Deed of Adjudication for Extrajudicial Settlement in the Philippines
(Everything you need to know, in one legal-style article – updated to April 30 2025)
Disclaimer: This write-up is for informational and academic purposes only and does not constitute legal advice. Always consult a Philippine lawyer or tax professional for your specific facts.
1. Concept and Context
- Extrajudicial Settlement (EJS) is the heirs’ private liquidation and distribution of a deceased person’s estate without opening a probate case.
- The Deed of Adjudication (also called “Self-Adjudication” when there is only one heir, or “Deed of Extrajudicial Settlement of Estate” when there are several heirs) is the notarized instrument that formally records the heirs’ agreement and is later registered with the Registry of Deeds (RD) or the Land Transportation Office (LTO) if movable property is involved.
2. Statutory & Regulatory Foundations
| Source | Key Provision |
|---|---|
| Rule 74, § 1–4, Rules of Court (1940, as amended) | Conditions for EJS; publication requirement; 2-year lien in favor of creditors & other heirs. |
| Civil Code (1950), Arts. 774–1101 | Succession, heirship, legitimes, collation, warranties among co-heirs. |
| National Internal Revenue Code (NIRC), as amended by the TRAIN Law / RA 10963 (2018) | Estate-tax rules, rates, due dates, and BIR Form 1801. |
| BIR Revenue Regulations No. 12-2018, 17-2023, etc. | Documentary requirements for Estate Tax Clearance and Electronic Certificate Authorizing Registration (eCAR). |
| RA 11213 (Estate Tax Amnesty, 2019) & RA 11956 (extension to June 14 2025) | One-time relief on penalties/surcharges for estates with decedents who died on or before December 31 2021. |
| Property Registration Decree (PD 1529) | Registration of transfers and annotation of liens in Torrens titles. |
| Local Government Code (RA 7160) | Local transfer and documentary stamp taxes, plus transfer fees at the City/Municipal Treasurer’s Office. |
3. When Is Extrajudicial Settlement Allowed?
- No Will, or Will not yet probated.
- Heirs are all of age (or minors are properly represented by guardians/parents with court approval).
- The estate has no outstanding debts, or the heirs pay/assume them.
- All heirs agree on the partition.
- Property is in the Philippines. (Foreign assets require forum-state procedures.)
If any of these is missing—e.g., there is a contested will, a minor heir without guardian, or unpaid creditors—the estate must pass through judicial settlement (probate, intestate, or letters of administration).
4. Forms of Deed
| Form | Typical Caption | Use-Case Highlights |
|---|---|---|
| Self-Adjudication | “Affidavit of Self-Adjudication” | Sole heir adjudicates entire estate to himself/herself. |
| Joint EJS | “Deed of Extrajudicial Settlement of Estate Among Heirs” | Two or more heirs partition property pro-indiviso or distributively. |
| EJS with Simultaneous Sale | “… and Sale” | Heirs settle, then immediately convey property to a buyer in the same instrument. |
| EJS to a Corporation | “… and Subscription” | Heirs capitalize the estate into shares of a family corporation (common in real-estate holding firms). |
5. Essential Clauses & Drafting Checklist
- Title & parties – full civil names, marital status, residence certificates/IDs.
- Antecedents – date/place of decedent’s death; statement that no will was left or will is uncontested.
- Declaration of heirship – relationship to decedent, legitimate/illegitimate status, representation.
- Statement on debts – “[T]he estate is free from outstanding obligations or all debts have been paid.”
- Detailed inventory – real (TCT/CCT numbers, area, location) and personal property (bank accounts, vehicles, shares).
- Manner of partition/adjudication – who gets what; lot and share descriptions; equalization money if unequal.
- Tax compliance line – “Subject to payment of estate, DST, and transfer taxes and issuance of eCAR…”
- Publication covenant – undertaking to publish in a newspaper of general circulation, once a week for 3 weeks.
- Warranty & indemnity – heirs bind themselves solidarily against later claims.
- Signatures & notarial acknowledgment – all heirs (or guardians) sign; include Community Tax Certificate / Passport ID details.
