Inheritance Law in Puerto Rico 101: An Introductory Guide

Puerto Rico’s Laws on Inheritance: An Overview

The basic principles of inheritance law in Puerto Rico follow a combination of Spanish Civil Code and U.S. common law. In broad strokes, Puerto Rico recognizes two types of succession: testamentary and intestate.
Succession is the transfer of an obligation to another person (the beneficiary) as a result of an event or as a consequence of a legal relationship (such as a contract). Testamentary succession, also known as "voluntary succession" is a transfer made in the passing of the testator by a will . Conversely, "intestate succession" or "legal succession," occurs when a person dies without leaving a will. In general terms, if the decedent makes a will, then the estate goes to the beneficiaries of the will. If the decedent has not made a will, or the will has not been validated by the proper Puerto Rican court, then the Puerto Rico probate court is vetting distributions of the estate under Puerto Rico’s intestacy laws. Since these laws establish who will inherit under these circumstances, the Puerto Rico probate court will have jurisdiction to ensure that these instructions are followed.

Comparison of Puerto Rico’s Inheritance Laws with those of the United States

One of the most significant differences between Puerto Rico’s inheritance laws in relation to the U.S. is the concept of intestate succession. Under US laws, most property falls if someone dies, and they have no will. But the law also lets people list beneficiaries, such as parents, children, siblings, etc. Like, US inheritance laws, Puerto Rico laws recognize the importance of willing property to another. However, unlike US ones, once heirs have been listed in a will, the rest of the process can be a bit different.
It is common knowledge that heirs cannot receive complete control of the deceased person’s assets. This is where the entire process can become difficult, especially when we talk about intestate succession. Here, you need to specify how the inheritance is divided between heirs, which is quite different from what happens in the US.
The Schedule of Heirs
When it comes to intestate succession, Puerto Rico and the United States follow a similar schedule of heirs. It is based on the familial relationship to the deceased person.
As per the Schedule of Heirs, US and PR laws list:
The rights of the spouses and children regarding inheritance are fundamentally the same in Puerto Rico and the United States.
Intestate succession in Puerto Rico is a straightforward process. However, if someone has written a will, it can result in unintended consequences, leading a person to lose their inheritance due to simple oversights.

Forced Heirship in Puerto Rico

Forced heirship in Puerto Rico aligns closer to the Civil Law tradition of other jurisdictions, rather than to the Anglo American tradition. In Puerto Rico, testamentary freedom and forced heirship coexist. On one hand, the inheritance law of Puerto Rico, as it is codified in the Civil Code, contemplates that a person, by his or her will, can dispose of his or her estate, with certain limitations. To this effect, Article 1249 of the Puerto Rico Civil Code provides that: Forced heirship refers to those sections of Title VI of the Puerto Rico Civil Code that determine the minimum limits to which testamentary freedom can reach. The limit to which testamentary freedom can go is known as the "disposable portion" of the estate. Thus, the Puerto Rico Civil Code also establishes in Article 1276 the rules that determine the capacity of parents to disinherit their children. By nature, forced heirship radically reduces the number of possible actions open to a testator, since such testamentary dispositions can only be partial. Said limitations are particularly relevant when the testator wants to make a testamentary disposition of his or her estate that will affect his or her forced heirs, which are his or her legitimate children and forced heirs (descendants); legitimate children of his or her parents (ascendants); and legitimate brothers of the testator (collaterals). In these circumstances, it will be necessary to consider the relationship of the testator with each of the forced heirs who are to receive a portion of the estate. For example, if the testator leaves the greater part of his or her assets to his or her former spouse, obligation payments, debt payments or donations, these dispositions must be made by way of a justifiable cause (Article 930 of the Puerto Rico Civil Code), recognized by the precepts of the Code; otherwise, the forced heirs can challenge the dispositions by those claimants named in Article 933 of the Puerto Rico Civil Code. Specifically, for forced heirs, any disposition on the part of the testator not sanctioned by law, which does not have justifiable cause, will bring about reduction claims against the estate of the testator or against the forced heirs. For said claims, Articles 933 and 934 of the Civil Code establish terms of ten years and five years respectively for the challenged dispositions that are not sanctioned by law. In these dispositions, an heir may file an action for reduction in a court of law, due to the fact that they originated in: To make such action possible, the system levels the playing field between forced heirs and those who are not, and prohibits a beneficiary from resisting such action, except in cases of testamentary dispositions made by will. It is important to note that, even though it does not expressly establish so, Article 930 of the Puerto Rico Civil Code establishes yet another category of testamentary dispositions aside from the dispositions that are not sanctioned by law, and involves testamentary dispositions that are made by virtue of justifiable cause. However, to determine whether or not the justifiable cause is applicable to the case, it is necessary to analyze the true intention of the testator.

