Comments on: Five Estate Planning Tips for Puerto Rico

By: Christian M. Frank Fas

Christian M. Frank Fas — Tue, 14 Jun 2011 23:55:16 +0000

Dear Mr. Nelson,

Thank you for your question.

You are absolutely correct. The PR Estate Tax Release, or “Relevo de Hacienda”, is NOT required for life insurance. This has been established both by law, and by jurisprudence in Puerto Rico. Prior to relatively recent amendments to PR estate law, many life insurance companies, and the Dept. of Hacienda, required the filing of a PR Estate Tax Form (PRETF) for the release of the totality of the life insurance benefits. This has since changed, and the life insurance benefits are NOT part of the estate.

The benefits are part of a contract that is executable once the insured dies, and therefore, is exempt from any estate and tax law requirements, since it is the beneficiary who can claim the payment, and not the deceased insured party.

By: Lance Nelson

Lance Nelson — Tue, 07 Jun 2011 19:59:02 +0000

This is more of a question than a comment. I work for a medium size life insurance carrier in Philadelphia, PA, USA. All of our policies are group term life insurance, in other words, policies issued to a business/ corporation/ etc. that provides life insurance as a benefit to its employees.

We have a few policy holders in PR, that provide life insurance benefits to PR residents.

My question is this. After some reseach of PR law/ statutes, it appears as though we may be required to secure the tax receipts described in Title 13, Chap 91, Sec. 900, et seq. before we can pay the life benefit to beneficiary/ies in PR. (Provided of course, that the insured employee resided in PR).

Number 4 above “Have a Life Insurance Policy naming the surviving spouse as beneficiary” because “[T]hey are unaffected by forced heirship, and do not require a PR Estate Tax Release”.

Are the PR Estate Tax Release the ones I mentioned above, i.e., section 900, 901?

By: M. De la Cruz

M. De la Cruz — Wed, 11 Nov 2009 19:15:10 +0000

The best thing is to have life insurance, where you can give the money to the people who really need it and deserve it. However, you should remember to update your life insurance’s beneficiaries. I had a nephew that passed away, so I had to change my list. People should also be aware that if you leave life insurance money to young children, the adult guardian will have access to it unless you write a Trust and give specific instructions on what that money is going to be used for (especially if you are a divorced parent). Also, I know of a lady whose husband died in a traffic accident and SURPRISE, he had never changed his beneficiaries, so the ex-wife got it all.