Tip: Attach a “Technical Description Annex” for each real property; banks may ask for it before releasing deposits.
6. Procedural Roadmap
| Step | What to Do | Where/Who | Key Papers/Fees |
|---|---|---|---|
| 1 | Secure TIN (if heir has none) and BIR Form 1904 | Any BIR RDO | None |
| 2 | Compute Estate Tax (flat 6 % of Net Estate after deductions). File BIR Form 1801 within 1 year from death (or within amnesty period). | BIR RDO where decedent resided at death | Estate tax + 25 % surcharge + 12 % interest per annum if late; or avail amnesty. |
| 3 | Submit EJS Deed, Decedent’s Death Certificate, Affidavit of Publication, SALN of decedent (for gov’t employees), etc. | BIR One-Time Transaction (ONETT) counter | BIR issues eCAR + DST eCAR |
| 4 | Publish a notice of the EJS, once a week for 3 consecutive weeks. | Newspaper of general circulation in province/city of property | ₱8 000–₱25 000 (metro papers); ~₱3 000 (provincial) |
| 5 | Notarize the Deed (if not yet notarized). | Notary Public | ₱600–₱2 000 |
| 6 | Register: | ||
| • Real property – RD in province/city where land is located; present Owner’s Duplicate Title, eCAR, tax clearance, transfer tax receipt. | |||
| • Personalty – LTO for vehicles; SEC/stock transfer agent for shares; banks for deposits. | RD / LTO / SEC / Bank | RD fees: 0.25 % of zonal value or FMV + ₱30 IT fee; Transfer tax: 0.5 % (provinces) to 0.75 % (cities). | |
| 7 | Annotate publication proof on each new title (optional but prudent). | RD | Minimal |
Timeline: 2–6 months if papers are complete; longer if estate-tax audit/assessment arises.
7. Taxes, Fees, and Penalties
| Item | Rate / Amount | Legal Basis / Note |
|---|---|---|
| Estate Tax (TRAIN) | 6 % of Net Estate | Sec. 84(NIRC), as amended 2018. |
| Documentary Stamp Tax | ₱15.00 for every ₱1 000 of FMV over first ₱1 000 | Sec. 196, NIRC. |
| Local Transfer Tax | 0.5 %–0.75 % of zonal value | Sec. 135, LGC. |
| Registration Fee (RD) | ~0.25 % of value + ITF | RD Manual of Fees. |
| Late Estate Tax | 25 % surcharge + 12 % interest p.a. | Sec. 248–249, NIRC. |
| Publication | Market-driven | Newspaper tariff. |
Amnesty window: Under RA 11956 (2024), estates of persons who died on or before 31 Dec 2021 may file amnesty returns until 14 June 2025, paying 6 % of net taxable estate without surcharge, interest, or penalties.
8. Creditor & Heir Protection Mechanisms
- 2-Year Lien (Rule 74, §4): Transfer of real property remains subject to challenge by unpaid creditors or omitted heirs within 2 years from registration or date of publication, whichever is later.
- Warranty solidary among heirs (Civil Code Art. 1092): Each heir is solidarily liable for eviction or hidden charges proportionate to his share.
- Bona fide purchaser protections: A third-party buyer relying on a duly published and registered deed acquires better title, but may still be reached if there is fraud and buyer was in bad faith.
