Puerto Rico Senate Approves Revocable Trusts: What Senate Bill 773 Means for Estate Planning

On January 27, 2026, the Puerto Rico Senate approved Senate Bill 773 (P. del S. 773), a sweeping 46-section overhaul of the Puerto Rico Trust Act (Law 219-2012) that formally recognizes revocable trusts for the first time. This landmark legislation eliminates the longstanding irrevocability mandate under Article 7 and replaces it with a modern, flexible framework for trust-based estate planning on the island.

The Problem: A Decade of Legal Uncertainty

For over a decade, Puerto Rico’s Trust Act (Law 219-2012) created confusion among practitioners and clients. Article 7 declared that trusts on the island “shall be irrevocable,” yet other provisions in the same statute contemplated revocable structures, including the possibility of “total” modification under Article 10. Law 241-2014 further complicated matters by expressly allowing holders of Individual Resident Investor decrees to constitute revocable trusts under Puerto Rico law.

What Senate Bill 773 Changes

The bill strikes Article 7’s irrevocability mandate and introduces a clear, modern framework for revocable trusts in Puerto Rico. Key changes include:

Default Presumption of Revocability. If a trust instrument is silent on revocability, the trust is now presumed revocable. This is a complete reversal of the prior default.

Full Settlor Control. Settlors of revocable trusts retain full control. They can amend terms, withdraw assets, replace trustees, and terminate the trust unilaterally by public deed. Fiduciary duties run exclusively to the settlor during their lifetime.

Creditor Protections Clarified. A revocable trust offers no asset shield while the settlor is alive. Creditors can reach trust assets as if the trust did not exist. Full asset protection only attaches once the trust becomes irrevocable by the settlor’s death, incapacity, or express conversion.

Proportional Co-Trustee Liability. Co-trustee liability shifts from joint-and-several to proportional, a welcome change for professionals serving alongside institutional trustees.

What This Means for Your Estate Plan

Revocable trusts are about to become a standard tool in Puerto Rico estate planning, offering probate avoidance, incapacity management, and flexible succession planning in ways that were previously uncertain. Clients with Puerto Rico assets or residency should revisit their estate plans now, well before the six-month implementation window closes.

Current Status and What Comes Next

The bill earned endorsements from the Colegio de Abogados y Abogadas de Puerto Rico and the Asociacion de Bancos de Puerto Rico. The Banking Association, while supportive, has flagged concerns about operational burden, cross-cutting impacts on tax and succession law, and the need for implementing regulations. We are closely monitoring this legislation as it moves to the House of Representatives.

If you have questions about how revocable trusts may fit into your estate planning strategy, contact Riefkohl Law to schedule a consultation.