The estate release: without it nothing is sold or inherited

Treasury separates two things people confuse. The return is the document declaring the estate. The Relevo — the Lien Certification — is what Treasury issues after verifying that return, and it is the paper the property registry, the bank and the buyer will ask for. No return, no release; and without the release the inherited property is frozen: it is not recorded in the heir’s name, not sold, not refinanced, and bank accounts and savings certificates are not handed over. The process runs through SURI since 10 December 2018; before that it went through Colecturía. The return may also be filed at any Taxpayer Service Office, or mailed to the Department of the Treasury, Estate and Gift Section, P.O. Box 9022503, San Juan, Puerto Rico 00902-2503.

The return must be filed for individuals who were residents of Puerto Rico at the time of death, and also for nonresident individuals who at death had property located in Puerto Rico. It may be filed and signed by the administrator or by any person holding possession or dominion over property includable in the estate: Treasury expressly names the widow or widower, the heirs, the estate administrator, the testamentary executor, the legal representative and the accountant. As to the form, it depends on the date of death: for deaths before 1 January 1969, Form SC 2789, Notice of Death or Gift; for deaths between 1 January 1969 and 31 December 2010, SC 2800 if the deceased was a Puerto Rico resident and the estate is not exempt, or SC 2800 A — the short return — if the deceased was a resident and the estate is exempt; for deaths after 31 December 2010, SC 2800 B; and for nonresident individuals or US citizens not born in Puerto Rico, Form AS 2801. Treasury warns that the return will not be considered filed if the wrong form is used.

• Filing the return within nine months of the deceased’s death.Verified against the official source
• Using the form that matches the date of death: the return will not be considered filed if the wrong one is used.Verified against the official source
• That the deceased is current on income tax filings; if they had no duty to file in the last five years, complete Form SC 2781.Verified against the official source
• Checking the Special Contribution debt using the deceased’s social security number and the property’s cadastre number, if there is real property.Verified against the official source

• A $25 Internal Revenue voucher.
• Copy of the Death Certificate or Declaration of Heirs.
• A CRIM certification stating that neither the deceased nor the reported properties owe property taxes as of the filing date; requested under the cadastre number.
• An Internal Revenue Collections certification that the deceased owes no other taxes: income tax, real property, excise taxes, sales tax and others.
• Complete copies of bank account statements and brokerage investment statements, as of the date of death.
• If the deceased was a US Armed Forces veteran and a Puerto Rico resident: a copy of Form DD-214.
• If the deceased had no social security number: a Social Security Administration certification to that effect.
• Evidence of the debts admitted as deductions from the estate.

1. 1

   Step 1: Understand what the release is for before starting

   Treasury says it in full: the Relevo is necessary for the heirs to record the property in the recipient’s name and to carry out any transaction, including sale or refinancing of the property, and it is also indispensable to receive savings certificates, bank accounts and the transfer of any other property to the heirs. If someone told you "you cannot sell the house until the release comes through", that is why.

2. 2

   Step 2: Count nine months from the death

   The estate tax return must be filed on or before nine months have passed from the deceased’s date of death. That is the clock. If you are not going to make it, there is an extension — but you have to ask for it; it is not granted automatically.

3. 3

   Step 3: Choose the form by the date of death, not the current year

   Deaths before 1 January 1969: Form SC 2789, Notice of Death or Gift. Between 1 January 1969 and 31 December 2010: SC 2800 if the deceased was a Puerto Rico resident and the estate is not exempt, or SC 2800 A, the short return, if they were a resident and the estate is exempt. After 31 December 2010: SC 2800 B. Nonresident individuals or US citizens not born in Puerto Rico: Form AS 2801. And Treasury’s warning that costs months: the return will not be considered filed if the wrong form is used.

4. 4

   Step 4: Inventory the whole estate, wherever it is

   The return must detail every asset or right over movable or immovable property, tangible or intangible, wherever the property is located. In the steps Treasury names: real estate, stocks and bonds, mortgages, promissory notes and cash in banks, life insurance and other property. "Wherever located" includes assets outside Puerto Rico if the deceased was a resident.

