The extrajudicial settlement of a bank account refers to the process by which the heirs of a deceased person settle the estate without resorting to court proceedings. This method is typically used when the estate does not include real property, or when the heirs are in agreement on the distribution of the estate. In cases involving a bank account, this procedure involves the settlement of funds held by a financial institution in the name of the deceased.

In the Philippine context, the settlement of a deceased person’s estate is generally governed by the Civil Code of the Philippines and related laws. Extrajudicial settlement is usually undertaken when there is no will, or when all heirs agree to divide the estate amicably. The Registry of Deeds plays a crucial role when real properties are involved, as the transfer of ownership of such properties must be recorded in the land registry.

The Process of Extrajudicial Settlement of a Bank Account

Before addressing the Registry of Deeds fees, it’s important to understand the general procedure for extrajudicial settlement involving bank accounts. This process involves the following steps:

Execution of an Affidavit of Extrajudicial Settlement: The heirs must execute an affidavit stating their agreement to divide the estate among themselves. This affidavit must be notarized and signed by all the heirs, declaring that they have settled the estate extrajudicially.
Payment of Estate Taxes: Before proceeding with the extrajudicial settlement, the heirs must settle the estate tax due to the Bureau of Internal Revenue (BIR). The BIR issues a Certificate of Estate Tax Payment (BIR Form 1801), which must be presented to prove that the estate taxes have been paid.
Transfer of Bank Account: Once the affidavit is notarized, the heirs must submit it to the bank where the deceased held the account. The bank will require a copy of the Affidavit of Extrajudicial Settlement, along with the death certificate, the BIR tax clearance, and other supporting documents. After reviewing the documents, the bank will release the funds to the rightful heirs.
Registry of Deeds Involvement: If the estate includes real property, the heirs must file the affidavit of extrajudicial settlement with the Registry of Deeds to have the property titles transferred in their names. However, if only a bank account is involved, the Registry of Deeds will not be involved, and the bank is the sole authority for processing the funds.

Registry of Deeds Fees for Real Property Transactions

While the Registry of Deeds is not directly involved in the settlement of a bank account, it is relevant to the larger process of transferring real property titles. In the context of extrajudicial settlement, the fees for registering a deed or affidavit with the Registry of Deeds are based on the value of the real property being transferred. These fees are computed as follows:

Notarial Fees: The affidavit of extrajudicial settlement must be notarized before being submitted to the Registry of Deeds. Notarial fees are generally set by the Notaries Public and can vary. They typically depend on the complexity and number of pages in the affidavit.
Documentary Stamp Tax: A documentary stamp tax (DST) is required for the registration of legal documents. For extrajudicial settlements involving real property, the DST is usually 1.5% of the value of the estate. The payment of this tax is mandatory and must be shown to the Registry of Deeds before any title transfers can occur.
Registration Fees: Registration fees are based on the value of the real property being registered. The fees are set by the Registry of Deeds according to the scale provided under the Land Registration Authority (LRA) rules. For instance, if the value of the real property is less than ₱10,000, the registration fee is typically ₱30.00. As the value of the property increases, the registration fees increase as well. The following is a general guide for real property registration fees:
- For properties valued up to ₱10,000: ₱30.00
- For properties valued above ₱10,000 but not exceeding ₱100,000: ₱50.00
- For properties valued above ₱100,000: The fee starts at ₱100.00, with an additional ₱2.00 for every ₱1,000 of the property's value.
These are subject to changes based on the rules set by the LRA, so it is important to check the current rates.
Other Fees: There may be other minor fees depending on the specific transaction, such as the issuance of certified copies of the new title or annotation of the extrajudicial settlement on the title.

Key Considerations for the Extrajudicial Settlement of a Bank Account

While the process for extrajudicial settlement involving a bank account is relatively straightforward compared to real estate, the following factors are essential to consider:

Proof of Relationship: Banks require evidence of the relationship between the heirs and the deceased. The death certificate is a primary document, but the bank may also request additional documentation, such as identification or a family registry.
Bank-Specific Requirements: Each bank may have its own specific requirements for processing the release of funds, such as the required number of signatories or the need for an official letter from the heirs.
Tax Implications: If the estate includes substantial assets, such as large sums of money or property, estate taxes must be settled before any funds are released from the bank. The BIR will require payment of estate taxes before issuing the necessary tax clearances.
No Need for Registry of Deeds: For a bank account alone, there is no need to involve the Registry of Deeds since the estate does not involve real property. However, if real estate is part of the estate, the involvement of the Registry of Deeds becomes necessary.

Conclusion

The process of extrajudicial settlement of a bank account in the Philippines involves several steps, most of which are handled by the bank rather than the Registry of Deeds. If the estate includes real property, the Registry of Deeds will be required to process the transfer of titles, with associated fees based on the value of the property. However, if only a bank account is involved, the primary fees are those required by the notary public for the affidavit and the documentary stamp tax. Understanding these fees and processes is essential for heirs seeking to settle an estate in the Philippines.