Argentina: Inheritance

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Inheritance tax and law

The Global Property Guide looks at inheritance from two angles: taxation, and what inheritance laws apply to foreigners leaving property in Argentina: what restrictions there are and whether making a will is advisable.

INHERITANCE TAX

How high is income tax on residents in Argentina?

There are no inheritance and gift taxes in Argentina.

INHERITANCE LAW

Thanks to Negri & Teijeiro Abogados

What inheritance laws apply in Argentina?

Argentine law and international treaties govern inheritance of property in Argentina.

The Argentine Civil Code provides that succession to an estate is governed by the law of the decedent’s domicile (country of permanent residence) at the time of death, regardless of the inheritors’ nationality. The Civil Code further provides that the same law governs the content and validity of wills.

Pursuant to the Argentine National Constitution, international treaties preempt domestic law. Consequently, the Treaties on International Civil Law (Montevideo) of 1889 and 1940 affect inheritance of Argentine property; however, given their limited territorial application, the provisions of these treaties are not discussed here. Argentina signed the 1989 Hague Convention on the Law Applicable to Succession of the Estates of Deceased Persons; however this convention is yet effective, and has a low rate of acceptance. Argentina has not signed the 1961 Hague Convention on the Conflicts of Laws relating to the Form of Testamentary Dispositions.

The Civil Code implies an important exception to the general rule that the law of the decedent’s domicile governs inheritance. Title to real property located in Argentina can only be transferred according to Argentine law. Courts and commentators have disputed whether this provision applies only to conveyance of title between living persons. A majority of court decisions have held that any transfer of title to real property located in Argentina, whether between living person, or by inheritance (testate or intestate) is governed by Argentine law. Argentine law is also applicable in cases of renvoi i.e if the law of the decedent’s domicile refers inheritance issues back to Argentina. This is an important issue for foreigners, since it means that if they own real property in Argentina, then they cannot escape from the rules of forced heirship and reserved portions required by Argentine law.

Inheritance issues involving the property of non-resident foreigners are normally dealt with by the same courts that hear the inheritance issues of Argentine nationals and resident foreigners i.e by the provincial courts. Under Argentina’s Federal constitutional scheme, each province has its own provincial judiciary. For example, in the city of Buenos Aires inheritance issues are dealt with by civil courts hearing matters of civil law with economic content (as opposed to civil courts hearing family issues).

The length of inheritance proceedings varies according to the complexity of the case. A straightforward proceeding (e.g. with few assets located in urban areas and no minors involved) can take five to six months, from its commencement to the recording of the heirs’ title at the relevant registries.

Argentine law applies the principle of “forced heirs”.

The Civil Code applies the principle of “forced heirs” (herederos forzosos) to ensure spouses, children and other persons receive a minimum share in the estate, of which they cannot be deprived without cause. Just causes for disinheritance are limited to those stated by the Civil Code (e.g. attempted murder of the testator) and must be specifically invoked in a will). Hence, a testator’s disposition of assets is subject to the statutory minimum afforded to forced heirs.

Intestacy

The statutory heirs designated by the Argentine Civil Code to receive an inheritance if the decedent dies intestate are as follows:

• Decedent survived only by children: The children take the entire estate. The descendants of pre-deceased children receive the same shares that their parents would have inherited if still living.
• Decedent survived only by lineal relatives in the ascending line: The ascendants take the entire estate. Each generation excludes the previous one (e.g. if the decedent is survived by one or both parents, then no shares pass to the decedent’s grandparents).
• Decedent survived by a spouse and children: The spouse and children take the estate per capita, except for the non-marital property of the decedent, which passes only to the children.
• Decedent survived by a spouse and ascendants: The surviving spouse takes one half of the decedent’s non-marital property, and one half of the decedent’s marital property. The remainder of the estate passes to the ascendants.
• Decedent survived by a spouse, with no children or ascendants: The spouse takes the entire estate.
• Decedent not survived by children, ascendants or a spouse: The estate passes to relatives within the fourth degree of collaterality (i.e (i) siblings of the decedent and their issue until grand-nephews/nieces, and (ii) cousins of the decedent). Between siblings of whole and half blood, the latter receive half of the share of the whole-blooded siblings.

Inheritance with a will: Statutory heirs have a right to “reserved portions”.

A testator cannot impose encumbrances or conditions on the reserved portions, which are as follows:

• Children: 4/5 of all assets existing at the time of the testator’s death and of those donated by the testator during his life. Grandchildren and other lineal descendants take the same proportion (within the limits of the share of their immediate ascendant). The individual reserved portion of each child is obtained by dividing the total reserved portion by the number of children.
• Ascendants: 2/3 of the assets of the estate and of those donated by the testator during his life.
• Spouse, when there are neither descendants nor ascendants of the testator: 1/2 of the assets of the estate and of those donated by the testator during his life.

