Extra-Judicial Settlement of Property with a Deceased Spouse in the Philippines

A comprehensive, practice-oriented guide

1) What “extra-judicial settlement” means

An extra-judicial settlement (EJS) is a way for heirs to divide and transfer a deceased person’s estate without filing a full-blown court case. It is permitted when the law’s conditions are met and results in a notarized deed that, together with tax clearances, lets the heirs register title to real property (and transfer personal property) in their names.

Key pillars in Philippine law:

Succession opens at death. Ownership of the decedent’s transmissible rights passes to the heirs the moment the person dies (Civil Code).
Rule 74 of the Rules of Court allows heirs to settle without court proceedings if statutory requirements are met and provides remedies for excluded heirs and creditors (notably the two-year window to assail the settlement).

2) When an EJS is allowed (threshold requirements)

You may proceed by EJS if all of the following are true:

No will (intestate estate). If a will exists—even if holographic—it generally calls for probate.
No outstanding debts, or debts have been fully paid/settled (or sufficient provision made for them).
All heirs are of legal age; minors or incapacitated heirs must act through a judicially appointed guardian (and, as a best practice, with court approval of the minor’s share).
Heirs agree on how to divide. If there is a dispute, use partition proceedings or a court-supervised estate settlement.
Publication: The EJS (or Affidavit of Self-Adjudication, if there is only one heir) must be published once a week for three consecutive weeks in a newspaper of general circulation.
Registration: If there is real property, the notarized deed must be presented to the Register of Deeds for annotation/transfer of title; for purely personal property, keep the deed and meet each agency’s transfer rules (e.g., stock transfer books, banks, LTO).

⚖️ If there are unpaid creditors, the safer route is a court proceeding (e.g., settlement of estate) so claims can be filed and resolved under court supervision.

3) Special note on a deceased spouse’s estate

Before distributing anything, liquidate the marital property regime:

Absolute Community of Property (ACP) (default for most marriages after the Family Code took effect in 1988): presume all property acquired during marriage is community unless excluded by law or marriage settlements. Half belongs to the surviving spouse, the other half forms part of the decedent’s estate.
Conjugal Partnership of Gains (CPG): return exclusive properties to each spouse, then divide the net conjugal gains; the decedent’s share goes to the estate.
Separation of Property: only the decedent’s exclusive assets comprise the estate.

Only after this liquidation do you compute legitimes and distribute the decedent’s half (or separate assets) among the heirs.

4) Who the heirs are (and how much they get, in broad strokes)

Heirs include compulsory heirs (who cannot be deprived of their legitime except by a valid cause of disinheritance) and voluntary heirs (if any, through a will). In an intestate EJS scenario, the Civil Code/Family Code intestacy rules apply:

If there are legitimate children/descendants + surviving spouse: they inherit together; shares depend on the number of children. The spouse typically gets a share equal to each legitimate child in intestacy.
If there are no descendants but there are ascendants (parents) + surviving spouse: they inherit together, with statutory fractions.
If there are illegitimate children: they participate according to statutory rules (their legitime is generally a fraction of a legitimate child’s share).
If there are no descendants/ascendants: the spouse may inherit with collateral relatives, subject to the Code’s order of intestate succession.

Because the exact fractions depend on family composition, many practitioners attach a family tree and share computation to the EJS for clarity.

5) Forms you may use

There are two common instruments:

Deed of Extrajudicial Settlement (by agreement among heirs) Used when there are two or more heirs. It states the heirs, identifies and values the assets, recites compliance with Rule 74, states there are no debts (or that debts have been paid/provided for), divides the estate, and includes undertakings to answer for claims.
Affidavit of Self-Adjudication (ASA) Used when there is only one heir. The heir adjudicates the entire estate to themself, subject to the two-year liability for claims of other heirs or creditors. Publication is also required once a week for three consecutive weeks.

Both documents must be notarized and (if real property is involved) presented to the Register of Deeds.

