Extrajudicial Settlement of Intestate Estate in the Philippines

A comprehensive practitioner’s guide

What “extrajudicial settlement” means

When a Filipino dies without a will (intestate), their estate may be settled outside court by the heirs through documents notarized and registered with the appropriate offices. This route—called an extrajudicial settlement (EJS)—is governed primarily by Rule 74 of the Rules of Court and complemented by tax rules of the National Internal Revenue Code (NIRC) and implementing regulations of the Bureau of Internal Revenue (BIR), as well as property registration laws.

Done properly, EJS avoids a full-blown judicial proceeding, saving time and costs. Done poorly, it leaves titles vulnerable to later challenge.

When extrajudicial settlement is allowed

An EJS is available if all of the following are true:

No will was left by the decedent (or an alleged will is void/ineffective).
No outstanding debts, or all known debts have been paid/settled. (EJS assumes the estate won’t need court supervision to marshal assets and pay creditors.)
All heirs are of legal age, or minors are duly represented by a judicially appointed guardian (and, in practice, with court approval for the minor’s participation).
The heirs are identifiable and in agreement on how to divide the estate, or there is a sole heir.

If any of these fail—e.g., there are contested claims, unknown heirs, unpaid debts, or minors without guardians—judicial settlement or special proceedings is the safer route.

Two main forms

Extrajudicial Settlement Among Heirs Used when there are two or more heirs. The heirs execute and notarize a Deed of Extrajudicial Settlement (often abbreviated “EJS” or “DEJS”), sometimes coupled with a Deed of Partition if they will physically divide real property.
Affidavit of Self-Adjudication (ASA) Used when there is only one heir. The sole heir executes a notarized affidavit adjudicating the entire estate to themself.
- Bond: Rule 74 requires the heir to post a bond equal to the value of the personal property involved, conditioned on payment of any valid claims. (Some registries variably enforce this; best to be prepared.)

Publication (both forms): A notice of the fact of the EJS/ASA and the names of the heirs must be published in a newspaper of general circulation once a week for three (3) consecutive weeks.

Creditor and omitted-heir protection (the “two-year rule”)

Under Rule 74, creditors and other persons unduly deprived (including omitted heirs) may, within two (2) years from the EJS/ASA and publication, bring an action to assert their claim. Even after two years, persons defrauded may file an action for reconveyance under ordinary rules on prescription if they can prove fraud; and distributees remain proportionately liable to creditors and other claimants to the extent of the estate they received.

Practical effect: Publication and strict compliance don’t make claims impossible—but they greatly strengthen the finality of transfers and start the prescriptive clock.

Taxes and clearances (before transfer of title)

An EJS doesn’t bypass taxes. The BIR must first authorize transfers through an Electronic Certificate Authorizing Registration (eCAR). Key points:

Estate Tax Return (BIR Form 1801): File within one (1) year from death (Commissioner may grant limited extensions for filing and longer extensions for payment on meritorious grounds).
Estate tax rate: A 6% tax on the net estate (post-TRAIN), computed on the higher of zonal value (BIR) or fair market value (assessor) for real property and on fair values for personal property.
Common deductions (illustrative, not exhaustive):
- Standard deduction (fixed amount under current law/regulations).
- Family home deduction up to the statutory cap, if applicable.
- Claims against the estate (valid, properly substantiated debts of the decedent).
- Share of the surviving spouse (only the decedent’s share in community/conjugal property is includible).
TINs: The estate must secure its own TIN, and all heirs must have TINs.
Documentary set (typical): Death certificate; IDs; proof of relationship (birth/marriage certificates); list and valuation of assets; tax declarations; certified true copies of titles; notarized EJS/ASA; proof of publication; proof of settlement of debts; waivers of rights (if any); and supporting documents for deductions.
Local transfer tax & registration fees: After eCAR issuance, pay local transfer tax (rate varies by LGU), registration fees at the Register of Deeds, and update tax declarations at the Assessor’s Office.

Practice tip: Start valuation and document-gathering early. Incomplete files delay eCAR issuance and title transfers.

