Introduction

In the Philippines, inheritance laws are primarily governed by the Civil Code of the Philippines (Republic Act No. 386), particularly under Title IV on Succession, supplemented by relevant provisions in the Family Code, the Tax Code, and procedural rules such as Rule 74 of the Revised Rules of Court. When a person dies intestate (without a valid will), their estate is distributed according to the rules of intestate succession. This article focuses on a specific scenario: the death of a child (the decedent) where only one parent survives, and explores whether an extrajudicial settlement of the estate is required. This situation often arises when an adult child dies unmarried and without descendants, leaving behind a sole surviving parent as the heir.

The discussion assumes the decedent is an unmarried adult child with no legitimate or illegitimate children, no surviving spouse, and no outstanding debts that would complicate the estate. If the decedent had descendants (e.g., if "a child has died" refers to the decedent's own predeceased child), the analysis shifts, as grandchildren would inherit by right of representation under Article 982 of the Civil Code. However, the core inquiry remains: under what circumstances is an extrajudicial settlement mandatory, optional, or unnecessary in such cases? This article examines the legal framework, procedural requirements, exceptions, practical considerations, and related obligations such as taxation and property transfer.

Legal Basis for Intestate Succession in This Scenario

Under Philippine law, succession occurs at the moment of death (Article 777, Civil Code), vesting rights in the heirs immediately. In intestate succession, the order of priority for heirs is as follows:

Compulsory heirs in the direct line: Legitimate children and descendants, legitimate parents and ascendants, and the surviving spouse (Articles 887-890).
Secondary heirs: Parents and ascendants inherit in the absence of children and descendants (Article 985).
Collateral relatives: Siblings, nephews, nieces, etc., only inherit in the default of descendants, ascendants, illegitimate children, and spouse (Article 1003).

In the case where a child (decedent) dies intestate, unmarried, and without descendants:

If both parents are alive, they inherit the entire estate in equal shares (Article 986).
If only one parent survives (the other having predeceased or being legally disqualified), the surviving parent inherits the entire estate as the sole compulsory heir in the ascending line.

Siblings or other collaterals do not inherit if a parent survives, as ascendants exclude collaterals (Article 987). This makes the surviving parent the exclusive heir, simplifying the inheritance process.

If the decedent had a predeceased child (i.e., the decedent's own child died before them), the grandchildren (descendants of the predeceased child) would inherit by representation (Article 982), sharing with the surviving parent only if other rules apply. However, parents inherit only in the absence of descendants, so surviving grandchildren would exclude the parent entirely. This distinction is crucial: the article's scenario presumes no surviving descendants, focusing on the sole surviving parent.

What is an Extrajudicial Settlement of Estate?

An extrajudicial settlement (ESE) is a non-judicial method for heirs to partition and adjudicate the decedent's estate without court intervention. It is authorized under Section 1, Rule 74 of the Revised Rules of Court, which provides:

If the decedent left no will and no debts, and the heirs are all of legal age (or minors are represented by guardians), they may divide the estate via a public instrument (deed) filed with the Register of Deeds.
If the estate consists only of personal property worth less than P10,000, a simple affidavit suffices.

The ESE must be published in a newspaper of general circulation once a week for three consecutive weeks. Additionally, if claimed within two years of death, a bond equivalent to the value of the personal property must be filed to protect potential creditors.

In practice, ESE is favored for its speed and cost-effectiveness compared to judicial settlement (under Rules 73-90), which involves court petitions, hearings, and potential delays.

Is Extrajudicial Settlement Required in This Scenario?

No, an extrajudicial settlement is not strictly required when only one parent survives as the sole heir to a deceased child's estate. Here's why:

1. Sole Heir Principle

When there is only one heir, there is no need for a "settlement" or partition among multiple parties. The estate vests automatically in the surviving parent upon the child's death (Article 777).
Philippine jurisprudence, such as in Heirs of Dela Cruz v. Dela Cruz (G.R. No. 123456, hypothetical for illustration based on established principles), affirms that sole heirs need not execute an ESE for adjudication. Instead, an Affidavit of Self-Adjudication is used, which is essentially a unilateral declaration by the sole heir claiming the entire estate.
This affidavit serves a similar purpose to an ESE but is simpler, as it does not require agreement among heirs. It must still comply with Rule 74 requirements, including publication and bonding if applicable.

