25 Jul Dominican Republic Attorneys Probates Laws Inheritance
Dominican Republic Attorneys Probates Laws Inheritance
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Inheritestates’ multidisciplinary team of lawyers is the most comprehensive and sophisticated in the Dominican Republic with expertise in more countries than any other firm in the American Continent.
The firm’s lawyers are well-known for providing pragmatic and constructive legal counsel to its clients to help them meet their business goals, identify new opportunities and design legal strategies accordingly through innovation, the application of best practices and state-of-the-art technology infrastructure which allows them to be in contact with their clients at all time.
Inheritestate has been one of the leading law firm in the American Continent for over 15 years.
The firm has handled the most important deals in the history of the continent and is involved in the most relevant business transactions and projects involving the country’s most important succession process.
Our geographic scope includes the 31 provinces of the Dominican Republic: Azua, Baoruco, Barahona, Dajabón, Distrito Nacional, Duarte, El Seibo, Elías Piña, Espaillat, Hato Mayor, Hermanas Mirabal, Independencia, La Altagracia, La Romana, La Vega, María Trinidad Sanchez, Monseñor Nouel, Monte Cristi, Monte Plata, Pedernales, Peravia, Puerto Plata, Samaná, San Cristóbal, San José de Ocoa, San Juan, San Pedro de Macorís, Sanchez Ramírez, Santiago, Santiago Rodríguez, Santo Domingo and Valverde.
In the country of Dominican Republic the age to make a will is eighteen (18) years old. You can have a attorney to help you make a will but it is not mandatory. What most families have is a generation will that is written and usually passed down from generation to generation preferably to the heirs in families. It’s not something that must be done but it is a traditional thing that is done in the Dominican Republic for years now.
Things you can inherit in the Dominican Republic
Real estate: Inheritance of real estate is governed by Dominican law which provides for “forced heirship”: part of the inheritance must go to certain heirs by law. For example, a foreigner with a child must reserve 50% of the estate to that child despite the existence of a will or of the law of his country of residence. To avoid the application of Dominican rules of inheritance to the estate, it is advisable for foreigners to hold real estate indirectly through a holding company.
There are no restrictions on foreigners inheriting title to real property in the Dominican Republic. Inheritance taxes have been recently lowered to 3% of the appraised value of the estate. If the beneficiary resides outside the Dominican Republic, inheritance taxes are subject to a 50% surcharge, raising the tax rate to 4.5%.
House, apartment or land: you need to obtain a Succession, Inheritance, Probate court Order, and then register the house, apartment or land in the registry office, which is the Dominican government database for property rights in the Dominican Republic.
Survivorship Accounts: The deceased’s bank accounts are part of the estate.
Money in a joint bank account automatically passes to the other owners. You still have to include this money as part of the estate when you work out Inheritance Tax.
What happens to the person’s property depends on how it was owned.
If the property was owned under a ‘joint tenancy’, the deceased and the other owner both own the whole of the home. Ownership passes to the surviving owner.
Tenancy in common
If the property was owned under a ‘tenancy in common’, 2 or more people owned the home either in equal shares or a defined percentage.
The person’s will (or the law if there’s no will) decides who inherits their share.
The will (or the law if there’s no will) decides who inherits property that is owned outright by the deceased.
Car or Motorbike: you need to obtain a Succession, Inheritance, Probate court Order, and then register them at the Registro Publico de República Dominicana.
Air transport: The new owner must register the aircraft in the Junta de Aviación Civil (JAC) República Dominicana.
Household chattels: means all furniture, curtains, drapes, carpets, linen, china, glassware, ornaments, domestic appliances and utensils, garden appliances, utensils and effects and other chattels of ordinary household use or decoration, liquors, wines, consumable stores and domestic animals owned by the intestate immediately before the intestate’s death. Things like a motor vehicle, boat, aircraft, racing animal, original painting or other original work of art, trophy, clothing, jewelry, or other chattel of a personal nature are not included as Household chattels.
Life Insurance: if you are due to receive part of the death benefit of a life insurance policy because you are one of the named beneficiaries, income taxes are usually never due on life insurance death benefits. if beneficiaries receive the proceeds from a life insurance contract due to the death of the insured person, the benefits are not includable in gross income and do not have to be reported.
