Extrajudicial Settlement of Estate When Some Heirs Are Already Deceased
(Philippine Law & Practice Guide, updated to 2 June 2025)
This article is for educational purposes and does not constitute legal advice. Always consult a Philippine lawyer or tax professional for case-specific guidance.
1. Statutory Backbone
| Source | Key Points |
|---|---|
| Civil Code of the Philippines Art. 777, 960–981 |
Succession opens at the moment of death; rules on legitimes, intestacy, and right of representation (art. 970 et seq.). |
| Rule 74, Rules of Court | Allows heirs to “divide the estate among themselves as they see fit” without court intervention if four conditions are met. |
| National Internal Revenue Code (NIRC), as amended; Revenue Regulations (RR) 12-2018; RR 17-2023 | Estate-tax filing, payment, and issuance of eCAR (electronic Certificate Authorizing Registration). |
| Tax Amnesty Act — RA 11213 and its extensions (RA 11569 & RA 11956) | Estate-tax amnesty for decedents who died on or before 31 May 2022, period now until 14 June 2025. |
| Property Registration Decree (PD 1529) | Mechanics for transfer of Torrens titles. |
| Notarial Law; Batas Pambansa 22 | Formalities and liabilities for false statements in notarized deeds. |
2. When Extrajudicial Settlement (EJS) Is Allowed
- No Last Will (or will has been vacated or lost its effect).
- No outstanding enforceable debts or all debts have been fully paid.
- All legal heirs are of age (or minors are duly represented by judicial guardians).
- Heirs agree on partition and execute a notarized deed, followed by three (3) consecutive weekly publications in a newspaper of general circulation.
No deadline exists for executing an EJS, but estate-tax returns must ordinarily be filed within 1 year from each decedent’s death (unless covered by amnesty).
3. Effect of Pre-Deceased Heirs
3.1 Right of Representation (Per Stirpes Succession)
Under Arts. 970-981 of the Civil Code, the descendants of a pre-deceased compulsory heir step into his/her shoes and collectively receive the share their ascendant would have received. Each “branch” of the family receives one share, which they subdivide among themselves.
Example. • Senate died intestate in 2020, leaving three legitimate children — Alex, Bella (d. 2018), and Cara — and one conjugal house. • Bella left two legitimate children, Dan and Eva. • Result: Alex gets ⅓, Cara gets ⅓, and Dan + Eva together get Bella’s ⅓ (½ each).
3.2 Required Proofs
- Certified copies of death certificates for every deceased person in the chain.
- Birth or marriage certificates proving lineage.
- Family tree or “genealogical chart” annexed to the deed.
- If minors inherit, attach court-approved letters of guardianship or a judicial appointment of a guardian ad litem.
4. Drafting the Deed of Extrajudicial Settlement
| Section | Purpose & Drafting Tips |
|---|---|
| Title | “Deed of Extrajudicial Settlement of Estate of the Late A B. Senate (with Waiver of Rights/with Assumption of Mortgage, etc.)”. |
| Preambles & Recitals | State dates of death, marital regime, list of heirs (living & represented), negative allegation of debts, and publication pledge. |
| Partition Clause | Describe each asset and its valuation (attach certified true copies of titles, ORs/CRs of vehicles, stock certificates, bank statements, etc.). Use “per stirpes” language for represented branches. |
| Tax Undertaking | Heirs assume liability for estate-tax and all incidental taxes/fees. |
| Publication Undertaking | Specify the newspaper; attach proof of payment. |
| Notarial Acknowledgment | All signatories (or their attorneys-in-fact) must appear. Overseas heirs sign before a Philippine consul; attach apostilled or authenticated SPA and IDs. |
A single deed can cover multiple estates (e.g., husband and wife who died years apart) provided shares are computed twice: first for Estate 1, then those shares (if still untransferred) form part of Estate 2.
5. Newspaper Publication
- Publish once a week for three successive weeks after notarization.
- Attach the original publisher’s affidavit and clipping to the Registry of Deeds (ROD) documents.
- Failure to publish does not void the deed between the parties, but leaves the estate vulnerable to third-party claims and prevents annotation of the deed on Torrens titles.
