RECENT P.R. TRUST LAW AMENDMENTS: THE ADVENT OF REVOCABLE TRUSTS
Act 153-2026 (the “Act”), signed into law on July 30, 2026, amends the Puerto Rico Trust Act (Act 219-2012) (the “Trust Law”), introducing several amendments – most notably, the introduction of revocable trusts for the general population in Puerto Rico. These changes will take effect six (6) months after the Act’s approval. Below is a summary of the principal amendments brought by the Act.
Revocable Trusts
A revocable trust is an estate planning tool commonly used in the United States to manage assets during the grantor’s life and transfer them upon death, avoiding probate. Before the Act was enacted, revocable trusts were generally not allowed in Puerto Rico, other than in limited exceptions such as certain Act 22 or Act 60 decree holders. Therefore, by default, Puerto Rico trusts were deemed irrevocable. The Act created a new rule: unless the trust agreement states otherwise, newly created trusts in Puerto Rico are now presumed revocable. A revocable trust allows the Grantor – the creator of the trust – to retain control in exchange for reduced asset protection: while the Grantor retains the power to revoke, his or her creditors may reach the trust assets as if held in the Grantor’s own name. The Grantor may modify or revoke the trust, direct its administration, and add or withdraw assets, subject to the registration requirements below. Trusts created for public purposes are excepted and must remain irrevocable. The beneficiaries of revocable trusts have no vested rights; they are expectant beneficiaries, acquiring rights only upon (i) the Grantor’s death; (ii) the Grantor’s loss of the power to revoke (for example, upon legal incapacity); or (iii) the fulfillment of the conditions set forth in the trust agreement.
Trust Registration, Notifications, and Certifications
Under the Trust Law, all trusts established in Puerto Rico must be registered with the Special Trust Registry, kept by the Office of Notarial Inspection (“ODIN”). The Act now requires that registration also state whether the trust is revocable or irrevocable. Until registered, a trust is not effective against third parties, such as creditors, buyers, or banks. The notary’s obligation to notify the trust to ODIN within the first ten (10) days of the month following execution remains in place; for revocable trusts, any subsequent revocation or amendment must likewise be notified, within ten (10) days of its execution. This includes the withdrawal of assets, treated as a partial revocation, which must be recorded at the Special Trust Registry (and, for real estate, the Property Registry) and carried out through the same type of document used to contribute them (for example, a private document or public deed). Separately, upon request and payment of the applicable fees, ODIN may issue trust certifications – including negative certifications – to interested parties or their legal representatives, without a court order.
Liability of Trustees and Forced Heirship Rights
Previously, co-trustees who breached their duties faced joint and several liability (responsabilidad solidaria) – anyone of the co-trustees could be liable for the entire liability. The Act changes the rule to several liability (responsabilidad mancomunada): each trustee is now responsible primarily for his or her own acts or omissions. A trustee is excused only by showing no involvement and due diligence, and full joint and several liability returns only where trustees acted intentionally and in concert. A trust may not impair the forced share (legítima) where Puerto Rico succession law governs, except one created over a minor’s or incapacitated heir’s forced share (as sole beneficiary, ending on emancipation, cessation of incapacity, or death).
Practical Considerations
Because a Puerto Rico trust is a “foreign trust” for U.S. tax purposes, revocable trusts presumably remain subject to complex federal reporting (Forms 3520 and 3520-A). Their role relative to limited liability companies (“LLCs”) and irrevocable trusts will continue to develop – particularly since they are designed to preserve the grantor’s control rather than to provide asset protection (unlike irrevocable trusts) or federal estate tax planning (unlike LLCs) and are best evaluated against each client’s particular goals and needs.
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This document has been prepared for information purposes only and is not intended as and should not be relied upon as legal advice. If you have any questions or comments about the matters discussed in this notice, wish to obtain more information related thereto, or about its possible effect(s) on policy or operational matters, please contact us.
Tax & Employee Benefits Department