CHILDREN’S INHERITANCE RIGHTS IN AN EXTRAJUDICIAL SETTLEMENT
(Philippine law, updated to June 2025)
1. What is an Extrajudicial Settlement?
| Key Point | Rule 74, Rules of Court | Practical effect |
|---|---|---|
| When allowed | • No will left OR the will has been lost/void • All heirs are of age or the minors are duly represented • There is no outstanding debt, or debts have been fully paid or settled with creditors’ consent |
Lets heirs bypass probate litigation and divide the estate by agreement |
| Forms | 1. Affidavit of Self-Adjudication (single heir) 2. Deed of Extrajudicial Settlement (two + heirs – with or without a simultaneous sale) |
Must be notarised, published once a week for 3 consecutive weeks in a newspaper of general circulation, and—if real property is included—registered with the Registry of Deeds |
Tip: Creditors, omitted heirs, and the BIR may attack an invalid deed within 2 years from its registration (or 4 years from discovery for fraud).
2. Who Are the Compulsory Heirs?
| Category | Civil Code Arts. 887, 979–981 | Share in the legitime* |
|---|---|---|
| Legitimate children & descendants | Always compulsory | ½ of the estate, divided in equal parts |
| Illegitimate children** | Arts. 895, 900; relative legitime | Each gets ½ of a legitimate child’s share (ratio 1 : 0.5)¹ |
| Children by legitimation (Arts. 177–182) or adoption (RA 11642, 2022) | Deemed legitimate | Same as legitimate child |
| Surviving spouse | Art. 892 | Concurrence rules apply (usually equal to one legitimate child’s share when children exist) |
| Parents/ascendants | Only if the deceased left no descendants | ½ of estate, subject to spouse’s co-legitime |
* Legitime = the portion of the estate the law reserves for compulsory heirs and that cannot be impaired by any disposition or agreement. ¹ The “⅓/⅔ rule” under Art. 895 was abolished in 1988; the ratio has been 1 : 0.5 since then.
3. Children’s Specific Rights and Protections
Participation & Consent
- Every child-heir must sign the deed. A minor signs through a court-appointed guardian ad litem or a guardian of property (Rule 96).
- A child who was omitted or whose legitime was impaired may annul the settlement and recover his share plus fruits and damages.
Right to Representation
- Grandchildren step into their pre-deceased parent’s shoes (right of representation, Art. 970).
Collation & Reduction
- Donations inter vivos to children are normally partially applied against their future legitime (collation).
- If lifetime gifts or testamentary dispositions impair the legitime, the heir may demand reduction after the estate is inventoried.
Posthumous Children (conceived – not yet born)
- They are “already born” for all inheritance purposes (Art. 41). The estate cannot be finally partitioned until they are born alive; only provisional administration is allowed.
Illegitimate Children’s Proof of Filiation
- Birth certificate (signed by the father), open & continuous possession of status, or admission in a public instrument/ testamento.
- DNA evidence is admissible since RA 9255 (2004) and jurisprudence from Tijing v. Court of Appeals (2001) onward.
Adopted & Administratively Adopted Children (RA 11642, RA 11222)
- Enjoy full legitimate-child status from the issuance of the Order of Adoption (now by the National Authority for Child Care).
4. Estate-Tax and Procedural Requirements Affecting Children
| Step | Children’s Concerns |
|---|---|
| BIR Estate Tax Return & Clearance | Legitimate and illegitimate children are co-liable only up to the value of what they receive (Art. 131). Since the TRAIN Law (RA 10963, 2018) the estate tax is a flat 6 % of net estate. |
| Estate-Tax Amnesty | RA 11956 (2023) extended the amnesty period to June 14 2025 – very relevant if the child-heirs are belatedly settling estates of decedents who passed on or before December 31 2021. |
| Publication & Bond | The bond under Rule 74 §1 is waivable if there are no debts; if minors are involved, the court may still require one for protection. |
| Transfer of Titles | Registry of Deeds requires (a) notarised deed, (b) proof of publication, (c) tax clearance, (d) owner’s duplicate title. Children’s names appear as co-owners unless they subsequently partition among themselves. |
| Personal/Bank Assets | Banks release deposits upon BIR eCAR + notarised deed; minors’ withdrawals require court approval (FAO No. 38-2020). |
5. Remedies if Children’s Rights Are Violated
- Action for Reconveyance/Annulment – within 4 years from discovery of fraud, but not > 10 years from registration (or 30 years if based on implied trust over unregistered land).
- Petition for Settlement of Estate (Judicial Administration) – heirs can abandon the extrajudicial route and ask the court to take over, especially to protect minors or resolve disputes.
- Criminal Liability – Estafa may arise if an heir misappropriates the share due to a minor child (Art. 315 RPC).
- Administrative Sanctions – Notaries and lawyers may be disciplined for knowingly excluding a compulsory heir.
6. Special Situations
| Scenario | Effect on Children |
|---|---|
| Foreign Parent / Mixed-Nationality Estate | Philippine real property is governed by Philippine law on legitime (Art. 16), so compulsory shares of children apply even if the parent’s national law differs. |
| Estate ≤ ₱10,000 | Rule 74 allows settlement by simple public or private instrument without publication; minors still need representation. |
| Outstanding Debts Appear After Settlement | Creditors may sue any heir pro-rata within 2 years. Children may be compelled to return what they received if necessary. |
| Ante-mortem Partition (Art. 1080) | A parent may partition property among children while alive, but must expressly reserve the legitimes of absentees/posthumous children; otherwise the partition is rescissible. |
| Preterition in a Will | If a will completely omits a compulsory heir (preterition), the institution of heirs is annulled to the extent of legitime; intestacy opens for the omitted child’s share. |
7. Practical Checklist for Parents & Guardians
- Inventory early – Locate all TCTs, shares, bank accounts, insurance policies, cryptowallet keys.
- Pay estate tax promptly – 6 % within one year; extensions possible for meritorious causes (Sec. 91, NIRC).
- Guardianship order – Secure court approval before signing for a minor; attach to deed.
- Double-check filiation documents – NSO/PSA birth certificates, legitimation papers, adoption orders.
- Publish correctly – Three consecutive weekly issues; keep the proofs and affidavit of publication.
- Register deeds – With BIR (for eCAR) before Registry of Deeds; assessors’ office for tax declaration transfer.
- Retain originals – Heirs should each keep notarised copies; minors’ copies kept by guardian and deposited with the court.
8. Conclusion
In the Philippines, extrajudicial settlement is an attractive shortcut—but only when every compulsory heir’s rights are fully respected. Children, whether legitimate, illegitimate, legitimated, adopted, or even unborn, are given robust statutory protection:
- Their legitime is untouchable;
- They must be included and represented;
- They enjoy multiple remedies if omitted or defrauded; and
- Authorities (courts, BIR, Registry of Deeds) provide procedural safeguards.
Because tax rules and family-law statutes evolve (e.g., estate-tax amnesty deadlines, new adoption procedures), heirs should always verify the latest issuances and, when minors or complex assets are involved, consult a Philippine estate-planning lawyer before signing any deed.