6. Estate-Tax Compliance
| Scenario | Practical Steps |
|---|---|
| Separate estates (e.g., parent died 2005, eldest child/heir died 2023) | File two estate-tax returns; each gets its own eCAR. If the earlier estate qualifies for amnesty, pay amnesty rate (6 % of net estate) before filing the later estate. |
| Open estate + Amnesty | Under RA 11956, pay either 6 % of net estate or P5,000 per decedent with no properties in the Philippines. Attach “Sworn Statement of Settlement”. |
| Penalties & Interest | Amnesty waives surcharges/interest for covered estates. Estates outside amnesty: 25 % surcharge + 12 % p.a. interest. |
| eCAR Processing | BIR requires: deed + certifications, TINs of all heirs, Proof of ID, official receipts for taxes, and “CAR Checklists” (Annexes of RR 12-2018). |
7. Transfer of Real & Personal Property
| Asset Class | Agency & Key Documentary Requirements |
|---|---|
| Land / Condo | • BIR — ETR, eCAR, DST (if applicable) • ROD — Owner’s duplicate title, original deed, eCAR, RPT clearance, tax declaration. |
| Motor Vehicles | Land Transportation Office: Deed, IDs, eCAR, OR/CR, insurance certificate, emission test. |
| Bank Deposits | Bank estate-settlement pack: deed, eCAR, bank’s indemnity form, IDs of heirs, possibly surety bond. |
| Shares of Stock | Stock transfer agent: deed, eCAR, SEC confirmation (for unlisted shares), secretary’s certificate for corporations. |
Ownership transfers only upon registration, not upon signing the deed.
8. Minors, Incapacitated, & Absent Heirs
- Minors / Judicially Incompetent – Must be represented by a court-appointed guardian; extrajudicial settlement needs prior court approval (Sec. 5, Rule 96).
- Heirs abroad – Special Power of Attorney must be executed before a Philippine consulate or apostilled.
- Unknown or unlocated heirs – Heirs in possession may proceed judicially (Rule 73) or execute an EJS subject to a two-year lien; prudent practice is to deposit the unknown heirs’ presumptive share in trust.
9. Two-Year Lien & Potential Challenges
Under Rule 74 §4, the estate remains liable for two (2) years for unpaid debts, collation, or omitted heirs.
Remedies for an aggrieved party:
- Acción reivindicatoria to recover property.
- Reconveyance / Annulment of the deed within 4 or 10 years (depending on fraud).
Deed signatories may incur civil or criminal liability (perjury, falsification) for false averments.
10. When Judicial Settlement Is Wiser
| Trigger | Why Court Proceedings May Be Needed |
|---|---|
| Disagreement over shares or validity of representation | Probate/letters of administration lets the court adjudicate and issue writs. |
| Debt disputes or insolvency | Rule 88 provides for payment order of estate debts. |
| Presence of minors without guardians | Judge supervises compromise and protects legitimes. |
| Complex, high-value estates | Court approval shields heirs from future challenges and tax audits. |
11. Best-Practice Checklist
- Gather chain of documents (deaths, births, CENOMAR/marriage, titles, tax decs, OR/CR, bank certs).
- Compute shares on a per-decedent basis; verify legitimes.
- Confirm zero debts or settle/pay them first.
- Draft deed with clear recital of representation branches.
- Secure tax clearance and eCAR(s).
- Notarize & publish for three weeks.
- Register/transfer every asset; keep official receipts.
- Maintain escrow or indemnity for omitted heirs if risk exists.
- Keep copies of the newspaper, ORs for taxes/fees, and stamped titles—courts or creditors may demand them within the two-year lien.
12. Frequently Asked Operational Questions
| Question | Short Answer |
|---|---|
| Can we split by “per capita” instead of “per stirpes”? | Yes—if all representatives are of age and unanimously renounce representation and sign the deed. |
| Must we pay estate tax twice if both parents died? | Yes—each death triggers a separate taxable estate, though you may settle them in a single deed; attach separate eCARs. |
| Is publication still required if all heirs accept? | Technically yes under Rule 74. Omission risks ROD annotation rejection and vulnerability to unknown creditors. |
| What if the estate is land only worth ≤ ₱200k? | Estate-tax exemption applies, but deed, publication, and ROD fees still apply unless covered by tax amnesty. |
| Does the two-year lien bar us from selling? | No—you can sell, but the buyer is subject to the same two-year risk; disclose this in the deed of sale. |
13. Conclusion
Extrajudicial settlement saves time and cost, but pre-deceased heirs add a layer of complexity. Applying the right-of-representation doctrine, filing multiple estate-tax returns where necessary, and carefully documenting lineage are vital to a defect-free title and peace among the living. When uncertainty exists—especially involving minors, large debts, or disputed lineage—judicial settlement or at least professional legal review is the prudent course.