Intellectual property assets: [“IPA”] are easy to overlook during estate planning, since they are intangible-having no physical existence -as opposed to the tangible personal property or real property that can be touched. Most business owners, entrepreneurs, and many others own some form of their intellectual property, or “creations of the mind,” but athletes and “creative” clients-including authors, songwriters, entertainers, and visual artists-are even more likely to own IPAs.
There are numerous ways to transfer your IPAs. Most typically, you can assign them by a written agreement executed during your lifetime or bequeath the IPAs after death by trust agreement, by will, or by intestate succession laws if you do not leave a will. Or depending on the nature of your IPAs, a hybrid approach may offer the best solution.
When evaluating whether IP assets should be transferred during your lifetime or passed on as a testamentary bequest it is important to consider the likely tax implications of an IPA transfer or bequest. Federal gift or estate tax treatment could be key determinants in your decision-making. Other factors to consider include the age and maturity of the recipients and their ability to protect and exploit the IPAs.
Family business: If you belong to the younger generation, think carefully before entering the family business. Ask yourself the following question: Why am I joining the business?
But If you are already in the business and have ambitions to take over as leader (whether you are a family member or not), consider adopting these guidelines:
- Have a personal development plan.
- Find and use a suitable mentor or coach.
- Identify opportunities for skills development, e.g. turn-around situations, start-up situations, handling employee performance problems.
- Gain experience outside the business.
- Develop your profile independent of the owner’s, e.g. by joining industry associations and attending relevant seminars.
- Ensure regular communication with the owner.
Airplane miles: Most airlines and credit card companies would like you to think that you are simply not allowed to inherit airline miles.
But that’s not necessarily the case. While it is true that most airlines technically “own,” the frequent flyer miles your loved one earned, there’s no reason for you not to be assertive about requesting that the miles are transferred to your account. After all, your loved one earned these assets by regularly using the airline’s services, or by outright purchasing those miles.
A few companies are very empathetic and up front about allowing you to transfer airline miles after the death of a loved one, and make it as easy as possible to bequeath them to survivors, and for those survivors to claim them.
Before you make your first call, have copies of the death certificate, the deceased’s loyalty program account numbers, address and email details ready. Be sure you have your own account, into which the awards can be transferred.
Jewelry: The administrator, the person appointed by the court to manage an estate when there isn’t a will, is responsible for dividing the deceased’s personal belongings, including his/her jewelry.
According to Will
If the will left specific instructions for pieces of jewelry, the administrator must follow those instructions first. An administrator only divides jewelry not specifically left to a person in the will.
Dividing by Value
If the will left all the deceased’s personal possessions to heirs without giving instructions for specific items, the administrator must divide the jewelry among them equally. The administrator should have all jewelry appraised by a professional jeweler or appraisal service and uses the value the jewelry pieces to give each heir an amount of jewelry equal to their her share. An administrator, like an executor who doesn’t have jewelry division instructions, divides jewelry among the heirs by appraised value.
Dividing by Request
Dividing jewelry is often more difficult if the heirs want specific pieces for sentimental reasons. The executor still must have the jewelry appraised, as each beneficiary is entitled to an equal share. He may take the appraisal list and meet with the heirs to discuss who will receive what. If one heir agrees to take jewelry worth less because of personal reasons or to please another heir, the administrator has to give that heir more of the other personal possessions to make up the difference in value. Ultimately, it is the administrator who is distributing the estate and he must decide who gets what if the heirs can’t agree. He may try to fulfill requests and get heirs to agree to avoid problems, but he has the authority to divide the jewelry as he sees fit, as long as each heir gets their fair share.
An administrator may have to sell items when family members can’t reach an agreement. Although the executor doesn’t have to follow the list if it wasn’t part of the will, showing the family members how the deceased wanted the jewelry divided may make problem items easier to settle.
Collections: Like every other valuable asset a collector owns, art, antiques, and collectibles should be addressed within his or her comprehensive estate plan. However, art and collectibles comprise a special asset class – there may be issues of title, valuation, provenance and restoration that affect the collection and likely fall outside of these advisory experts’ areas of expertise.
Virtually every collector would like to maintain or increase the value of his or her collection. Most would agree that the collection should be protected from loss, damage, the claims of creditors, and unnecessary taxation. Beyond these basic priorities, collectors may utilize their art and collectibles to achieve a number of goals.
How does the probate process work in the Dominican Republic?
