In the Philippines, the distribution of a deceased person’s estate is governed primarily by the Civil Code. Navigating the transition of property from the deceased (the decedent) to the heirs often involves a tug-of-war between the decedent's documented wishes and the strict mandates of the law.
Two critical concepts often collide in these disputes: the Notarized Letter of Intent and the system of Legitimes.
1. The Legal Standing of a Notarized Letter of Intent
In Philippine law, a "Letter of Intent," even if notarized, generally does not carry the same weight as a Last Will and Testament.
The Rule on Formalities
For a document to legally transmit property ownership upon death, it must qualify as either a Holographic Will (entirely handwritten, dated, and signed by the testator) or a Notarial Will (signed in the presence of witnesses and acknowledged by a notary public under specific legal protocols).
- If the Letter of Intent is essentially a Will: If it contains "dispositive" language (e.g., "I give House X to Person Y") and meets the strict formalities of a Notarial Will (three witnesses, attestation clause, etc.), it may be probated.
- If it is just a letter: It is viewed merely as an expression of sentiment or a "wish list." While it can be used to show the decedent's intent during a dispute, it cannot override the legal order of intestate succession or the mandatory shares of compulsory heirs.
2. Compulsory Heirs and the Concept of Legitimes
The biggest hurdle to enforcing any letter of intent is the Legitime. Philippine law reserves a specific portion of the estate for "Compulsory Heirs." The decedent cannot deprive these heirs of their share without a valid legal disinheritance.
Who are the Compulsory Heirs?
- Primary: Legitimate children and their descendants.
- Secondary: Legitimate parents and ascendants (only in the absence of children).
- Concurring: The surviving spouse and illegitimate children.
The "Free Portion"
Only the portion of the estate remaining after all legitimes have been satisfied is considered the Free Portion. The decedent can only give away property via a Letter of Intent or Will to strangers (non-heirs) or favor one heir over another using this specific segment of the estate.
3. Grounds for Contesting Inherited Property
Heirs or interested parties typically contest the distribution of property on the following grounds:
- Preterition (Omission): If a compulsory heir in the direct line is totally omitted from the inheritance, the institution of other heirs may be annulled.
- Violation of Legitimes: If a Letter of Intent or Will gives away so much property that a compulsory heir receives less than their legal minimum.
- Incapacity of the Decedent: Proving the deceased was not of "sound mind" or was under "undue influence" or duress when signing the document.
- Forgery or Fraud: Challenging the authenticity of the signature on the notarized document.
- Simulated Sales: Often, parents "sell" property to one child to avoid inheritance laws. Other heirs can contest this as a "donation in disguise" that should be brought back into the estate (collation).
4. Enforcement and the Probate Process
If a party seeks to enforce a notarized document as a will, they must undergo Judicial Probate. No property passes to the beneficiary until a court determines the document is valid.
Steps in Enforcement/Contestation:
- Petition for Probate/Settlement: The document is filed in court.
- Notice to Heirs: All legal heirs are notified and given the chance to oppose.
- Inventory of the Estate: All assets are listed to determine if the "intent" in the letter impairs the legitimes of others.
- Collation: This is the process of adding back any properties the decedent gave away while alive to the total estate value to ensure no heir is cheated of their share.
5. Summary Table: Letter of Intent vs. Last Will
| Feature | Notarized Letter of Intent | Last Will and Testament |
|---|---|---|
| Legal Power | Persuasive/Sentimental | Legally Binding (if probated) |
| Formalities | Simple Notarization | Strict (Witnesses, Attestation) |
| Transfer of Title | Cannot trigger title transfer alone | Basis for Transfer of Title |
| Legitime Impact | Cannot infringe on legitimes | Must respect legitimes |
6. Practical Realities
In the Philippines, a notarized letter of intent is most effective when it is used as a guide for an Extrajudicial Settlement. If all heirs are in agreement and are of legal age, they can choose to honor the decedent’s letter of intent by signing a "Deed of Extrajudicial Settlement of Estate" that reflects those wishes.
However, if even one heir disagrees, the letter of intent usually fails to stand up against the default distribution rules of the Civil Code, unless it can be proven to be a valid Notarial Will.