Bringing Your Mainland Trust to Puerto Rico

By Hans Riefkohl, Riefkohl Law • March 2026

You created a revocable living trust in Delaware, Florida, or another mainland state years ago. It holds your investment accounts, your brokerage portfolio, maybe a piece of real estate. Your estate planning attorney set it up to avoid probate, protect your assets, and ensure a smooth transfer to your heirs. It worked perfectly—while you lived on the mainland.

Now you have moved to Puerto Rico under Act 60. You have your decree. The tax benefits are real. But that trust you brought with you? It was designed for a common law state, and Puerto Rico is not one. Understanding how Puerto Rico law treats your mainland trust—and what Act 60 does and does not protect—is one of the most important steps you can take to safeguard your estate plan.

The Civil Law Gap: Why Puerto Rico Does Not Recognize Your Trust the Way Your Prior State Did

Puerto Rico is a civil law jurisdiction. Its legal system derives from Spanish civil law, not English common law. This distinction matters enormously when it comes to trusts.

The common law trust—where legal title to property is held by a trustee for the benefit of beneficiaries—has no direct analogue in the civil law tradition. However, Puerto Rico has had formal statutory trust legislation since 1928 (Act 41-1928), and the current law—Law 219-2012 (Ley de Fideicomisos)—is a comprehensive, 75-article trust code codified at 32 L.P.R.A. §§ 3351–3355a. This statute governs private trusts, charitable trusts, and retirement plan trusts, and applies to any natural or juridical person with legal capacity—not just Act 60 decree holders. Under Law 219-2012, a trust creates an autonomous patrimony (patrimonio autónomo) rather than the dual legal-equitable title of common law. The law covers creation requirements, fiduciary duties, trustee powers, creditor protections, spendthrift provisions, a prudent investor rule, and detailed termination rules. Article 72 designates Anglo-American trust doctrine as supplementary interpretive authority where the statute is silent. Critically, all trusts must be registered in the Special Trust Registry (Registro Especial de Fideicomisos) under ODIN, under penalty of nullity (Article 5).

What does this mean in practice? Law 219-2012 provides a comprehensive legal framework for trusts in Puerto Rico, but it operates on civil law principles fundamentally different from those governing your mainland trust. PR trusts must be created by public deed (escritura pública) for inter vivos trusts or by will for testamentary trusts, and are irrevocable by default. The civil law concepts of ownership and autonomous patrimony do not map onto the common law trust’s division of legal and equitable title. A mainland trust designed around common law concepts of dual title and revocability will encounter structural friction when its administration moves to Puerto Rico.

Revocable trusts face an absolute statutory prohibition. Article 7 of Law 219-2012 provides that “Los fideicomisos en Puerto Rico serán irrevocables” (“Trusts in Puerto Rico shall be irrevocable”). This is not a matter of interpretive difficulty or civil law conceptual friction—it is a flat mandate dating back to the original 1928 Act, which defined the trust as a mandato irrevocable (irrevocable mandate). The Act 60 exception allowing revocable trusts is therefore a legislative override of an explicit statutory prohibition, making its prerequisites all the more critical.

What Act 60’s Section 45147 Actually Protects

Act 60’s trust provision—13 L.P.R.A. § 45147—was created specifically for Individual Resident Investor (IRI) decree holders. It provides meaningful protections, but its scope is narrower than many decree holders assume. Understanding exactly what it does is the starting point for sound planning.

Grantor Trust Election (Subsection a)

If you hold an IRI decree, you can set up trusts under Puerto Rico law and elect grantor trust treatment for PR income tax purposes. This means all trust income, gains, losses, deductions, and credits flow through to you as if you realized them directly. This is a tax provision—it does not address trust validity or governing law.

Revocable Trust Authorization (Subsection b)

This is significant. It authorizes IRI decree holders to create both revocable and irrevocable trusts under Puerto Rico law. This matters because Article 7 of Law 219-2012 flatly prohibits revocable trusts—“Los fideicomisos en Puerto Rico serán irrevocables.” This subsection is therefore a legislative override of that explicit statutory mandate, not a workaround for a civil law interpretive gap. If you do not designate the trust as revocable, it is presumed irrevocable.

However, this authorization applies only to trusts created under the laws of Puerto Rico. It does not, by its terms, retroactively validate a revocable trust you created in Delaware or Florida before you moved. It creates a new mechanism for PR-law revocable trusts within the Act 60 framework.