Step-by-step process (practical workflow)

Asset & heir mapping
- Inventory properties (real, personal, bank accounts, shares, vehicles, receivables).
- Identify heirs under intestate succession rules (legitimate/illegitimate descendants, ascendants, surviving spouse, collaterals).
- Verify if properties are exclusive or conjugal/community; only the decedent’s share enters the estate.
Debt assessment
- Ascertain liabilities (loans, taxes, last-illness expenses).
- Pay/settle or obtain creditor clearances. If debts can’t be settled, consider judicial settlement.
Draft the deed
- For multiple heirs: Deed of Extrajudicial Settlement (with or without Deed of Partition and Waivers/Quitclaims).
- For sole heir: Affidavit of Self-Adjudication, with bond for personal property when applicable.
- Include full legal descriptions of properties; exact technical descriptions for titled land; plate/motor numbers for vehicles; bank details for accounts; share certificates for stocks.
- Insert Rule 74 recitals: no will, no debts (or debts settled), all heirs of age or duly represented, publication undertaking, assumption of liabilities under Rule 74.
- If minors: reflect guardian’s authority and court approval; otherwise use judicial route.
Notarization
- Ensure personal appearance or notarization via appropriate remote rules where allowed.
- Attach IDs and, where necessary, consularized/apostilled documents for heirs abroad.
Publication
- Publish notice in a newspaper of general circulation once a week for three consecutive weeks.
- Keep publisher’s affidavit and tear sheets—you’ll need them for BIR and the Register of Deeds.
BIR processing
- Secure estate TIN; prepare and file Estate Tax Return (Form 1801) with documentary support.
- Pay estate tax (or apply for extension/instalment where eligible).
- Obtain eCAR for each property to be transferred (the BIR now issues one eCAR per property).
Registration and transfer
- Real property: Present eCAR, EJS/ASA, owner’s duplicate title, tax clearances, and IDs to the Register of Deeds for issuance of new titles in heirs’ names; then update tax declarations at the Assessor’s Office.
- Vehicles: Submit to LTO the EJS/ASA, eCAR (if required), OR/CR, and other LTO forms for transfer.
- Bank accounts & securities: Provide banks/brokers with eCAR and EJS/ASA to release/transfer funds or re-register shares.
- Condominiums/HOAs: Notify administrators for membership/dues updates.
Post-transfer file-keeping
- Keep originals/certified copies of: notarized deed(s), publisher’s affidavit & proofs, eCAR(s), new titles/tax declarations, receipts, and any creditor clearances.

Frequently encountered issues (and how to manage them)

Unpaid or unknown debts surface after EJS: Creditors may sue within two years. Maintain a reserve or obtain creditor waivers; include assumption-of-liability clauses.
Heir disputes: EJS requires consensus. If disagreement persists—valuation, allocation, inclusion of assets—shift to judicial partition/settlement.
Minors/heirs abroad: For minors, appoint a legal guardian and, prudently, obtain court approval. For heirs abroad, use apostilled SPA/affidavits and comply with Philippine notarization/substitute rules.
Errors in technical descriptions: Have a licensed geodetic engineer verify TD/lot/plan numbers; mismatches delay titling.
Conjugal/community property maze: Determine property regime (absolute community, conjugal partnership, separation). Only the decedent’s share is taxable/transferable. Obtain the surviving spouse’s conformity.
Missed publication: It’s a statutory requirement. Registers and BIR may still process based on internal checklists, but skipping publication weakens protection under Rule 74.
Estate cash-poor but asset-rich: Explore installment or extension for estate tax payment (subject to BIR approval), or partial sale of assets (ensure eCAR sequencing and capital gains/donor’s tax planning if applicable).
Property with liens/encumbrances: Settle or assume per agreement; reflect in the EJS and registration instructions.