9. Common Pitfalls & Practical Tips
| Pitfall | Consequence | Tip |
|---|---|---|
| Skipping publication | Deed is valid inter partes but cannot be registered; title remains in decedent’s name; future buyer may refuse. | Publish in advance or simultaneously with eCAR processing. |
| Unpaid real-property taxes | RD will not register; LGU may sell property at public auction. | Secure Real Property Tax clearance first. |
| Undeclared bank accounts | Frozen accounts; heirs must file BIR Tax-Free Withdrawal Certificate (BIR Form 1904-A). | Request list of balances via Bank Secrecy-Rule exceptions for executors/heirs. |
| Leaving out minor heirs | EJS is voidable; guardian ad litem may seek rescission. | Obtain guardianship order; or do judicial settlement. |
| Using “blanket” descriptions like “including all other property” | RD and BIR will disallow; eCAR only covers specifically declared assets. | List each asset with identifying details. |
| Paying estate tax late | Surcharge + interest can exceed asset value; cannot register titles without eCAR. | File a “partial estate return” within the 1-year deadline even if values are estimated; amend later. |
10. Leading Jurisprudence
| Case | G.R. No.; Date | Doctrine |
|---|---|---|
| Heirs of Malate v. Gamboa | G.R. No. 170338, Sep 21 2011 | Publication cures lack of probate but does not cut off claims of co-heirs defrauded in settlement. |
| Spouses Abalos v. Heirs of Gomez | G.R. No. 158989, Jun 16 2005 | Rule 74 deeds registered after 2-year period are no longer vulnerable to collateral attack by omitted heirs. |
| Heirs of Mendiola v. Court of Appeals | G.R. No. 159333, Jul 13 2004 | Even after 2 years, aggrieved heirs can sue for reconveyance on ground of fraud, subject to 4-year prescriptive period from discovery. |
| Litonjua v. L&R Corp. | G.R. No. 219451, Feb 14 2022 | Buyer in bad faith cannot rely on EJS; double sale principles still apply. |
11. Sample Skeleton (One-Page Format)
AFFIDAVIT OF SELF-ADJUDICATION
(Section 1, Rule 74, Rules of Court)
I, JUAN DELA CRUZ, Filipino, of legal age, widow/er, residing at…, hereby depose:
1. That my spouse, MARIA DELA CRUZ, died intestate on 15 March 2025 in Quezon City, as evidenced by Certificate of Death-Reg. No. _______;
2. That we had one legitimate child, now deceased, and I am the sole surviving heir;
3. That the decedent left the following properties, to wit:
a. TCT No. 123456 – Lot 5-B-2, 200 sq m, Brgy. Sta. Mesa;
b. BDO Savings Acct. No. 000123456789;
4. That the estate is free from debts and liabilities;
5. That pursuant to §1, Rule 74, I hereby ADJUDICATE unto myself the above-described properties, subject to my liabilities under the law;
6. I undertake to publish this affidavit in a newspaper of general circulation for three (3) consecutive weeks and to pay the estate and other applicable taxes.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of ___ 2025 at ___, Philippines.
(sgd.) ______________________
JUAN DELA CRUZNotarial acknowledgment follows.
12. Comparative Note: EJS vs. Small-Estate Settlement (Rule 74, §4)
| Criterion | Regular EJS | Summary Settlement of Small Estate |
|---|---|---|
| Estate ceiling | None | Gross value ≤ ₱10,000 (set in 1940; rarely used today) |
| Publication | Required | Required and filing of bond |
| Court action | None | Petition to MTC; order & bond approval |
| Practical use | Majority of heirs use this route | Under-valued rural estates |
13. Updating or Revoking an EJS
- Before registration: Heirs may execute an Amended Deed or simply ratify a new partition.
- After registration but within 2 years: Do a Supplemental EJS, then re-publish and re-register.
- After 2 years: Changes require voluntary deeds of sale/exchange or judicial re-opening on fraud, mistake, or pre-terition grounds.
14. Key Takeaways
- Meet all four statutory conditions (no will, no minors without guardians, no debts, unanimous heirs) before drafting.
- Never ignore estate tax—the eCAR is the gatekeeper for every registry office.
- Publication is non-negotiable; photocopies of the newspaper issues (not just the publisher’s affidavit) are invaluable.
- Register promptly; the 2-year lien still runs, but the sooner the title is in the heirs’ names, the easier subsequent transactions become.
- Maintain complete files (certified copies of titles, tax declarations, receipts, eCAR, newspaper clippings) to pre-empt future disputes.
15. Final Words
The Deed of Adjudication for an Extrajudicial Settlement can appear deceptively simple—often a two-page notarized form downloaded online—but mis-steps can cost millions in back taxes, expose heirs to lawsuits, or cloud titles for decades. Treat it as a formal, legally significant conveyance: perform due diligence, compute and pay the correct estate tax, publish and register according to Rule 74, and obtain professional advice when the family tree, property profile, or creditor picture gets complicated.