1) What “Extrajudicial Settlement” Means

An Extrajudicial Settlement of Estate (EJS) is a written, notarized agreement by the heirs to settle and divide the estate of a deceased person without going to court. It is the common route for transferring the title of inherited land (and other properties) when the law allows it.

The governing rule is Rule 74, Section 1 of the Rules of Court (Settlement of Estate of Deceased Persons), which permits extrajudicial settlement when specific conditions are met.

2) When Extrajudicial Settlement Is Allowed

Extrajudicial settlement is generally available if all of the following are true:

A. The decedent left no will

If there is a will (even if questionable), settlement is typically judicial until the will is dealt with.

B. The decedent left no unpaid debts (or obligations are fully settled)

If there are debts, heirs should first pay/settle them properly. Creditors can attack an EJS if they are prejudiced.

C. The heirs are all in agreement and can legally act

All heirs must participate and sign (or be properly represented).
If an heir is a minor or incapacitated, there must be proper representation (more below), and court involvement may be required depending on the situation and what acts are contemplated.

D. No dispute as to who the heirs are or what the properties are

If there is conflict (missing heirs, contested filiation, multiple families with competing claims, unclear ownership), judicial settlement is safer and often necessary.

If these conditions are not met, the Registry of Deeds (RD), BIR, or other offices may refuse processing, or the transfer may later be voided/annulled.

3) Why EJS Matters for Land Title Transfer

In Philippine practice, you usually cannot update the Transfer Certificate of Title (TCT) in the names of the heirs (or a buyer, if there is a sale) unless there is a registrable document showing how ownership passed—most commonly:

Extrajudicial Settlement of Estate (with partition), or
Deed of Extrajudicial Settlement with Sale (if the heirs sell the inherited land), or
Affidavit of Self-Adjudication (if there is only one heir).

4) Key Variations of Extrajudicial Settlement

4.1 Extrajudicial Settlement with Partition

Used when there are two or more heirs, and they agree to divide the estate among themselves.

4.2 Extrajudicial Settlement with Sale

Used when heirs settle the estate and sell the inherited land (either to a third person, or to one heir buying out others).

Often used to transfer directly to a buyer, but it must be done carefully to avoid defects.

4.3 Affidavit of Self-Adjudication (Single Heir Only)

If there is only one legal heir, that heir may execute an affidavit adjudicating the estate to himself/herself.

If there are actually multiple heirs, using self-adjudication is a serious defect and can be attacked.

5) Who Are the “Heirs” That Must Sign?

“Heirs” depend on whether the decedent was married, had children, etc., under the Civil Code rules on intestate succession. Common patterns:

With legitimate children: children inherit; spouse shares in most cases.
No children but with spouse: spouse inherits with other compulsory heirs (e.g., parents) depending on who survives.
Illegitimate children: also inherit, but shares differ and must be handled correctly.
Multiple marriages / prior relationships: requires careful heir determination.

Because the EJS must include all heirs, a wrong heir list is one of the most common grounds for future cancellation of titles.

6) The Publication Requirement (Very Important)

Rule 74 requires publication of the extrajudicial settlement:

Published in a newspaper of general circulation
Once a week for three (3) consecutive weeks
In the province/city where the decedent resided, or where the property is located (practice varies; many publish where the property is).

Purpose: to notify creditors and other interested persons.

Failure to comply can expose the settlement and subsequent title transfers to challenge, and RD/BIR may require proof of publication.

7) The Two-Year Vulnerability Period (Rule 74 “Liin”)

Even after EJS, the law protects creditors and omitted heirs:

Within two (2) years from the EJS (and publication), persons deprived of their lawful participation may enforce rights against the estate.
The RD may annotate a two-year lien/encumbrance on the title.

This does not automatically void the transfer, but it creates legal risk, especially for buyers.