The Wills and Testaments in Puerto Rico

In line with the general principles of successions promulgated by the Spanish Civil Code, Puerto Rico’s inheritance law, found in Title 31, Subtitle 2, Chapter 1, Section II of the Civil Code and embodied in the Civil Code of Puerto Rico, isa comprehensive assemblage of the law relating to the disposal of real and personal freed under the laws of this Commonwealth, whether by inter-vivos legal acts (gift, partition), or upon the death of the owner (testamentary dispositions and intestate inheritance).
The law grants the person not subject to adequate testamentary disposition the right to dispose of his property in the manner and form provided by law to those having such capacity, and therefore create dispositions by testament. A will or testament has binding legal effect only if made as prescribed by law, thus there is no expectancy or property right derived from a disposition by will except for the legal heirs, without prejudice to dispositions in favor of legatees.
A will is created only in accordance with the forms of testaments provided by law. On the island there are three types of valid testaments: 1) the formal or notarial testament; 2) the holographic or handwritten testament; and 3) the closed or secret testament. The formal will evidences the formalities of the moment of its pronouncement by a notary public in the presence of the witnesses. The signature of the testator and of the witnesses are required. The most common type is the formal testament. The other types, the holographic testament and the closed testament, do not require the presence of a notary public. Neither of these requires the participation of witnesses. However, the proportion of testaments of these types is insignificant. The estate of the testator will ordinarily be subject to the Puerto Rico probate process and the liquidation of the succession, even if it originated in a foreign country.

Intestate: How it Works and What to Expect

In Puerto Rico, when a person dies without a will, he or she is said to have died "intestate". Intestate refers to the rules that apply when a person dies without a will or a will that is valid. Those rules are set forth in the sections 2411-2650 of the Civil Code of Puerto Rico. The law establishes a formula for dividing the property of a person who dies intestate among his or her heirs. A person who dies intestate will have his or her estate divided among the following surviving family members "terceros" (not relatives of the deceased): (1) all the children of the deceased (legitimate or not) (2) if there is no children, then the estate will be divided between the parents of the deceased, brothers and sisters and (3) if none of the above, between the uncles and cousins of the deceased . Under Puerto Rico law, the surviving widow or widower has a right to inherit only from the applicable intestate succession provisions; he or she cannot specifically be disinherited in the same way that children can be disinherited. While the husband or wife has the option to claim one half of the community property, the spouse does not inherit or take property in the same manner as heirs do under intestate succession rules.

Notaries and Legal Proceedings

In Puerto Rico, notaries public play an important role in the legal system. Given that estate planning in Puerto Rico must comply with formal requirements, most people will end up having their estate either partially or fully settled in a notarial probate. As in life, notaries are always present at the most critical moments.
The notary public is appointed by the Puerto Rico Department of State (Departamento de Estado de Puerto Rico) and is given a unique identification number through a corporate registry. Their main duty is to ensure that documents related to an estate are valid and that the people affected by these documents are protected from fraud, coercion and malice. In a nutshell, notaries public are Puerto Rico’s front line against bad faith.
After the death of a person, a testate or intestate succession is opened. An inheritance claim (demanda de sucesión intestada or demanda de testamentaria) is filed before the Puerto Rico Court of First Instance along with other required documents, such as the death certificate, information regarding the deceased property and a petition to declare heirs to whether a will exists or not.
In an intestate succession, the law mandates specific terms to proceed with an estate and it refers to those heirs who have the right to receive the estate, whether or not a will exists. In an intestate succession, the legal heirs of the deceased are determined by Puerto Rico law, including cases where children or spouses are not recognized before the law. In such instances, if no will is registered, the closest legal heir according to the law will receive the estate.
Once the judge of the Puerto Rico Court of First Instance approves the claim, a notice is published in the newspaper and the interested parties have 30 days to be included in the process. Once the 30-day period passes, the judge determines who will inherit the estate per the law and the will, if any. Once the judge decides, an inventory is elaborated whereby the Notary Public intervenes. At that moment is when the notary public of the estate will elaborate an estate inventory for the court before the creditors, debtors and people who claim to be heirs.