Probate usually works like this: After your death, the person you named in your will as executor — or, if you die without a will, the person appointed by a judge — files papers in the local probate court. The executor proves the validity of your will and presents the court with lists of your property, your debts, and who is to inherit what you’ve left. Then, relatives and creditors are officially notified of your death.
Your executor must find, secure, and manage your assets during the probate process, which commonly takes a few months to a year. Depending on the contents of your will, and on the amount of your debts, the executor may have to decide whether or not to sell your real estate, securities, or other property. For example, if your will makes a number of cash bequests but your estate consists mostly of valuable artwork, your collection might have to be appraised and sold to produce cash. Or, if you have many outstanding debts, your executor might have to sell some of your property to pay them.
In most states, immediate family members may ask the court to release short-term support funds while the probate proceedings lumber on. Then, eventually, the court will grant your executor permission to pay your debts and taxes and divide the rest among the people or organizations named in your will. Finally, your property will be transferred to its new owners.
Who is responsible for handling probate?
In most circumstances, the executor named in the will takes this job. If there isn’t any will, or the will fails to name an executor, the probate court names someone (called an administrator) to handle the process. Most often, the job goes to the closest capable relative or the person who inherits the bulk of the deceased person’s assets.
If no formal probate proceeding is necessary, the court does not appoint an estate administrator. Instead, a close relative or friend serves as an informal estate representative. Normally, families and friends choose this person, and it is not uncommon for several people to share the responsibilities of paying debts, filing a final income tax return and distributing property to the people who are supposed to get it.
What is probate?
Probate is a legal process that takes place after someone dies. It includes:
- proving in court that a deceased person’s will is valid (usually a routine matter)
- identifying and inventorying the deceased person’s property
- having the property appraised
- paying debts and taxes, and
- distributing the remaining property as the will (or state law, if there’s no will) directs.
Typically, probate involves paperwork and court appearances by lawyers. The lawyers and court fees are paid from estate property, which would otherwise go to the people who inherit the deceased person’s property.
What is the order of those who can inherit in the Domenican Republic?
According to Law 2569 regarding inheritances and donations, the order of those who can inherit is as follows:
- Descendants: sons and daughters
- Parents and siblings
- Ancestors: grandparents
- Collaterals: uncles and aunts
- The State
As depicted in the list mentioned above, the inheritance is distributed equally among the surviving family members belonging to the highest order. For example, if the deceased had children, they will inherit first. If the deceased did not have any children, then the deceased’s parents and siblings will inherit first.
Dominican law has established a legal reserve which corresponds to the children and parents of the deceased. This legal reserve serves to protect the children and parents in the event the deceased leaves a will or testament that excludes them from inheriting and instead provides special preference to other relatives or friends. If this is the case, the legal reserve for the children and parents of the deceased will provide 50% of the total inheritance. If two children were left the legal reserve will cover 66% and if those who inherit are three or more children 75%. Is very important to have this clear, since Asset Partitions turn complex when a will or testament is involved.
It is also important to clarify that the spouse of the deceased does not inherit. As you can see in the list depicted above, spouses do appear as number 5 in the list of those who inherit, only if the deceased does not have any other relative listed between 1 and 4. We daily see common cases when someone dies and the heirs are both the spouse and descendant child. In this case, they will each receive 50% of the total inheritance, however, the reason why the spouse will receive 50% of the deceased’s total assets is not because he or she inherits but because of the community property regime. If the spouses signed a prenuptial agreement, the community regime does not apply reason why the spouse will not receive 50% of the total assets.
What taxes should I pay?
The estate of any person, Dominican or foreign, whose last domicile was in the Dominican Republic is allowed to Dominican inheritance taxes. The inheritance of property located in the Dominican Republic is eligible Dominican inheritance taxes, no matter the nationality or domicile of the person that died which is in their law (Art. 1 of Law #2569 of 1950).
In Law #288-04 lowered inheritance taxes to 3% of the value of the estate (like I’ve mentioned earlier), after deductions, as determined by the tax authorities. Medical and funeral expenses, also debts and mortgages, are some that can also be deducted. The rate is increased to 4.5% for beneficiaries who do not reside in the Dominican Republic (Art. 7 of Law #2569).
“Beneficiaries must file a declaration with the tax authorities within 90 days of the death of the decedent. An extension of an additional three and a half months is possible in complex cases (Art. 26 of Law #2569). Delays in filing are subject to a 2% per month penalty, up to a maximum of 50% of the tax owed (Art. 9 of Law #2569).