LEGAL MATTERS CAN BE COMPLICATED, EVEN OVERWHELMING, BUT IN THE HANDS OF HIGH-CALIBER, TALENTED AND EXPERIENCED PROFESSIONALS, THE COMPLEX CAN BE MADE SIMPLE, THE OVERWHELMING CAN BE TACKLED.
IRW represents individuals and businesses in Puerto Rico and the U.S. mainland, working closely with them to protect their rights and interests through estate planning, asset protection, tax planning and corporate law strategies.
We help our clients plan for the future and reach their goals while working to preserve wealth, protect assets and mitigate taxes.
Estate planning is more than just having a will. A good plan is multigenerational and covers the disposition and administration of assets during a person's life and in the event of incapacity or death.
At IRW, we take an individualized approach to develop estate plans that work for our clients and that ensure their wishes will be respected. We help individuals and families achieve their lifetime and post-mortem planning goals, guiding them through the entire probate process and assisting with estate and trust administration. We represent beneficiaries, family members, business owners, executors, trustees and fiduciaries.
End-of-life planning can involve difficult and emotional decisions. IRW is committed to securing what's most important to you and your loved ones, giving you the peace of mind you need and deserve. That's our promise.
On June 1, 2020, the new Civil Code of Puerto Rico, Act 55-2020, was signed into law, to be effective on Nov 28, 2020.
The New Code was long overdue. Efforts to overhaul the outdated 1930 Civil Code started more than 20 years ago. The 1930 Civil Code was based on the Spanish Civil Code of 1889, which in turn was based on the Napoleonic Code of 1804. The Napoleonic Code, which abolished the centuries-old feudal system, was the first modern civil code to be adopted with a pan-European scope, influencing laws throughout the world.
The New Code is now the main source of private law in Puerto Rico. It regulates numerous aspects of a person's life, including legal relations, marriage, contracts, obligations, torts, real and personal property, estate rights and successions.
Some of the most notable changes introduced by the New Code deal with the statute of limitations of personal claims, revision of contracts and regulation of adhesion contracts. Following are some of the most relevant changes that affect inheritance issues:
- Elimination of the surviving spouse usufruct quota and the recognition of the surviving spouse as a forced heir, with the right to receive, in equal parts with the descendants, from the legitimate portion of the estate
- Climb in position of the surviving spouse in the succession order in the event of absence of descendants (position currently occupied by the deceased's ascendants)
- The right of preferential attribution of the primary residence to the surviving spouse
- The legitimate portion is set as 50% of the estate, eliminating the structure based on thirds (legitimate, betterment and free disposition)
- Increase of the portion of the estate that can be freely distributed (50% of free disposition)
- Elimination of the requirement for the appearance of three instrumental witnesses during the execution of a last will and testament before a notary public
While the New Code does not invalidate wills executed before Nov 28, 2020, the amount inherited may be reduced if it is not possible to give each forced heir what corresponds to him or her under the New Code. Therefore, we're recommending clients revise their wills.
For more information, to revise your will or to attend a free orientation about the most significant changes of the New Code, contact IRW. We’re here to help.
Ask the wealthy, and they will tell you that staying rich is more difficult than getting rich. Indeed, preserving wealth can be more challenging than creating it, hence the need for asset protection planning.
Asset protection laws offer strategies that can be used against future creditors to protect personal and business assets from seizure as a result of adverse judgments, bankruptcy, predatory lawsuits, death, separation or divorce. The most common types of asset protection sought are protection from long-term care costs, loss of mental capacity to manage assets, lawsuits and poor decision making.
Widespread use of personal guarantees by banks and creditors has dramatically raised personal exposure for business owners, investors and ordinary people with valuable assets to lose. Personal and professional liability, frequent abuses of the legal system, and aggressive tactics employed by unscrupulous creditors and other third parties have dramatically increased the need for asset protection.
At IRW, we can help you shield and shelter your assets. We use a variety of tools and tactics available under the law to evaluate our clients' current solvency issues and identify the best legal structure for allocating and holding their assets. In addition to placing assets beyond the reach of creditors, we plan for these assets to be protected when transferred to your beneficiaries as part of your estate.
It’s important you have asset protection before you need it. To effectively guard your wealth, asset protection planning should be in place before an adverse event puts your assets at risk.
The new Puerto Rico Homestead Act (Act No. 195 of 2011) protects individuals domiciled in Puerto Rico from judgments against their principal residence under certain circumstances and regardless of the value of the residence. The previous act limited this protection to $15K.
The homestead protection applies to real property consisting of a parcel of land and the structure located thereon that is legally owned by an individual or head of family and occupied exclusively by that person and his or her family as a principal residence. Only one property can be claimed for homestead protection.
The law protects the principal residence against judgments in malpractice and tort cases, as well as collection actions related to debts not secured by the principal residence. This protection survives the death of one of the spouses in favor of the other. After the death of both spouses, it survives in favor of their children until the youngest attains legal age. In the case of unmarried individuals, the homestead protection survives their death in favor of their ascendants or descendants up to the third degree of consanguinity or affinity until the youngest child attains legal age.
The right to homestead exemption cannot be waived. Leasing of the principal residence does not waive the right if the beneficiary relocates temporarily to another residence for work, study, military or diplomatic services, or as a result of disease of the beneficiary or any family member up to the third degree of consanguinity or affinity, as long as another property acquired is not also claimed as a protected homestead.
Individuals and businesses in Puerto Rico must consider commonwealth and federal taxes when planning their tax strategies. To mitigate the impact of certain taxes and potential tax penalties, they need to work with knowledgeable and experienced tax experts.
Business tax planning can be extremely complicated:
- Business owners running their companies as sole proprietorships are exposed to personal liability for business activities, since both the individual and the business are the same entity for taxation purposes.
- Someone starting a business should understand the various business structures available—such as corporation, partnership, cooperative and limited liability company—and the impact these have on taxes
All of these cases require intricate tax strategies best handled by skilled tax lawyers and accountants. IRW has established partnerships with local and stateside tax attorneys and accountants to offer clients the most comprehensive advice and service possible.
Our firm provides sophisticated, custom-tailored tax planning strategies designed to structure business activities and transactions in a tax efficient manner. We stay on top of the ever-shifting maze of tax regulations and procedures to help our clients take advantage of new tax planning opportunities, stay in compliance and achieve their financial and business goals.