Protection of Trusts Created Outside Puerto Rico (Subsection c)

This is the provision most relevant to mainland transplants. It provides that the provisions of any trust validly created outside of Puerto Rico by an IRI decree holder cannot be challenged by any person based on any PR law or regulation that may be contrary to or inconsistent with the trust’s provisions.

This protection has real teeth. If your trust was validly created under Delaware, Florida, or any other state’s law, Puerto Rico law cannot be used to attack its terms and conditions. The protection even survives the expiration of your Act 60 exemption period, as long as your decree has not been revoked.

Free Transfer of Assets (Subsection d)

IRI decree holders can freely transfer or donate assets to these trusts regardless of property type, location, or any contrary PR legal provision—including the Civil Code. This overrides forced heirship rules, community property rules, and other Civil Code restrictions on property transfers. Like the subsection (c) protection, it survives decree expiration.

What Section 45147 Does Not Do

This is where the analysis gets critical, and where I see the most misunderstanding among decree holders.

It does not create a general trust code. Section 45147 applies only to IRI decree holders. The general trust code applicable to all persons in Puerto Rico is Law 219-2012 (Ley de Fideicomisos), a comprehensive statute codified at 32 L.P.R.A. §§ 3351–3355a. Section 45147 selectively overrides certain provisions of Law 219-2012 for decree holders—most notably the irrevocability mandate—but does not replace it. Understanding the interaction between these two statutory regimes is essential for competent trust migration planning.

It does not change the governing law of your mainland trust. Subsection (c) shields your trust from PR-law challenges, but your trust remains governed by whatever state law applied at its creation. The trust does not become a “Puerto Rico trust.”

It does not address which court has jurisdiction. The provision says nothing about whether a Puerto Rico court, a Delaware court, or a Florida court has jurisdiction over your trust. This gap has significant implications, which I will address below.

It does not address IRS classification. Section 45147 is a Puerto Rico law provision. It does not interact with federal tax classification—specifically, whether the IRS considers your trust “domestic” or “foreign.”

It does not protect you if you do not have a decree. If you move to Puerto Rico without obtaining an IRI decree, or if your decree is revoked, none of these protections apply.

The Governing Law Problem: Why Your Trust’s Choice-of-Law Clause May Not Be Enough

Your trust instrument almost certainly contains a governing law clause—something like “This trust shall be governed by and construed in accordance with the laws of the State of Delaware.” When you lived in Delaware, that clause was never tested. Now that you live in Puerto Rico, it matters enormously.

Two frameworks govern whether a settlor’s choice of law will be honored, and they differ in important ways. Under the Restatement (Second) of Conflict of Laws § 270, the designated state must have a “substantial relation” to the trust—meaning the trustee, settlor, assets, or beneficiaries are domiciled or located there—and the designation fails if it would violate a strong public policy of the state with the most significant relationship to the matter. Under the Uniform Trust Code § 107, by contrast, the black-letter text does not require any connection between the designated jurisdiction and the trust; the sole limitation is the “strong public policy” exception (and six states adopted UTC § 107 without even that exception). The UTC Official Comment acknowledges this departure from the Restatement, though some courts continue to apply Restatement-style analysis regardless. In either framework, however, a governing law clause alone may not be enough.

This means a governing law clause, standing alone, is not a guarantee. If Puerto Rico has the most significant relationship to your trust—because you live there, your assets are there, and you are administering the trust from there—a court could refuse to honor the governing law designation, particularly if enforcing it would conflict with PR’s property law structure, forced heirship rules, or community property regime.

The Risk of Contact Migration

When you move to Puerto Rico, there is a natural tendency for your trust’s contacts to follow you. If you are the sole trustee and you now live in PR, the trustee is located in PR. If you manage the trust’s investments from your home office in Dorado, trust administration is occurring in PR. If you move your brokerage accounts to a PR-based institution, trust assets are in PR.

Over time, the only remaining connection to the original state may be the governing law clause itself. Courts have recognized that this kind of contact migration can undermine a choice-of-law designation. If the designated state no longer has any real connection to the trust beyond the clause in the document, a court may find insufficient basis to honor it.

This is not a hypothetical concern. The leading case is In re Huber, 493 B.R. 798 (Bankr. W.D. Wash. 2013), where the court disregarded an Alaska choice-of-law clause for a self-settled trust because Alaska lacked a substantial relation to the trust (all contacts were in Washington) and applying Alaska law would violate Washington’s strong public policy. Puerto Rico’s mandatory irrevocability, forced heirship rules, and registration requirements under Law 219-2012 could similarly constitute the kind of “strong public policy” that would support a PR court in overriding a mainland governing law designation. It is the central planning challenge for every Act 60 decree holder who maintains a mainland revocable trust.

