Attorney’s Fees for a Deed of Adjudication / Extrajudicial Settlement of Estate in the Philippines
(Everything a Filipino heir or practitioner should know — updated to July 2025)
Quick takeaway: In the Philippines there is no statute that fixes lawyers’ compensation for drafting or completing a Deed of Adjudication (often called a “Deed of Extrajudicial Settlement of Estate”). Fees are governed by agreement, professional-ethics limits on reasonableness, market custom, and certain tax rules. This guide unpacks each of those pillars, gives practical fee ranges, and flags the add-on costs clients usually confuse with “attorney’s fees.”
1. Why the document matters (and why a lawyer is usually engaged)
Purpose — It is the heirs’ written declaration that:
- the decedent left no will or left a will already probated;
- no debts remain, or the debts have been paid; and
- the heirs agree on how to divide the estate.
Legal effects — Once notarised, published in a newspaper of general circulation (Rule 74, Rules of Court), and registered with the Register of Deeds/BIR, the deed becomes the basis for the issuance of new titles or transfer certificates.
Role of counsel — A Philippine lawyer typically:
- performs due-diligence on titles, tax clearances and debts;
- drafts the deed (often with a waiver of rights or partition agreement);
- oversees publication, BIR estate-tax settlement (Form 1801, electronic CAR), and registration;
- pays assessments and releases new titles.
Because errors can invalidate the deed or trigger surcharges/penalties, most families retain counsel even though the Rules permit them to draft the document themselves.
2. Sources that indirectly regulate attorney’s fees
| Source | Key provision | Practical impact on estate-settlement fees |
|---|---|---|
| Civil Code Art. 1306 & 1159 | Contracts are law between the parties. | Lawyer and client are free to agree on fee structure (lump-sum, hourly, percentage). |
| Code of Professional Responsibility and Accountability (CPRA, 2023), Canon III § 41 | Lists eight factors to gauge reasonableness: time/labor, novelty/complexity, skill, customary charges, amount involved, beneficial results, contingencies, professional standing. | Prevents unconscionably low/high fees; used by courts and IBP to review complaints. |
| Canon III § 42 (CPRA) | Bars “unconscionable, excessive, or exorbitant” fees. | Even a signed contract can be voided or reduced by the court/IBP. |
| IBP Minimum Suggested Schedule of Legal Fees (MSSLF, latest 2022 draft) | Suggests ₱3,000 – ₱5,000 for notarial work on deeds, plus 1 %– 5 % of estate value for “complete probate/extrajudicial settlement services.” | Non-binding benchmark; Metro Manila lawyers often use it as a floor, not a ceiling. |
| Value-Added Tax Law (NIRC §§ 106–108) | Lawyers earning >₱3 M per year must add 12 % VAT to professional fees (unless exempt). | Clients should expect VAT on top of fees when engaging mid- to large-firm counsel. |
| BIR Estate-Tax Regulations (RR 12-2018, RR 17-2021) | Allow deduction of “judicial expenses in settling the estate,” which include reasonable attorney’s fees. | If the estate files a tax return, attorney’s fees (properly receipted) lower the taxable estate. |
3. Common fee-setting models and current market ranges (2025)
| Model | Typical Percentage / Peso Figure | When used | Pros & cons |
|---|---|---|---|
| Fixed-lump sum | ₱15,000 – ₱40,000 for straightforward inheritance of 1–2 properties worth ≤ ₱5 M | Simple family, clear titles, heirs already agreed. | Predictable; lawyer bears risk of extra work. May exclude BIR & RD liaison fees. |
| Fixed-plus-appearance | Lump sum + per-appearance fee (₱3k–₱8k) for BIR/RD follow-ups | If heirs live abroad and lawyer runs all errands. | Incentivises quick completion; transparent. |
| Percentage of gross estate | 1 % – 3 % (rarely up to 5 %) | High-value estates (₱20 M+) or messy documentation. | Aligns lawyer’s pay with estate size; can be costlier than lump-sum for big estates. |
| Hybrid | Lower lump sum + success bonus (e.g., ½ % of estate) | When transfer of hard-to-trace assets is expected. | Lawyer motivated to recover hidden assets. |
| Hourly | ₱3,500 – ₱10,000 per hour senior counsel; ₱1,500 – ₱3,000 associates | Large firms or estates with cross-border issues. | Transparent time entries; final bill unpredictable. |
Provincial rates can be 20 %–40 % lower. The wide spread reflects complexity, firm size, and lawyer reputation.
4. Typical add-on charges mistaken for “attorney’s fees”
| Item | Amount (indicative) | Who collects | Tips |
|---|---|---|---|
| Notarial fee | ₱500 – ₱3,000 per deed page; plus ₱200–₱500 per witness acknowledgement | Lawyer-notary public | Many lawyers fold this into the professional fee. |
| Publication (Rule 74 notice) | ₱4,000 – ₱12,000 for 3 weekly issues | Newspaper | Choose the cheapest newspaper with national circulation to cut cost. |
| BIR estate-tax | 6 % of net estate within one year of death, plus interest/surcharge thereafter | Bureau of Internal Revenue | Lawyer assists in valuation & deduction substantiation. |
| Doc. stamp tax on deed | ₱15 per ₱1,000 of total value conveyed (under Sec. 196, NIRC) | BIR | Applies even if the heirs are original owners under Art. 777, Civil Code. |
| Transfer/registration fee | 0.25 % – 0.50 % of zonal/fair market value | Registry of Deeds / Provincial Treasurer | Estate may incur separate fees per property. |
| Courier, certified copies, ID verification | Variable (₱1,000 – ₱5,000 total) | Third parties | Clarify if lawyer bills at cost or with admin surcharge. |
5. How the “reasonableness test” is applied in fee disputes
- Client complaint → IBP Commission on Bar Discipline
- IBP uses the Canon III § 41 factors to examine the retainer contract and actual work.
