Inheritance Share Rights When a Parent Sells Property in the Philippines

(A comprehensive legal‑article overview, updated to July 30 2025)

Disclaimer: This article is for general information only and is not a substitute for personalised legal advice. Statutes cited are from the Civil Code of the Philippines (CC), the Family Code (FC), and related special laws; case names are for illustration of prevailing doctrines.

1. Governing Legal Framework

Source	Key Provisions
Civil Code (Republic Act No. 386, 1950)	Book II (Property), Book III (Succession), Book IV (Obligations & Contracts)
Family Code (Executive Order No. 209, 1987)	Title IV (Property Relations), Title V (Successional Rights)
Special laws	Torrens System (Property Registration Decree), Tax Code (NIRC), Indigenous Peoples’ Rights Act, etc.
Jurisprudence	Spouses Abalos v. Heirs of Gomez (G.R. 158989), Heirs of Malate v. Gamboa (G.R. 181174), Diaz v. IAC (G.R. 73541), et al.

2. Nature of a Child’s “Right” While the Parent Lives

Mere Expectancy, not Ownership
- Children (legitimate, illegitimate, or adopted) hold no vested real right over property still owned by a living parent; their “right” is an inchoate expectancy (Art. 777 CC).
Freedom to Dispose
- An owner may sell, mortgage, or otherwise dispose of their exclusive property without seeking heirs’ consent (Art. 428 CC).
Statutory & Contractual Limits
- Disposition may be void or voidable if:
  - It violates mandatory spousal consent for community or conjugal property (Arts. 96 & 124 FC).
  - It is a simulated sale intended merely to hide a donation (Arts. 1345‑1346 CC).
  - It is an inofficious donation that impairs the legitime of compulsory heirs (Arts. 752, 771, 776 CC).
  - It is in fraud of creditors (accion pauliana, Arts. 1381‑1389 CC).

3. Property Regimes & Capacity to Sell

Regime (marriages after 3 Aug 1988)	What Needs Spousal Consent?	Children’s Role
Absolute Community of Property (ACP)	Any disposition or encumbrance of community realty (Art. 96 FC)	None during parents’ lifetime
Conjugal Partnership of Gains (CPG) (marriages before 3 Aug 1988, unless they opted into ACP)	Same rule (Art. 124 FC)	Same
Exclusive / Paraphernal Property	Owner‑spouse alone may sell (Art. 109 FC)	Same

If no valid consent is obtained, the sale is voidable and the aggrieved spouse (not the children) may sue to annul within five years (Art. 1390 CC).

4. Legitime: The “Untouchable” Share at Death

Compulsory Heirs (Art. 887 CC)
- Legitimate children & descendants
- Legitimate parents & ascendants (only if no descendants)
- Surviving spouse
- Illegitimate children
Illustrative Legitime Fractions

Scenario	Children’s legitime	Spouse’s legitime	Free Portion
Spouse + 2 legitimate children	½ of estate, equally divided	¼	¼
1 legitimate child only	½	¼	¼
No children; spouse only	—	½	½

Effect of a Lifetime Sale
- If the parent sells for fair value, the estate is effectively reduced; legitime is calculated on what remains at death.
- If the sale is disguised and price is illusory, its donative character is exposed and the amount is subject to reduction during succession (Arts. 771, 771 CC).

5. Distinguishing Sale vs. Donation Disguised as Sale

Indicator	Genuine Sale	Donation Disguised as Sale
Consideration	Full & paid price in cash/check (recorded in deed & receipts)	Grossly inadequate or never paid
Tax Paid	6 % CGT + DST + transfer fees	Often only 6 % donor’s tax applies (rarely paid if disguised)
Possession & Use	Buyer enjoys property immediately	Parent retains control or liens
Intent Shown in Evidence	Negotiations, bank proof, notarised deed	Testimonies of “secret arrangement”

Philippine courts examine totality of circumstances (see Heirs of Malate).