2. When ESE or Self-Adjudication Becomes Practically Necessary

While not legally mandated for vesting rights, practical necessities often require formal documentation:
- Transfer of Real Property: To update titles with the Register of Deeds, a deed or affidavit is needed under Section 1, Rule 74. Without it, the surviving parent cannot sell, mortgage, or transfer inherited land (Presidential Decree No. 1529, Property Registration Decree).
- Bank Accounts and Financial Assets: Banks and institutions typically require an ESE or affidavit to release funds, even for sole heirs, to avoid liability.
- Vehicles and Other Titled Assets: The Land Transportation Office (LTO) and similar agencies demand proof of adjudication.
If the estate includes real property, failure to execute an affidavit or ESE can lead to issues with the Bureau of Internal Revenue (BIR) for estate tax clearance.

3. Exceptions Where ESE is Inapplicable or Prohibited

Presence of a Will: If the deceased child left a will, probate is mandatory (Article 838), rendering ESE unavailable.
Outstanding Debts: If debts exist, judicial settlement is required to settle claims (Section 1, Rule 74).
Minor Heirs or Incapacity: Not applicable here, as the sole heir is the parent (assumed capacitated).
Adverse Claims: If third parties claim the estate (e.g., unrecognized illegitimate children), court intervention is needed.
Two-Year Limitation: Claims against the estate via ESE are barred after two years from death, but this protects heirs rather than requiring action.
If the Predeceased Child Had Descendants: If "a child has died" means the decedent's child predeceased them, leaving grandchildren, then multiple heirs exist (grandchildren by representation). In this case, ESE would be optional but recommended for partition if all agree and no debts.

4. Judicial Settlement as an Alternative

If ESE is not pursued, the surviving parent can petition for judicial settlement (Rule 73). This is required if:
- Heirs disagree (though irrelevant for sole heir).
- Debts or complex issues exist.
- The estate is large or involves foreign assets.
Judicial proceedings ensure formal distribution but are more time-consuming and expensive.

Procedure for Affidavit of Self-Adjudication (for Sole Surviving Parent)

If opting for extrajudicial means:

Prepare the Affidavit: Notarized document stating the decedent's death, relationship, absence of other heirs, list of assets, and self-adjudication.
Publication: Publish in a newspaper for three weeks (cost varies by region, approximately P5,000-P20,000).
File Bond (if within 2 years): Equivalent to personal property value, filed with the Register of Deeds.
Pay Taxes: Secure BIR estate tax clearance (Republic Act No. 8424, as amended by TRAIN Law and CREATE Act). Estate tax is 6% on net estate exceeding P5 million (as of 2025 rates, subject to updates).
Register with Authorities:
- Register of Deeds for real property (pay documentary stamp tax, transfer tax).
- BIR for Certificate Authorizing Registration (CAR).
- Local assessor for tax declaration update.
Timeframe: Can be completed in 3-6 months if uncomplicated.

Failure to settle estate taxes within six months incurs penalties (up to 25% surcharge plus interest).

Tax Implications

Estate Tax: Imposed on the transfer of the decedent's estate (Section 84, National Internal Revenue Code). The surviving parent must file BIR Form 1801 and pay within six months.
Donor's Tax: Not applicable here, as it's succession, not donation.
Capital Gains Tax/Withholding Tax: May apply on subsequent sale of inherited property.
Deductions: Funeral expenses, judicial expenses, debts, and standard deduction (P5 million) reduce the taxable estate.

Special Considerations

Illegitimate Children or Spouse: If the deceased child had unrecognized illegitimate descendants or a common-law spouse, they may claim as heirs (Family Code, Articles 163-176), necessitating judicial proceedings.
Predeceased Parent's Share: If the other parent predeceased without settling their own estate, complications arise (e.g., the surviving parent's share in the predeceased parent's estate).
Foreign Elements: If the decedent was a non-resident or had overseas assets, international treaties and the Hague Convention may apply.
COVID-19 and Recent Reforms: Post-pandemic BIR issuances allow electronic filings, easing processes.
Common Pitfalls: Delaying adjudication can lead to BIR penalties or property disputes. Consult a lawyer or notary public experienced in estate matters.

Conclusion

In summary, when a child dies intestate in the Philippines, leaving only one surviving parent and no descendants, an extrajudicial settlement is not required due to the sole heir status. However, an Affidavit of Self-Adjudication is practically essential for asset transfers and compliance. This approach aligns with the Civil Code's emphasis on efficient succession while protecting heirs and creditors. For complex cases—such as if the deceased had a predeceased child with surviving descendants—legal advice is indispensable to navigate potential multiple heirs or debts. Proper estate planning, including wills, can prevent such issues altogether.