The truth about inheritance laws in Uruguay – whether you like it or not, your children will inherit most of your estate and there’s no tax to be paid. Essential reading for anyone living (or dying) in Uruguay for Guru’Guay by lawyer, Mark Teuten.
Since Uruguayan law assures an estate goes to a deceased person’s children, and Uruguay does not have a significant inheritance tax, most Uruguayans don’t bother to make a will.
However, there are still valid reasons for making a will in Uruguay to cover just specific Uruguayan assets or a will with worldwide application.
Legal guidelines for wills in Uruguay
By Uruguayan law, if a person has a single child, then they can only give away fifty percent of their estate to other entities–the other half of their estate must go to the child. If they have two children, then the percentage drops to 33%. And if they have three or more children, the limit is 25%.
In Uruguay, a spouse or partner is not a statutory heir. Of course if the couple has purchased property in joint names then the spouse already has a 50% share. However in the case that the spouses signed a separación de bienes—an agreement that each has their own property—then the surviving spouse has the choice of living in the marital home for the rest of their life or being considered a legal heir. More about the rights of a surviving spouse in Uruguay.
Reasons to have a will in Uruguay
If you do not have children, you are free to leave all your estate to whoever you wish. You will probably want to ensure that the estate does not go to the Uruguayan government which would happen if there are no children or surviving parents. This would be an herencia yacente—a vacant estate.
- If you want to leave the part of your estate that you are allowed to dispose of freely to other than to your children, for example by giving it to charity.
- If you want to make formal provision for your partner by giving them a specific share.
- If you have assets outside Uruguay, which are not governed by Uruguayan law, so that you can dispose of them freely (or in accordance with the law of the country where the assets are located). In this situation, the general solution is to make a specific individual will for each country where a person has assets, but since now it is quite common for people to move assets from one jurisdiction to another, a will with a worldwide application is a reasonable possibility.
- If you want to appoint a lawyer or accountant as Executor to ensure that your estate is dealt with properly and as far as possible limiting any disputes between heirs.
What else to take into account around making a will or not in Uruguay
There is no inheritance tax in Uruguay, save that a tax of 3% of the rateable value (usually considerably less than the market value) of any real estate is payable within one year of the death of the owner, rising to 4% if there are no legal descendants.
So because there is no inheritance tax per se, wills are not used much as an instrument of tax planning. Trusts are recognised in Uruguayan law, but not in the same form as common law countries, so they are not really used in wills or otherwise by physical persons.
There are a lot of formalities involved in signing and registering a will, so costs are considerably higher than in common law countries, such as England and most of the US and Canada. [Guru note: A very approximate ballpark figure could be 500-750 USD]
So what’s the take away?
As you’ve read there are some good reasons for making a will in Uruguay, despite the costs involved. In a future article, we will cover some more specific situations such as a spouse or partner’s rights, and the possibility of making a living will.
Mark Teuten is a British lawyer based in Montevideo since the 1990s. He has law degrees from both the UK and Uruguay. He can help you with your residency applications, setting up a registered company and other legal matters. Guru’Guay has recommended him to our readers who have praised his trustworthiness, clarity, prompt communication even over great distances and careful advice regarding courses of action.
This article is for information purposes only. Please consult with a lawyer as to your particular circumstances.
Photo: William Wootton [Guru salve: It’s a pet funeral]