6) Mandatory publication & the two-year risk window

Publication: Once weekly for three consecutive weeks in a newspaper of general circulation. Keep the Affidavit of Publication and copies of the issues.
Two-year period (Rule 74): Within two (2) years from the date of the EJS/ASA, omitted heirs or creditors may assert claims directly against the heirs who received property (or against the distributed properties). This is why buyers and lenders often require proof of publication and sometimes a surety bond or warranties.

7) Taxes and government clearances (practical roadmap)

A) Estate tax (BIR)

Estate Tax Return (BIR Form): File an estate tax return and pay estate tax based on the net estate (gross estate less allowable deductions, including standard deduction under current tax rules, the family home deduction up to the statutory cap, claims against the estate, and the net share of the surviving spouse).
Deadline: Generally one (1) year from death (extensions may be available upon meritorious application). Late filing/payment triggers surcharges and interest.
CAR: For real property (and other registrable assets such as shares), the BIR issues a Certificate Authorizing Registration (CAR) after tax payment and document review. CAR is indispensable for title transfer.

Typical BIR dossier (expect variations by RDO):

Death certificate; IDs/TINs (including TIN of the Estate)
EJS/ASA (notarized) + Affidavit of Publication + newspaper clippings
List and valuation of assets at time of death (zonal value/BIR valuation for land; assessor FMV; bank certifications; stock valuations; vehicle CR/OR, appraisals if any)
Deductions proofs (e.g., debts with notarized instruments, mortgages, judicial expenses if any)
Marriage certificate and birth certificates of heirs; proof of property regime if relevant (e.g., marriage settlements)

B) Local transfer tax & registration fees

After CAR, pay local transfer tax at the city/municipality where the property is located (rates vary by LGU; Metro Manila often has a slightly different rate structure).
Settle assessor’s and Register of Deeds fees (annotation/transfer, issuance of new title).

C) Asset-specific transfers

Land/condo: Present CAR, EJS/ASA, tax clearances, and IDs to the Register of Deeds; secure new TCT/CCT in heirs’ names; update Tax Declaration with the Assessor.
Bank accounts: Banks will require CAR (or BIR letter ruling if applicable), EJS/ASA, IDs, and bank forms.
Shares of stock: Present CAR and EJS/ASA to the corporate secretary/stock transfer agent to update the stock and transfer book.
Motor vehicles: Use LTO transfer procedures with the CAR and EJS/ASA.

8) Step-by-step practical workflow

Gather data: Inventory assets & debts as of date of death; identify heirs and marital property regime.
Liquidate the marital partnership (ACP/CPG), determine the decedent’s share.
Check the Rule 74 conditions (no will, no debts or fully provided for, all heirs capable/represented, consensus).
Draft the EJS (or ASA) with: facts of death; heirs; property list with valuations; confirmation of Rule 74 compliance; allocation table; warranties/undertakings; claims indemnity.
Notarize.
Publish (3 consecutive weeks).
File estate tax return; pay estate tax; secure CAR.
Pay local transfer taxes; process Register of Deeds and agency-specific transfers.
Keep a closing binder (EJS/ASA, publication proofs, CAR, receipts, new titles, updated tax declarations).

9) Common pitfalls (and how to avoid them)

Skipping liquidation of the spouses’ property regime. Always compute the surviving spouse’s half first; only the decedent’s half is distributable.
Assuming “no debts” without proof. Check for mortgages, credit cards, taxes, hospital bills. If in doubt, settle through court or clearly reserve for debts in the EJS and obtain creditor releases.
Publication lapses. Make sure the paper is of general circulation and the ad runs once a week for three weeks; secure the affidavit and clippings.
Using the wrong property descriptions. Use exact TCT/CCT numbers, lot/block, technical descriptions, and condo project names; attach certified true copies.
Estate tax miscomputations. Validate valuations (zonal vs. assessor); be consistent on date-of-death values; reflect deductions with documents.
Minors’ shares. Use a court-appointed guardian and get court approval for compromises affecting minors.
Omitting heirs. Conduct due diligence on prior marriages/children; affidavits of kinship help, but be truthful—Rule 74 preserves remedies for those left out.