How shares are generally determined (brief refresher on intestacy)

A quick, simplified overview (Civil Code rules apply; special rules exist for adopted/illegitimate children, representation, and survivors):

Legitimate children/descendants share the entire estate with the surviving spouse who gets a conjugal/community share first (if applicable) plus an intestate portion.
If no descendants: legitimate parents/ascendants inherit with the surviving spouse.
If neither descendants nor ascendants: the surviving spouse inherits with illegitimate children or, absent them, with collateral relatives (usually full/half-blood siblings), per statutory shares and order of preference.
Representation applies down the line (grandchildren step into a predeceased child’s shoes).

Because exact shares depend on family facts, it’s wise to attach a heirship table to the EJS showing the legal basis for allocations.

Drafting guide: essential clauses for an EJS/ASA

Preambles & parties (complete identities, civil status, addresses; confirm capacity to contract).
Recitals
- Death details and that the decedent left no will.
- Heirship (identify all heirs; attach civil registry proofs).
- No debts / debts settled; undertaking to answer for later claims under Rule 74.
- For ASA: statement that affiant is the sole heir and posting of bond for personal property.
Asset schedule (Annex “A” onwards): legal descriptions, valuations, supporting documents.
Manner of partition/adjudication (who gets what; co-ownership vs physical partition).
Assumption of liabilities & warranties (to indemnify each other for undisclosed claims; proportional liability under Rule 74).
Publication undertaking (3 consecutive weeks).
Special provisions (guardianship approvals, foreign-executed SPAs, escrow arrangements).
Signatures, notarization, and acknowledgment compliant with the Notarial Practice Rules.

Timelines, costs, and practical expectations

Document preparation & publication: Typically 3–5 weeks (publication alone spans 2+ weeks).
BIR processing to eCAR: Varies widely with completeness/valuation; plan for weeks to a few months.
Registry transfers: Often days to weeks once eCAR is in hand.
Fees:
- Publication (market-rate; varies by paper).
- Notarial fees (document length/value-based).
- Estate tax (6% of net estate) + possible surcharge/interest if late.
- Local transfer tax, registration fees, and assessor updates.

When you should not use EJS

There is a contested will or serious heirship dispute.
Creditors oppose or debts cannot be settled without court supervision.
There are missing/unknown heirs or heirs under disability without guardians/court authority.
Complex estates requiring accounting, collation, or rescission of inter vivos transfers best handled in court.

Compliance checklist (condensed)

Death certificate; asset & heir inventory
Debt clearance/settlement; creditor waivers if any
Draft and notarize EJS/ASA (+ Partition/Waivers)
Publication: 1×/week × 3 weeks; keep proofs
Secure estate TIN; file Form 1801 + attachments
Pay estate tax (apply for extensions if needed)
Receive eCAR(s)
Register transfers (RD/LTO/banks/brokers); update tax declarations
Organize a complete closing file

Final notes and risk management

Substance over form: Titles can be issued even if a deed “looks” complete, but Rule 74 compliance (esp. publication and creditor language) materially reduces litigation risk.
Heir transparency: Circulate drafts among all heirs; attach a cap table and valuation basis to pre-empt disputes.
Professional guidance: Estates often touch family law, property regimes, tax, and registration practice. A short consult with counsel and a tax practitioner usually pays for itself in avoided errors.
Keep evidence: If a claim arises within two years, your best defense is a clean paper trail: debt settlement proofs, publication, eCARs, and properly described assets.

Model skeleton: Deed of Extrajudicial Settlement (outline)

Title & Parties
Recitals (no will; heirs; no debts/debts settled; Rule 74 statements)
Asset Schedule(s) with valuations
Partition/Adjudication clauses (per asset)
Assumption of liabilities; warranty and indemnity
Publication undertaking
Special clauses (minors/guardians, foreign docs, escrow)
Signatures; Notary Acknowledgment
Annexes (civil registry docs, titles, tax declarations, valuations, waivers, SPAs)

This article provides a practitioner-level overview for Philippine estates settled without court intervention. It is not a substitute for tailored legal advice. For fact-specific questions (e.g., there are minors, foreign assets, or contested debts), consult counsel and coordinate early with your BIR RDO and the Register of Deeds handling the properties.