Vehicles, Stocks, Businesses and Other Assets of the Deceased

When people talk about inheritance, almost everyone thinks of the house and the bank account. But many families also have to figure out what to do with the car, some stocks, a small business, mom's jewelry or the dog that was left alone. This guide goes over those assets one by one.

Everything is part of the caudal relicto.* The caudal relicto (the decedent's estate) is the set of property, rights and debts left by the person who died. Each asset must appear on *Schedule A (Anejo A) of the estate information return (Modelo SC 2800 C), with a code according to its type: B for cash and brokerage, C for stocks, E for cars, aircraft and boats, F for the contents of a safe deposit box, G for household goods, H for art and jewelry, and I for other personal property.

Until the estate is divided, nothing belongs to anyone in particular. The heirs own everything in common, and a specific asset can be sold only with everyone's consent (Civil Code, Art. 1604). In addition, the Government has a preferred lien on all estate property for taxes owed, which is canceled with the relevo (the lien release from the Departamento de Hacienda, Puerto Rico's Treasury, formally the Certificación de Cancelación de Gravamen) (Código de Rentas Internas, the Internal Revenue Code, Section 2054.01).

The deceased's vehicle

First, who owns it. If the car was bought during the marriage under the sociedad legal de gananciales (community property regime), half belongs to the surviving spouse and only the other half is part of the inheritance. If it was separate property, all of it goes into the estate.

On the return. The vehicle goes on Schedule A with code E, the license plate, the make and the model.

The transfer at CESCO. Vehicle title transfers are handled at the Centros de Servicios al Conductor (CESCO, the driver service centers) of the Departamento de Transportación y Obras Públicas (Department of Transportation and Public Works), and the Ley de Vehículos y Tránsito (Vehicle and Traffic Act, Ley 22-2000) governs transfers in general. However, we did not find an official page or form explaining the requirements for a transfer by inheritance. Before you go, call or visit CESCO and ask:

• Which document they accept to prove who the heirs are: the declaration of heirs (declaratoria de herederos) or the will.
• Whether they require Hacienda's relevo.
• Whether all the heirs must appear or whether it is enough for one to go with powers of attorney from the others.
• Which fees or stamps must be paid.

If the car had a loan. The bank or finance company keeps its lien. The debt belongs to the estate, and the heirs are liable for it only up to the value of what they receive (Art. 1587). Talk to the lender early to find out how they want to proceed.

If someone will use it in the meantime, make sure the insurance stays in force and that all the heirs agree. Selling the car, even to pay expenses, requires everyone's consent.

Stocks, brokerage accounts and investments

The limit without the relevo. Brokerage firms are included among the financial institutions covered by the Internal Revenue Code. Without the relevo or an authorization from Hacienda, they cannot release to the heirs more than $15,000 or 25% of the funds, whichever is greater, and that includes accounts held jointly with another person (Section 2054.05(a)(2)). The calculator helps you estimate that amount:

On the return. Cash held in brokerage goes under code B. Stocks go under code C, listing the institution, the account number and, when applicable, the entity's employer number and the percentage the deceased held.

Accounts with a designated beneficiary. Some investment or retirement accounts have a named beneficiary. The 2020 Civil Code does not regulate these designations, so the institution will apply its own rules and those of the contract. Ask in writing which documents it requires. If it is life insurance, see life insurance and beneficiaries.

Stock in U.S. corporations. This surprises many families. A person born in and residing in Puerto Rico who is a citizen through their connection to Puerto Rico is treated, for federal estate tax purposes, as a "nonresident not a citizen." For that person, property in Puerto Rico does not count as situated in the United States, but stock in U.S. corporations does. If those U.S.-situated assets exceed $60,000, federal Form 706-NA may be required, due 9 months after the death. Read estates with property in the U.S. and get professional help.

Keep the purchase cost. For deaths since 2018, a person who inherits in Puerto Rico keeps the same tax basis the deceased had. If you ever sell the stock, that original cost matters. We explain this in taxes of the estate.

The deceased's business or corporation

Business in their own name. If the deceased ran a corner store (colmado), a repair shop or an office without a corporation, the business's equipment, inventory and accounts are part of the estate. Until the heirs accept the inheritance, it is managed by the person the causante (the deceased person whose estate it is) designated; if no one was designated, by the albacea (executor); if there is no albacea either, by those called to inherit; and if they cannot agree, by a provisional administrator appointed by the court (Art. 1563). Useful repairs during that stage require court authorization (Art. 1564). See the executor (albacea).

Corporation or limited liability company. Here the heirs do not inherit the business directly, but rather the deceased's shares or membership interests. The entity continues to exist. Review the bylaws, the operating agreement or any agreement among the owners, because they may limit who can become an owner or give the others a right to buy.

The business's tax debts weigh on the relevo. Hacienda also considers as debts of the deceased the taxes owed by a corporation, partnership or company in which they held more than 80% (Determinación Administrativa 18-09). If there are debts, the relevo will not be issued clean.

Income after the death belongs to the sucesión (the estate, the group of heirs). If it exceeds $1,300 gross in the year, the estate must file its own income tax return, for which it needs an employer identification number.

Firearms

Firearms are regulated by a special law and by the Negociado de la Policía de Puerto Rico (Puerto Rico Police Bureau). We do not describe the transfer requirements here because we did not verify them. In the meantime, keep them locked up and out of other people's reach, and do not sell, give away or move them without first getting guidance from the Police or an attorney.

Pets and other animals

Under the Civil Code, pets are not things. Domestic and domesticated animals are "sentient beings"; they are not property or things and are not subject to seizure (Art. 232). Decisions about their custody must ensure their well-being and physical safety (Art. 233). That is why the family dog or cat is not divided like a piece of furniture: what matters is agreeing on who will care for it.

Working animals are different. Animals used in industry or in sporting or recreational activities fall outside that category (Art. 232). The livestock on a farm, for example, is part of the estate.

Furniture, jewelry and keepsakes

The surviving spouse's personal belongings. When the community property is settled, personal items of ordinary use are not included in the inventory and are given to the surviving spouse (Art. 533).

Everything else is divided. Household goods (code G) and jewelry and works of art (code H) are part of the inheritance. Keep anyone from taking things before the partition: besides causing conflict, hiding estate assets counts as accepting the inheritance (Art. 1580).

The safe deposit box. The bank cannot open it without a Hacienda representative (Section 2054.05(a)(3)). Schedule the appointment with the bank and then write to citaaperturacaja@hacienda.pr.gov with the subject line "Cita para Apertura Caja de Seguridad" (appointment to open a safe deposit box). The official prepares Modelo SC 2655, which is attached to the return.

Digital assets

The 2020 Civil Code has no provision at all on digital assets or digital inheritance. In practice:

• Make a list of phones, computers, email accounts, social media, subscriptions and online accounts.
• Use the process each provider offers for accounts of people who have died, instead of logging in with the deceased's password.
• If there were cryptocurrencies or other digital assets with economic value, treat them as part of the estate and ask whoever prepares the return how to describe them.
• Cancel subscriptions that keep charging the deceased's cards or accounts.

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.