If the decedent is survived by heirs entitled to inherit, but with different reserved portions, then the highest global reserved portion applies. For example, if the decedent is survived by a spouse and children, the global reserved portion is 4/5. Within the global reserved portion, the spouse and children receive the same as if by intestate succession.

The testator is free to bequeath the residue of the estate (i.e that part in excess of the reserved portion) to third persons, or to enhance the shares of the statutory heirs. Dispositions in a will in excess of the reserved portions cannot exceed the residue.

The Argentine Civil Code provides that Argentine or foreign heirs residing in Argentina are entitled to receive any assets which they were deprived of by virtue of a foreign law. This means that if a foreign citizen dies leaving assets in both Argentina and in his/her country of domicile, and a will deprives a forced heir who resides in Argentina of his/her statutory reserved portion, then the deprived heir may receive property located in Argentina, in an amount equal to his/her statutory reserved portion. This provision is also applied if an heir is deprived from a right to inherit by a cause not recognized in Argentine law.

Wills must be pursuant to the formalities of Argentine law.

Wills are generally made only by wealthy individuals in Argentina. Most people die intestate, in which case the strict rules of intestacy apply.

Under general principles contained in the Argentine Civil Code, wills made by foreigners outside Argentina are only valid if they comply with the legal formalities prescribed by the testator’s domicile, nationality, or Argentina. Foreigners residing in Argentina can make a valid will outside Argentina by signing it and having it attested at the Argentine consulate. Depending on its content, and the formalities of its making, some Argentine courts require a valid will made abroad to be transcribed in a public deed (escritura pública) in Argentina at the start of the relevant probate proceedings.

There is no advantage for a foreigner who owns real property in Argentina to make a local will, other than to facilitate probate. Testators should seek advice from Argentine legal counsel, since some forms of local will (e.g. nuncupative or mutual wills) although complying with the rules, might prove difficult to enforce in Argentina. Even a will made by a foreigner in his/her country’s consulate in Argentina may not be considered valid by an Argentine court.

A testator may appoint an executor of a will. The role of the executor is limited to ensuring that the dispositions of the will are made as directed. The duties of an executor do not include defending the interests of heirs.

An owner cannot freely transfer property as a gift before death.

A person planning to transfer real property located in Argentina as a gift should seek legal advice. Depending on the identity of the recipient, a gift may affect the status of the title conveyed.

A person cannot freely transfer real property as a gift to his/her spouse during their marriage, or to his/her spouse’s children from a prior marriage, or to any persons to whom the children are legal heirs.

If the net assets of the estate are sufficient to cover the reserved portion, any gifts made by the decedent during his/her lifetime are deemed to be made from the residue (i.e assets outside the reserved portion). If a gift made during the lifetime of a deceased person exceeds the residue of his/her estate then a legal action seeking a reduction in the gift can be brought by the statutory heirs. Descendants born after the gift was made are also entitled to receive a share of the gift.

Gifts made to legal heirs before the death of a donor are considered to be an advance of the statutory heirs’s share in the estate, unless the donor states, in a legal instrument, that the gift is deemed to be part of his/her estate in excess of the reserved portion. Nevertheless, the gift will still be reduced if it exceeds the residue of the estate in excess of the reserved portion.

Ownership of property is determined by Title Deeds.

In matters of real property ownership, Argentine law looks primarily to the title deeds and their recording with the relevant land registry.

Argentine law governs marital rights to property.

The Argentine Civil Code provides that the marital property regime is governed by the law of the place of the first domicile (country of residence) of the couple after marriage. A change of domicile does not change the law applicable to the relationship between the spouses or to their assets, regardless of whether the assets were acquired before or after the change.

Under Argentine marital law, all assets acquired by spouses after marriage are considered “marital property” (bienes gananciales) unless they were received as gifts. Each spouse is free to manage and dispose of any marital property acquired by him/her; however consent of the other spouse is required to dispose of real property. Upon dissolution of a marriage, marital property is distributed equally between spouses. Other assets (i.e those acquired before marriage, or gifts received during marriage) are considered “non-marital property” (bienes propios). Such property may be freely managed and disposed of by an individual spouse (except for the family home, if they have minor children), and remain with him/her after dissolution of the marriage.

Minors and others who are not entitled to inherit require a guardian.

Under Argentine law, unborn persons and minors who are under legal age cannot assume legal obligations, and in cases of inheritance they must be represented in court by their parents or specially-appointed guardians. Persons declared mentally incompetent by an Argentine court or deaf-mute persons who cannot write must also have a court-appointed guardian. In addition, a special public attorney must be a party to the proceedings.

Argentina - more data and information

• How high is income tax on residents in Argentina?

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