How to Execute an Extrajudicial Settlement with Waiver of Rights (Philippines): Requirements, Steps, and Risks

Extrajudicial settlement (EJS) is a streamlined way for heirs to divide a deceased person’s estate without a full-blown court proceeding. A common variant is a Deed of Extrajudicial Settlement with Waiver of Rights, where one or more heirs renounce (waive) their hereditary share, often in favor of a co-heir. This article explains when EJS is allowed, what documents are required, how to do it end-to-end, and the practical/legal risks to watch out for—in Philippine law and practice.

When Extrajudicial Settlement Is Allowed

EJS is permitted only if all of the following are true:

No will (intestate estate).
No outstanding debts of the decedent or debts have been fully paid/settled or adequately provided for.
All heirs are of legal age; if there are minors or incapacitated heirs, they must be represented by a judicially appointed guardian and, in practice, court approval is needed for any waiver/partition affecting the minor’s share.
All heirs agree on the partition (and, if applicable, the waiver).

Tip: If any heir refuses to participate, if there’s a will, or if significant debts remain contested, proceed with judicial settlement instead of EJS.

Legal Foundations to Keep in Mind

Rule on EJS: The Rules of Court allow heirs to settle without court by public instrument (a notarized deed) if the conditions above are met, subject to publication and potential bond requirements.
Publication: Notice of the EJS must be published in a newspaper of general circulation once a week for three (3) consecutive weeks.
Bond: Where personal property is involved, heirs may be required to post a bond up to the value of the personal property, conditioned on payment of lawful claims that surface later.
Repudiation/Waiver: Under the Civil Code, acceptance or repudiation of inheritance must be in a public instrument or by petition to the court. A waiver can be:
- Abdicative (pure renunciation): Heir simply gives up their share without designating a beneficiary.
- Translative (in favor of a specific person): Heir waives in favor of a named co-heir; this can have donor’s-tax implications (see Taxes below).

Choosing the Right Instrument

Affidavit of Self-Adjudication (ASA): Use only when there is a sole heir who adjudicates the entire estate to themself (still subject to publication).
Deed of Extrajudicial Settlement Among Heirs (EJS): Use when there are two or more heirs dividing the estate.
Deed of EJS with Waiver of Rights: Use when one or more heirs will renounce their share (either abdicative or in favor of a co-heir).

You can combine the partition and waiver in one public instrument, or have a separate Deed of Waiver/Quitclaim referenced by the EJS.

Documentary Requirements (Typical)

Proofs of status and filiation
- PSA Death Certificate of the decedent
- PSA Birth Certificates of children; Marriage Certificate of the surviving spouse
- Any other documents establishing heirship (e.g., recognition documents for illegitimate children, adoption papers)
Property documents
- Titles (TCT/CCT) and latest Tax Declarations for real property
- Inventory and proofs of personal property (bank accounts, vehicles, shares, etc.)
- Latest Real Property Tax (RPT) receipts; clearance if required by LGU
IDs/TINs
- Valid government IDs of heirs
- TIN of the Estate and TINs of heirs (for BIR filings)
Draft instruments
- Deed of EJS (and Waiver if separate), ready for notarization
- Publication notice (for the newspaper)
- Bond (if personal property and required)
Tax filings
- Estate Tax Return (BIR form) and supporting schedules/attachments
- Payment documents / Electronic Certificate Authorizing Registration (eCAR) once issued

Some registries/LGUs may ask for SPAs if an heir is represented, and clearances (e.g., Barangay/Treasurer’s certifications) before accepting transfers.

Step-by-Step Process

Heirship and Asset/Debt Check
- Identify all compulsory heirs and shares under the Civil Code (legitimate, illegitimate, spouse, etc.).
- Verify no outstanding debts or make provisions for payment (creditor agreements, escrow from sale proceeds, etc.).
Draft the Deed(s)
- Describe the estate (real and personal), heirs, their legal status, and mode of partition.
- If waiving:
  - Abdicative: “Heir X renounces all hereditary rights/interests in the estate.”
  - In favor of Y: “Heir X waives in favor of Heir Y.” (mind the tax consequences)
- Include warranties (e.g., no pending debts/claims to the best of heirs’ knowledge), indemnity among heirs, and publication undertaking.
Notarization
- Execute before a notary public. Ensure complete exhibits (IDs, titles lists, tax declarations) and special powers if signing by representative.
Publication
- Cause the newspaper notice to be published once weekly for 3 consecutive weeks. Keep affidavits of publication and copies of each issue.
Estate Tax Compliance (BIR)
- File the Estate Tax Return and pay assessed taxes/interest/penalties (if any).
- For waivers in favor of specific heirs, assess donor’s tax exposure (see Taxes).
- Secure the eCAR for each real property (and sometimes for certain personal properties).
Transfer of Titles/Registrations
- Real property: Submit to the Register of Deeds: notarized EJS (and Waiver), eCAR, owner’s duplicate title, tax clearances, IDs, and fees. New TCT/CCTs will be issued per partition/waiver.
- Tax Declaration: Update at the Assessor’s Office.
- Personal property: Update vehicle OR/CR, share registry books, bank requirements (often need bank’s own forms), etc.
Keep a Paper Trail
- Store certified copies of the EJS/Waiver, publication proofs, tax filings, receipts, and new titles. These protect against later claims.

