1) What an Extrajudicial Settlement is (and when it applies)

An Extrajudicial Settlement of Estate (EJS) is a non-court process where the heirs of a deceased person divide and transfer the decedent’s estate among themselves through a public instrument (a notarized document), instead of filing a judicial settlement case.

In Philippine practice, EJS is commonly used to transfer land titles, bank deposits, vehicles, and other properties from the deceased to the heirs with less time and expense than going to court—but only when the law’s conditions are met.

Core legal idea

EJS is anchored on Rule 74 of the Rules of Court (settlement of estate without administration), working alongside substantive rules on succession (who inherits and in what shares) under the Civil Code/Family Code framework, and tax/transfer rules (estate tax, documentary stamp tax where applicable, local transfer taxes, registration fees) under tax and local government rules.

2) The “Big 4” Legal Requirements for a Valid EJS

An extrajudicial settlement is generally proper only if all of the following are true:

(1) The decedent left no will (intestate)

EJS is the typical route for intestate estates. If there is a will, the usual route is probate (court process). In some real-world situations, parties still try to proceed without probate, but this can create serious title and validity problems—especially later when selling or registering.

(2) The decedent left no outstanding debts (or they are fully settled)

Rule 74 contemplates that EJS is used when the estate has no debts. If there are debts, creditors can later go after the property transferred to heirs (more on this under “2-year exposure period”).

Practical note: Many EJS documents state that the estate has no debts. If that statement is untrue, the heirs may face liability.

(3) All heirs are known, alive, and in agreement

All heirs must participate (or be duly represented). If an heir is omitted, the settlement can be attacked, and transfers based on it become risky.

(4) The settlement must be made in a public instrument and comply with publication/filing rules

A private, unnotarized agreement is generally not enough for registries and tax authorities. EJS is normally:

executed as a notarized Deed of Extrajudicial Settlement (public instrument), and
accompanied by publication (commonly required in practice and explicitly required by rule when settlement is by public instrument), and
registered/filed with the Register of Deeds if real property is involved.

3) Variants: EJS vs. Self-Adjudication vs. EJS with Sale

A. Deed of Extrajudicial Settlement (multiple heirs)

Used when there are two or more heirs.

B. Affidavit of Self-Adjudication (only one heir)

If there is only one legal heir, the heir may execute an Affidavit of Self-Adjudication. This is still subject to tax and registry requirements and typically still requires publication in practice.

C. EJS with Sale / EJS and Deed of Sale

Common scenario: heirs want to sell the inherited property.

Two typical approaches:

Two-step: EJS (transfer to heirs) → then Deed of Sale (heirs sell to buyer).
One combined instrument: EJS with Deed of Sale (or EJS and Sale in one document).

Risk management tip: Some registries/buyers prefer a two-step approach for clarity, but the combined form is widely used too. Either way, you still must satisfy estate tax and registry requirements.

4) Who the Heirs Are (and why this matters)

Before drafting EJS, you must correctly identify:

Compulsory heirs (e.g., legitimate children, surviving spouse; in some cases parents; and the legitime system),
whether there are illegitimate children, adopted children, or prior marriages,
whether property belongs to the conjugal partnership / absolute community (so only the decedent’s share is in the estate).

Even a “simple” estate can become complicated when:

there is a second marriage,
there are children from different relationships,
a spouse predeceased,
there are renunciations/waivers,
there is a family home claim,
or properties were acquired before/after marriage under different property regimes.

Bottom line: If the wrong heirs or wrong shares are stated, the EJS can be vulnerable and titles can be clouded.

5) Publication and the “Two-Year Exposure” Rule (crucial)

Publication

Rule 74 requires that settlement by public instrument be published (commonly “once a week for three consecutive weeks”) in a newspaper of general circulation in the province/city where the decedent resided (or where the property is located, depending on practice/registry requirements).

Publication is not a mere formality—many Registers of Deeds and the BIR will look for proof of it.

Two-year period where heirs remain exposed to claims

A key feature of Rule 74: for two (2) years after an extrajudicial settlement, creditors and other persons with claims may pursue the estate (and in effect, the heirs who received property).

Additionally, for real property, the rule is often implemented as an annotation on the title (or in the registry records) warning of the Rule 74 settlement and the two-year period.

Practical impact: Buyers and banks often care about this. Some may require waiting out the 2 years or require extra safeguards.

6) Bond Requirement (often overlooked)

Under Rule 74, when personal property is distributed extrajudicially, there is a concept of filing a bond equivalent to the value of the personal property to answer for claims (implementation and strictness can vary, and many estates focus on real property transfers). In practice, requirements differ depending on:

whether the estate includes significant personal property,
the registry/agency,
and the risk posture of parties/buyers.

