El Salvador: 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 El Salvador: what restrictions there are and whether making a will is advisable.

INHERITANCE TAX

How high are inheritance taxes in El Salvador?

There are no inheritance taxes in El Salvador.

INHERITANCE LAW

Thanks to Consortium Centro América Abogados

What inheritance laws apply in El Salvador?

El Salvadorian inheritance law follows the territorial principle: i.e. the applicable law depends on the location of the property.

The relevant legislation includes: Constitution of the Republic, Civil Code, Civil Procedures Code, Bustamante Code, Family Code, Code of Civil Procedures, Law of Notary Public Acts, Immigration Law, and Tax Code.

According to its constitutional principles, El Salvador does not discriminate against or provide different legal treatments to members of different religions, nationalities, or any other groups; they are all treated as citizens of El Salvador. The Constitution does not establish restrictions on property ownership in El Salvador.

The law which applies to the inheritance of immovable property is the law of the place where the property is located. If one spouse belongs to one nationality, or religion, and the other spouse to another, this is unlikely to cause a problem, since the legal system applies the territorial principle, regardless of the nationalities of husband and wife.

Two options are available in El Salvador to pursue the process of accepting/rejecting an inheritance, regardless of whether the deceased made a will.

• Before the offices of a notary public (so long as all heirs are of legal age and there are no disputes between heirs);


• Before a civil court, which has jurisdiction in the place where the deceased last resided. If the deceased was a foreigner who owned assets in El Salvador, but his last place of residence was not in El Salvador, the court that will have competence on this matter will be the one of the country where the deceased last resided. El Salvador will recognize the ruling from such court.

The time taken to conclude the process depends on the particularities of each case, but most cases take approximately a year. It is quicker for a case to go before a notary public, rather than before a civil court.

No reserved portion in El Salvador law.

There are no reserved portions. Only in exceptional cases does the testator not have freedom to dispose of his/her assets freely, for example, if there is a court ruling granting child or spouse support. In order to become effective, the spouse or representative of the child must file a lawsuit against the heirs for the recognition of their rights. Any court ruling over the assets of a decedent survive his/her death. This only applies to cases in which a will was granted by the deceased.

It is advisable for a foreigner to make a local will.

A will is a personal legal act, which cannot be granted by any other person on behalf of the testator. However, if a foreigner wishes to make a local will, his presence in El Salvador is not required.

Wills granted abroad are recognized under Salvadoran law, as long as they comply with the formalities of the country where they were granted and the authenticity of the document is evidenced. Nevertheless, granting a local will is advisable for foreigners, since the process of executing a will granted abroad is more complicated due to the official validation of the will.

The will must satisfy certain requirements for its validity. The requirements are.

• It must be granted before a notary public; or a head of a permanent diplomatic mission or consul of El Salvador
• It must be written in Spanish and in a public deed;
• It must be written in the presence of two witnesses older than 18 years, who know how to read, write, and speak in Spanish, are domiciled in El Salvador, are known by both the testator and the notary public, and who have a profession.
• If the testator is not a Spanish speaker, an interpreter has to intervene.

The law forbids certain persons to inherit property in El Salvador, including the doctor of the deceased, the priest present at the time of death, and people considered “unworthy” (e.g. a person accused of murdering the testator). In such cases, the will is considered null, and the succession is processed by the heirs before a civil court. In the absence of a will, the rules of order of presedence are applied.

The order of precedence for intestate succession.

In the absence of a will, the order of precedence of the individuals who are called upon by a court to accept or reject an inheritance are:

• First degree: Children, father, mother and spouse.
• Second degree: Grandparents and other ancestors, if any; Grandsons, and a father who has recognized his child voluntarily;
• Third degree: Brothers and sisters;
• Fourth degree: Nephews and nieces;
• Fifth degree: Uncles and aunts;
• Sixth degree: First cousins;
• Seventh degree: University of El Salvador and public hospitals.

Property can be given freely by the owner to anyone, prior to death.

Gifts are usually not subject to challenge due to the strong protection of the right of free disposal of assets. The only exception is the disposal of a family household placed under protection before third parties, a regime which operates in families of limited economic resources. Under Salvadoran law, gifts of real property must be recorded in a public deed, before a notary public.

Ownership of property is determined from deeds in the public records. Deeds of real estate, transfer deeds, and any transaction affecting real property rights must be registered in a public registry. For problems dealing with ownership of real property, courts in El Salvador look at the deeds to determine who has his/her rights registered in the public records.

If a foreigner acquires real property in El Salvador, he/she is not required to remain in the country until the registration process is finished. The notary public before whom the public deed for the acquisition was granted may take care of this process. Once registered, a page certifying the registration is attached to the public deed.

Marital rights.

The co-property rights of spouses in El Salvador depends on: (a) whether the property is registered under the names of both spouses; and (b) the regime they selected when they married. For the second case, spouses can choose between three regimes: participation of incomes, or matrimonial community (both of which imply co-property rights) or separation of assets.

Minors may inherit property.

When the property goes to a child or children under legal age (18 years), or to others not considered legally capable of administrating their assets, the law allows these persons to own the estate, but they require a guardian to assist them in the administration of the estate, until they are legally adults. Guardians may be appointed in a will. If a will was not granted, or if the appointment of the guardian was not included in a will, guardians may be appointed by a court.

El Salvador - more data and information

• How high is income tax on residents in El Salvador?

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