A Legal Overview and Practical Guide

I. The Usual Scenario

A person dies leaving real properties, bank deposits, or other assets. The heirs execute an Extra-Judicial Settlement (EJS) and then go to the Bureau of Internal Revenue (BIR) to:

File the estate tax return;
Pay estate tax; and
Secure Electronic Certificate(s) Authorizing Registration (eCAR) so that titles, shares, or vehicles can be transferred.

Often, only one heir or even a non-heir (e.g., a lawyer or broker) actually goes to the BIR and the bank. This raises the practical question:

Is a Special Power of Attorney (SPA) legally required for estate tax payment after an extra-judicial settlement?

The precise answer is:

For the act of paying the tax itself – strictly speaking, no, any person may pay a tax obligation.
For representing the estate and the other heirs in filing, signing, dealing with BIR, banks, and registries – in practice, YES, an SPA (or equivalent written authority) is usually required or at least expected.

The rest of this article explains why, and in which situations an SPA is necessary, advisable, or optional.

II. Legal Framework

1. Estate Tax Under the National Internal Revenue Code (NIRC)

Upon death, an estate comes into existence as a separate taxable entity. The estate is liable for estate tax, and the law requires:

Filing of an estate tax return within the statutory period;
Payment of the corresponding estate tax;
Compliance with BIR documentary and procedural requirements.

The return is ordinarily signed by:

The executor or administrator, if there is one appointed by the court; or
In the absence of such, any heir who may be treated as the person acting for the estate.

2. Extra-Judicial Settlement (Rule 74, Rules of Court)

An EJS is allowed when:

The decedent left no will;
The decedent left no outstanding debts, or such debts are fully paid;
All heirs are of legal age (or duly represented).

The EJS must be in public instrument and published in a newspaper of general circulation. In many EJS documents, the heirs appoint one heir as their representative for processing estate tax and transfer of titles. Sometimes they don’t, creating practical problems.

3. Special Power of Attorney (Civil Code)

Under the Civil Code, agency may be:

General – broad acts of administration;
Special – for specific acts (e.g., to sell a particular parcel, to file a specific tax return, to receive specific documents).

Certain acts require a Special Power of Attorney, especially where the act involves:

Disposition or encumbrance of property;
Compromises, waivers, or releases;
Acts which go beyond mere “management” and clearly affect substantial rights.

III. Who May File and Pay Estate Tax?

1. Executor or Judicial Administrator

If there is a testate or intestate proceeding and the court has appointed an executor/administrator:

That person is the recognized legal representative of the estate;
They may file and sign the estate tax return and deal with BIR without need of an SPA from the heirs, because their authority flows from the court.

2. Heirs in Extra-Judicial Settlement

If there is no court-appointed executor/administrator and the heirs settle extra-judicially:

Any heir can sign the return as an heir;
However, when that heir is effectively representing all other heirs (e.g., in waivers, declarations, receiving eCARs), the BIR and other institutions often want proof of authority.

This proof of authority is typically in the form of:

An explicit clause in the EJS appointing a representative-heir; and/or
A Special Power of Attorney (SPA) executed by the other heirs in favor of that representative.

3. Third Persons (Lawyers, Agents, Brokers)

The tax code allows any person to pay a tax, but:

Only an authorized person can sign returns, waivers, and official declarations for the taxpayer (the estate).
Thus, for lawyers or agents to file, sign, and appear before BIR on behalf of the heirs, a written authority is required; a notarized SPA is the usual and safest form.

IV. Distinguishing “Payment” From “Representation”

It’s vital to separate two different acts:

Paying the tax (handing over money to BIR or the bank)
Acting for the estate/heirs (signing returns, executing documents, dealing with BIR and third parties)

1. Payment of Tax

As a rule, any person can pay a tax liability:

A child, relative, or even a friend may physically pay at a bank or through an authorized payment channel;
The tax system is neutral as to who provides the money, as long as the payment is applied correctly.

For this mere act of paying, a formal SPA is usually not legally required.

2. Representation Before BIR and Other Offices

However, estate tax processing involves much more than just paying:

Signing the estate tax return and other BIR forms;
Submitting and certifying documents;
Receiving BIR assessment, notices, and eCARs;
Possibly executing waivers, undertakings, or compromise agreements.

These are all acts of representation. To perform them validly for the estate and other heirs, the representative should have:

Clear authority in the EJS, and/or
A Special Power of Attorney (especially if the representative is not the signatory heir, or deals with third persons like banks and registries).

V. When an SPA Is Practically Required or Strongly Advisable

1. Only One Heir Is Available to Deal With BIR

If only one heir is present and the others are:

Abroad;
Far away;
Unavailable due to work, health, or other reasons,

then, in practice:

BIR examiners or ONETT officers may require that heir to produce an SPA from the other heirs, especially when:
- Signing the estate tax return “for and in behalf” of all;
- Receiving and acknowledging eCARs;
- Submitting sworn statements on behalf of the estate;
- Signing waivers or undertakings.

Without an SPA, the BIR may refuse to process, or may limit transactions to what that heir alone can validly bind.

2. Withdrawals From the Deceased’s Bank Accounts to Pay Estate Tax

Philippine banks typically:

Freeze the account of the deceased upon notice of death until estate tax requirements are met or proper proof is presented;
For partial withdrawals to pay estate taxes (under allowable thresholds), banks often require:
- Proof of death;
- Proof that funds will be used for estate tax;
- Consent or authority of the heirs.

If one person (heir or third party) will withdraw funds or close accounts for estate tax payment:

Banks commonly require an SPA from the other heirs and/or documentation that this person is authorized by court or by co-heirs, because it is an act dealing with estate property.

