What Is a Decedent's Estate (Caudal Relicto) in Puerto Rico

When a loved one dies, one of the first terms the family hears at the notary's office, the bank or Hacienda is caudal relicto (the decedent's estate). It sounds like lawyer's language, but the idea is simple: it is what the person leaves behind. Understanding it helps you know what gets divided, which debts need attention and what is not part of the inheritance.

What caudal relicto means

"Caudal" means assets; "relicto" means left behind. The caudal relicto is the set of assets, rights and obligations a person leaves at death. In practice it is used almost as a synonym for "inheritance" or "the deceased's property."

The Código Civil de Puerto Rico de 2020 (2020 Civil Code) defines the inheritance as the rights and obligations transmitted by a person's death, "whether the rights exceed the obligations, the obligations exceed the rights, or there are only obligations" (Art. 1552). In other words, the estate includes the good and the not so good: the house and also the mortgage.

There are other words you will come across often:

• Causante: the person who died and whose inheritance is being divided. Sometimes people simply say "the deceased."
• Sucesión: the transfer of the causante's rights and obligations to other people (Art. 1546). In Puerto Rico, the group of heirs is also called "the sucesión"; that is why you will see documents in the name of "Sucesión de Carmen Rivera" (the Estate of Carmen Rivera). The sucesión opens at the exact moment of death (Art. 1547).
• Heredero (heir): someone who succeeds the causante in all of his or her transferable rights and obligations, as a universal successor (Art. 1553).
• Legatario (legatee): someone who receives a specific item under a will, such as a car or a sum of money (Art. 1553).

If you want to understand what happens to the property while the heirs hold it in common, see the estate and co-ownership among heirs.

What is included in the caudal relicto

Assets and rights

Everything the causante owned at death is included, whether or not it is in his or her name in a registry, for example:

• Real estate: the house, an apartment, a lot, a farm, or the share the person owned in a jointly owned property.
• Money: savings and checking accounts, certificates of deposit, cooperative (cooperativa) accounts.
• Investments: stocks, brokerage accounts, ownership interests in businesses.
• Vehicles, boats and other personal property: jewelry, artwork, furniture, tools.
• Amounts owed to the deceased: money other people owed, pending refunds.

Hacienda's return (Modelo SC 2800 C) asks for a breakdown of these assets with their cadastral (catastro) number, account number or license plate number.

Debts and charges

The causante's debts are also part of the estate: the mortgage, a car loan, credit cards, personal loans, back taxes owed to the Departamento de Hacienda ("Hacienda", Puerto Rico's Treasury) or to CRIM (Municipal Revenue Collection Center).

Apart from debts, there are the estate charges (cargas hereditarias), which are expenses that arise from the death or from handling the inheritance. The Code mentions the costs of the funeral, the inventory and the division, the preservation and administration of the assets, the delivery of bequests and the compensation of the albacea (executor) or administrator (Art. 1589).

What is NOT included in the caudal relicto

This is one of the most common sources of confusion, and it helps to clear it up early.

The surviving spouse's community property half

If the causante was married under the sociedad legal de gananciales (community property regime, which applies when the couple did not sign a prenuptial agreement), the community property does not all belong to the deceased. First the community is settled: its debts are paid and what remains is divided in half between the surviving spouse and the heirs of the spouse who died (Art. 539).

The widow's or widower's half is theirs in their own right, not by inheritance. Only the other half, plus the causante's separate property, makes up the caudal relicto. See the example with numbers in community property and inheritance.

In addition, the spouses' personal belongings in ordinary use are not included in the community's inventory and are handed over to the surviving spouse (Art. 533).

Life insurance with a beneficiary

The Puerto Rico Supreme Court held that the proceeds of a life insurance policy are not part of the causante's caudal relicto, because the beneficiary acquires a right of his or her own that comes from the insurance contract and not from the inheritance (Vélez Rivera v. Bristol-Myers Squibb, 2002 TSPR 123). So if your father named your sister as beneficiary, that money is hers and is not divided among all the children.

Two cautions: if the policy has no living or designated beneficiary, get advice before assuming who gets the money. And tax law limits what an insurer can pay without Hacienda's authorization (the greater of $5,000 or 40% of the policy's value, under Section 2054.05 of the Código de Rentas Internas, the Internal Revenue Code), so the insurer may ask you for documents before paying everything.

Accounts with a designated beneficiary

Retirement accounts, annuities and other accounts where the person designated a beneficiary are not governed by the 2020 Civil Code. They are generally paid to the beneficiary under the contract with the institution, outside the partición (division of the estate). Even so, the fact that something is not divided as part of the inheritance does not mean it does not have to be reported to Hacienda. Ask the institution what it requires and see life insurance and beneficiaries.

Be careful with joint accounts. The Civil Code also does not govern what portion of a joint account belonged to the causante, and that may depend on the contract with the bank. What is clear is the tax rule: the bank cannot release more than the greater of $15,000 or 25% of the funds without Hacienda's relevo (lien release), and that rule includes joint accounts (Section 2054.05(a)(2)). We explain this in bank accounts of the deceased.

Gross estate and net estate

The gross estate is the sum of all assets and rights, with nothing subtracted. The net estate is what remains after subtracting debts and estate charges. The net estate is what is actually divided among the heirs.

To calculate the legítima (forced share, the portion of the inheritance the law reserves for certain relatives), the Code uses the estate valued at the time of the division, subtracts debts and charges, and then adds the value of certain gifts the causante made during his or her lifetime (Art. 1787). We explain this in the guide on the legítima.

Myth: "You have to pay inheritance tax in Puerto Rico"

For deaths on or after January 1, 2018, there is no estate tax in Puerto Rico. Ley 76-2017 (Act 76-2017) eliminated that tax and also the tax on gifts made after that date (Código de Rentas Internas, Sections 2021.01(d) and 2041.01(c)).

What does still exist is an obligation to report:

• The administrator of the inheritance must file Modelo SC 2800 C, Planilla Informativa de Caudal Relicto (the estate information return), within 12 months of the death (Section 2051.01(e)). It is filed only through SURI (Hacienda's online system), at suri.hacienda.pr.gov. The system is in Spanish.
• Some older Hacienda pages still say "nine months" or refer to paper returns. Nine months was the rule for deaths before 2018.
• With the return you request the relevo (Hacienda's lien release, formally the Certificación de Cancelación de Gravamen), the certificate that cancels the priority lien Hacienda holds over the estate's assets for any tax owed (Sections 2054.01 and 2054.02). Without the relevo, a notario (in Puerto Rico a notary is an attorney) cannot authorize the sale or division of the assets, and banks hold back funds.

The details are in the estate information return and in Hacienda's lien release (relevo).

Two important nuances. If the death occurred between 2011 and 2017, the rules of that period still apply to that estate. And the absence of an inheritance tax does not mean there are never any taxes: if the heirs sell the property, there may be tax on the gain, and for deaths after 2017 the inherited tax basis in Puerto Rico is the same one the causante had (Section 1034.02(a)(5)(D)). If the causante had assets in the United States, there may also be federal obligations; see estates with property in the U.S..

CaudalRelicto.com is an independent guide. It is not Puerto Rico's Departamento de Hacienda, the courts or any government agency. This page is general information, not legal advice from an attorney who knows your case. Names and figures in examples are hypothetical. Found an error? Tell us.