Spring 2005-06 Bill would freeze only half of funds in deceaseds account

Number 59
Spring 2005

Bill would freeze only half of funds in deceased’s account

If it becomes law, Puerto Rico Senate Bill 174 would require that only 50% of the funds in a bank account of a married, deceased person be subject to the freeze mandated by
the tax laws.

The current state of the law is that all bank accounts to a person’s name are to be frozen as soon as the bank receives notice that the customer has died. The fact that there may be other signatories to the account, or that the same was opened under two names (husband and wife, for example) is not an exception and does not modify this rule of law. The account remains frozen until an estate tax return is filed with the Treasury Department, Treasury approves it and issues a certificate allowing access to the funds.

Bill 174

Senate Bill 174, filed on January 14, 2005, would allow withdrawal of 50% of the funds if the account is in the name of two persons, and the two persons are married to each other under either the community property regime or a separate assets or similar regime duly constituted by public instrument. Moreover, the surviving party would be able to continue to operate the account; and deposits made after the date of demise would be freely available for withdrawal.

** Note:

The bill does not attempt to legislate new rules with respect to title to the funds. Under current Puerto Rico law, a co-owner or co-signatory of a bank account is not necessarily the owner of the funds as the surviving account customer. That person’s title to the funds is to be determined based on the decedent’s last will and testament, and on applicable inheritance laws.

© 2005 Goldman Antonetti