When someone passes away, their assets, including both real and personal property, make up their estate. The process of settling the estate involves identifying, valuing, and distributing these assets among the heirs and beneficiaries. It is important to account for all properties and settle any taxes owed to the Bureau of Internal Revenue (BIR). Only after these estate taxes have been paid can the heirs or beneficiaries receive their inheritance.
What are the ways to settle an estate in the Philippines?
- Judicial Settlement
The court designates an administrator to handle the estate. This administrator is responsible for settling the estate’s obligations, which include debts, ongoing maintenance and administrative expenses, and taxes. They may also need to submit a proposal to the court on how to distribute the estate among the heirs.
2. Extrajudicial Settlement
This settlement occurs when a decedent leaves no will and has no outstanding debts. If all heirs are adults, or if minors are represented by duly authorized guardians, they can divide the estate among themselves without obtaining letters of administration. This division can be documented through a public instrument filed with the register of deeds.1
Who has jurisdiction over a settlement of a decedent’s estate?
The jurisdiction generally lies with the Regional Trial Court (RTC) of the area where the decedent resided at the time of death, establishing a clear legal framework for filing probate cases. It involves a probate process, which includes validating wills, appointing administrators or executors, and resolving disputes regarding asset distribution, emphasizing that the chosen RTC must have the authority to handle these matters effectively.
The decision also explores factors influencing jurisdiction, such as the decedent’s residence and the location of properties, noting that multiple RTCs may have concurrent jurisdiction if the estate includes assets in different areas. Disputes among heirs regarding the estate’s distribution or challenges to a will should be addressed within the appropriate RTC, with the understanding that the court’s decisions are generally final and binding.2
How can the partition of the inheritance be effected?
- By the heirs themselves extrajudicially,
- By the court in an ordinary action for partition, or in the course of administration proceedings,
- By the testator himself, and
- By the third person designated by the testator. 3
What happens if the heirs disagree on the division of the estate?
When heirs cannot reach an agreement, they may file a petition for partition in court, allowing for judicial intervention to resolve the conflict and ensure compliance with legal standards. There is a need for evidence and valuation of the estate, as heirs must present documentation to support their claims during the partition process. The rights of all heirs must be considered, and any court decisions regarding the partition are binding and final, providing clarity on the division of assets.4
Is an Oral Partition between heirs valid?
An oral partition can be considered valid and binding on the heirs, as there is no legal requirement mandating that partitions among heirs must be documented in writing to be effective. An oral partition is not subject to the provisions of the Statute of Frauds.5
How are debts and claims against the estate handled in an extrajudicial settlement?
All debts and obligations of the decedent must be settled before any distribution of assets to heirs can occur, prioritizing claims such as funeral and administrative expenses. It underscores the necessity for notifying creditors about the decedent’s passing, allowing them to file claims within a specified timeframe, thereby protecting their rights. Creditors must provide documentation to support their claims, and any outstanding debts must be resolved before heirs can receive their inheritance. Once all debts are addressed, the remaining assets can be divided among the heirs.6
- Rule 74, Rules of Court ↩︎
- Treyes vs Larlar, G.R. No. 232579, September 08, 2020 ↩︎
- Heirs of Morales vs Agustin, G.R. No. 224849, June 6, 2018 ↩︎
- Silva vs Lo, G.R. No. 206667, June 23, 2021 ↩︎
- Fajardo vs. Cua-Malate, G.R. 213666, March 27, 2019 ↩︎
- Estipona vs Aquino, G.R. 207407, September 29, 2021 ↩︎
