Keep the Income, Give the Asset: The Property Usufruct as Dominican Estate Planning Tool

The most elegant move in Dominican estate planning is also one of its oldest: split the property in two. Not physically, legally. The usufruct separates ownership into the right to use the property and collect its income (the usufruct itself) and the bare ownership of the asset (the nuda propiedad), allowing each to be held by different people at the same time, over the same property, with the registry recording both.

The classic deployment is generational. Parents donate the bare ownership of the home or the rental portfolio to their children today, moving the asset forward, ordering the succession in advance, while reserving a lifetime usufruct: they keep the house, the rents and the control for as long as they live, and at their passing the usufruct extinguishes and full ownership consolidates in the children automatically, without the asset ever passing through a contested estate. It is succession planned in daylight, executed by operation of law.

The figure’s uses run beyond family. A usufruct can be constituted for a term rather than a life, over commercial property rather than homes, in favor of a company rather than a person, anywhere the economics call for separating enjoyment from title: structured acquisitions, intra-family business arrangements, charitable dispositions.

Registration at the Title Registry is what gives the split its force against the world: both positions appear on the record, each holder can defend and (within limits) transact their own, and everyone dealing with the property knows exactly which bundle of rights they are dealing with. And because the usufructuary lives in an asset the bare owner will eventually receive, the obligations between them, conservation, repairs, charges, inventory, reward careful drafting at constitution rather than litigation at extinction.

The framework is the Civil Code’s usufruct regime together with Law 108-05. Arthur & Castillo designs usufruct-based structures for Dominican and foreign families, constitution, registration, the tax analysis each step deserves, and the eventual consolidation. If your estate plan should work by operation of law, start here.

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Disclaimer: This publication is not intended to provide advice or suggest a guaranteed outcome as individual situations will differ and the situation may have changed since publication. For specific advice on the information provided and related topics, please contact the author.

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