect you with qualified, English-speaking lawyers specializing in wills and estates to help you protect your family's future.