Taxes and Government Charges (Overview)

Estate Tax: Due on the net estate (assets less allowable deductions). Must be paid, and eCAR issued before property transfers.
Local Transfer Tax / Registration Fees: Payable upon transfer of real property (rates vary by LGU) and Register of Deeds fees.
Documentary Stamp Tax (DST): Generally due on conveyances and certain instruments; assess per property and instrument type.
Donor’s Tax (possible):
- Abdicative waiver (no specific beneficiary): Typically not donor-taxable (it enlarges the co-heirs’ portions by accretion).
- Translative waiver in favor of a named heir: Often treated as a donation of the waiving heir’s hereditary share to the favored heir—donor’s tax may apply, based on the value transferred.
- Onerous transfer (e.g., sale of hereditary rights for consideration): Treated as a sale; assess income/CGT or other applicable taxes depending on the asset and timing.

Because tax treatment depends on the exact wording and factual context, it’s best to align the deed language with the intended tax outcome and secure tax advice before filing.

Special Situations

Minors/Incapacitated Heirs: A parent cannot unilaterally waive a minor’s share. Expect guardianship and court approval for partition and any disposition of a minor’s interest. Consider judicial settlement instead.
Surviving Spouse’s Property Regime: Only the decedent’s share of conjugal/community property enters the estate. Identify exclusive vs. conjugal/community assets to avoid over-transferring.
Unknown or Later-Appearing Heirs: If heirship is unclear (e.g., potential illegitimate children), EJS is risky. Resolve heirship first (often via court).
Properties in Multiple RDs/LGUs: File at each relevant Register of Deeds and update each tax declaration. Publication remains once weekly for three weeks (a single notice typically suffices if it adequately describes all affected properties).

Key Risks (and How to Manage Them)

Omitted Debts/Creditors
- Risk: Creditors can pursue the heirs for payment.
- Mitigation: Settle debts or escrow provisions; disclose liabilities in the deed.
Omitted or Unknown Heirs / Defective Heirship
- Risk: Claims of nullity/partition challenges; possible criminal exposure if fraud is involved.
- Mitigation: Thorough heirship due diligence; consider judicial settlement if uncertain.
Publication or Bond Defects
- Risk: Vulnerability to challenge for failure to comply with Rule 74 formalities.
- Mitigation: Keep publication proofs and post bond where applicable.
Two-Year Exposure Under Rule 74
- Risk: Within two (2) years from EJS/publication, creditors and persons unduly deprived may sue; heirs are solidarily liable up to the value received.
- Mitigation: Maintain reserves; avoid immediate resale until exposure window and taxes are squared away. Note: Some RDs annotate this 2-year lien on titles.
Tax Misclassification (Waiver vs. Donation vs. Sale)
- Risk: Donor’s tax or other taxes/penalties assessed later.
- Mitigation: Draft deeds to reflect true intent; secure BIR rulings/clarifications when needed; compute both estate and possible donor’s taxes upfront.
Minors’ Shares and Court Approval
- Risk: Later nullification of partition/waiver as to the minor.
- Mitigation: Obtain guardianship and court approval prior to EJS affecting a minor’s interest.
Title/Registry Compliance Gaps
- Risk: Refusal to transfer titles; circular document requests from RD/LGU/BIR/banks.
- Mitigation: Pre-clear checklists with each office; ensure eCARs line up with the exact property identifiers (lot/block/area) in the titles.

Practical Drafting Pointers

Caption & Parties: Clearly identify all heirs, their relationship to decedent, ages, civil status, and residences.
Recitals: Death details, absence of will, absence/settlement of debts, complete property inventory.
Partition Clauses: Exact allocations per heir, with metes and bounds for real property if subdividing or co-ownership clauses if undivided shares remain.
Waiver Clauses:
- Abdicative: “Heir X renounces all hereditary rights… without designating any beneficiary.”
- In favor: “Heir X waives in favor of Heir Y the entirety of X’s hereditary share….”
- State whether the waiver is gratuitous or for value (and the consideration, if any).
Warranties & Indemnities: No will; debts addressed; heirs will defend and hold each other harmless against undisclosed claims up to what each received.
Publication Undertaking: Heirs shall cause and pay for 3-week newspaper publication and keep the proofs.
Delivery & Possession: When each heir (or favored heir) takes possession of which properties and when.
Execution: Notarial acknowledgments; attach Annexes (titles, tax decs, identity documents).

Common Pitfalls

Treating a translative waiver as if it were abdicative to avoid donor’s tax—then getting flagged at BIR/ROD.
Ignoring conjugal/community property rules and transferring the surviving spouse’s half by mistake.
Forgetting publication or misplacing the affidavits of publication.
Attempting EJS where an heir refuses to sign, or where there’s a will—both call for court.
Proceeding despite minors’ interests without guardianship/court approval.

Quick Checklist

No will, no unpaid debts, all heirs identified and of age (or with court-approved guardian)
Draft EJS (+ Waiver if applicable) as public instrument
Notarize
Publish notice once a week for 3 weeks; keep proofs
File Estate Tax Return; pay estate tax; secure eCAR(s)
Pay DST, local transfer taxes, and registration fees as applicable
Transfer titles/registrations (ROD, Assessor, LTO, corporate share registries, banks)
Keep a complete file (deeds, proofs, taxes, new titles)

When to Seek Judicial Settlement Instead

There’s a will; heirship is contested/uncertain; debts are substantial or disputed; minors’ interests are complex; an heir refuses to cooperate. Judicial settlement provides the court supervision needed to validly resolve these.

Final Notes

An Extrajudicial Settlement with Waiver of Rights is efficient and cost-effective when the legal prerequisites are truly met and the documents are carefully drafted. The publication, possible bond, two-year exposure window, and tax classification of any waiver are the pressure points. Align the deed language with the intended legal and tax effects, complete the estate tax process, and coordinate early with the Register of Deeds/LGU/BIR to avoid surprises.