Although Puerto Rico has remained a U.S. territory for over a century, it is not a U.S. state. Therefore is not subject to the same laws. There are different inheritance laws that apply to Puerto Rico. They differ from the U.S. and other nations in a variety of ways.
Whether looking to pass along assets and real estate in Puerto Rico to loved ones, at the time of your death, or a loved one has recently passed, you’ll need to determine the division of property and assets among surviving family members. Hence, you need to understand how Puerto Rico real estate law and inheritance law could impact the outcome. Here are a few important inheritance laws you should know about.
The taxable estate of a deceased person considers the gross estate value minus any existing debts. Additionally, it is important to consider the cost associated with the funeral, and charitable bequests through a will, trust, or other end-of-life planning device. There also is a fixed exemption applied to property and assets. The amount depends on the status of the descendent.
The exemption for Puerto Rico residents is $400,000 (USD). Non-resident U.S. citizens receive a $30,000 (USD) exemption. In addition, non-resident aliens, who are not US citizens, get a $10,000 (USD) exemption. Once deducted from the estate, any remaining value is the taxable estate.
Personal Property and Real Estate
Personal property refers to any assets that are not real estate. These items are generally considered subject to the inheritance laws of the region where the descendent resided. Therefore, residents of Puerto Rico are subject to their own inheritance laws and taxes. Although if a foreign jurisdiction dictates that Puerto Rican law applies, then their court will almost certainly execute applicable judgment.
Where inheritance can get tricky is when it comes to real estate, especially property in Puerto Rico. Whether you’re making plans to bequeath your property or you’ve inherited property, it’s best to confer with a Vieques real estate law professional to understand how inheritance of real estate works in Puerto Rico.
Wills and Forced Heirship
When it comes to real estate, foreign residents or inheritors need to understand forced heirship. Under Puerto Rican law, children of the deceased have an allowance of any part of real estate property located there. This is regardless of the stipulations of a will. Children are automatically entitled to a third of the property.
A person may allocate the remaining two-thirds of the estate as they see fit by bequeathing it through a will. However, without a will, the entire estate will pass to the children of the descendant. If there are no living children, the property goes to grandchildren or the parents of the descendent.