Estate Planning Trust or Will: Two Different Ways to Protect and Transfer Assets in the Dominican Republic
By Virgilio Santana Ripoll
A person has worked for thirty or forty years. They own a home, several properties, business interests, investments, and perhaps assets abroad. Then a seemingly simple question arises:
What will happen to all of this when I am gone?
The traditional answer has been: make a will.
But since the Dominican Republic incorporated the fideicomiso (trust) into its legal system through Law No. 189-11, another tool deserves attention: the estate planning trust.
These instruments are not equivalent. Nor can it be said that one is always better than the other.
The right question is not “trust or will?” but something more important:
What structure does my estate actually need?
A will takes effect after death; a trust can organize assets now
This is the first major difference.
Article 895 of the Civil Code defines a will as an act by which a person disposes of all or part of their property for the time when they are no longer alive, while retaining the power to revoke it.[1]
A will, therefore, is essentially directed toward the future.
While alive, the testator remains the owner of their assets. They may sell, mortgage, or replace them, and may amend or revoke their will.
A trust works differently.
Article 3 of Law No. 189-11 defines it as an act by which a person—the settlor—transfers certain ownership rights or other rights in rem or personal rights to a trustee in order to create a separate estate dedicated to one or more specified purposes.[2]
That estate is autonomous from the personal estates of the settlor and the trustee and, as provided by law, the beneficiaries.
This difference changes the entire planning process.
With a will, we essentially say:
“When I die, I want these assets to go here.”
With a trust, we can structure things so that:
“From now on, these assets will be dedicated to this purpose and managed according to these rules.”
Dominican law expressly allows the use of a trust to plan a succession
We are not simply importing the American concept of a trust.
Law No. 189-11 itself expressly created this option.
Article 55 provides that a trust may be used for estate planning purposes and is subject both to Law No. 189-11 and to the other laws applicable in the Dominican Republic.[3]
The Dominican Tax Authority (DirecciĂłn General de Impuestos Internos, or DGII) also recognizes this type of trust and explains that it allows the settlor to appoint a trustee to administer the assets for the benefit of designated persons.[4]
This makes it possible to plan in far greater detail than simply allocating assets.
For example, a person could arrange for certain assets to be managed for the benefit of minor children, descendants who do not yet have experience managing wealth, or family members who should receive periodic income without necessarily taking immediate control of the assets.
A trust may also be used to organize business interests, income-producing properties, or certain family assets whose immediate division could prove impractical.
That is where the practical difference begins to emerge.
Inheriting real estate is not the same as inheriting an asset management structure
Suppose a person has four children and several income-producing properties.
Through a will, they could specify who receives certain assets, within the limits allowed by law.
But after their death, difficult questions may arise:
Should the properties be sold?
Should they be kept?
Who will manage them?
What happens if two children want to sell and the other two want to keep them?
Who collects the rent?
Who decides which repairs to make?
Who manages the business interests?
A trust makes it possible to address many of these issues before conflict arises.
The estate can be governed by rules established in advance and professionally managed by a trustee.
And this is not merely contractual theory.
The First Chamber of the Supreme Court of Justice has recognized in its case law the separation between the trust estate and the trustee entity’s own estate. In decisions concerning obligations incurred in trust transactions, the Court has specifically considered whether certain obligations must be satisfied from the trust estate rather than from the trustee’s own assets.[5]
This separation of assets is one of the most important structural differences between a trust and a will.
But beware: a trust is not a license to disinherit
This is where an essential caution comes in.
It is tempting to think:
“If I transfer my assets to a trust, I can freely decide who will receive them and avoid succession rules.”
That is a dangerous conclusion.
Law No. 189-11 itself provides that an estate planning trust is subject to the laws applicable to the matter in the Dominican Republic.[6]
Those laws include the Civil Code’s forced heirship rules.
Article 913 limits gifts and bequests when there are descendants: the freely disposable portion is one-half when there is one child, one-third when there are two, and one-quarter when there are three or more.[7]
The Supreme Court of Justice has reiterated that the reserved portion is part of the estate that the deceased cannot freely dispose of and that is protected for the benefit of certain heirs.[8]
Accordingly, neither a will nor a trust should be structured in disregard of forced heirship rules.
Changing the legal vehicle does not necessarily eliminate succession rights protected by mandatory rules.
A trust designed to fraudulently prejudice those rights may lead to precisely what it was meant to avoid: litigation.
So what does a trust actually protect?
The word “protection” must be used carefully.
A trust creates a separate estate. Law No. 189-11 establishes specific rules governing trust assets and the obligations that may be satisfied from that estate.[9]
But this does not mean absolute immunity from creditors, taxes, legal claims, or succession rights.
The Supreme Court has recognized in its case law that obligations validly assumed by the trust may be enforced against that very estate.[10]
Likewise, the Constitutional Court has heard various challenges involving procedures under Law No. 189-11, confirming that a trust operates within the general legal system, not outside it.[11]
For that reason, marketing a trust as some kind of impregnable “legal safe” would be technically irresponsible.
Its real strength lies elsewhere:
separation of assets, orderly administration, continuity, and carrying out a previously defined purpose.
What about taxes?
This issue calls for particular caution.
A trust should not be established solely on the assumption that it will eliminate inheritance taxes.
The Dominican tax regime for trusts has its own rules. Depending on the type of trust and the relevant transaction, the DGII identifies obligations involving real estate transfer taxes, IPI (property tax), ITBIS (value-added tax), information returns, and the taxation of certain distributions to beneficiaries.[12]
The DGII also notes that, although trusts are not generally required to pay income tax on the same basis as a commercial company, they do have filing obligations, and distributed returns may be taxable, with specific rules for succession trusts.[13]
For this reason, sound estate planning requires a joint review of civil, succession, trust, and tax law.