3. Heirs Living Abroad

When heirs reside abroad:

They often cannot personally appear before BIR, bank, or Registry of Deeds;
They therefore execute an SPA abroad, authorizing a relative or lawyer in the Philippines to:
- Sign the estate tax return;
- Process the eCAR;
- Deal with banks and transfer titles.

This SPA typically needs to be:

Notarized abroad, then apostilled or consularized, depending on the country and Philippine practice;
Sometimes translated if not in English or Filipino.

Without such an SPA, the local representative may not be accepted by BIR, registry, or banks.

4. Signing Deeds and Other Transfer Instruments

After estate tax payment and eCAR issuance, the heirs must transfer titles. If properties are sold as part of the settlement:

Deeds of Sale, Deeds of Assignment, or Deeds of Absolute Transfer must be signed by all registered heirs, or
By a properly authorized representative via SPA.

Even if the estate tax is already paid, registries and buyers’ banks usually insist on either:

Physical signature of each heir, or
Clearly worded SPA empowering a representative to sign on their behalf.

VI. Situations Where an SPA Might Not Be Strictly Needed

1. All Heirs Personally Sign Everything

If all heirs:

Signed the EJS;
Personally sign the estate tax return (each signing as heir);
Appear as needed and sign BIR documents;
Individually sign deeds of transfer and bank requests,

then an SPA may not be necessary. The BIR and other institutions deal directly with the persons whose rights are affected.

This is often impractical, especially when heirs are numerous, elderly, in different regions, or abroad.

2. Court-Appointed Executor or Administrator

If a probate or intestate proceeding is opened and a judicial executor/administrator is appointed:

That court order is usually sufficient authority.
The executor may transact with BIR, banks, and registries without SPA from each heir, since their power comes from the court.

In such cases, the key document is the Letters Testamentary or Letters of Administration, not an SPA.

VII. Contents and Form of the SPA for Estate Tax Purposes

When an SPA is used, it should be specific and detailed, typically authorizing the attorney-in-fact:

BIR-Related Powers
- To prepare, sign, and file:
  - The Estate Tax Return and supporting schedules;
  - Any amended returns or supplemental declarations.
- To submit documents, respond to BIR queries, and receive notices and eCARs.
- To pay estate tax and other related fees and receive official receipts.
Bank-Related Powers
- To process withdrawals from the decedent’s accounts for estate obligations;
- To close accounts and obtain manager’s checks payable to the BIR;
- To receive bank certifications required by BIR.
Property Transfer Powers
- To sign documents necessary for transfer or sale of properties identified in the SPA;
- To appear before the Registry of Deeds, LTO, corporate custodians (for shares), etc.
General Administrative Powers
- To secure copies of public documents and certifications;
- To represent the heirs before any government office in connection with the estate.

Formal requirements commonly observed:

Notarized in the Philippines if executed locally;
If executed abroad: notarized and apostilled or consularized, and usually with a Philippine notarial form;
Clear identification of the parties and the estate;
Specific description of properties or bank accounts, where possible.

VIII. Interaction Between EJS and SPA

Sometimes the EJS itself includes a clause such as:

“The parties hereby constitute and appoint [Name] as their true and lawful attorney-in-fact to process the estate, pay estate taxes, and transfer titles…”

That clause functions like an SPA if:

The EJS is duly notarized;
All heirs sign it;
The clause is clear and specific.

However, institutions may still request a separate SPA, especially when:

The EJS is bulky and they prefer a focused instrument;
There are later acts not clearly covered by the EJS wording (e.g., sale of property not mentioned there);
Some heirs signed only by mark or through representatives whose authority is also questioned.

In practice, having both:

An EJS that describes the arrangement and shares; and
A separate SPA appointing a representative,

makes processing smoother.

IX. Practical Step-By-Step Guide

Agree Among Heirs
- Identify who will act as estate representative for BIR and related matters.
Prepare and Execute the EJS
- Ensure it reflects the correct heirs, shares, and how properties are partitioned or to be sold.
- Decide whether to include a representation clause in favor of one heir.
Prepare an SPA (Especially if Not All Heirs Will Appear Personally)
- Each heir, especially those who cannot appear personally, signs an SPA naming the same attorney-in-fact.
- If abroad, ensure proper apostille/consularization.
File the Estate Tax Return With BIR
- Using the EJS, SPA, and required attachments (death certificate, TINs, titles, tax decs, etc.).
- The representative signs as attorney-in-fact for the heirs or estate.
Pay Estate Tax and Secure eCARs
- Representative handles payment and secures eCARs using the SPA.
Transfer Titles and Close/Move Assets
- Use eCARs, SPA, and EJS to annotate and transfer properties, close accounts, and/or sell.

X. Key Takeaways

Estate tax can be paid by anyone, even without SPA, if the act is purely payment.
However, estate tax processing after extra-judicial settlement is more than payment; it involves representation, signing, and receiving documents on behalf of the estate and co-heirs.
For these representative acts, a properly worded and notarized Special Power of Attorney (or clear representation clause in the EJS) is highly advisable and often practically required by BIR, banks, and registries.
Where there is a court-appointed executor/administrator, that appointment may replace the need for SPA from the heirs for estate matters.
Without SPA or similar authority, the designated representative may face delays, refusals, or limited recognition in government and private offices.

This discussion gives general legal information on whether an SPA is required for estate tax payment after extra-judicial settlement in the Philippines. Actual situations can vary significantly based on documents, family arrangements, foreign elements, and institutional practice, so concrete cases should be evaluated with the help of a qualified legal professional.