When a vehicle owner passes away, the ownership of the motor vehicle does not automatically transfer to the heirs. Under Philippine law, the estate must be settled to legally transfer the Certificate of Registration (CR) and Tax Declaration. When the deceased left no will and no debts, the most efficient method is an Extrajudicial Settlement of Estate (EJS).

Legal Basis: Rule 74, Section 1

The Rules of Court allow heirs to bypass lengthy court proceedings through an EJS if the following conditions are met:

The decedent died intestate (without a will).
The estate has no outstanding debts.
All heirs are of legal age, or minors are represented by judicial or legal guardians.
The settlement is made through a public instrument (notarized deed) filed with the Register of Deeds.

Step 1: Execution of the Deed

The heirs must draft and sign a Deed of Extrajudicial Settlement of Estate. If there is only one surviving heir, the document is instead called an Affidavit of Self-Adjudication.

Essential Elements of the Deed:

Description of the Vehicle: Make, model, engine number, chassis number, and Plate Number/MV File Number.
Declaration of Heirship: Relationship of the heirs to the deceased.
Agreement to Partition: A statement on who shall inherit the vehicle (e.g., "The vehicle is waived in favor of [Name of Heir]").
Bond Requirement: A statement regarding a bond (required if personal property like a car is involved, though often waived or satisfied by the publication requirement).

Step 2: Publication Requirements

The law requires that the EJS be published in a newspaper of general circulation once a week for three (3) consecutive weeks. This serves as a notice to creditors or any other parties who might have a claim against the estate.

Note: Publication does not automatically vest ownership; it is a jurisdictional requirement to ensure the settlement is binding against third parties.

Step 3: Payment of Estate Tax (BIR)

Before the Land Transportation Office (LTO) can transfer the title, the Bureau of Internal Revenue (BIR) must issue an electronic Certificate Authorizing Registration (eCAR).

The Tax Rate

Under the TRAIN Law (Republic Act No. 10963), the estate tax rate is a flat 6% of the value of the net estate at the time of death.

Requirements for BIR eCAR:

Notice of Death (if applicable under older laws).
Certified True Copy of the Death Certificate.
Deed of Extrajudicial Settlement.
Original Certificate of Registration (CR) and latest Official Receipt (OR) of the vehicle.
Affidavit of Publication from the newspaper publisher.
Taxpayer Identification Number (TIN) of the decedent and the heirs.

Step 4: Transfer of Ownership at the LTO

Once the eCAR is issued, the heir(s) can proceed to the LTO for the transfer of the motor vehicle’s title.

Documentary Requirements:

Original CR and latest OR.
BIR eCAR specifically identifying the motor vehicle.
Notarized Deed of Extrajudicial Settlement.
Affidavit of Publication and clippings of the notice.
PNP-HPG Motor Vehicle Clearance (requires physical inspection/macro-etching).
Mandatory Third Party Liability (MTPL) Insurance in the name of the new owner.
Valid IDs of the heirs.

The Process:

Clearance: Obtain the PNP-HPG Clearance to ensure the vehicle is not on the "Stolen" or "Wanted" list.
Inspection: Bring the vehicle to the LTO District Office for inspection and emission testing.
Submission: Submit all documents to the evaluator.
Payment: Pay the transfer fees, computer fees, and any renewal fees if the registration has expired.
Issuance: Receive the new Certificate of Registration in the name of the heir.

Summary Table of Costs and Fees

Item	Estimated Cost / Basis
Estate Tax	6% of the vehicle's fair market value
Publication Fee	PHP 3,000 to PHP 10,000 (depending on the newspaper)
Notarial Fee	1% to 2% of the vehicle value (negotiable)
PNP-HPG Clearance	PHP 300 to PHP 500
LTO Transfer Fee	Based on vehicle weight + computer fees

Important Considerations

Heirs Abroad: If an heir is outside the Philippines, they must execute a Special Power of Attorney (SPA) authenticated or apostilled by the Philippine Consulate in their country of residence to allow a representative to sign the EJS.
Waiver of Rights: If there are multiple heirs but only one wants the car, the other heirs must include a "Waiver of Rights" section within the EJS deed.
The Two-Year Rule: Under Section 4, Rule 74, the transfer is subject to the rights of any creditor or heir who may have been excluded, for a period of two years after the settlement. A notation regarding this lien will typically appear on the new CR.