7) Step-by-Step Process in Real Life (Typical Workflow)

Below is the usual “from death to updated titles” path when real property is involved.

Step 1: Gather core documents

Commonly required:

Death Certificate (PSA-issued is often preferred)
Proof of heirship/relationship (birth certificates, marriage certificate, etc.)
Valid IDs of heirs
Tax Identification Numbers (TINs) of heirs (and often of the decedent/estate)
Property documents, e.g.:
- Transfer Certificate of Title (TCT) / Condominium Certificate of Title (CCT)
- Tax Declaration
- Latest Real Property Tax (RPT) receipts / Tax Clearance
- If unregistered land: survey/technical descriptions, tax dec, proof of possession, etc.
List/inventory of assets and their locations
If there’s a surviving spouse: documents to determine marital property regime and which portion belongs to the spouse

Step 2: Identify heirs and compute shares

This is a legal determination. Many EJS errors start here.

Step 3: Draft the EJS (public instrument)

The deed typically contains:

decedent’s details (name, citizenship, last residence, date of death)
declaration of intestacy (no will)
declaration on debts (none, or already settled)
complete list of heirs and their relationships
complete description of properties (title numbers, locations, technical descriptions)
distribution/allocation of shares
undertakings, warranty, and signatures

If there is a sale, the deed also includes:

buyer information
purchase price and payment terms
warranties, taxes/fees allocation
delivery/possession terms

Step 4: Notarization

The EJS must be notarized. Heirs typically appear personally before a notary (or comply with rules on notarization for those abroad via consular notarization/apostille arrangements, depending on circumstances).

Step 5: Publication

Publish the notice as required (commonly weekly × 3 weeks). Keep:

newspaper issues / clippings, and
publisher’s affidavit/ प्रमाण of publication.

Step 6: Estate tax compliance with the BIR

To transfer real property and many assets, you typically need BIR clearance (often issued as an electronic certificate / authority recognized for transfer processing).

Estate tax compliance generally involves:

preparing an estate tax return
valuing the estate (often using BIR zonal values/fair market values and rules for valuation)
applying allowable deductions (standard deduction and others, subject to the law in effect)
paying estate tax due (or documenting that none is due)
securing the BIR certificate/clearance needed for transfer

Late filing/payment may trigger surcharges, interest, and compromise penalties.

Step 7: Pay local government transfer requirements

For real property, you will typically address:

Transfer tax (provincial/city/municipal treasurer, depending on location and rules)
updated RPT clearances/tax payments

Step 8: Register with the Register of Deeds (RD)

Submit the packet (varies by RD, but often includes):

notarized EJS (and Deed of Sale if any)
proof of publication
BIR clearance/certificate for transfer
transfer tax payment proof
original owner’s duplicate title (if available)
IDs, special powers of attorney if representatives sign
other RD-required forms/clearances

The RD issues:

new titles in the heirs’ names (or buyer’s name, if sold), and
annotations as required (including Rule 74 annotation in many cases)

Step 9: Update the Tax Declaration (Assessor’s Office)

After the RD transfer, update the tax declaration in the heirs’/buyer’s name at the City/Municipal Assessor.

8) Costs: What You Should Expect (and why it varies)

Costs vary widely depending on:

location (city/province),
number of properties and heirs,
value of the estate,
whether it’s late (penalties),
and whether there’s a sale or mortgage.

Below are the common cost buckets.

A. Professional fees (typical components)

Attorney’s fees (if you engage counsel): often structured as a package or percentage depending on complexity/value.
Notarial fees: usually higher when the property value is higher and when multiple documents are notarized.

B. Publication cost

Publication in a newspaper of general circulation is usually a material out-of-pocket cost. Rates vary heavily by publication and length of notice.

C. BIR / estate tax

The estate tax is generally computed as a percentage of the net taxable estate (gross estate minus allowable deductions). In recent years, Philippine estate tax has been simplified compared to older schedules, but the exact computation depends on the law and regulations applicable at the time of death/settlement and on the BIR’s current implementing rules.

In addition to the basic tax, watch for:

surcharge
interest
compromise penalty if filing/payment is late.

D. Local transfer tax

Local transfer tax is imposed by LGUs and rates vary by ordinance (often expressed as a percentage of the property’s value base used by the LGU).

E. Register of Deeds fees

RD charges:

registration fees (often scale-based),
annotation fees,
issuance fees for new titles,
and other administrative charges.

