It is very common for someone who lived their whole life in Puerto Rico to leave something off the island: a condo in Orlando, an account at a New York bank or shares of U.S. companies. When that happens, the estate has two fronts: the steps in Puerto Rico and the steps where that property is located. On top of that comes the federal estate tax, which has special rules for many people from Puerto Rico.
Remember: the causante is the deceased person whose estate it is, and the caudal relicto (the decedent's estate) is all of their property and debts.
Which law decides who inherits
The law of the domicile. Under the Código Civil de Puerto Rico (the Puerto Rico Civil Code), succession is governed by the law of the deceased's domicile at the time of death, except for the public-policy rules of the place where the property is located (Art. 62). If the deceased lived in Puerto Rico, Puerto Rico law decides who inherits and how much.
The forced share protects real estate on the island. Even if the deceased lived in a state, Puerto Rico's rules on the legítima (forced share: the half of the estate that the law reserves for children and the spouse) apply to any real estate the deceased owned in Puerto Rico (Art. 62). See the forced share.
The will. A will is valid as to its form if it meets the law of Puerto Rico, the law of the place where it was signed or the law of the testator's domicile (Art. 65). Be careful with joint wills, where two people sign a single document: even if they are allowed where they were signed, they have no effect on real estate in Puerto Rico (Art. 1640).
Property in Florida or another state: probate
What it is. Probate is the court procedure that states use to validate a will, appoint a representative and transfer the property of a person who has died. Each state has its own rules.
Why the Puerto Rico declaration is not enough. Generally speaking, real estate is transferred under the rules of the state where it is located. So if your father lived in Puerto Rico and owned a condo in Florida, a Florida proceeding will probably be needed for that condo, often called ancillary probate because the person lived somewhere else. The rules on courts, attorneys, deadlines and simplified procedures vary by state.
What to prepare. You will usually be asked for the death certificate, the will or the Puerto Rico declaratoria de herederos (declaration of heirs) and possibly English translations. It is a good idea to talk to an attorney in the state where the property is located and coordinate with the process in Puerto Rico.
Assets that may avoid probate. In many states, accounts with a designated beneficiary, joint accounts with right of survivorship and certain transfer-on-death titles pass directly to the person named. Review each account's documents before assuming a court will be needed. See life insurance and beneficiaries.
Accounts at U.S. banks
A bank in another state follows its own policies and that state's laws. It may ask you for documents from a court in that state, even if you already have the Puerto Rico declaration. In Puerto Rico, by contrast, banks and cooperatives cannot release more than $15,000 or 25% of the funds, whichever is greater, without Hacienda's relevo (lien release) (Section 2054.05). See bank accounts of the deceased.
Do not forget Hacienda. The estate information return (Modelo SC 2800 C) filed with the Departamento de Hacienda ("Hacienda", Puerto Rico's Treasury) asks you to describe each asset and indicate whether or not it is located in Puerto Rico. Property outside the island is reported too. See the estate information return.
The federal estate tax
Puerto Rico has no estate tax for deaths since 2018. The federal estate tax is a separate matter, and here how the deceased obtained citizenship matters a great deal.
Section 2209: citizens through their tie to Puerto Rico
If the deceased was a U.S. citizen, resided in Puerto Rico at death and obtained citizenship solely by being a citizen of Puerto Rico or by having been born or resided here, then for federal estate tax purposes that person is treated as a "nonresident not a citizen" (26 U.S.C. § 2209). This is the typical case of a person born in Puerto Rico who lived on the island at death.
What counts and what does not.
- For these purposes, the "United States" means the 50 states and the District of Columbia. Property in Puerto Rico is not considered situated in the United States.
- Real estate in Florida is situated in the United States.
- Shares of U.S. corporations are considered situated in the United States, even if they are held in a brokerage account.
- Life insurance proceeds and certain bank deposits do not count as situated in the United States (26 U.S.C. §§ 2104–2105).