8) Bond Requirement (Know the Scope)

A bond is classically required under Rule 74 when the settlement involves personal property and there is a need to protect creditors. In real-world processing, offices sometimes ask for bonds depending on the fact pattern and what is being transferred. For land title transfer, the most consistently enforced requirements are publication and tax clearance (eCAR), but where the estate includes significant personal property or creditor risk is apparent, a bond issue may arise.

9) Step-by-Step Process to Transfer Title of Inherited Land (Typical Workflow)

Below is the common end-to-end workflow from death to new title:

Step 1: Gather core documents

Typical documents needed (exact list varies by BIR/RD):

Civil status and death

Death Certificate (PSA or Local Civil Registrar certified)
Marriage Certificate (if married)
Birth Certificates of heirs (to prove filiation)
Valid IDs and TINs of heirs
If a spouse is involved, proof of marriage and whether property is conjugal/community

Property and tax

Owner’s duplicate copy of TCT (or other proof of title)
Latest Tax Declaration and Tax Clearance
Certified True Copy of Title (often requested)
Vicinity map / lot plan in some cases
If subdivision/partition requires technical description changes: approved subdivision plan, etc.

If representation is needed

Special Power of Attorney (SPA) if an heir cannot sign personally
Guardianship documents if an heir is minor/incapacitated (may require court involvement)
If an heir is deceased: documents for “estate of an heir” chain (this complicates things)

Step 2: Determine the correct settlement instrument

Choose the correct document:

EJS with Partition (multiple heirs, dividing among themselves)
EJS with Sale (settling + selling the land)
Self-Adjudication (single heir only)

Step 3: Draft the Extrajudicial Settlement properly

A well-drafted EJS typically includes:

Facts of death (name, date of death, last residence)
Statement that the decedent left no will
Statement that the decedent left no debts (or that debts have been paid)
Complete list of heirs and their civil status, addresses, relationship to decedent
Full description of properties (title numbers, technical descriptions, tax declarations)
Agreement on partition/shares
If there is a sale: terms, buyer details, consideration, proof of payment language
Undertakings re: publication, taxes, and registration
Signatures of all heirs (or authorized representatives)
Notarial acknowledgment

Common drafting pitfalls

Incorrect heir listing
Vague property descriptions
Missing title numbers or inconsistent technical descriptions
Using “waiver” language incorrectly (waiver can have tax and legal consequences)
Treating conjugal/community property as exclusive property (or vice versa)

Step 4: Notarize the document

EJS must be notarized to be registrable.

If heirs sign in different places:

Use counterparts and ensure notarial rules are followed.

Step 5: Publish the EJS (3 consecutive weeks)

Secure a newspaper publication.
Keep the publisher’s affidavit, newspaper clippings, and/or certificates of publication.

Step 6: File and pay estate taxes with the BIR; secure the eCAR

For land transfers by inheritance, the key BIR output is the electronic Certificate Authorizing Registration (eCAR).

What happens here in practical terms:

File the appropriate estate tax return and supporting documents with the RDO having jurisdiction (usually where the decedent was domiciled).
Pay the estate tax (if due) and other BIR-assessed charges required for eCAR issuance.

Important notes

Even if estate tax is minimal or zero due to deductions/exemptions, the BIR process still requires proper filing to issue eCAR.
Penalties can apply for late filing/payment, depending on circumstances.

Step 7: Pay Local Transfer Tax and secure local clearances

After BIR eCAR is issued (or sometimes as part of parallel processing), you typically pay:

Transfer Tax at the local treasury (city/municipality)
Secure tax clearances and certificates required by RD/Assessor

Requirements vary by LGU.

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

Submit to RD:

Notarized EJS (and Deed of Sale if separate)
Proof of publication
BIR eCAR
Tax clearances, transfer tax receipt
Owner’s duplicate title (if available)
Other RD-required forms and fees

After registration:

The old title is canceled and a new TCT is issued in the names of the heirs (or the buyer, if transferred).