F. Miscellaneous

certified true copies of titles/tax declarations
PSA certificates
documentary expenses
SPA/consularization/apostille costs (if heirs are abroad)
settlement of unpaid RPT (if any)
geodetic engineer/survey costs (if boundaries/technical descriptions need correction)

9) A Practical “Ballpark” Cost Framework (Non-binding)

Because fees are location- and value-sensitive, a useful way to estimate is by layers:

Fixed-ish admin costs

PSA documents, certified copies, IDs, etc.
publication cost
notarial cost base

Value-based taxes/fees

estate tax (net estate-based)
local transfer tax (property value-based)
RD registration fees (value-based schedules)

Complexity multipliers

many heirs (signing logistics)
heirs abroad (SPAs/consular work)
contested heirship or missing documents
unregistered land
“with sale” structuring
late compliance penalties

If you want a working estimate for planning, you can treat the total as:

Total ≈ (publication + notarization + documents) + (estate tax, if any) + (LGU transfer tax) + (RD/assessor fees) + (professional fees) + (penalties if late).

10) Special Situations That Commonly Cause Problems

A. Minor heirs

If an heir is a minor, additional safeguards are usually needed:

representation by a legal guardian
possible court authority in some situations (especially when disposing/selling a minor’s share)
stricter scrutiny by registries/banks

B. Missing heirs / unknown children

Omitting an heir can expose the settlement to attack and can cloud title. This is one of the biggest real risks in EJS.

C. Unpaid debts of the decedent

Even if the deed states “no debts,” creditors can still pursue claims. The two-year Rule 74 exposure is especially relevant.

D. Properties acquired during marriage

Only the decedent’s share goes into the estate when property is conjugal/community. Misstating this leads to incorrect shares and transfer issues.

E. Unregistered land or imperfect titles

EJS does not “cure” land title problems. If land is not titled or has defects, you may need separate processes (e.g., judicial/administrative titling, correction of technical descriptions, reconstitution of title, etc.).

F. Heirs want to renounce/waive shares

A “waiver” can be treated differently depending on whether it is a general renunciation or a waiver in favor of specific heirs—this can have tax and documentation implications. Drafting matters.

11) Practical Checklist: What Agencies Usually Ask For (Real Property)

BIR / estate tax packet commonly includes

Death certificate
TINs of heirs and decedent/estate
EJS / Self-adjudication (notarized)
Proof of publication
Inventory of properties
Certified copies of titles/tax declarations
RPT clearances/receipts
IDs/SPAs
Other supporting documents depending on deductions and circumstances

LGU Treasurer

BIR clearance
deed(s)
property documents
payment computations based on local ordinance

Register of Deeds

original title (owner’s duplicate)
deed(s) notarized
BIR clearance
transfer tax proof
publication proof
IDs/SPAs and RD forms

Assessor

RD transfer documents/new title
deeds
BIR clearance
tax clearances and forms for new tax declaration

12) Common Mistakes to Avoid

Skipping publication or failing to keep proof.
Wrong heirship (especially undisclosed children, prior marriage issues).
Wrong property regime assumption (treating conjugal property as wholly owned by decedent).
Using “EJS” when there is a will (probate issues later).
Failing to account for the 2-year exposure period (buyer/bank concerns).
Inconsistent names/details across PSA documents, titles, IDs (causes delays).
Late estate tax leading to heavy penalties.
Selling before cleaning up the estate without proper structure (can derail registration).

13) How Long It Usually Takes

Timelines vary widely, but the pacing is often driven by:

document gathering (PSA, title copies, tax clearances),
publication period (commonly ~3 weeks plus processing),
BIR processing time,
RD processing queues.

If everything is complete and there are no complications, many cases still take weeks to a few months end-to-end. Complications (missing titles, heirs abroad, unpaid taxes, inconsistent records) can stretch the timeline significantly.

14) When You Should Consider Judicial Settlement Instead

Judicial settlement (court) may be necessary or strongly advisable when:

there is a will (probate),
heirs disagree,
there are significant debts/claims,
an heir is missing/unknown,
there are complex issues involving minors/incompetent heirs,
the estate involves disputes, fraud allegations, or uncertain ownership.

15) A Short, Practical Summary

An Extrajudicial Settlement is powerful because it can transfer an estate without court, but it is not a shortcut around legal heirship, taxes, and creditor protections. The process succeeds when:

heirs and shares are correct,
publication and documentation are complete,
estate tax and local transfer obligations are properly handled,
registry requirements are met with clean, consistent records.

Important note

This article is for general information in the Philippine context and is not a substitute for advice on your specific facts (especially because heirship, property regime, and tax consequences can change the correct approach). If you share your scenario (e.g., number of heirs, whether there’s a surviving spouse, property locations, and whether there are debts), I can lay out a tailored checklist and the usual decision points.