Filipinos have this aversion to topics involving death. Thus, it comes as no surprise that preparation of wills is not popular among Filipinos. This results to confusion among the heirs – who are family members – and, sadly, causes bickering among them.
When a person dies, her or his properties are still registered in her or his name. The heirs cannot transfer the properties under their respective names without, first, settling the estate of their dearly departed and, second, paying the appropriate transfer taxes.
This article particularly discusses the options of heirs of deceased persons who left no will and left no debts, as in the usual case among Filipinos.
Modes of settlement of estate of deceased persons
There are four modes to settle the estate of deceased persons who left no will and debts: first, an extrajudicial settlement of estate; second, a judicial action for partition; third, a judicial proceeding of administration of estate; and finally, a summary settlement of estates.
- Extrajudicial settlement of estate
An extrajudicial settlement of estate of deceased persons involves the execution of a public instrument by the heirs. Said instrument is filed with the Register of Deeds of the province where the property is found.
Should there be only one heir, he or she may execute an Affidavit of Self-Adjudication. Meanwhile, should there be at least two heirs, the parties may execute a Deed of Extrajudicial Settlement.
In either public instrument, it must contain compliance with the legal conditions for extrajudicial settlement, description of the properties to be extrajudicially settled, nature of the properties, name of the parties, and manner as to how the properties shall be divided among the heirs.
The fact of the extrajudicial settlement or administration shall be published in a newspaper of general circulation once a week for three (3) consecutive weeks. A bond shall be paid with the Register of Deeds in an amount equivalent to the value of the personal property involved as certified to under oath by the parties concerned.
- Judicial action for partition
In some instances, there is a disagreement among the heirs on how the estate is divided among themselves. In case of disagreement, the heirs have the option to file an action for partition.
This complaint for partition may be filed by any of the heirs against the other heirs in accordance with Rule 69 of the Rules of Court.
The complaint must allege the nature and extent of his title and an adequate description of the real estate involved.
In the partition proceedings, the issue of whether the heir is entitled to participate in the proceedings as an heir is also ventilated and ascertained.
- Judicial proceeding of administration of the estate
The heirs are not prevented from instituting administration proceedings if they have good reasons for choosing not to file an action for partition.
In such instance, a petition for judicial administration of the estate is filed. This petition is filed in the Regional Trial Court of the place in which the deceased person resided at the time of his death, should he or she be an inhabitant of the Philippines at that time of death. For inhabitants of a foreign country, the petition is filed in the Regional Trial Court of any place in which the deceased person had estate.
- Summary settlement of estates
Finally, the heirs may opt for a summary settlement of estate when the value of the estate does not exceed ten thousand pesos (P10,000.00). This is initiated through a petition filed with the Regional Trial Court having jurisdiction of the estate.
This option may also be availed of even when the deceased person left a will.
Payment of estate taxes
The estate of a deceased person enjoys a juridical personality insofar as tax purposes are concerned. As a result, the heirs or administrators must secure a separate Taxpayer Identification Number (TIN) for the estate after finishing the appropriate forms and submitting completed requirements with the Bureau of Internal Revenue.
The estate, through the heirs or the administrator, should pay estate tax at the rate of six percent (6%) based on the value of such net estate for those who died on or after January 1, 2018. For those who died on or before December 31, 2017, their heirs may apply to the Government’s tax amnesty program which is in effect from June 2019 until June 2021.
After payment of the estate tax and the penalties, if any, a Certificate Authorizing Registration (CAR) is issued by the BIR.
The CAR is presented to the Register of Deeds in order that appropriate transfers will be recorded.
Juris Supellectilem 