6. Remedies of Heirs After Parent’s Death

Action for Reduction/Collation (Arts. 771‑775 CC)
- File during partition to bring the inofficious donation/sale back into the estate.
Annulment or Rescission
- If lack of price → annulment for absence of cause (Art. 1397 CC).
- If spousal consent was missing → action by spouse to annul within 5 yrs.
Acción Reivindicatoria
- If heirs succeed and sale is invalid, they may recover the real property or its value from buyer not in good faith.
Protection of Third‑Party Buyers
- A buyer in good faith who relies on a clean Torrens title is generally protected (Art. 1544 CC; Spouses Abalos).
Prescription
- Real actions to recover property: 30 years (Art. 1141 CC) unless Torrens—then indefeasible after one year from decree of registration for innocent purchasers.
Tax Consequences
- Heirs must still pay estate tax on net estate within one year (six‑month auto‑extension possible, Sec. 90 NIRC).

7. Remedies (Limited) During Parent’s Lifetime

Acción Pauliana (Art. 1381 CC)
- Creditors (including those holding legitime expectancy only after death) generally cannot sue yet because right is not “due”.
Annotation of Lis Pendens
- Rare before death; courts dismiss for prematurity.
Guardianship / Support Claims
- If parent sells entire estate and becomes indigent, support obligations to minors survive.

8. Special Situations

Situation	Key Points
Double Sale	Earlier buyer who first registers wins (Art. 1544 CC).
Ancestral or Indigenous Lands	Additional consent from NCIP; CADT rules; sale void without it.
Agricultural Tenancy Lands	Needs DAR clearance; sale may be void if rights of tenants violated.
Co‑Owned Inherited Property	One co‑owner may sell only their undivided share (Art. 493 CC).
Partial Simulation (Dacion)	Treated as novation if accepted as payment of debt.
Disinheritance Attempt	Requires cause & will; sale cannot be used to disinherit indirectly if it impairs legitime.

9. Practical Checklist for Heirs

Gather Evidence: deeds, ORs, bank statements, tax clearances, title history.
Calendar Deadlines: estate tax (1 yr), annulment (5 yrs), reduction (within partition), real action (30 yrs).
File Extrajudicial Settlement (if no will) or probate (if with will) to open succession.
Commission an Appraisal: prove inadequacy of price or inofficiousness.
Consider Mediation: courts require JDR; tax amnesties (e.g., Estate Tax Amnesty Act, RA 11213 as amended) can ease settlement.

10. Key Supreme Court Decisions to Know

Case	G.R. No.	Doctrine
Spouses Abalos v. Heirs of Gomez	158989 (2005)	Buyer in good faith protected; heirs must prove fraud.
Heirs of Malate v. Gamboa	181174 (2011)	Lack of price = donation; subject to reduction.
Diaz v. IAC	73541 (1986)	Simulated deed of sale for children’s legitime reduction void.
Heirs of Quadrado v. Quadrado	200695 (2018)	Partition may be rescinded if legitime impaired.
Spouses Reyes v. Heirs of Malance	163519 (2016)	Annulment when no spousal consent in CPG.

11. Tax Snapshot

Transaction	National Taxes (2025 rates)
Sale of capital real property (individual)	6 % Capital Gains Tax (CGT) on gross price/FMV, whichever higher + 1.5 % Documentary Stamp Tax (DST)
Donation (if sale disallowed)	6 % Donor’s Tax on net gift above ₱250 k annual exemption
Estate transfer at death	6 % Estate Tax on net estate above ₱5 M standard deduction; family home up to ₱10 M deductible

12. Takeaways & Best Practices

Parents should:
- Document real price, issue official receipts, pay CGT & DST promptly.
- Obtain spousal consent for community/conjugal assets.
Children / Compulsory Heirs should:
- Respect parents’ disposition while they live but preserve evidence of suspicious sales.
- On parent’s death, assert legitime in settlement and, if impaired, file for reduction or annulment.
Buyers must:
- Verify marital status, spousal consent, tax payments, and title encumbrances.
- Require face‑to‑face payment or escrow; register deed immediately.

Bottom line: A Filipino parent may validly sell property during their lifetime even without the children’s consent. However, legitime is untouchable—any “sale” that is effectively a donation, or that lacks required marital consent, can be unpicked by the heirs after death. Proper documentation, timely registration, and sound tax compliance are the best shields against future disputes.