What works legally may not be tax-efficient, and what looks attractive from a tax perspective may be vulnerable under succession law.
What happens when assets are located in the United States, Europe, or other countries?
Planning becomes even more delicate in these circumstances.
It is increasingly common to find Dominican families with a home in the Dominican Republic, bank accounts or investments in the United States, children living in different countries, and corporate interests spread across multiple jurisdictions.
In these cases, it is not enough to draft a Dominican document and assume that it will automatically resolve the entire global succession.
Rules concerning domicile, tax residence, the location of assets, international succession, recognition of foreign documents, and taxation may all come into play.
Dominican Law No. 544-14 on Private International Law then becomes particularly relevant, along with the specific rules of the countries where the assets are located.
An international structure may therefore require coordination among a Dominican will, documents executed abroad, companies, and possibly trust structures.
Poorly coordinated international planning can produce exactly the opposite of what was intended: conflicting documents, double taxation, jurisdictional disputes, or assets left outside the planned structure.
Which option is more suitable?
There is no universal answer.
For someone with a relatively simple estate—for example, a home, bank accounts, and few heirs—a properly drafted will may be enough.
It is simpler, generally less costly to put in place, and allows the testator’s wishes to be clearly expressed.
But when there are several properties, family businesses, income-producing assets, investments, minor children, complex family circumstances, beneficiaries in different countries, or concerns about continuity of the estate, a trust deserves serious consideration.
A simple comparison may help:
Will: distributes assets.
Trust: can manage and distribute assets.
Will: primarily produces succession effects after death.
Trust: can begin organizing the estate when it is established.
Will: keeps assets directly in the testator’s estate during their lifetime.
Trust: can transfer certain assets to a separate estate.
Will: is usually simpler and less expensive.
Trust: requires more structuring, trustee administration, and related costs.
But perhaps the most important difference is this:
a will says who should receive the assets; a trust can also establish how, when, and under what structure the estate will be managed.
Sometimes the right answer is not to choose just one
This is probably the most important conclusion.
For estates of some complexity, framing the issue as a choice between a will and a trust may be a mistake.
They can be complementary tools.
Certain assets may form part of a trust structure while others remain in the personal estate and are governed by a will.
A will can cover assets that were never transferred to the trust. A trust can ensure continuity in the administration of specific assets. Companies can organize business governance. And succession instructions must be coordinated so that all these pieces form part of a single strategy.
True estate planning is not about signing a document.
It is about answering difficult questions in advance:
Who will manage what I have built?
Who will be allowed to sell?
Who will receive the income?
What happens if my children disagree?
How can I prevent a family business from becoming paralyzed?
Which assets do I want to keep, and which may be sold?
What will happen to my assets outside the Dominican Republic?
Does my structure respect my heirs’ rights and tax obligations?
When these questions are asked after someone has died, they are generally answered by the heirs, the lawyers, and, in the worst-case scenario, the courts.
When they are asked in time, the owner answers them.
And that, ultimately, is the essence of good estate planning:
not controlling the estate from the grave, but responsibly organizing during one’s lifetime what took a lifetime to build.
Notes and References
[1] Dominican Republic, Civil Code, art. 895.
[2] Dominican Republic, Law No. 189-11 on the Development of the Mortgage Market and Trusts, art. 3. See also Regulation No. 95-12.
[3] Law No. 189-11, art. 55: estate planning trust.
[4] Dominican Tax Authority (DGII), institutional information on trusts and estate planning trusts.
[5] Supreme Court of Justice, First Chamber, Judicial Bulletin No. 1352, July 2023, decisions concerning obligations chargeable to the trust estate and the conduct of the trustee entity.
[6] Law No. 189-11, art. 55.
[7] Dominican Civil Code, arts. 913 et seq.
[8] Supreme Court of Justice, First Chamber, case law on forced heirship and reduction of gifts and bequests. See Principal Decisions of the Supreme Court of Justice, May–August 2022.
[9] Law No. 189-11, particularly arts. 3, 10, 18–20, and 27.
[10] Supreme Court of Justice, First Chamber, case law on obligations of the trust estate, Judicial Bulletin No. 1352, July 2023. See also Dominican Case Law Yearbook 2023, study on trusts and commercial transactions with third parties.
[11] Constitutional Court, decisions TC/0266/13, TC/0530/15, and TC/0311/21, concerning provisions and procedures established by Law No. 189-11.
[12] Dominican Tax Authority, Taxpayer’s Guide to Trusts and applicable tax regulations: General Rule No. 01-15, as amended by General Rule No. 02-16.
[13] Dominican Tax Authority, tax regime and obligations applicable to trusts.
Additional Bibliography
DOMINICAN REPUBLIC. Civil Code of the Dominican Republic.
DOMINICAN REPUBLIC. Law No. 189-11 on the Development of the Mortgage Market and Trusts.
DOMINICAN REPUBLIC. Regulation No. 95-12 implementing Law No. 189-11.
DOMINICAN REPUBLIC. Law No. 544-14 on Private International Law.
SUPREME COURT OF JUSTICE. Judicial Bulletins and Dominican Case Law Yearbook.
DOMINICAN TAX AUTHORITY. Taxpayer’s Guide to Trusts and supplementary tax regulations.
This article is for informational and academic purposes. Whether a will, trust, or combined structure is suitable depends on the composition of the estate, family circumstances, residence, tax obligations, and each person’s individual objectives. An individualized legal assessment is therefore required.