Step 9: Update the Tax Declaration with the Assessor’s Office

After the new TCT is released:

Update the Tax Declaration in the name of the new owner(s).
This is important for real property tax billing and future transactions.

10) Special Situations and How They Affect Transfer

A. If the property is conjugal/community property

If the decedent was married and the land is part of the marital property regime, the settlement must reflect that:

Only the decedent’s share passes by succession (often 1/2 of community/conjugal, subject to exceptions).
The surviving spouse’s share is not inherited; it is retained by operation of property regime, but the spouse may also inherit from the decedent depending on heirs present.

Mischaracterizing the property can cause incorrect shares and title issues.

B. If there is a minor heir

A minor cannot simply sign.

A parent may represent in some contexts, but dispositions/waivers/sales involving a minor’s inheritance frequently require court authority to be safe and acceptable.
If the settlement effectively reduces a minor’s share or sells the minor’s share, judicial safeguards typically come into play.

C. If an heir is abroad or unavailable

Use a Special Power of Attorney executed and authenticated/consularized as required.

The SPA must be specific enough for EJS signing and registration.

D. If an heir is unknown, missing, or refuses to sign

Extrajudicial settlement requires unanimity and inclusion of all heirs.

If someone refuses or cannot be located, the remedy often shifts to judicial settlement or other court processes.

E. If the title is lost

You may need a judicial reconstitution or other RD procedures before transfer can proceed.

F. If the property is still untitled (tax declaration only)

If there is no title and it is tax-declared land, transfer of “rights” may be possible, but titling issues are separate and can be complex (administrative/judicial titling routes). EJS may settle hereditary rights, but it does not automatically create a Torrens title.

11) Tax and Fee Landscape (High-Level)

For inherited land, the usual cost components include:

Estate tax (if due) and BIR charges to obtain eCAR
Documentary Stamp Tax (DST) assessment as required by BIR processing for registrable documents
Local transfer tax
Registry of Deeds fees (registration, issuance of new title, annotations)
Notarial fees and publication costs
Assessor’s fees for updating tax declaration (varies)

Exact computations depend on:

Fair market value (zonal value / assessed value / selling price rules in relevant contexts)
The decedent’s allowable deductions, estate composition, and timing
Whether there is a sale vs pure transfer to heirs

12) Common Mistakes That Derail Title Transfer

Skipping publication or improper publication details
Leaving out an heir (including children from prior relationships)
Using Self-Adjudication when there are multiple heirs
Incorrect property regime assumptions (conjugal/community vs exclusive)
Inconsistent names across documents (spelling/aliases)
Unclear partition (who gets which portion) without subdivision approval where needed
Trying to sell before settling without a clean chain (creates RD/BIR complications)
Failure to secure eCAR (RD typically will not transfer without it)

13) Practical Drafting Pointers for a Strong EJS

A sound EJS for land typically:

Lists heirs with complete identifiers and states the basis of heirship
Enumerates all real properties with TCT numbers and full technical descriptions
Clearly states the partition: who gets which parcel or what pro-indiviso shares
Includes an undertaking that heirs will answer for legitimate claims and comply with Rule 74 requirements
Reflects marital property regime where applicable
Avoids ambiguous “waiver” language unless intentionally used and understood (waivers can be treated differently than partitions)

14) Quick Reference Checklist

Eligibility

No will
No unpaid debts (or settled)
All heirs known, included, and agree

Core compliance

Notarized EJS
Newspaper publication (3 consecutive weeks)
BIR filing and eCAR
Local transfer tax payment
RD registration and issuance of new TCT
Update tax declaration

15) Legal Effect: What You Achieve After Completion

Once fully processed:

The inherited land’s Torrens title is updated into the heirs’ names (or buyer’s name if sold).
The transaction becomes part of the public registry, establishing a clearer chain of title for future dealings (sale, mortgage, donation, etc.).
The estate settlement remains susceptible to claims of omitted heirs/creditors within the Rule 74 protective framework, especially during the two-year period, depending on circumstances.