Form 706-NA. It must be filed if the property situated in the United States, together with certain prior gifts, exceeds $60,000. That figure is not adjusted for inflation. It is due 9 months after the death, and an extension is requested with Form 4768.
The credit. For these decedents, the unified credit is the greater of $13,000 and $46,800 multiplied by the proportion that the U.S. property represents within the worldwide estate (26 U.S.C. § 2102(b)(2)). The credit is subtracted from the computed tax.
Don Rafael was born in Ponce and lived in Puerto Rico when he died in 2026. He left a $250,000 condo in Orlando, $90,000 in shares of U.S. companies, his $300,000 house in Puerto Rico and $40,000 in a Puerto Rico bank.
- Property situated in the United States: $250,000 + $90,000 = $340,000. Because it exceeds $60,000, his estate must file Form 706-NA.
- Worldwide estate: $680,000. The U.S. property is half (0.5).
- Credit: $46,800 × 0.5 = $23,400, which is greater than $13,000. The credit would be $23,400.
Whether any tax remains after the credit depends on the federal tables and deductions; a professional should do that calculation. In addition, the condo will probably require probate in Florida.
Section 2209 surprises many families: a person born in Puerto Rico with some U.S. stocks and a condo in Florida can easily exceed the $60,000 threshold. There are no treaties that change this rule.
Other citizens: a $15 million exclusion in 2026
Citizens who do not fall under Section 2209 are subject to the general rules. For example, a person born in a state who moved to Puerto Rico, or a person born in Puerto Rico who was living in a state at death.
- The federal exclusion is $15,000,000 for deaths in 2026 (it was $13,990,000 in 2025).
- Form 706 is required if the gross estate, plus certain prior gifts, exceeds that amount, or if the spouse wants to keep the unused exclusion (portability).
- For these people, property in Puerto Rico is also part of their federal estate.
If this is your situation, also read estates of Act 60 decree holders.
How to organize an estate with property in two places
- Make an inventory that shows where each asset is and whose name it is in.
- Take care of the Puerto Rico documents first: the will certificate or declaration of heirs, the SC 2800 C return and the relevo.
- Consult an attorney in the other state about probate or simplified procedures.
- Ask an accountant to determine whether Form 706-NA or Form 706 is needed.
- Keep a calendar with the deadlines on both sides: 12 months for the SC 2800 C and 9 months for the federal form.
If you live off the island, you may also find heirs living outside Puerto Rico helpful.
Frequently asked questions
Does the Puerto Rico house of a person born and living on the island count for federal estate tax?
If Section 2209 applies, no: for that person, property in Puerto Rico is not considered situated in the United States. What counts is property in the states, such as real estate or shares of U.S. corporations.
Does a bank account in New York count toward the $60,000 threshold?
Certain bank deposits are not considered situated in the United States for these decedents (26 U.S.C. § 2105). Shares of U.S. corporations do count. Ask an accountant to review each account.
Is the Puerto Rico declaration of heirs valid in Florida?
It is an important document, but transferring real estate in Florida usually requires a proceeding in that state. Consult an attorney there.
Which law applies to the Puerto Rico house of someone who lived in New York?
The estate is generally governed by the law of the deceased's domicile, but Puerto Rico's forced-share rules apply to real estate on the island (Art. 62). In addition, the house will need the Puerto Rico steps, including Hacienda's relevo.
Sources
- Código Civil de Puerto Rico de 2020, Arts. 62, 65 y 1640. bvirtualogp.pr.gov
- Internal Revenue Code, 26 U.S.C. § 2209. law.cornell.edu
- Internal Revenue Code, 26 U.S.C. §§ 2102, 2104 y 2105. law.cornell.edu
- Internal Revenue Service, Instructions for Form 706-NA (Rev. Sept. 2025). irs.gov
- Internal Revenue Service, Instructions for Form 706 (Rev. July 2026). irs.gov
- Internal Revenue Service, "What's new — estate and gift tax". irs.gov
- Departamento de Hacienda, Instrucciones del Modelo SC 2800 C. hacienda.pr.gov
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.