A Practical Checklist: Maintaining Your U.S. State Connection

Based on the Uniform Trust Code, the Restatement, and established conflict-of-laws principles, the following steps help maintain a genuine connection to your trust’s designated governing state after you relocate to Puerto Rico:

Retain a U.S.-based trustee or co-trustee. This is the single most important step. The trustee (or at least one co-trustee) should be a resident of, or have its principal place of business in, the designated state. An institutional trustee in your designated state is particularly effective.

Keep administration in the U.S. state. Record-keeping, investment management, tax return preparation, accountings, and trust correspondence should originate from the designated state—not from your home in Puerto Rico.

Maintain trust accounts in the U.S. state. Holding trust financial accounts and significant assets with institutions in the designated state reinforces the connection.

Execute amendments in the U.S. state. If you amend or restate the trust, do so in the designated state.

Consider appointing a trust protector in the U.S. state. A trust protector or distribution advisor located in the designated state adds another substantive contact.

Do not serve as sole trustee. This is the most common mistake. If you—a PR resident—are the sole trustee, the trustee contact points to Puerto Rico, not to your designated state. At minimum, appoint a co-trustee in the designated state who has genuine administrative responsibilities.

Puerto Rico Real Property: A Special Consideration

If your trust holds or will hold real property in Puerto Rico, there is an additional layer of complexity. Under both the PR Civil Code’s conflict-of-laws provisions and the Restatement, rights in real property are governed by the law of the situs—meaning Puerto Rico law applies to questions about real estate located here, regardless of what your trust’s governing law clause says.

The PR Property Registry also requires that documents executed outside Puerto Rico involving PR real property must, among other conditions, involve acts that are lawful and permitted under PR law and be protocolized by a PR notary. A mainland trust instrument that purports to govern PR real property needs to satisfy these requirements.

Section 45147(d)’s free transfer provision helps here for decree holders, as it authorizes asset transfers regardless of property type or any contrary PR provision. But this protection is specific to IRI decree holders with active (non-revoked) decrees.

What You Should Do Now

If you hold an Act 60 decree and brought a mainland trust with you to Puerto Rico—or plan to—the following steps are worth taking sooner rather than later:

First, have a Puerto Rico attorney review your existing trust structure alongside your IRI decree status. The interaction between Section 45147’s protections and your trust’s actual governing law is fact-specific.

Second, evaluate whether your trust’s real contacts with its designated state are strong enough to sustain the governing law clause. If they are not, structural changes—such as appointing an institutional co-trustee in the designated state—may be needed.

Third, consider whether creating a new trust under Puerto Rico law pursuant to Section 45147(b) makes sense for some or all of your planning goals, particularly for PR-situs assets. A new PR trust created under Act 60 avoids the governing law question entirely for assets it holds.

Fourth, if you create or constitute a trust in Puerto Rico, ensure it is registered in the Special Trust Registry (Registro Especial de Fideicomisos) maintained by ODIN. In Allio v. Santiago Chardón, 2026 TSPR 13 (February 3, 2026), the Puerto Rico Supreme Court confirmed that unregistered trusts under Law 219-2012 are null ab initio—they never had any legal effect and never existed in law. There are no exceptions, no cure provisions, and no judicial discretion. The notary who executes the trust instrument has a statutory obligation to notify ODIN no later than the first ten days of the month following execution (per Law 219-2012, Article 5). The court also left unresolved whether trusts created in other U.S. jurisdictions by PR domiciliaries require PR registration, creating an open question for mainland trusts administered from Puerto Rico.

Fifth, be aware that the enforcement landscape around Act 60 has intensified significantly. The GAO documented substantial declines in federal taxable income among Act 60 recipients after relocation (GAO Report GAO-26-107225, December 2025), the Office of Business Incentives (OIN) audited nearly 1,800 decree holders in 2025 and has confirmed collaboration with the U.S. Treasury and IRS, and pending legislation (House Bill 505) would impose a 4% passive income rate for new IRI applicants while grandfathering existing holders at 0%. These developments increase the importance of rigorous compliance with both Act 60 decree requirements and trust formalities.

Sixth, do not assume that Act 60’s protections resolve every issue. Section 45147 addresses challenges under PR law, but it does not address jurisdiction or IRS classification—topics covered in a companion article on the foreign trust trap.

Hans Riefkohl is an attorney at Riefkohl Law in San Juan, Puerto Rico, focusing on trusts, estate planning, and Act 60 advisory services.