When a landowner passes away in the Philippines, their real estate properties do not automatically transfer to the individual names of the heirs. Instead, they form part of the Gross Estate. To legally subdivide and title these lands among the heirs, a specific legal process must be followed under the Civil Code and the Rules of Court.

1. Determination of Heirship and Estate Settlement

Before land can be physically divided, the heirs must first legally establish their right to the property. This is done through one of two primary methods of estate settlement:

A. Extrajudicial Settlement of Estate (EJS)

This is the most common and fastest route. It is applicable only if:

The deceased left no will.
The deceased left no debts (or all debts have been paid).
All heirs are of legal age (or represented by judicial guardians).
All heirs are in agreement on how to divide the property.

The heirs execute a public instrument called a Deed of Extrajudicial Settlement of Estate. If there is only one heir, they execute an Affidavit of Self-Adjudication.

B. Judicial Settlement of Estate

If the heirs cannot agree on the partition, or if there is a contested Last Will and Testament, the settlement must go through the courts. This involves filing a petition for the probate of the will or judicial partition, which can take years to resolve.

2. The Partition Agreement

The heirs must decide on the specific boundaries of their respective shares. This is formally documented in a Deed of Partition.

Pro-indiviso: Initially, heirs own the property in "common" (co-ownership).
Partition: This act terminates the co-ownership and assigns specific "metes and bounds" to each heir.

3. The Subdivision Survey

Once the heirs agree on the division, a Geodetic Engineer must be hired. The process involves:

Surveying the Land: The engineer measures the property and marks boundaries with concrete monuments (mojones).
Subdivision Plan: The engineer prepares a survey plan (Blue Print) showing the individual lots (e.g., Lot 1-A, Lot 1-B).
Approval: The plan must be submitted to and approved by the Land Management Services (LMS) of the Department of Environment and Natural Resources (DENR) or the Land Registration Authority (LRA).

4. Mandatory Tax Compliance

No land transfer can occur without paying the requisite taxes to the Bureau of Internal Revenue (BIR).

Estate Tax

Under the TRAIN Law (Republic Act No. 10963), the estate tax rate is a flat 6% of the value of the net estate.

Proof of Payment: Upon payment and submission of documents (Death Certificate, Titles, Tax Declarations), the BIR issues a Certificate Authorizing Registration (CAR).
The CAR is a mandatory requirement for the Register of Deeds to issue new titles.

5. Registration and Issuance of New Titles

After obtaining the CAR and the approved Subdivision Plan, the heirs must visit the Register of Deeds (RD) where the property is located.

Required Documents for the RD:

Deed of Extrajudicial Settlement / Partition.
Original Owner’s Duplicate Copy of the Title (TCT or OCT).
BIR Certificate Authorizing Registration (CAR).
Approved Subdivision Plan.
Affidavit of Publication (proof that the EJS was published in a newspaper for three consecutive weeks).
Updated Tax Clearance from the City/Municipal Treasurer’s Office.

The Register of Deeds will cancel the original title in the name of the deceased and issue new individual Transfer Certificates of Title (TCT) for each subdivided lot in the names of the respective heirs.

6. Transfer of Tax Declarations

The final step is the "Administrative Transfer." The heirs must take the new titles to the Assessor’s Office of the municipality or city to request new Tax Declarations in their names. This ensures that real property taxes (Amilyar) are billed to the correct owners moving forward.

Summary of Costs to Anticipate

Estate Tax: 6% of the net estate.
Professional Fees: Geodetic Engineer and potentially a Lawyer.
Publication Fees: For the newspaper notice of the EJS.
Certification Fees: BIR, DENR, and LRA processing fees.
Transfer Tax: Paid to the Local Government Unit (usually 0.5% to 0.75%).
Registration Fees: Paid to the Register of Deeds (graduated scale).