5. 5

   Step 5: Get the two no-debt certifications before anything else

   The CRIM one must state that neither the deceased nor the properties reported in the return owe property taxes as of the filing date, and it is requested under the property’s cadastre number. The Internal Revenue Collections one must state that the deceased owes no other taxes — income tax, real property, excise taxes, sales tax and others. They come from two different places and take the longest; start there. If there is real property, you must also check the Special Contribution debt using the deceased’s social security number and the cadastre number.

6. 6

   Step 6: Bring the deceased’s tax filings up to date

   Treasury calls it an indispensable requirement: the deceased must be current on filing their income tax returns. If they had no duty to file during the five years before death, the administrator must complete Form SC 2781, Certification of Reasons Why One Is Not Legally Required to File the Individual Income Tax Return. It is not optional: it is the substitute for the returns that do not exist.

7. 7

   Step 7: Gather the rest of the documents

   A $25 Internal Revenue voucher. A copy of the Death Certificate or Declaration of Heirs. Complete copies of bank account statements and brokerage investment statements — and note: they must be as of the date of death, not today. If the deceased was a Puerto Rico resident and a US Armed Forces veteran, a copy of Form DD-214. If the deceased had no social security number, a Social Security Administration certification to that effect. Evidence of the debts admitted as deductions from the estate. And any other document the Department requires.

8. 8

   Step 8: If you cannot make nine months, ask for an extension

   The Secretary may grant a three-month extension if the applicant lives in Puerto Rico, and six months where the person obliged to file is outside the country. It is requested with Form SC 2777, Application for Extension to File the Estate Tax Return. Since 10 December 2018 the extension request also goes through SURI.

9. 9

   Step 9: File and wait for the Relevo

   Since 10 December 2018, all filing, extension requests and payments related to the Estate Tax Return and the Lien Certification request go through SURI. The return may also be filed at any Taxpayer Service Office, or mailed to the Department of the Treasury, Estate and Gift Section, P.O. Box 9022503, San Juan, Puerto Rico 00902-2503. Once submitted, Treasury verifies it and issues the Lien Certification or Relevo. Treasury does not publish how long that issuance takes, and this guide does not invent it.

10. 10

    Step 10: If you must amend, watch the 25% threshold

    The return may be amended when, after filing, it turns out information was omitted or the data differ: you complete it again, tick the Amended Return box, attach a $25 Internal Revenue voucher and include an explanatory letter with the reasons. If amending to increase the property’s value, you must submit a copy of the appraisal report with the real value as of the date of death and a clarifying deed. If it is to add real property, you must submit a CRIM certification. And here is the hidden cost: if the return is amended to include additional property worth more than 25% of the originally reported total, the amendment carries additional fees equal to 10% of the difference between the estate in the original return and in the amended one.

SURI, since 10 December 2018, for all filing, extensions and payments. Also at any of the Treasury Department’s Taxpayer Service Offices. By mail: Departamento de Hacienda, Sección de Herencia y Donaciones, P.O. Box 9022503, San Juan, Puerto Rico 00902-2503.

• Using a form from another era: the return is not considered filed if the form does not match the date of death.
• Letting nine months pass without filing or requesting an extension with SC 2777.
• Requesting today’s bank statements instead of statements as of the date of death.
• Leaving the CRIM certification and the Internal Revenue Collections certification until last.
• Not resolving the deceased’s unfiled income tax returns, or not completing SC 2781 when there was no duty to file.
• Omitting assets outside Puerto Rico when the deceased was a resident: the return covers property wherever located.
• Amending to add property above 25% of the original value without budgeting the 10% additional fee.
• Believing the release is optional: without it nothing is recorded, sold, refinanced or collected.

These are the government pages this guide is based on.

• Departamento de Hacienda de Puerto Rico

  Hacienda

  hacienda.pr.gov

• Steps to request the Lien Certification (Relevo)

  hacienda

  hacienda.pr.gov

• Documents to submit with the return

  hacienda

  hacienda.pr.gov

• Forms by date of death

  hacienda

  hacienda.pr.gov