10) Creditor and excluded-heir remedies (what happens if there’s a problem)

Within two years from the EJS/ASA, an omitted heir or creditor may seek annulment or enforcement against the heirs and/or the specific properties distributed.
Even after two years, ordinary actions (e.g., to recover one’s hereditary share) may still be available subject to prescriptive periods, but the special Rule 74 protections/shortcuts no longer apply in the same way.
Buyers from the heirs within the two-year window are often asked to accept warranties, require publication proof, and sometimes a bond or escrow.

11) Special cases

Single heir: Use Affidavit of Self-Adjudication, still publish, then tax and transfers.
Small estates: There is a summary settlement mechanism under Rule 74 for estates of “small value” (an archaic threshold in the text). In practice, most estates proceed either by EJS or through regular/special court proceedings.
Foreign assets / dual proceedings: You may need ancillary probate/recognition abroad or domestication of foreign judgments; coordinate with counsel in both jurisdictions.
Foreign spouse / marriage abroad: Ensure the marriage and its property regime are provable in the Philippines (e.g., report of marriage, governing law).
Properties with incomplete titles: Cure the title (e.g., lost title reissuance, technical corrections) before or along with the EJS to avoid rejection at the Registry.

12) Practical drafting checklist (for your deed)

Parties and capacity statements (ages, civil status; guardianship if any)
Facts of death (date/place), intestacy, no debts (or fully settled/provided for)
Marital regime liquidation results (identify the spouse’s share vs. estate)
Complete inventory of assets with date-of-death values
Allocation schedule showing each heir’s share and the legal basis
Undertakings under Rule 74 (publication, liability for claims, warranties of title/possession)
Signatures with proper acknowledgment (notarization block)
Annexes: certified copy of death certificate; IDs; marriage/birth certificates; titles; valuations; tax declarations; guardianship order (if any)

13) Frequently asked questions

Q: Can we do EJS if the decedent had debts? A: Rule 74 presumes no debts (or that they’ve been paid/provided for). If there are known creditors, either settle and document payment/waivers or opt for court settlement to process claims formally.

Q: Is publication really mandatory? A: Yes. Publication once a week for three consecutive weeks is a statutory safeguard for third parties.

Q: What if a previously unknown heir appears later? A: Within two years, they can demand their lawful share from the distributees (and, in some cases, go after the property itself).

Q: Do we need a bond? A: There is no universal bond requirement for an EJS among multiple heirs, but a sole heir using an ASA should be ready to answer for claims. Buyers or lenders may contractually require a bond.

Q: How long does the process take? A: The timeline depends on publication, BIR processing for CAR, and the Registry of Deeds—plan for those critical path items.

14) Simple model clauses (illustrative only)

Opening recitals

“That Juan D. Cruz died intestate on 15 March 2025 in Quezon City; that the parties hereto are his sole heirs xxx; that the deceased left no outstanding debts as of the date hereof; and that the absolute community of property between Juan and his surviving spouse Maria S. Cruz has been liquidated, allocating one-half (1/2) to Maria and one-half (1/2) to Juan’s estate.”

Rule 74 undertakings & publication

“Pursuant to Rule 74, the parties shall cause publication of this instrument once weekly for three (3) consecutive weeks in a newspaper of general circulation and hereby assume liability for claims of omitted heirs or creditors within two (2) years from the date hereof.”

Allocation clause

“After taxes and fees, the following properties are adjudicated as follows: [attach Schedule A listing TCT/CCT numbers, areas, locations, and the heir to whom each is adjudicated].”

(Tailor language to your facts; consult counsel for binding templates.)

15) Takeaways

EJS is efficient but formal: meet all Rule 74 conditions, publish, and pay taxes.
With a deceased spouse, always liquidate the marital property first; only the decedent’s share is distributable.
Keep a meticulous paper trail (publication proofs, CAR, valuations, receipts, new titles).
When in doubt—e.g., unpaid debts, minors, disputed heirs—choose the court-supervised route to protect everyone involved.

This guide is for general information in the Philippine context. For decisions affecting rights or significant value, coordinate with counsel and your local BIR RDO/Registry of Deeds for document-specific requirements.