- If fee is excessive, IBP or the Supreme Court can order refund or reduce the fee (see Advincula v. Advincula, A.C. 13334, 2021; Vda. de Consuegra v. Fabian, G.R. 65577, 1986).
- Lawyer may also face administrative sanctions for overcharging or for Champerty if the fee arrangement gives the lawyer ownership of property transferred.
6. Tax treatment and documentation
| Stakeholder | Requirement | Effect |
|---|---|---|
| Lawyer | Issue BIR-registered official receipt and file VAT/percentage tax returns. | Non-compliance bars estate from deducting the fee. |
| Estate (as taxpayer) | Include attorney’s fee under “Judicial Expenses” in BIR Form 1801; attach receipt and notarised contract. | Lowers taxable estate; must be “necessary and reasonable” per RR 12-2018. |
| Heirs | If paying out of pocket instead of estate funds, keep proof; can be reimbursed by estate. | Heirs cannot deduct it from personal income tax. |
7. Ethical and practical tips for clients & counsel
- Always reduce the engagement to writing – state scope (drafting only vs. “end-to-end”), fee basis, VAT, out-of-pocket costs, and timelines.
- Avoid open-ended hourly billing unless the estate is unusually complex; ask for a cap or periodic billing statements.
- Check VAT status of the lawyer (ask for a BIR Certificate of Registration).
- Clarify who should attend BIR hearings – some assessors insist an heir appear personally.
- Publish on time – missing the Rule 74 publication can void the transfer and expose heirs to creditors.
- Keep originals and certified copies – the Register of Deeds retains the original deed; lawyer should give heirs at least two certified copies for banking and other agencies.
- Involve estate accountant early – personal vs. estate funds, valuation methods (zonal, FMV) and deduction substantiation affect tax due and therefore the heirs’ net shares.
8. Frequently asked questions
| Question | Short answer |
|---|---|
| Can we DIY the deed and just have a lawyer notarise it? | Yes, but the lawyer must still read the document and verify identities; notarial rules forbid “rubber-stamp” notarisation. Expect to pay a higher notarial fee (often ₱3k–₱10k) if no drafting service is hired. |
| Is the lawyer’s percentage fee computed on gross or net estate? | By default on gross value (before debts and taxes), but you may negotiate net basis. Put the definition in the contract to avoid disputes. |
| Can heirs pay the lawyer after titles are transferred? | Yes, but many lawyers require a signing retainer (30 %–50 % of estimated fee) because estate work can take 3–6 months. |
| Are attorney’s fees deductible if settlement is extrajudicial, not via probate court? | Yes, BIR accepts them as “judicial expenses” so long as they are necessary to effect transfer and are properly receipted. |
| What if a sibling refuses to sign unless fees are lowered? | Lawyer cannot coerce signature. Either negotiate separate fee allocations among heirs or proceed to judicial settlement under Rule 73. |
9. Checklist for setting or reviewing the engagement fee
- List the properties and estimated values (get latest BIR zonal valuations and tax declarations).
- Identify special issues: missing titles, unsettled debts, foreign heirs, estate-tax arrears.
- Decide on service scope: drafting only ♦ end-to-end ♦ BIR only ♦ litigation backup.
- Choose fee model (lump-sum, % of estate, hybrid) and document VAT, publication, filing & courier costs.
- Confirm timeline: drafting ⟶ publication ⟶ BIR filing ⟶ CAR ⟶ Registry of Deeds; demand a tentative Gantt or at least number of weeks per stage.
- Get an official receipt upon every payment.
- Keep proof of publication and CAR for at least 10 years (creditors’ period to claim).
10. Key takeaways for 2025 and beyond
- Fee liberalisation remains the norm – The Supreme Court has not issued any tariff with mandatory force; regulation focuses on reasonableness, not price-setting.
- CPRA tightened ethical scrutiny – The new 2023 Code makes it easier for clients to challenge “unconscionable” fees and for courts to award refunds.
- Digital BIR workflows – Since 2024, many RDOs accept eTSR uploads; lawyers who master the eCAR portal can justifiably charge premium “end-to-end” fees.
- Estate tax amnesty ended in June 2025 – Late filers now face higher surcharges; lawyers may justifiably bill more for negotiating waivers or instalment plans.
Final word
Attorney’s fees for a Deed of Adjudication in the Philippines are market-driven but not arbitrary. A well-drafted engagement letter that aligns with the CPRA factors, clearly separates professional fees from statutory charges, and is supported by official receipts will protect both lawyer and heirs — and keep the settlement on budget and on schedule. Always consult directly with counsel to tailor fees to the estate’s size, complexity, and timelines.