A staple storyline for afternoon soaps would be the war between families and the familiar conflict would revolve around, you guessed it right – “Mana” or Property. But mind you, what you see on TV, as well in the movies, portray an indelible reality and that is families getting estranged all because one heir wants something more than the other or vice-versa. In fact, Philippine Jurisprudence is peppered with cases where the parties are as heirs of deceased, such as Heirs of Doronio vs. Heirs of Doronio, etc.
Truth be told, the settlement of estate of a deceased is actually a simple process, with some legal formalities that have to be complied along the way. The process is actually made easier when there is a last will and testament ascribing which property and what portion of the estate shall be disposed of according to the wishes of the deceased.
Things get a little tricky when properties are left by the deceased without a last will and testament and there are heirs wanting to make sure they get their even share of the pie, or perhaps a little more. Not to mention, there are other things that have to be settled such as payments for estate tax, and other legal fees associated with transfer, titling and registration of property.
What is the difference between Settlement and Partition?
These are actually separate and distinct actions:
Extrajudicial Settlement of Estate – in layman’s term, a settlement outside of court, such as when a decedent died without a will, the property of the decedent may pass upon to the heirs. If the heirs owned the property in common, then they are considered as co-owners.
Judicial Settlement of Estate – when the testator died, leaving a last will and testament, the law provides that any executor, devisee, or legatee named in a will, or any other person interested in the estate, may petition the court to have the will allowed in what we call “probate” proceedings.
Now, to distribute the property to INDIVIDUAL co-owners, the proper action is Extrajudicial Partition.
What are the other requirements for an Extrajudicial Settlement of the Estate?
Section 1 of Rule 74 of the Rules of Court provide:
The decedent left no will
The estate must have no existing debts
Heirs are all of age or the minors are represented by their judicial or legal representatives duly authorized for the purpose
An “Affidavit of Self Adjudication” for sole heirs who wish to adjudicate the entire estate to him- or herself, filing the affidavit at the Register of Deeds of the locale where the decedent resided.
A “Deed of Extrajudicial Settlement of Estate and Adjudication of Estate” for a group of heirs. This must be signed by all individuals involved, notarized before a Notary Public. This document would include: a) An inventory with individual descriptions of the decedent’s properties, both real and personal, that the heirs have agreed to divide among themselves; and b) The exact manner that the properties are to be divided.
The heirs then secure a bond from a reputable bonding company recognized by the Register of Deeds, and file it simultaneously with the registration of the notarized “Deed of Extrajudicial Settlement and Adjudication of Estate.”
Additional things to take note of:
Extrajudicial settlement of estate is often recommended to expedite the transfer of properties of the decedent to his heirs. This is in view of the fact that judicial settlement of estate takes years before the case is concluded. Furthermore, this is more adversarial and is resorted to when the heirs disagree on the properties to be partitioned and the corresponding shares of the respective heirs.
An extrajudicial settlement of estate is done by executing a public instrument known as ‘Extrajudicial Settlement Among Heirs’.
The abovementioned provision also requires that the Deed of Extrajudicial Settlement must be published in a newspaper of general circulation once a week for 3 consecutive weeks. More importantly, estate taxes must first be settled with the Bureau of Internal Revenue before the Deed of Extrajudicial Settlement with the Register of Deeds where the property is located.
For more information about this topic, you may contact Atty. Joyce Felisa B. Domingo-Dapat at (+63) 917 548 8045. Atty. Joyce is the founding partner of Domingo-Munsayac and Associates. Her practice areas include intellectual property law, family law, real estate transactions, corporate law, immigration, taxation and litigation. She also specializes in estate planning and handles judicial and extrajudicial settlement of estates.