What Happens in the Event of an Inheritance Dispute?

Inheritance disputes in Puerto Rico are generally categorized into four main types of cases: (1) the validity or interpretation of a will, (2) the challenge to the legitimacy of a testator’s children, (3) the calculation of a forced heirship portion, and (4) the collection of inheritances. The special feature of our legal system is that, along with these cases, we have the procedure of "contesting the inheritance," which is used as an alternative way to adjudicate and terminate the four types of cases mentioned above. This alternative gathering of all the related matters in one case is called "connotation," and it occurs when all the cases between the same parties are connoted in one file. Connotation requires that a special petition be submitted by any interested party, who must also provide proof of the existence of another related case. Since the main purpose of this procedure is to exempt the interested party from the filing fees of each individual case, this is not an onerous procedure.
It is common for inheritance disputes to arise from the following circumstances: (1) the testator who dies without a will; (2) the children that the testator had before his or her marriage, and who would therefore not be heirs according to Puerto Rico Law; (3) the errors of the Public Registry when they draft an inscription of inheritance; or (4) the failure of a testator adequately to analyze what he has under his possession or the misunderstanding of relatives who do not understand forced heirship portions as they apply to them. This last category usually arises when there are two or more partial or forced heirs, who do not know how to handle an inheritance or to calculate the undivided estate.
The special characteristic of the Puerto Rico Inheritance Law is that it maintains those rules that were in force before the incorporation of the Civil Code. In this sense, the decision of the Supreme Court of Puerto Rico in Civil Case No. AC-76-52 (October 17, 1979), holding that "forced heirship is relative with respect to the residual assets," has been adopted as a general rule for all cases where the inheritance is calculated based upon a forced heirship portion.
The issues most commonly raised by partial or forced heirs involve the difficulties that arise in deciding what are the residues that must be left to a forced heir if the testator designated that heir as the universal heir. The disposition of such residuary parts of inheritance normally takes time, since litigation must first be resolved to allow the Public Registry to clear the corresponding notices of lis pendens. However, an important feature of these residual inheritances is that the costs to administer these estates are usually covered by the funds of the inheritance.
Except for the special requests for binding appellate review made by the parties, the final orders in Puerto Rico Inheritance Law have no appeal. Therefore, the time required by the appellate courts to resolve an appeal of a final order is at the discretion of those courts.
Puerto Rico Inheritance Law allows an extrajudicial option for inheritance dispositions. This option requires that there exist an agreement between all the forced and/or partial heirs as to how the case should be resolved. Once an inheritance is accepted extrajudicially, the heirs can avoid the possibility of filing a case and are entitled to obtain: (1) the delivery of the possession of the inheritance directly, (2) an inventory and partition of the inheritance, and (3) the granting of an authentic document.

Inherited Property Tax

Inherited property may be subject to certain tax obligations in Puerto Rico. The estate, meaning the sum of all the property owned by the deceased person, is subject to an estate tax (impuesto sobre sucesiones) under Puerto Rico law. The payment of these taxes is the responsibility of the executor or administrator of the estate.
Currently, the estate tax is only assessed if the gross estate exceeds the exemption amount, which is currently set at $960,000. When the existence of real property and movable property of the estate is pursuant to a donation, then such property is exempt from estate taxes up to an amount of $1,500,000 . However, real property subject to a usufruct right is exempted from estate taxes up to an amount of $600,000, as long as the heirs take the property subject to the usufruct. Lastly, the estate of the deceased person must be confirmed by the Probate Court by way of a decree before the estate taxes become payable.
In Puerto Rico, there is no inheritance tax. Instead, beneficiaries of the estate are subject to the right to acquire property tax (derecho de adquirido de la propiedad) of four percent (4%) over the net value of the property they inherit (with a minimum of $150), and a one percent (1%) grant tax (impuesto de concesión) over the same net value.